You entered the performance marketing space in 2009 after spending time at Microsoft, the BBC and the Founders Fund. Seems like a change in direction for you? What was it that inspired you to enter the space?
Oliver Roup: "I was wrapping up business school and looking for my next project. Performance marketing seemed like an interesting arena and so as an experiment, I did a web crawl that showed that fewer than 50% of eligible Amazon links were affiliated. Arguably, Amazon's affiliate program is one of the more popular and easy to use, but it was still being massively underutilized. Your readers know that merchants pay commissions for the traffic you send them, but as a whole relatively few publishers do and even fewer take advantage. There was clearly an opportunity."
"The company received seed funding in June 2009 and officially launched in January 2010 with the goal of bringing the tools and techniques familiar to your readers to a wider audience."
As part of the VigLink deal, 25% of earnings are handed over to VigLink. How is this justified in your business model?
Oliver Roup: "Most of our customers do not think of themselves as affiliates. They are publishers focused on creating content and performance marketing is unknown to them or seems hard or scary so to them it's all found money.
What has been surprising is that even for affiliates, many of them find that the time we save them pays for itself especially when they consider the rates we get. Also, VigLink doesn't overwrite existing affiliate links so a publisher can use us to backfill what they missed. We've had a number of customers tell us they were only using VigLink until they built their own system but somehow they never seem to get around to it. It's harder than it looks."
Since you launch into the UK space, what has been your greatest challenge thus far?
Oliver Roup: "Surprisingly, a lack of knowledge around performance marketing. We like to say our biggest competitor is ignorance -- your readers all know the value of outbound traffic but most publishers do not. Remarkably few track where visitors are going when they leave a site and few indeed track what they do when they get there.
A concept we talk about a lot is the "outclick." An outclick is a click leaving your site. When an outclick results in a monetary gain for the recipient, a publisher can and should see a piece of that action (The "vig"). Over time, more publishers will make linking decisions based on the revenue opportunity.
Our publisher outreach efforts are focused more on addressing the lack of awareness of the value of outbound traffic and less around VigLink product specifics. Once that "ah ha" moment takes place, and a blogger, forum owner or other publisher realizes they are essentially leaving money on the table, there is very little barrier to signup and very little churn."
And what does Google make of your offering?
Oliver Roup: "Google Ventures was one of our first investors! Danny Sullivan got Matt Cutts on record as saying that VigLink does not affect page rank. Google already recognizes affiliate links and prevents them from transmitting juice and VigLink and her competitors do not change this."
VigLink just closed a Series B round of financing; what does the organisation hope to accomplish in the UK with the additional capital?
Oliver Roup: "Yes, we just closed a $5.4 million Series B financing, led by Emergence Capital. In the short term, we're getting really excited about the broad release of link insertion, which at the request of a publisher will introduce sensible new links into areas of content not yet linked.
We'll also be expanding both our publisher and merchant networks in the UK and the rest of Europe. While our merchant network abroad is already quite robust, the additional capital will allow us to expand the manpower focused on the region at the moment.
From a long-term product perspective, we see quite a few optimization opportunities all focused around driving incremental revenue to merchants and helping publishers improve monetization."
For those publishers that have already implemented VigLink, or a service like it, what do you recommend as a next step to maximizing the revenue stream they see?
Oliver Roup: "Introducing content centered around purchasing intent is a great way to maximize publisher revenue. Marketplaces and forums are two example ways to do this. Both enable your users to create additional monetizable content centered around purchasing.
In the case of forums, there are a number of easy-to-use tools that make the process painless (one example is Huddler). And we've found forums to be a significant value add to the end-user experience. Publishers spend a great deal of energy bringing passionate visitors to their site each month. A forum introduces an outlet for visitors to interact and creates lift for publishers in the sense that visitors create their own content."
Finally, on a wider scale - what do you think is next for Performance Marketing?
Oliver Roup: "For the most part, every page on the net has some sort of analytics installed. We think over the next several years, services like VigLink will become just as ubiquitous. I think we'll see webmasters increasingly focused on outbound analytics -- where they're sending their visitors and the return they're seeing on each Outclick. One day it will be just as natural to ask your marketing team "how many outclicks this month?" as it will be to ask "how many uniques?"
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