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I don't really see the logic in this, surely amazon know that just sticking a banner on your homepage is not goinig to make you sell alot of stuff. This change in policy just penalises high performers I don't get it.
Does anyone know how I can complain, I can't find any e-mail addressess to complain to.
Like you I don't want an Amazon advert on my home page - even though it means I lose out on the tiered structure
The non media requirement could be difficult for people with certain types of sites also.
1) Amazon lowered their commissions back to 5%
2) They try to find some schnooks who do free branding for them.
I have no problem with 1.
But 2. it's sad to see, that even Amazon moves away from doing real business and plays games with their business partners.
I don't think, doing free branding is an option for any professional site and so I'm offended that I received this sneaky offer.
At least there's something positive about it: Now that Amazon has the same commissions as Barnes&Nobel and others again, some more competition might arise, preventing Amazon from building the ultimate Shopping Monoply on the net.
I will not put anymore effords into my partnership with Amazon until I tested the alternatives and set up some fall-back partnerships.
Now we have 5% comms, more branding required, higher min comms for non-US sites, and landing pages that do all they can to deter your leads from buying what you want (and get the full comm) to going further into the site where your commissions slide into oblivion.
I think they are lokking away from affiliates and towards other means of selling their stuff. Direct advertising, froggle, PPC, arrangements with mega large sites, aquisitions of Web properties etc etc. Affiliatanism made Amazon. Now its a different world.
I think these changes are evidence that the affiliate model is now far less valuable for Amazon, now they have created a solid brand with enormous brand recognition and recall. To make that even better, they need far more branding precense in other sites.
There is far less need now for Amazon with high brand recognition and recall, and better search engines that can target actual products better plus new services like Froggle, for Amazon to have to rely on the affiliate model which they made famous, and were one of the pioneers for. The Web is changing - as always.
We are dropping Amazon from Feb 2003. They just no longer provide the rewards for the work involved in promoting their products and the risks of being seen as an "affiliate" site. At the moment its still borderline, but we ae making the decision on the basis that the trend has been set and will continue.
Chiyo, will you partner with another company to sell the things you sold via Amazon, or will you use a completely different kind of generating money? Or will you just kiss the advertising money goodbye?
With that in mind I am already starting to experiment with other book and movie affiliate programs to see how well they convert to sales in comparison.
In Q4, Amazon went to the tiered system, which increased payouts to the vast majority of Assocates, seeing how the second tier started at 25 items.
Three Things Happened:
1. Afilliate Program payouts went up
2. Most affiliates had no major increase in sales, even though they were now being paid more
3. A small minority of affiliates had their sales go through the roof, and have been compensated well for their performace
Q1-03 Amazon has announced the new controversial aspects of the tier system, and here is what I see happening as a result. Amazon is trying to seperate the affiliates in #1 from #3, offering them different commision structures. The hard part was getting the #1 affiliates to go back to 5% willingly. The very high performing affiliates cannot afford the 5% structure, and many will just add the graphic, as the income from the program is significant.
I don't have a crystal ball to know where Amazon is going with all this, but it seems like a good business decision to me based on the results I have seen.
-Pete
Q4-02's tiered plan was an experiment - and it was clearly defined as such when they unfurled it. It was there to determine what, if any, effect offering a tiered structure would have on Associate sales. If sales went up, great. If sales remained the same (and we're talking click to sale ratios here, not traffic, I suspect), then they could go back to the 5% and call it good. What ended up happening (and Peter Daly's post above got it closest to right), was that most sites didn't do anything better, but a number of sites increased so much that it put a little shock into the system.
The Q1-03 structure is designed to keep the little guys who aren't going to put the work in down at the flat rate. Put some links up and make 5% on anything, if anything, that you sell. The tiered structure was lowered because it was determined that the "test structure" was too easy and they paid (er, will pay) out a lot more than expected. (I saw a better than 1000% increase in sales and a nearly 20% click to sale ratio this quarter). For me, it's the "non-media" requirements that are the killer, but in the end, the sites that sell alot or are willing to put some effort in to do so WILL make more than 5%. The sites that don't, will make 5%. Period. Remember, Amazon's in business to make money.
Now, the notion that Amazon is moving away from the whole "Associate Program" marketing notion is complete bullocks. If anything, they are working their way toward bringing the Associate to a level where they are actually a salesperson for the company rather than a "Marketing Tool." Look at the Amazon Web Services program. Once you've got the hang of it, you can virtually mirror Amazon's entire product line (if you so desire) with maybe 20-30 hours of coding. What also happens here is that you don't send the customer to Amazon's site until they are actually going to buy. They give the AWS developer a HUGE amount of information (compared to any other program out there) and are working on delivering even more information in the coming months.
So, for those upset about the banner on the front page - it's not really for you. It's for the sites that are generating lots of sales. And, those sites that are generating lots of sales are using the AWS program effectively. And, those using the AWS effectively aren't sending people to Amazon until the very last minute and many aren't even being completely clear on the fact that the data the site visitor is seeing is actually coming from Amazon in the first place. They require that banner for the simple fact that the "big boys", while generating lots of sales, are in fact, diluting the main purpose of Amazon's Associate Program - Name Recognition and Branding. It's a small price to pay for $1000 a month or more in revenue.
Coming in the first quarter of 2003 (according to the last report I read), Amazon is going to roll out an "on Associate's Site" shopping cart module for AWS. What this means is that I don't actually send a visitor to my site to Amazon until the actual "Proceed to Checkout" step of the order process (right now, we send them over at the "add to cart" step). This will surely increase conversion rates for associates and therefore sales for Amazon, but it goes even further to dillute their "branding efforts". So, they make us put a banner.
What's really happening here is that Amazon is dividing their Associate Program into two distinct entities. For those who want to be "afilliates" and slap a few links and banners up, then that's fine. They are free to do so and the program remains the same as it's been for ages now. (And the notion that you can't earn 15% on a book is BS - nearly 50% of ALL books I sold this quarter - qualified or not - paid out 15%).
The other entity is closer to a "Tupperware" or "Avon" type sales program. I have a party (my web site) and present the line of products to my family and friends (my web site visitors). I collect the orders, then turn them in for fulfillment. When you look at the conversion rates for the people doing this (as I said, mine were near 20% this quarter - um, 19.27% exactly) you can see why Amazon is spending a bit more time on this one. They gave away $5000 this month to a developer who came up with a tool to make it so that any novice could choose this plan rather than the "build a link" plan most newbies have to contend with.
Amazon's not moving away from the associate theme, they're redefining it. As with many things, people resent change, but overall, this plan is going to make both parties a lot more money.
And, if you still don't get why you need to put a banner up on your home page, look at it this way. Bob's Ford is it's own company. But, if they are going to sell Ford products, they've got to but a gigunzic big blue oval over their door, on the sign out front, and all over the place. (I don't know if it's still true, but in the 80's, the blue oval needed to be twice the size of the dealer name on the sign out front by the street). I don't think Bob got upset about this, even though many people driving by ended up going to Joe's Ford dealer the next day. It's just the way things work. Period.
G.
Clearly amazon are not looking for the broad reach of affiliate sites they used originally to gain their high level of brand recognition and recall they have now. That is not the highest priority anymore. ROI is, as their financial statements would suggest.
They are mainly interested now in high revenue affiliates mainly as it makes sense that low revenue affiliates are not cost effective.
To me I'm absolutely convinced that the strategy is to broaden their promotion expenditure avenues and spend less/dedicate less effort towards affiliate revenue and promotion as a whole. Yes, high revenue affiliates are being encouraged, but the affiliate strategy is being rationalised as a whole and alternative promotion vehicles will be evaluated IMHO.
If those alternatives produce a better ROI for Amazon, they will use them, though a diversified promotion portfolio including high value affiliates would necessarilly be part of it.
Only if, down the track, competitors like other direct shopping sites or Barnes and Noble etc, gain brand recognition apropos Amazon, then expect the affiliate commission structure to change yet again.
That's the forest, not the trees...
As I stated in my post, they are doing quite a bit to encourage more advanced developers to assist in creating tools for the novice developer to be able to use those new features without having to learn XML and Perl, ASP, PHP, SOAP, or XSLT. By doing this, their investment can be spent on improving the performance and features of their new (and highly effective) model while having other developers handle porting it to the less informed associate.
Amazon, in fact, is actively promoting any useful tool developed (even ones where the developer is charging for the purchase of the tool) to meet this end.
Sure, Amazon's moving away from promoting the Add a Banner or link and we'll pay you theme because, well, because it just doesn't work very well - for anyone.
Yes. It looks, on the surface, that Amazon is only interested in High Revenue Afilliates. But, take a look deep down. A good amount of effort is being focused on making ALL of the little guys into High Revenue Afilliates.
I guess the reason no one sees it is that it's still early in the game. Though AWS was introduced in July, it really wasn't functional to a workable extent until October. Then, you've got the general poke-and-prod with folks on both ends trying to see what works and what doesn't. Now, and only now, will you start to see applications being developed to help capitalize on this for everyone throughout the spectrum.
In the end, if you take a good look, Amazon seems MORE dedicated to the Associates now than they ever have. My questions are often answered within hours and always within a day.
Okay, maybe you're seeing a clump of trees, but you're still not seeing the forest.
G.
We will just have to wait and see I guess.
