Are You Profitable as an Internet Marketer?
Most afiliate Websites simply cannot find their way to profitability and run more of a side business. Travelgrove looks at the difficulties and some remedies it provides to travel related sites.
The Internet bares some awesome opportunities but even more barriers. It's funny how we receive emails almost every single day from some hypsters proclaiming the ultimate money making machine.
"Turn your visitors into CASH COWS!", "We send your email to 100 Million potential customers!" and similar flukes spam our mailboxes and then in our trash cans.
What makes the Internet so difficult is that due to the high level of competition among e-commerce sites, most sites do not sell their own products anymore, but they offer products from some affiliate program. There are some problems why the typical models do not work for most of us:
* Not enough customization
* Small commissions
* Less Loyalty, so that users return to the merchant and not to your site
* No transparency of revenues
Typically, if you are not an SEO guru, you will have trouble getting enough visitors on to your site and you will end up spinning your wheels with the traffic you buy from search engines and other placements.
The larger merchants can operate because they have invested millions into their loyalty campaigns, distribution channels and tech development, so there is enough site loyalty and their traffic will always convert better than yours at the beginning.
As an affiliate site that searches many travel sites at once, Travelgrove had to fight with just these problems. We knew that running CPC (cost per click) campaigns would generate more predictability of our revenues and would give us more power towards our merchant partners. The question was only whether we could convince merchants to work with us on a CPC base rather than with commissions.
To our disappointment, not a single larger merchant that offers an affiliate program will switch you to CPC,
unless your sales force is on them constantly and by the time it happens your site may be broke already.
Travelgrove's model was innovative enough to get a few smaller merchants signed on for a trial and was able to start driving more traffic. However, with more volume the cost per user was increasing quickly, so that Travelgrove wasn't able to increase traffic more with just marketing.
What's to be learnt here is that despite most products in the world, cost per unit (in this case users) increases with the increase in volume. With most products we know you would expect the cost per unit to drop with the increase in volume.
Also, the more targeting you apply, the more expensive the user gets. Travelgrove built a partner program to generate more volume from publishers that implement their search functionality. The volume quickly increased and higher CPC rates with the merchants could be negotiated.
None of this is new, Google Adsense as well as Overture and other PPC feeds are profitable for the reason that they were able to increase their traffic through third party sites and those ads often work better in terms of revenue than any other ad you sell to advertisers.
Recommendations for those of you who are seeing several similar problems with your site:
1. Join a publisher network like Travelgrove's that allows you to predict your revenue stream and that already has arrangements with advertisers.
2. In addition, choose an ad network that provides you with quality travel targeted banners and then only focus on making your site better and better.
We believe in joining forces with others to increase our volume and create a more efficient marketing as well as distribution channel.
For more information about Travelgrove please visit www.travelgrove.com.
If you would like to receive more information about our publisher program please send us an email and we will contact you shortly.
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