By Steven Rothberg, President, CollegeRecruiter.com
One of the very real but not well known impacts of the great fall in value of Internet-related stocks is the huge drop in spending on advertising by many Internet companies, even by those which still exist. When venture capital firms were pushing the start-ups in which they invested to spend ever more ridiculous sums on customer acquisition, advertising was often the answer. With those days gone, a lingering problem for many web sites is how to buy banner advertising at a price that will add to their bottom line. The answer is through the proper use of affiliate programs.
Given the choice, most web sites would prefer to sell their banner advertising inventory by the impression. Under that model, the publisher, which is the owner of the web site on which the banner ad appears, gets paid simply for showing the ads and regardless of whether the ads generated any visitors for the advertiser, let alone customers. This model is attractive to the publisher because they assume no risk of the ad actually working. To be paid, they just need to show the ad. This same model, however, should be the least preferable to the advertiser because they assume all of the risk of the ad not working.
With advertising budgets drying up, fewer organizations are willing to buy advertising on an impression basis, especially because the option of buying the same ads on a performance-basis are now well known. Virtually every experienced on-line advertiser is aware that banner advertising can be purchased by the click through, under which the publisher gets paid only when one of its users clicks on the banner ad to go to the web site of the advertiser, by the lead, under which the publisher gets paid only when one of its users successfully fills in a form provided by the advertiser, or by the sale, under which the publisher gets paid only when one of its users actually buys something from the advertiser.
Affiliate programs are incredibly efficient vehicles for purchasing on-line advertising because they allow the advertiser to efficiently and effectively purchase advertising from hundreds or even thousands of publishers. web sites that purchase their advertising through affiliate programs often find that they are able to do so with minimal time involvement because they can eliminate the entire process of deciding where to spend their advertising dollars. Because the risk of performance is shifted to the publisher, if the ad doesn't work then the publisher doesn't get paid. As a result, the advertiser doesn't have to worry about where to buy their advertising.
One of the benefits of an affiliate program that often surprises the advertiser is that their advertising is often more effective. The reason is that the advertiser is able to set the criteria that must be met in order for the publisher to be paid and the criteria tend to be based on the effectiveness of the advertising. For example, CollegeRecruiter.com pays its affiliates a $100 commission whenever one of their visitors clicks through and buys something - anything - anytime within 365 days of that initial click through. What could be a more effective use of our advertising dollars? We only pay for our advertising when we know that it has worked. Now the trick is to make is to make it work for you too, and the way to do that is to create your own affiliate program and use it to buy your on-line advertising. It could be the best marketing-related decision you make this year.
-- Steven Rothberg is the President and Founder of CollegeRecruiter.com , the highest traffic job board targeted to students and recent graduates with 681,000 unique users per month. Steven oversees the sales and marketing of CollegeRecruiter.com, including managing its relationships with over 16,000 affiliates.
