The Internet Affiliate
The good news is that there are probably hundreds or even thousands of third-party Web sites out there ready and eager to try to sell subscriptions to your magazine.
In fact, a magazine with broad appeal may find itself being courted by tens of thousands of sites. A few months ago, Time Inc.'s Online Team ran a page on the Teen People site with a blunt affiliate-recruitment message: "Got a Web site? Good. Make money with us."
"What we heard going into this is that most programs generate 30,000 affiliates within three months. Our experience is pretty much holding true on that," says Kelly Cook, director of project management for the team, who spoke at this year's FMA Day in New York. For Time Inc., at any rate, "This is not about picking a couple of exclusive partners that you are going to do some special deals with," Cook adds. "This is a flood of people who have decided they want to sell your magazine for you."
But if visions of effort-free net-paid subs are dancing in your head, you could be in for something of a let-down. As increasing numbers of publishers go about striking deals with affiliate sites, it's quickly become clear that using this new channel efficiently requires skills and levels of management atypical of traditional sources.
Time Inc. not only has automated systems in place to deal with the ongoing management demands of scores of existing affiliate programs, but a separate team dedicated to affiliate marketing functions. "Affiliate programs are very different from typical consumer marketing," says Cook. "They're actually a lot closer to credit-card marketing than typical subscription selling. You're basically doing recruitment of affiliates. You're marketing to get them activated as your affiliates, then you're marketing to retain them. In some ways, it's also like newsstand [marketing] and partnership selling. So, affiliate programs had a difficult time finding a home within our organization. That's why we started a separate group to tackle them."
While other publishers, particularly in niche markets, are unlikely to try to emulate the magnitude of the Time Inc. program, there are certain minimum upkeep and marketing requirements whatever the size of the program. Also, unless you're charged with bringing in new subs on a cost-be-damned basis, taking on all affiliate comers could prove dangerous to the health of your budget: Most publishers pay a bounty per gross sub, and pay-up on affiliate-generated subs tends to be quite low. Finally, you do need to be aware that combined volumes from the total affiliate program can fluctuate widely from month to month, making this source tough to count on in a tight rate base situation.
Yet, with all of that said, publishers seem convinced that affiliates are an important source to develop. Cook and Imagine Media VP, circulation Holly Klingel both say that, even though affiliates tend to grossly overestimate how many subs they can generate, the volumes actually produced are more than worthwhile.
Klingel reports that about half of all of the company's Internet-generated subs, or about 250,000 orders, now come in through the company's hundreds of affiliates--even though pay-up rates are indeed much lower than those for in-house Web sites (Imagine's affiliate pay-up rates range between 5 and 20 percent). She adds that it's unrealistic to try to get deals based on net, rather than gross orders: "These people don't like to wait for Net," she notes.
Like Cook, Klingel agrees that automation is the key when it comes to ongoing management, and says Imagine is "trying to work with automation companies."
Imagine leaves the specifics of how magazines are marketed up to the affiliates. Some use newsletters, some use a page that contains affinity editorial content as well as a sub promotion, and some use other hooks, Klingel notes.
Because Imagine isn't as well-known as Time Inc., it has to do more promotion to add to the number of sites in the program. "We spend time cruising around the Internet and working with ad sales people and editors to find candidates," Klingel says. "We will send them an email or call them and ask them if they want to be partners with us."
Imagine has three full-time online people who handle all kinds of online functions, including affiliate recruitment. All affiliate candidates are offered the same commission terms.
Klingel confirms that volumes are very unpredictable. "We never know how many orders we'll get until they hit the file, and then we have to wait three to six months to see if they pay up," she notes. Roll-out decisions are based strictly on how cost-per-order stacks up against direct mail, which means that programs with 5 percent pay-up rarely make the cut. "We have to test and analyze carefully before we roll out [with any affiliate]"--the challenge being that many other factors can change within a six-month period, she says. "I always tell people that these programs are a lot of work."
"We sometimes sign contracts, but not usually," Klingel adds. "We always want to have an out if the acquisition cost gets too high or we don't need the orders. We do it kind of on a rolling basis. With the little sites, the relationships are more casual."