Monday, January 16, 2006

Business Trends and E-Learning: Affiliates, Monetizing, Direct navigation

Podcast.

What does it take to achieve solid, fast-paced growth in an e-learning organization? It's not just about building courses, recruiting students, or containing costs. It's also about generating new revenue streams, which may include establishing affiliate relationships, monetizing websites through advertising and reciprocal relationships, and acquiring "valuable real estate" (domains) in order to monetize them, then sell as "type-in" direct navigation domains. Needless to say, it's important to be perceived as maintaining academic excellence as you build student and revenue bases. Nevertheless, there are exciting new ways that have been newly legitimized by investment banking firms for organizations (including e-learning organizations) to establish relationships and to market and promote products, services, and approaches.

Affiliate Marketing

Affiliate software has evolved tremendously since 2001, and during the last year, new programs and Internet capabilities have emerged that allow smaller institutions to harness the power of a whole new level of the Internet.

While the massive programs (Google Adsense, Yahoo Commission Junction, Amazon) still make sense, it's becoming easier to affiliate with small, independent, yet high-traffic sites. The end result is that the owners of medium and low-traffic weblogs, websites, and podcasts promote programs for a small fee based on clicks, leads, or commissions. Or, alternatively, there are new opportunities to affiliate with providers of the services your clients want and need and to receive commissions - all in a completely seamless manner.

Some individuals at educational institutions may cringe and say that this approach is really crass and tacky. However, they fail to keep in mind that state and private colleges and universities have been doing this for years, but in a way that is not usually acknowledged.

For example, stroll through the student union of an average college campus, look around you and observe what there is to purchase. You will see florists, travel agencies, fast food, copy centers, class rings, cell phone providers, credit card company sign-up tables, book stores, and branded clothing or gift items. The college will receive a percentage of sales from virtually ever transaction done. It is not viewed as selling out. Instead, this is a viable partnership.

What has not been perfected is how these commercial relationships and partnerships function best for online institutions. I would venture to say that it is different for each institution, and that it is important to not seek a generic solution, but to take the time to identify needs, constituencies, and products to align them in the most appropriate way.

Examples include the following:

Personal Affiliate Manager (PAM), developed by George Cain. (shareware)

http://www.sharewareconnection.com/personal-affiliate-manager.htm (from the website: Personal Affiliate Manager is all you need to organize, manage and report on all of your personal affiliate site subscriptions. Keep all of the your various affiliate site logins, URL link codes, commissions and profits all within one simple program.)

Affiliate Network Solution, developed by Pilot Group. Net. (shareware)
http://www.sharewareconnection.com/affiliate-network-solution.htm
PilotGroup.Net: http://www.pilotgroup.net/index.php
(from the website: The most effective marketing tool to earn money on-line. Simple and easy-to-set-up program. The design can be easily changed to suit you. Thousands of products, partners, and ads. A full-service advertising network. Affiliates can check their statistics and get ads through a special page. Includes detailed sales and click-through statistics. Fixed and non-fixed price products. Both automatic and manual sales approval. Powerful payout control. Comprise Owner Admin Area with many features. HTML Code Generator for affiliate setup. Powerful organization tool and business manager for your online business.)

Stats Remote, developed by Network 24/7 (shareware)
http://www.sharewareconnection.com/statsremote.htm
Statsremote home: http://www.statsremote.com/
This program has a "FOUR COWS" rating at 2cows.com, and is a 2004 XBiz Award winner. (from the website: StatsRemote is automatic stats-checking software for affiliates and pay-per-click search-engine webmasters. It checks the statistics of your affiliate programs and pay-per-click search engines automatically, with no need to manually log in to each stats area, as the software does it all for you. StatsRemote reads and displays your hits, sales, and money directly from the stats areas of the affiliate programs and PPC search engines, so you have all the numbers right in front of you. In addition, you can add custom income and expenses (server bills and traffic purchases, for example). StatsRemote can check your stats as often as every 15 minutes and displays all your numbers and a forecast for the current month, or daily, previous, or year-to-date stats, in one interface.)

Website Monetization.

I've also been investigating the opportunities that exist with monetizing websites, and domain sponsoring, in order to untangle hype from reality.

To be honest, I find the concept of filling a webpage with links to advertisers (without any real content) to be sort of repugnant. I know that I do not like landing on domain names filled with links when I misspell a domain name. For example, check out http://www.yahho.com/ and you'll see what I'm talking about.

One of the software solutions that helps individuals with domain sponsor businesses build links is Alstrasoft.com http://www.alstrasoft.com/domains.htm

Companies such as Chitika will help a person develop a monetized website for a share of the ad revenues. In this case, it is 60%. They also have a product, e-minimalls, which can help drive ad and referral revenue. Billed as the "leader in impulse marketing," chitika.com has (I am assuming) spent a great deal of time figuring out what makes people click. I think they have my number. https://chitika.com/index.php Actually, I know they have my number.

I personally question how often content-less sites get picked up by search engines, primarily google. On the other hand, generating traffic is a multi-dimensional art, which is all the more complicated by blogs, podcasts, and other syndicated content. I have seen blogs (particularly celebrity-based blogs) that seem to be little more than placeholders for affiliate-program ad links. I suppose it is a matter of degree. It could be viewed as a service to provide links to related products (I certainly have discovered new products and have purchased items this way). On the other hand, no one wants to be adrift on a sea of fluff and google adsense.

The Wall Street Journal had an interesting article in November 2005, in which they described some of the big players in the domain name monetization business. Domain aggregators have assembled venture capital to purchase domain names - to the tune of $250 million!

Along with the new surge in investment and ad revenue, a shift in attitudes has occurred:
"The business model has shifted," said Matt Bentley, chief executive of domain broker Sedo.com LLC, which managed the sale of website.com for $750,000 this year. "The fact that it is moving from individuals to larger corporations … represents a legitimization of the domain-name industry." For years, the industry had a less-than-rosy reputation because many domain owners dealt in "cyber-squatting," registering names associated with famous brands in hopes of selling them to a big company at a hefty price, which fueled legal squabbles. (Thanks to Web Ads, Some Find New Money in Domain Names, WSJ, 17 Nov. 2005)

The shift was a hot topic at a recent ICANN meeting, where the debate about parked domains continues. Joi Ito wrote an interesting post in in CircleID.com in December 2005 about the practice and some of the issues:
http://www.circleid.com/posts/the_parked_domain_monetization_business/
According to him, the "Parked Domain Monetization Business" is making it easier for squatters to operate, and more difficult for individuals and businesses to purchase the domain name they want. The analogy used these days is real estate. Hot "type-in" type domain names are viewed as valuable virtual real estate.

On the other hand, there are a number of nuances, and I still think that it is possible that monetization without content may go away sometime in the future, particularly if google and other search engines do not acknowledge pages that consist only of ads and links.

Direct Navigation

The other issue, the concept of "direct navigation" is very problematic to me. I suppose there is something to it, but my preliminary research into the subject is at odds with what the apologists claim. They describe direct navigation in the following way: "Simply put, Direct Navigation is finding the information you're looking for without using a search engine, a directory of sites, or clicking on a link from another site." http://www.directnavigationmarket.com/ According to the website, "type in traffic" is natural traffic, because there is an affinity to the product. To rely on search engines and search engine-driven traffic is ultimately futile, because conditions always change.

The implications for the e-learning organization are multiple. First, it means that there is more competition for sites you may wish to purchase. It also means that your bookstore will be competing with millions of other sites that will offer the same products, but possibly at a lower price. Eventually, courses and software could be sold in this way (not only products). Certainly many colleges (not just the University of Phoenix) have aggressively embraced affiliate marketing, which means, indirectly, they are participating in the direct navigation market and the parked domain monetization business, since their ads may show up there.

The issues are complex and worth exploring. For now, I'm content to explore and try to keep up with the trends.

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