Third-Party Solution Providers

Third-party affiliate solution providers come in two types. The easy to set-up and initial low-cost provider, and the more expensive and sophisticated higher-cost provider that supplies a range of services (see Table 9.2).

Table 9.2. The Big Four Services Compared

	Commission Junction	Dynamic Trade	Be Free	LinkShare
Set up	$1,295, plus $500 in escrow	$5000	$5000	$5000
Renewal Fee	$0	$0	$0	$1000
Commission	20%	Negotiated	2%–3%	2%–3%
Minimum Commission	$250	$0	$2000 month	$2000 month
Software Installation	NO	NO	YES	YES
Free Check	YES	YES	NO	NO
WritingPrivate	NO	NO	YES	YES
Label Option
Time to Implement	1–2 days	2 weeks	2–4 weeks	2–3 days
Contract Length	12 months	12 months, can be cancelled with 30 day notice	12 months	12 months
Exclusivity Agreement	NO	NO	YES	YES

Be Free, Commission Junction, Dynamic Trade, and LinkShare are considered the Big Four of affiliate solution providers, although there are other smaller ones that you might choose depending on your affiliate program model.

Let’s take a look at each of the Big Four and what they offer.

Be Free

Be Free (www.befree.com) (see Figure 9.5), the only publicly traded affiliate solution provider (Nasdaq: BFRE), boasts the category killers in its stable of companies, including America Online, Barnes & Noble, and Gap, Inc. Be Free is expensive, but very good, and it offers a top-notch solution for sophisticated online retailers with lots of sales, as well as those who aspire to be the top players in their space.

Be Free has a sophisticated Affiliate Serving Technology called BFAST that can simultaneously monitor millions of hits on your banner links and tens of thousands of transactions generated from them. In addition, Be Free’s banner linking technology, BFIT, targets, places, and tracks your banner links. From this, you can track the success of all your banner or text links to point of sale, which allows you to determine that a specific banner in a specific location led to the sale of a certain product.

You must install its software on your PCs and attend classes to learn to use the software properly. The trade-off here is that to have such a robust affiliate management software, it requires time to learn it. Set up costs $5,000, with transaction fees of 2%–3% of an affiliate’s compensation, and a $2,000 a month minimum fee.

Be Free tracks pay-per-lead, pay-per-click, and pay-per-sale programs. It also offers automatic sign-up for your affiliates, and a choice of auto approval or manual approval if you want. Like the other affiliate solution providers, you can list your program on its site for its affiliates to review and join. Be Free announces new programs to its affiliate clients, which helps in your recruiting drive. It also has a system through which you can communicate with all your affiliates via e-mail.

All Be Free customers are assigned business consultants who will make recommendations based upon your business model and provide data points from other merchants’ success, so you don’t need to reinvent the wheel. Be Free can also assign an Affiliate Program Manager as an optional service at an additional cost.

Basic Be Free services for merchants include two programs for the price of one: affiliate and strategic partner programs, customized affiliate and partner Web site (merchant.reporting.net), unlimited business consulting from its affiliate consultants, unlimited technical support, unlimited support from a client development manager to build your program, unlimited access to the Be Free Customer Connection and affiliate knowledge base (where you can find any information you will need to manage a successful program), unlimited access to University Be Free (www.betaught.com), and recruiting of about 30 affiliates per day, every day. And Be Free provides a way to communicate with your partners via targeted messaging with 10,000 personalized e-mails per month at no additional cost. E-mails can be sent either as text or HTML.

Be Free offers a full suite of marketing services through the Be Free Marketing Platform at additional costs. These services include BSELECT Onsite (a real-time product or content recommendation service for site visitors), BINTOUCH (an e-mail customer referral service), check processing, the Advanced Marketing Pack (combining two of Be Free’s most popular marketing tools—Dynamic Links and Auto-Merchandiser), affiliate support (Levels I & II), custom outreach, and affiliate program management.

In other words, Be Free supplies a very good, high-end system with the price to match. Be Free also requires that you sign an exclusivity agreement.

Commission Junction

If there were a popularity contest in terms of number of merchants, Commission Junction (www.cj.com) (see Figure 9.6) would win. It is one of the leaders in the affiliate marketing industry and features more than 1,700 affiliate programs from a wide array of online merchants, including Fingerhut, The Sports Authority, and Tower Records.

Commission Junction (CJ) aggregates affiliates’ commissions from all the merchants’ programs that are a part of its program. Affiliates who earn over $25 in commissions from any of its merchants will be paid in one aggregate check every month. No specific account manger is assigned to the merchant, but the merchant is assigned to a client services group at no cost. Dedicated Account Representatives (DAR) are available for $2,500 per month with a one-year contract. There is a 90 day, “PowerLaunch” package available to new merchants for $2,000 per month for a term of three months.

Basic CJ services for merchants include Merchant Client Services Group, Web-based 24/7, real-time reporting and program-management interface, performance/term incentives and custom payout capabilities, aggregated affiliate payment, fraud detection and prevention, affiliate support, online knowledge base and FAQs, ad serving, auto-merchandizing and advanced link serving capabilities, product data feeds, and a two-tier recruitment bounty.

Its service is entirely Web-based. Because you don’t have to buy or install any software on your PC, setting up CJ’s program only takes a couple of hours. The set up fee is $795 with a renewal fee of $595 per year, and you have to pay 20% of the commission on each transaction you pay your affiliates. So if you pay affiliates $1 for a sales lead, you must pay CJ 20 cents. You also have to keep a minimum escrow account of $250, from which CJ pays your affiliates.

CJ’s program, called EnContext, allows affiliates to create links to individual products on merchant sites. With this virtual store affiliates can select individual products from various merchants to create a customized store on their own site, earning commissions on all those sales.

CJ is committed to customer service and continual service enhancements and does not require clients to sign an exclusivity agreement.

Dynamic Trade

Dynamic Trade (www.dynamictrade.com) (see Figure 9.7) touts client merchants such as Eddie Bauer, Neiman Marcus, and Spiegel. Unlike the more well-known services like Be Free, Commission Junction, and LinkShare, Dynamic Trade stresses its ability to recruit quality performing partners that are revenue motivated and relevant, rather than the quantity approach of some other affiliate solution providers.

Dynamic Trade charges $5,000 in set-up fees. After the set-up fee, clients only pay for each sale or lead generated. That cost is negotiated with each client before the offer is made online. There are no monthly minimums for merchants and Dynamic Trade pays partners when they reach a $50 threshold. Every merchant is assigned an account manager who manages a small number of clients and stays in touch with them continually—this is included in the service to each merchant.

Dynamic Trade’s tracking technology allows for even the most complex kind of partnerships. It develops individual personalized marketing strategies for each of its merchant clients by signing up powerful affiliates and integrating the pay-for-performance model into every aspect of its marketing strategy.

Dynamic Trade provides comprehensive, easy-to-use, Web-based reporting. No software installation is required. All reports can be downloaded and are completely customizable for merchants and affiliates. Merchants can track performance on an individual affiliate and promotion basis 24 hours a day, 7 days a week.

For additional costs, Dynamic Trade provides search engine optimization and e-mail programs that are purely pay-for-performance, as well as the ability for merchants to directly download individual product information to partner sites with its DDI 2.0 software.

Dynamic Trade does not require clients to sign an exclusivity agreement.

LinkShare

LinkShare (www.linkshare.com)(see Figure 9.8) claims to be the “first company to pioneer and launch an affiliate network,” and its merchant list includes American Express, Dell, and Disney. Like Be Free, it offers a software system that you install on your PCs to manage your affiliate network. Installation time for the software on your systems is 2 to 4 weeks. It also offers a network of affiliate clients to merchants who want to recruit potential affiliates.

Set up fees are $5,000 and transaction fees are 2%–3% of the earnings of your affiliates or a $2,000 a month minimum. There is also an annual $1,000 license renewal fee. Like the other solution providers, LinkShare does the tracking and reporting. Because LinkShare has attracted some big names, including Dell, you can benefit from the publicity it generates recruiting new affiliates. Its unique Linksynergy tracking software has some useful features, such as the Affiliate Content Spider that crawls sites for specific words or phrases you specify and the Grouping feature, allowing you to e-mail target specific affiliates.

Additional fees that include a $1.50 check-writing fee and a banner serving fee. LinkShare tracks pay-per-lead, pay-per-view, pay-per-click, and pay-per-sale programs.