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During my "Internet life" I saw a lot of products, which become hype on Internet, a lot of copies were sold within 2-3 weeks (or at least their authors declared huge sales) and after next 2-3 weeks nobody heard about them. Idea behind those products was good and usefull, but after first release, authors of projects stop the development and products were dead.

Here in Quality Unit we continue with development of affiliate software for the 5th year already and we don't plan to stop. This year we will release final version of Post Affiliate Pro 4 and now is time to start thinking about next milestones and challanges.

Sure, we can look into the products of our competitors and implement similar features, but this is not something we want to do. We want to be one step ahead. We want to have unique features and lead the affiliate software industry.

We would like to invite you into the discussion about future of affiliate marketing community of internet marketers, shop owners or even simple affiliates. Everyone has some experience (good or bad) and everyone has a valuable opinion. Together we can think about future and define new standards.

Now we are thinking about questions like:

  • Where will affiliate marketing be in the next 5 or 10 years?
  • Will the tracking way change in the future?
  • What features should next generation of Affiliate software contain?
  • Are there new forms of Affiliate marketing, which we can develop in our products?
  • Are current workflows efective for affiliates and merchants or in general for affiliate marketing?

Do you have any ideas? Do you have any opinion?

  •  
  • 9 Comment(s)
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Gravatar: Julian Wolf
22.11.2008
12:19
Julian Wolf

Well, I have many ideas. I start with brainstoarming, some of them are published already in the features-part of the website. - The DirectURL allows great things. In combination with the footer-script for my opinion this is a killer-strategy, which mostly goals on Forums. Brings the forum-webmaster tons of leads and the merachant tons of backlings. - Viral Systems are growing. Viral PDF is planned already, but in the future affiliate marketing I guess this will grow into movies and songs and so on. There is one software ... puh, how is it called? Ah, I know: Sorenson Squeeze, where I can put in the movie a link, which brings a user directly after watching the video to an url. Things like that will grow in affiliate-marketing. - The affiliate-marketing will get easier for webmasters. Less thinking, auto-optimizing banners, no ref-codes, very much automated. This also makes it more and more a strategy for "the masses". So the pricing of (small) affiliate-software will decrease. I guess it will quickly go under 100 Dollars, while good business-software will stay over 200 but under 1.000 dollars. The "under-100-Dollar-Scripts" will be playfull for little th ings. - PMP for my opinion has great chances, because it brings the affiliate and the custommer closer togehter. I guess this was a good start, but PMP is like an icebreaker in a new business, so there also is a lot of work to do until it will be what the market would take instantly. An Example: A friend of me is managing a party. I thought about using PMP for that: Each ticket is 25 Dollars, 10 Dollars of that will go to the friend, who invited you. The PMP-Business in the moment focuses on tons of eBooks and other bullshit, that doesn´t have a great value. As soon as it is going more product-orientated, as soon as the "regular people" find out, what this can be used for, it will be taken that for. This is the way I see the market for PMP: It brings frieds together and rewards the one friend, who brought another. This works for partys, for new music-bands, for fan-clubs, for all of that kind of communities. That for PMP has to get much more "fluent" for somebody, who isn´t fluent in internet-marketing. I would love to see PMP growing as a module for PAP and I strongly suggest that if you do that PAP should be able to handele multiple PMP-Networks simultaniously. - I see a strong need to combine the automated systems like PAP and the ticket-handling like SC in a bigger framework that will lead into a CRM. I tested nearly all CRMs that I could get in the last year: SugarCRM, vTiger, eGroupare, Microsoft Dynamics, Salesforce ... they are all leaking on some points and the "easyness" of SC is one of your big points. If you combine the SC with PAP, then you already have half of a SC. ;-) - Also the "growing togehter" will grow in the internet. I see for example more and more Joomla or Typo3-Pages, combined with phpBB2 or vBulletin. There are more and more solutions, some of them are "general solutions", that are able to combine different systems. In Joomla for example there is a (free) extension for J1.5 that can integrate nearly all important forums with the Joomla-Frontend. This is a trend which will grow through all Internet-Systems and it is more and more important. My personal hope is that there will be a "standart-userdatabase" some time. That there is like a protocoll for a user-database, that works like mySQL for databases: Each application can simply "hook on" and built up theire own "user-profile". The double fields like "eMail-Adress" are marked as those, and so the applications have "shared fields" and "own fields" in a general user-table. However, the hope for that is not very realistic. But I truly believe that the ability of "working togehter" with other user-databases will be one of the most interesting trends. I love to see a vBulletin-User, and to intantly have the other data: What did he buy (PAP), what problems he had (SC), who did he talk to (LA), is he revieving the newsletter (interspire), is he doing an online-course (moodle) and so on. Best wishes, Julian!

Gravatar: AlanT
22.11.2008
16:37
AlanT

It's wonderful to see that you are requesting feedback and implementing that into your future development plans. Yes, it's a strong advantage to have new and unique features, however it's also good to duplicate every feature offered by the competition. Features are great, but stability and reliability are even more so. Never release a feature that doesn't work, and never release a new version if the core features aren't working on the most basic server configuration (LAMP). AFFILIATE MARKETING IN 5 - 10 YEARS I see the landscape of affiliate marketing going in 2 general directions, which Julian has pointed out in other posts. One direction is the amateur who only wishes to refer his friends and family to a merchant and does not want to do any real promotion. For this class of affiliate, simple rewards are best. The other direction is the professional, who will become more sophisticated in his/her promotion of various merchants. For this class of affiliate, affiliate programs will reflect more of the structures of offline affiliates such as salespeople and resellers. Some of these affiliates may wish to purchase a quanitity of product in order to increase their profitability, while simultaneously promoting the merchant's site for more sales. To handle this, some mechanism will need to be in place to differentiate commissions from wholesale discounts. CHANGES IN TRACKING New technologies and standard practices will develop over time, resulting in changing needs for tracking. The goal for your development team will be to analyze all new browser developments for tracking options and implement them when possible. Also, anytime someone asks, "can PAP do this?", take that as a feature request. Some of these relate to tracking. Both McDonald's and Disney have a phrase that keeps them ahead of their competition -- "we can create faster than they can copy." The core idea here is to be proactive and listen to your customers. WHAT THE NEXT GENERATION OF AFFILIATE SOFTWARE SHOULD CONTAIN 1) CRM Extensions Regarding a 'visionary' goal, affiliate marketing is dependant upon building relationships with your affiliates. The stronger the relationship, the more the affiliate will do to help the merchant. Because of this, a CRM extension could be a valuable component of a merchant's overall system. The benefits here are that the merchant can track every contact made with each affiliate or potential affiliate. As a merchant, I can open a file for a potential affiliate I'd like to recruit. As I send emails, make phone calls, send postal mail, I can track what I've sent that prospect. Not only that, but I can also keep myself organized, as the software can remind me when it's time to make another contact with a prospect who hasn't yet responded. Once the prospect has been recruited as an affiliate, a CRM-type system can schedule additional contacts, much like an autoresponder, but also including phone calls and physical mailings. Obviously, the software can't make the phone calls or do the physical mailings, but can remind me to take those steps. When dealing with 1000 affiliates, having these reminders can make the difference in keeping the affiliates' interest or letting them drift away. This doesn't need to be a full-fledged CRM system. Perhaps all that is required is to maintain a list of communication in each affiliate's profile. PAP already keeps a list of emails sent, but doesn't show this in the affiliate's profile. Perhaps the 'actions' plug-in can be made to implement a communication schedule with reminders to the merchant that a call or mailing needs to be done. With these 2 features, we have much of the benefits of a CRM system. Obviously, this can be extended to systematize even more of a merchant's management of his/her affiliates. 2) Customized Reporting PAP's ability to be customized can also be extended. I'd love to be able to define what data I want in a report, such as commissions earned per click, or per banner impression. Someone else may want to see the average number of clicks per lead generated. Someone else may want to know the number of subaffiliates recruited for each affiliate. To do this, some sort of report generator will need to be implemented. Something like Crystal Reports, or the report generator in MS Access. What would be even better would be to associate multiple keywords to each ad / banner and be able to run reports on those keywords. For example, a graphic banner may have keywords to associate it with a particular product, a general 'theme', a format, and more. Being able to run a report that shows how different 'themes' compare with each other can help me decide how to create future banners. Running a report on the various formats can also give me this type of data. Going further along this direction, I can then compare the effectiveness of graphic banners against ebooks, articles, text ads, and so on. I could also run reports to compare the conversion ratios for different products, or different products promoted with graphic banners, and compare that data against the same products promoted with articles or ebooks. Having this level of detailed sales data is incredibly powerful. It would also be good to report things like ROI (return on investment - ad costs and/or affiliate commissions) and $/email sent (computed on email copy sent to an affiliate's list of X subscribers). To get this last number, a custom data field needs to be used when running the report. Since an affiliate's list size will change over time, this number will need to be stored separately. Perhaps the system can track when each affiliate broadcasts a promotional email, recording the affiliate's list size with each broadcast. This number can also be used to calculate the open-rate, reporting how many of the subscribers actually opened the message. This can track the effectiveness of the email's subject line. Basically, the idea is to track everything and be able to report on anything or any combination of things. 3) Royalties / Profit-based Commissions Sometimes, a merchant wishes to award commissions based on the gross profit involved. This gross profit may be what's left over after deducting product costs, ad costs, or royalties paid to authors, illustrators, musicians, and so on. Product costs may be stored with each product ID stored in the system. Royalties may also be associated with product IDs, and should be either fixed amounts or percentages (much like commissions are calculated, complete with performance rewards). Ad costs (1-time, periodic, non-periodic, and CPC) may be associated with SubID tracking. Product costs may change over time, and there are several standard accounting rules for determining a cost per sale. To track this accurately, multiple cost records need to be stored for each product. The possibility also exists that there will be multiple royalty agreements for any one product. The core idea here is to track the costs involved with each sale and use the gross profit left as a basis for computing commissions. Even if a merchant doesn't wish to vary commissions in this way, having the ability to report on profitability is a benefit for everyone. 4) Split Commissions Rewarding commission to either the first or last affiliate to refer a customer may be standard practice, but who is to say this is the only way to do it? Offering your affiliates a split of commissions may be even more fair, especially when a time frame is involved. For example, Affiliate A makes a referral, which does not result in a sale. 12 months later, Affiliate B refers the same person, and it also does not result in a sale. Affiliate C refers the same person a 3rd time 4 days later and a sale is made. In this case, Affiliate A's referral may not have influenced the sale, but both Affiliate B and Affiliate C may have been necessary to create the required impact on the customer. In this case, the fair thing to do would be to split the commission between the last 2 affiliates. A commission split is not uncommon in offline sales. Sometimes the split is divided equally between salespeople. Other times the salesperson who initiated the process gets a greater percentage, and elsewhere the salesperson who closes the sale gets the lion's share. This sort of feature could be very welcome by some merchants. 5) Taguchi Analytics Very similar to a free service offered by Google, and somewhat related to rotating banners and ad tracking, taguchi testing provides a means of determining what combination of factors result in the highest conversion ratio. This could be used by both merchant and affiliates. The merchant can use it on the main website to improve the profitability of the whole affiliate program for all involved. Affiliates could use it to improve their promotion of the merchant's program. While this can be use to test the common variables, such as headlines, calls to action, images, and so on, it can also be used to determine the effectiveness of mixing articles and ads, free downloads and banners, product reviews with articles, and any number of possible combinations that may exist on a webpage. 6) Event Sequences While this may be done by creating separate campaigns, sometimes it would be much easier if I could simply create a collection of promotional emails and other marketing materials to be associated with a promotional event. This way, I can add a new sequence without having to create a whole new campaign, and affiliates can select materials for a specific event in which they wish to particpate. The advantage here is that an affiliate can have their own private event without having to figure out which promotional material relates to the planned event structure. 7) Increased Integration The more I develop my business, the more I want everything integrated -- shopping cart, affiliate system, ad tracking, autoresponder, and email communications. The new API promises to make this much easier, especially with the Actions plug-in. Also, the plug-in approach, with helpdesk and other applications easily added to the system will also help. NEW FORMS OF AFFILIATE MARKETING In my business, I'm seeing a lot more co-operative projects, in which partners cross-promote each other. In some cases. some merchants want to limit their promotions to match what the other partner does, in order to enforce fairness. As such, some sort of "escrow" marketing is needed, in which a promotion goes out (or changes) when some pre-determined event takes place. For example, a partner's bonus item is moved to the top of the list after the partner mails out a promotion for the event. Or maybe the bonus item is hidden until after the partner's mailing goes out. If you think about how many people are running "Amazon Bestseller Campaigns", and how the process may be automated, you'll get several ideas of what may be implemented to ease the process and improve the merchant's results. Related to this, I'm also seeing a greater focus on promotional events involving multiple contacts, and less focus on single-shot emails. Think "Product Launch Formula". I've noted above how this may be addressed. In some cases, working with a major organization, such as a charity or media outlet, requires that type-in traffic be assigned to a specific affiliate account for a specific time-period. For example, if I work with the "March of Dimes" and they agree to promote me as part of an event, they don't want to use any type of affiliate link and want to promote the main URL. In this case, an agreement may be formed where they get a percentage of all sales made in a 5-day period. Obviously, sales associated with other affiliates will possibly need to be considered separately. Being able to assign a "default affiliate" for a specific time period only will help. Being able to schedule this for months ahead of time may improve workflow efficiency. EFFECTIVENESS OF CURRENT WORKFLOWS Being a single-person business, my workflow requirements are small. If I had a team of people all responsible for different aspects of the business, this would change. My main problem with workflows is mainly with bugs, such as clicking a link to approve pending transactions and getting a screen full of approved click transactions. However, there are things that could be improved, such as running an "inactive affiliate" report and not being able to broadcast a message to only those accounts. Or wanting to broadcast a message to all affiliates who meet a different set of criteria, such as high sales, or low conversion ratios with greater than 100 referrals in the last 3 months. IDEAS & OPINIONS Yeah, I have lots of both, some relevant and other not so much. Overall, focus on creating a quality product first, then add features later. Only add a few features at a time, and make sure they work before you release them. I'm amazed at some of the bugs that exist in the core functions of PAP/PAX. The original PAP4 'beta' should have been labeled 'alpha'. Other than that, focus on flexibility. Allow users to configure the software to work the way THEY want it to work. Don't make any assumptions or lock anything to a particular way of doing things if more ways exist. See what I've written above for examples. I think there is a huge potential with PAP4, and I'd love to be involved in it's promotion. I fully intend to set up some promotional event once I feel it's ready, but not a day before. When that day comes, I will be in touch to see how we may work together on creating a high-visibility event that will dominate the affiliate software marketplace, like the Butterfly Marketing, Fantasos, and Product Launch Formula events did.

Gravatar: David Yang
22.11.2008
23:22
David Yang

I do expect PAP will be as an absolute component of my business in the internet. To improve it in future, I think it's necessary to think of the developing tendency of global e-commerce, and the capabilities for QualityUnit in sustainable development. After all, everything in the world is changing fast. As a customer, I also need your all products enable to create a solid way of 'double-win' between you and I. I would like to see your next success! David Yang

Gravatar: vzeman
23.11.2008
02:36
vzeman

Your feedback will for sure change development plans in our products. It will never work if we will implement just features, which we think users need. We want to implement features, which users suggest and really need in real life. I'm very happy, that you are open to give us feedback to our products.

Gravatar: Julian Wolf
23.11.2008
09:17
Julian Wolf

For my opinon, just to add that thought, the product-mix of PAP, LA and SC can be the base of a new kind of CRM. Alan said above that you must not go in direction of a CRM, and I agree on that. The CRMs today are not really usefull for my opinion. They are too wild in trying to use an old concept. The concept of Leads, Chances and Sales, tracking every bullshit (phonecalls, letters,...) and making lot of work in the need of typing in every bullshit, bad eMail-handling and so on ... the CRMs d on´t work for me. But however ... continuing the developement of the three (PAP, LA, SC) with a vision of a "centered management-center" which collects all data, sorts it and allows an easy handling, this could lead into a total new kind of a CRM, which an orientation on the usability and the really needet features. This vision is nothing you should go for. This vision for my opinion should just be an orientation, like a guiding star with no intent do really reach it, but to grow slowly in that direction. Do you know, what I mean? Best wishes, J ulian!

Gravatar: vzeman
23.11.2008
11:10
vzeman

Yes, I know. GwtPhp framework is already build so, that all applications can use one user database. Also we can add into one application features from another as addons. So at the beginning we will not think too much about tight integration, but we will just try to make good applications (Good PAP, good SC and good LA). Later we will make small integration pieces and we will extend them just if users will require.

Gravatar: Julian Wolf
23.11.2008
12:14
Julian Wolf

That´s why I suggest to keep the "Vision CMS", but not goaling on it. That will work for getting a good Base for later growing togehter. By the way, something else: As far as I could understand the migration-script is ready, but not yet published. Do you see a chance to get it earlier? Best wishes, Julian!

Gravatar: Kishore Asokan
23.11.2008
14:42
Kishore Asokan

INTEGRATION WITH SOCIAL NETWORKING SITES In todays world social networking sites are very much used in selling products and making money online. It would be greate if you could add up popular social networking sites. Many of the online money makers are using their identity of brand to sell products and well known to others. API's for these networking sites like digg, twitter, stumbleupon, hi5 are available and recently Google has annouced the launch of a similar product.

Gravatar: AlanT
24.11.2008
21:12
AlanT

It seems that Julian may have misinterpreted a portion of what I wrote above. While I agree that there is no reason to fully implement a complete CRM system into a future version of PAP, implementing as much as your users ask for could be beneficial. I did not intend to suggest that growing into a full-blown CRM was undesirable. Just not necessary. Integrating helpdesk functionality, with communication referencing an affiliate's account, may be a great start. I agree with Julian that many CRM systems are created for large corporate enterprises dealing with sales cycles stretching for months or even years, and isn't quite so useful for many of us who live and breathe online. These long sales cycles happen when you're selling multi-million $$ equipment. The more my business matures, the bigger my projects get and the longer I work with each of them. I'm also starting to get into projects that require the involvement of dozens of partners, and keeping track of all that communication is getting beyond my current tools. Personally, I want the software to track every communication, whether it be email, letter, phone call, personal visit, etc. Actually, as I think about it more, storing the incoming messages in the database would also be helpful, as I could look through an affiliate's account to see what requests have been made, what promises have been made, and what information was provided. Beyond that, I need help in remembering all the various tasks I need to do in relation to my affiliates and JV partners. That's why I suggested some sort of calendar feature also tied to affiliate accounts. It looks like Kishore has a great idea. Creating plugins to interact with common social networking sites sounds like a move in the right direction. - Alan

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