Super Partners vs. Affiliates

Martin Smith

May 14

Super Partners vs. Affiliates Agenda

• What is a Super Partner?• Super Partner Community.• Who should become a Super Partner?• What’s wrong with affiliates?• How Super Partnerships work.• Benefits of Super Partnerships

What is a Super Partner?

• Super Partner Defined:

“Super Partnerships link content marketing web sites to a company (or companies) strong in back end customer fulfillment. SometimesCalled a “white label” site, a Super Partner store is created using a fulfillment partner’s merchandise and a modifiable template.

Partners agree to benefit from and contribute to a “community” helping other partners and themselves. The whole, in online marketing, is greater than the sum of individual parts.”

Martin Smith, Marketing Director

Super Partner Community

• Community Goal: establish search engine rank, benefit by receiving

rank from other Super Partners, contribute rank to other partners. – Community Goal: share content development costs. – Community Goal: share site traffic. – Community Goal: share profits.– Community Goal: reduce online marketing costs.

– Community Goal: reduce competitive “raid” opportunities across

a large keyword universe.

Who Should Create Super Partnerships

• Companies with large affiliates:– Any online scale can be arbitraged into some other benefit.

• Traffic can become revenue.• Revenue can become lifetime value. • Search Rankings can become traffic.• Site A’s rank can benefit site B with both making more.

• Companies with significant fulfillment capabilities. • Content marketing companies:

– Monetization with ad revenue is difficult. – Customers want to buy direct. – Distribution costs can be high. – Hard goods (i.e. non-digital goods) carry highest profit margins.– Hard goods also create best lifetime value (LTV).– Hard goods also cost the most. – Look to offload hard goods fulfillment to a “super partner”. – If all digital goods now, should add hard goods via Super Partnerships.

What is wrong with Affiliates?

• Web marketing used to be spit:– E-commerce sites sold things (right brain).– Content sites discussed things (left brain).

• E-commerce sites were willing cash registers:– Pay Per Click ads acquired traffic.– Content marketing affiliates traded traffic for money.– Email created Lifetime Value (LTV).– Offline media expenditure continued.

• Model broke down because:– Traditional ads = crowded and unprofitable. – PPC = crowded and less profitable.– Google achieves a dominant search share (74%)– Google rewards content creators. – Affiliates can reduce PPC return.– Affiliates can reduce return from organic search.

What is wrong with Affiliates?

• Biggest affiliate problem is a sophisticated online customer’s desire to buy from who they know.

• Moving a customer when money changes hands (most sensitive moment) is unsustainable if any 2 conditions outlined below are true:

– E-commerce sites begin to create and load content.– Content becomes so thick, a “content storm”, it can’t be managed. – Content storms push customers to trusted brands and sites.– Price is off the table (as it is). – How you do things matters more than what you do (as it does).– Any segment contains infinite content and/or products (as all do now).

• All of these conditions exist now in varying degree.

How Super Partners Work

• Super Partners are arbitrage groups.• They trade individual strengths for community assistance

across a Super Partner Matrix (next page).– Managing a “community” benefit creates balance.

– Any partner event or content may become valuable.

– Any value can be increased by sharing across the partnership.

– In the beginning, Super Partner management falls to the fulfillment partner (or head fulfillment partner).

– Management should rotate once reports can make such management easy.

– Each partner should manage the group at some point to insure empathy and maximize return.

Super Partner Matrix

Arbitragable Event Turns Into Turns Into

Search Rank Traffic Revenue

Revenue Customer List Lifetime Value

Content Search Rank Traffic

Traffic Revenue Search Rank

Long Tail Products Advertising Revenue

Sales Data Higher Conversions Revenue

Offline Marketing Traffic Search Rank

Unfair Community?

• Will all partners contribute equally?– No, but doesn’t matter because:

• Every Super Partner creates arbitragable events.• Super Partner agreement defines minimal “community” property. • Partners who share will benefit most, so other will follow. • Fair is not as important as more and less (more content, traffic and

revenue for less costs).

• Can Super Partners get hijacked?– Fulfillment partner is only initial source for unfair assignment.– Fulfillment partner gains most by sharing.– High fix cost depreciation is fulfillment partner’s main benefit. – Depreciation is more valuable to managing partner than money.– Partners interest are protected during initial stages (when hijack is most

likely).

Super Partner Benefits

• Web sites = expensive and highly competitive.• SP lowers development and merchandising costs while

increasing revenue for all. • SP = watch each others backs in keyword red oceans. • Content storms push online consumers to trusted

sources = SP.• Google’s “content rewards” killing content arbitrage.• Content marketing now critical for right brain (e-com)

and left brain (content development) sites. • In an infinite content, product and cost universe

partnerships are the only way to survive.

Martin Smith Contact Info

• http://www.linkedin.com/in/martysmith1980vc• http://scentTrail.blogspot.com• http://www.facebook.com/people/Martin-W-Smith/10661

51258

• Email: martinsellingzoe(at)aol