I read a post recently on Internet Retailer stating that Affiliate marketing technology firm VigLink raises $5.4 million. The article went on to say that this raised VigLink‘s investment capital to a grand total of 7.3 million.
And of course, my first thought is “What the HELL could they be developing that requires that much cash?” So I read on.
Turns out VigLink is kind of like Adsense, but for affiliates. What do I mean?
Well, Adsense is basically lazy monetization. Website publishers give Google a cut of the advertising revenue (somewhere around 40%) and Google sells their advertising space for them (I have sites that use Adsense, but I’ve done my best to always make it a backfill to CPM ads or affiliate marketing efforts.)
Basically – to me – VigLink is lazy affiliate marketing. You sign up with their program and they automatically insert affiliate links from “merchants across more than 20 affiliate networks” with “one simple sign up.” In exchange for them turning any link they possibly can into an affiliate link on your blog, you pay them a commission of any affiliate commissions your site earns from those links.
I’m not going to lie. This post started as a rant. But about three paragraphs in I decided to contact VigLink (pronounced with a hard G) to clarify a few points of my rant and have to admit that their CEO, Oliver Roup, definitely made me pause to think. I asked some tough questions (in my opinion) and he didn’t shy away from any of them. Completely absent from the response was any arrogance or any defensiveness. And in a world of bullshit, VC funded startups that definitely impressed me. He’s either pretty genuine or one hell of an actor.
Interview with Oliver Roup – VigLink CEO
Rae: Your merchant page states that merchants have the ability to say they don’t want certain publishers using their links in your program. Do you provide me with a list of the merchants who’ve decided they don’t want my sales so I know not to link to them?
Oliver: Merchant domains may be not “on for you” for a number of reasons:
- they’ve asked for whitelist affiliation where only domains they specifically approve get affiliated.
- they’ve specifically turned off your site.
- the merchant may not have approved VigLink at all.
You can determine if a merchant is covered by VigLink at all here. We do not currently provide a full list of our supported merchants for competitive reasons.
Merchants that are off for you (either because of a whitelist of a blacklist) are listed in best merchants for total revenue with a “-” (a hyphen) instead of a numeral. Obviously this needs to be clearer and we’re working on an improvement. Listing things this way originally made sense because our publishers were not making linking decisions based on our support but measuring the site they had already built. As our customers have gotten more engaged and started promoting offers as a result of the incentive VigLink provides, we’ve realized we need to make this clearer.
Rae: The VigLink site states: “VigLink lets affiliates create merchant links naturally, with no unsightly affiliate codes and no unintelligible jump domains. Cleaner links mean more user trust, more click-throughs and more conversions.” Can you give me an example of what an affiliate link using your software will look like on my blog?
Oliver: Yes – the demo page has a number of example links all of which are affiliated by our software.
Rae: On the VigLink site, your publisher page asks: “Have you lost relationships with merchants because your state has passed tax laws for online retail? We may be able to help, find out more on our blog.” The post you link to basically cites information about the Amazon tax and says you might be able to help, but doesn’t say how. Care to elaborate? (P.S. Arkansas has also passed the Amazon Tax and is not listed on your post.)
Oliver: Different merchants have different (and evolving!) views regarding the various new laws which also continue to change. (The Arkansas law is less than a week old.) We comply with merchant wishes about who they want to do business with. For example, Amazon does not want to do business with affiliates in affected states and the use of an intermediary like us makes no difference to them. So unfortunately affiliates in those states are out of luck with respect to Amazon and we cannot help. Some other merchants may take a softer view and we may be able to help depending on the merchant, the particular publisher, and current law. It’s tough to be more concrete than that.
Rae: No where on your site could I find an exact percentage you’d be taking from folks using your service as publishers. “Small fee” was as specific as I saw. Based on your referral program though, I’d imagine your commission is at least 10% of the commissions paid to me by merchants. What is the exact amount? And why isn’t the information published?
Oliver: This needs to be clearer and I’ve added the following entry to the FAQ:
Q: How much does VigLink charge?
A: There is no up-front fee for using VigLink so you can try it without risk. VigLink takes a cut of the commissions a publisher earns, typically 25% although we occasionally negotiate a smaller share for particularly large or strategic customers and in return for a commitment period. In some cases an account is referred to us by someone else, either individually or through a distribution deal. (And of course VigLink is a merchant in it’s own software so any links to VigLink on a site running VigLink are automatically affiliated.) Referral commissions are usually 10% and they always come out of VigLink’s portion, so a publisher is never worse off for having been referred than if they’d approached us directly.
It’s worth noting that many merchants offer improved rates with higher volume. In some cases VigLink receives a rate more than 25% higher than an affiliate can get for themselves and in those cases the affiliate will receive more money working through VigLink vs on their own.
Rae: On your FAQ, you state cookie duration lasts up to 30 days. However, many merchants with the networks have 45, 60, 90 or sometimes even longer cookie expiration dates. Do I still get paid past 30 days if the merchant allows it through the network? If not, does VigLink still receive that commission?
Oliver: We never interfere with a merchant cookie duration. If a transaction is affiliated through VigLink, the publisher will receive their cut of that transaction. Measured on a per-dollar basis of traffic flowing through our networks, it is very rare for merchants to have cookie durations longer than 30 days. (IE merchants that have longer cookie durations do not drive much business through our network.) I’ve amended the FAQ language to reflect that there are in fact cases where the cookies are longer and we do not interfere.
Rae: You have a “spam control” statement on the FAQ page that states in part: “This will ensure that you send only traffic that will convert at a high rate.” I can see where this statement would have a place in lead generation, but not in a straight up “we sell something, you pay us” scenario?
Oliver: Many merchants do not like poorly converting traffic even if they don’t explicitly pay for it. There are some costs associated with traffic and they often have internal metrics like revenue per visit that are distorted by large volumes of poor traffic. Moreover certain brands, most notably fashion brands, are very sensitive to their products being promoted in a way that erodes their brand. To them, poorly-converting traffic is a potential red-flag and in certain cases is evidence of cookie-stuffing or other fraud. VigLink monitors the conversion rate of all our traffic and rates that fall outside our norms are flagged for investigation.
Rae: You make assertions like: “Additionally, VigLink increases confidence, click-through rates and conversions by making the links to your site appear to be “natural” links instead of obviously embedded affiliate codes.” several times, but then on the FAQ page, you push for disclosure and mention the FTC guidelines, which means users will know it’s an affiliate link anyway, correct?
Oliver: The FTC has made it clear that affiliate links should be disclosed no matter whether those links are created by hand or using automated technology like ours. (We provide tools to assist our publishers in disclosure.)
Making link destinations transparent is a related facet of the same issue. Conversion and click-through are improved when a customer knows what they’re about to click on. Mousing over a link and seeing a link to a particular merchant instead of one to andozers.net or some other equally opaque domain gives a reader a greater sense of where they’re about to be taken.
The two issues are related but distinct. I certainly don’t speak for the FTC but it seems unlikely to me that linking to andozers.net would satisfy them that the affiliate nature of a link had been adequately disclosed.
*Note by Rae: I definitely didn’t mean to imply the URL merely “appearing affiliate” was disclosure – to be clear.
Rae: As a career affiliate, I have to admit I take offense to this statement that appears on the website: “This prevents the traditional problem of publishers becoming overly aggressive once they’ve been admitted to an affiliate program.” It seems like typical affiliate FUD spread to merchants. And frankly, an aggressive affiliate likely wouldn’t use a program that took a cut of their affiliate commissions. Most professional, full time affiliates (which, granted, are the not the majority in sheer numbers tho they many times are in sales volumes) hate even having to use a network that we know cuts into “our cut.” Did you obtain the information that led you to make that statement from any published data you can point me to?
Oliver: We certainly don’t intend to contribute to FUD. Merchants have complained to us about this problem and alleviating their concerns along these lines is one of the key barriers we face in getting a merchant to admit us to their program. Nonetheless, I’ve softened the language to reflect that these cases are more about certain bad actors than about affiliates as a class.
Rae: You discuss your crawler on the site. Is the crawler actually yours or technology belonging to someone else? Assuming it’s yours, whats the name to be identified in the robots.txt file?
Oliver: The technology is ours. The user-agent string is ‘viglink’ (A single word as suggested by Nutch, the crawling package we use.) I’ve added this to the FAQ.
Rae: Do you ever plan to release a flat fee version of your product for affiliates with large networks? If not, do you worry someone could come along and do so, likely snapping up the higher earning affiliates while doing so?
Oliver: We do not currently have such plans. Building a technology like ours is more labor intensive than it might at first appear. A company charging a flat fee would need to charge a high enough amount that it would likely be off-putting to a large number of potential customers. We find a revenue-share best maps the value we deliver to the revenue we earn – the more money you make, the more money we make and vice-versa. Charging a flat fee creates different incentives – such a company would be incented to do as little as possible for their fee because any work done after a sale is just lost profit.
Also note that VigLink does not overwrite existing affiliate links. So an affiliate might use our technology on one of their pages just to “backfill” the links they have not gotten around to affiliating themselves. We think over time affiliates will feel that the work we save them increases their productivity more than 25%.
Rae: I noticed that one of your investors is Google Ventures. Is there a clear line of “investor” there or do they have access to the detailed information you keep on your publishers and merchants?
Oliver: Google Ventures receives information typically disclosed to investors – aggregate financial performance, hiring, future product plans and so on. They do not have access to detailed publisher and merchant information.
Rae: Is there or will there be the ability to use VigLink within mobile applications as well?
Oliver: Yes, VigLink runs unmodified on mobile browsers and developers wishing to integrate VigLink directly into their app can make use of our API.
What I Learned
I looked at VigLink as a professional affiliate publisher and not as a typical blogger or hobby site webmaster. Oliver (I assume he caught onto that in our conversation and by the questions I asked) added:
“A majority of our customers do not think of themselves as affiliates, but just as web publishers, many of whom are completely unaware of affiliate marketing as a concept until we introduce it. So a number of product decisions we’ve made make a lot more sense in that light.”
And you know what? That makes sense.
Catching what falls through the cracks
Monetizing a site via affiliate marketing, to be done very successfully, is a big task. If your topic is broad, there could be thirty or forty or fifty relevant affiliate programs for you and unless they are producing significant revenue, many are almost a waste to bother with. So I could definitely see the time factor making VigLink attractive. As well as the “don’t need to know anything about affiliate marketing” factor.
I’d never use VigLink to monetize in place of the programs I make x,xxx or xx,xxx per month with (as they said, it doesn’t override current affiliate links), but if they can catch the small opportunities I currently don’t bother with, paying a commission for them to do so seems like it might be a win/win. (And I plan to try it on a site or two, so I will let you know how that goes.)
commissions strength in numbers
An interesting comment Oliver made was regarding their ability to receive higher commission rates: “In some cases VigLink receives a rate more than 25% higher than an affiliate can get for themselves” – and that also makes sense.
VigLink is basically acting like a master affiliate, with all their publishers acting, essentially, as sub affiliates. So, the “volume” the merchant uses to decide commission rates is actually VigLink’s and not each individual publisher with VigLink. It kind of reminds me of a chamber of commerce and how they band together small businesses to be able to offer cheaper prices on health insurance.
That said though, at BEST, that means their ability to demand increased commissions covers their cut – when they can get it. So you have to weigh the convenience of their service against the money you lose in paying their cut. But since their target market are folks who don’t currently make a full time (or even part time) income with affiliate marketing, the convenience factor (and the compensation for the “affiliate ignorance factor”) there is a good chance convenience will win.
Their ability to monetize mobile apps
I found that to be one of the more interesting facets of their capabilities – and it’s (app developers) a market they definitely should be targeting. I’ve long said there’s affiliate opportunity in mobile, especially for the first ones “on the scene.”