04.10.01 Editor's NoteThe slow-down of the dot-com economy is having a big impact on every area of the Net. When a business needs to pinch pennies, one of the first places they look to cut back is the advertising budget. That could mean big problems for your affiliate links. Read on to find out why you might need to worry. Michael McDonald and Stephanie Mitchell The PromoteNewz Team 
The big story at last year's SuperBowl - aside from the game itself - was the amount of advertising dollars spent by Internet companies. Flush with money from venture capitalists, their marketing folks barely blinked at the huge figures required to get into the event's ad game (which sold this year for $2.5 million per 30-second spot). We all know how that story ended. The only web companies that repeated at this year's SuperBowl were Monster.com, Hot Jobs and e*Trade. Those not repeating included WebMD (4th quarter losses = $50 million), and more notably, Pets.com. This is big bad news for those who invested money in these companies hoping for double-digit returns. And their woes have trickled down to those of us who operate our little dot-com companies without the benefit of venture capital (other than what we keep in our own bank accounts). The trickle-down factor has resulted in fewer advertising dollars allocated for the Internet. If you publish an ezine, you have probably already tightened a few notches on your belt. According to TechWeb, 'Ad rates are now nearly impossible to track because companies are no longer paying designated prices. In ad parlance, these sales are *off the rate card,*' and those companies who are buying ads are enjoying discounts of up to 50%.
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Not all companies with money problems have dropped out of the affiliate game. Many continue to hang in by reducing commissions, a strategy Dennis feels is short-sighted. 'The reduction in payout rates has made some merchants too costly to carry as they insist that when a visitor clicks on their link, that they totally leave my site. To lose a visitor for a payout of 1 or 2 cents is absurd!' he says. But Dennis and is still optimistic about the Internet's potential to earn even small players a solid income. So are the experts at TechWeb, who note that ad impressions reached an all-time high in December, despite the soft market (a total of 65 *billion*)
TechWeb quoted ad exec Charlie Buchwalter, who is bullish on the long-term prospects for internet advertising. 'It's not going to happen overnight," said Buchwalter. 'The growth will be gradual, with traditional companies that have been around longer with the bigger marketing budgets learning how to advertise online.' So what should the 'little guys' do while they wait for the market giants get their online act together? Dennis suggests that webmasters carefully evaluate each merchant's offerings in light of the current economic climate. 'Stick with the essentials that people always need. (i.e., clothing, household items, etc.) Cut back on the luxury items merchants. Post any discounts that you can find. The more you help your shoppers out, the more they can afford to buy. And they will appreciate the extra effort that you have gone through to help them find quality items AND save money.' That's good advice for entrepreneurs of all sizes in this crazy economy. Donna Schwartz Mills writes about the specific needs of work at home parents at her website, The ParentPreneur Club "For Parents Who Want Choices, Not Office Politics." The latest news, tips, and tools you need to help grow your home based business while raising a family. www.parentpreneurclub.com | |||||||||||||||||||||||||
