Nurturing Resources

Two, Four, Six, Eight -Why Don't We Affiliate?

By Jon Lee Andersen, Esq.

Affiliated marketing arrangements have been around for a long time, but the Internet really makes them particularly attractive. The multitude of potential Web relationships available, the ease of establishing links, and the vast informational content of the Web makes the environment quite conducive to affiliate and co-marketing programs. It is a relatively simple task to pair-up employment Web Sites with Resume writing Web Sites, or Airlines with those offering hotels and rental cars. So, I thought I would give you some thought and tips about these arrangements should you or your company be considering such a venture.

Affiliated marketing programs can take a number of forms, from a simple link posting, to a site-within-a -site. They can have a multitude of fee and compensation arrangements. Here are some of the issues that come up in arranging an affiliated Marketing program:

If the program is a link based program, where will the link be placed? Will it be "above the fold"? This is nearly always the preferred location, as many Web users don't take the time to scroll down a Web page. If the link is not visible when the page is opened, the odds go up that it will not be seen at all, so always aim for an agreement, which places your link above the fold. If the Web site has a folder, a frequent point of negotiation is the placement in the folder, usually the thought being, and "the higher the better".
Another consideration in an affiliated marketing program is exclusivity, or if that cannot be obtained, at least some limitation on the type and amount of competition which will be present. The best agreements usually prohibit the Web Site host from marketing or linking to similar products or services. Occasionally a company's product base will be so vast, that there will be some unavoidable overlap, but even this can be contained to some degree. There are also arrangements for designated areas on a Web Site which can be utilized to establish a degree of exclusivity.
Will the co-marketing be just a link or will there be some additional promotional features. As technology gets more advanced, with flash, audio and video inserts, promotional pop ups are frequently employed in affiliated programs. At a minimum there are usually logo placements, boxes ads, or similar marketing additions.
Fees and payment provisions are probably the most critical negotiation point. Here are some of the typical fee arrangements: fixed placement fees, one time up-front fees, fees for traffic regardless of sales, fees tied to a flat percentages of sales, fees based upon a percentage of sales after a monthly minimum is reached, fees based upon formulas which take into account shipping costs, taxes and rebates and returns. The only guidance I can offer here is to really think through the issue and negotiate an arrangement which will acceptable is the promotion is less that a roaring success.
Today's world also requires a through review of the privacy policies of both parties to the co-marketing or affiliated arrangement. If data is shares, or even available to both parties, it is imperative that the privacy polices be acceptable to each of the participating companies.
Other issues, which are worthy of mention, include testing of links, down time, and announcements and publicity surrounding the affiliate program. Who is responsible for testing the link, who is responsible for the publicity concerning the program, what form is to take and how is it to be distributed? What is the effect of server problems and what are the support obligations? What kind of reports are going to be generated and who is responsible for compiling this information and analyzing it?
Finally, and I think this is the most important consideration of all, is whether this is the right combination and what happens if there is some change in one or the other company. Buy-outs, management changes, and product development or obsolesce make arrangements like this dynamic, so always remember that the partner you have today is likely to change, and may no longer be the partner you would choose. Be sure to have a good exit program.

Here is another way to put it:

Madam Mona manicured nails
Monsieur Joseph coiffed ponytails
But when an ad majordomo
Arranged a joint promo
Both of them doubled their sales

Need a Speaker? I am available to speak to your group, present lectures and lead discussion groups. Call (770) 315-8668, fax (770) 558-4427 or e-mail me at adcounsleor@justice.com for a list of speech topics.