Affiliate programs help Web

Affiliate programs help Web marketers turn a profit

Forget banner ads and even targeted e-mail. To the converted, affiliate marketing is the future of e-commerce.

In an affiliate marketing program, a Web site includes a variety of links to e-commerce sites. Each time a visitor clicks onto one of the links, the content provider hosting the link earns a commission (a flat fee or a percentage) on either the lead or the sale.

While some e-commerce sites coordinate directly with their affiliates, others prefer using brokers. Over 20 companies organizing affiliate marketing programs have been launched over the past couple of years.

Typical of those companies is also one of the youngest and largest, Be Free, Marlborough, MA, which was originally created primarily to serve Barnes & Noble Inc.

Lending Tree Inc. (www.lendingtree.com) is one of Be Free's clients. based in Charlotte, NC, Lending Tree is an online loan marketplace. Consumers fill out a form on the Web site and the company works to find a loan suiting the consumer in its network of lenders.

According to vice president of marketing Reginald Bowser, Lending Tree is linked to over 6,000 sites. Bowser says the links are from any site offering high-ticket items for which consumers might want to borrow money, such as new or used cars, vacations or real estate.

Since the program began last November, the affiliate links have generated some 75,000 completed applications. Bowser estimates the costs of getting those applications are about one-fifth those of other strategies.

He notes affiliates earn their fees on the basis of completed applications, and not whether the loan was granted. Finding the right loan for the consumer is Lending Tree's business, not the affiliate's, he adds.

Affiliate programs, Bowser feels, are a win-win situation for the affiliate and the e-commerce site. Eric Borgos of Impulse Communications, Boston, agrees.

Borgos maintains content sites with links to e-commerce sites. A professional Web-site designer, he creates content pages catering to many niches. Each page will link to other sites providing related goods or services.

Many of Borgos' visitors come from search engines. His most popular page, with some 7,000 hits a day, is www.bored.com. Cancer care pages prove successful for both hits and sales of books, vitamins and other items.

Borgos - who says he's set up niche sites simply because a Be Free client offered related products - claims his most profitable links are for books, followed by music. He usually earns a 5% to 10% cut from a sale.

For what Borgos describes as less than an hour a week updating a page so that people will keep coming back for more information, he can earn, for example, 7% on the $15,000 a month in sales he gets for Barnes & Noble.

Gordon Hoffstein, CEO of Be Free, says his company targets clients by size. He favors the No. 1 or No. 2 firms in any product category, supplemented by rising stars. In addition to Barnes & Noble and Lending Tree, Be Free's 100-plus clients include Staples, eToys, Reel.com, Electronic Newsstand and PlanetRx.com.

Be Free, which deals with over 1 million affiliates, earns a 2% commission on each sale from affiliates.

A good affiliate site can expect to earn between $1,000 and $1,500 a month off a link. The pages have to include interesting content. Furthermore, that content has to be timely and updated frequently, or as Hoffstein says, visitors won't come back for another look.

Hoffstein points out that while affiliate programs are attractive to e-commerce merchants and affiliates alike, there is a question of accurate and impartial accounting. Companies like Be Free are "third-party honest brokers" who "keep all the checks and balances accurate."

Some other popular affiliate brokers include Linkshare, New York, and Affiliate Network Solutions, based in Stamford, CT.