<== Store of the Day for 2005-01-12 ==>

Commission Junction

Commission Junction is currently the largest affiliate network. The secret behind CJ's success is that Commission Junction provides performance metrics and consolidate payments. Performance metrics allow affiliates to separate out the legitimate affiliate opportunities from the chaffe.

CJ's performance metrics come in the form of a figure called the EPC (Earnings Per 100 Clicks). They also have a merchant performance bar that shows you how the merchant rates in terms of overall commission payments. The performance bar has five levels. One bar indicates the site pays very little in commissions. Five bars indicates it pays a great deal in commissions.

As I understand the equation, CJ calculates EPC by taking all affiliate commissions for the merchant, dividing that figure by the number of clicks then multiplying by 100. They might do a little bit of scrubbing of the data. Regardless, I find that CJ's EPC are close to what I get paid for my traffic.

The main benefit of EPC is that it helps affiliates weed out the large number of fake merchants. CJ lets you sort the merchant list by EPC. You will notice that there is a large number of merchants that pay less than a dollar EPC. Many have a 0.00 EPC. Smart affiliates avoid these merchants.

Of course, EPC alone is not the sole factor in determining how well a merchant will do on your site. The figure shows the average earnings per click. You will not get the same number of clicks for all merchants. For example, credit card companies have high EPCs...that is because few people click on credit card company ads. eBay has a notoriously low EPC. In part, that is because people are likely to click on an eBay ads.

When joining merchants, you first need to look at how well the merchant fits with the overall content and direction of your web site. Complementary merchants do better than high EPC merchants. You will also want to look at the total payment bar. A merchant with low EPC but a solid payment bar probably gets more clicks than a site with a high EPC and small payment bar.

BTW, you are likely to find out that many of the sites with high EPCs reject most affiliate applications.

The second great advantage of CJ is that they consolidate payments. Generally, you have to have a certain amount of sales before you collect your commission check. When you have a separate minimum for each merchant, you can end up with hundreds of dollars just being carried from month to month. By consolidating payments, you can feel comfortable joining CJ without the worry of making their minimum payment.

Affiliate programs come and go. I've lost several hundred dollars in commissions because the merchant closed their program before reaching the minimum.

Now for the downside. Commission Junction has a history of developing relations with companies that border on the definiton of "parasiteware." A parasite is a program that infects a computer and uses various schemes to change the affiliate tag on a sale from your tag to the owner to the parasite. These relations greatly reduce the actual amount of payout that gets in the hands of small companies.

In 2004, Commission Junction was purchased by Valuclick (owner of BeFree). Neither BeFree nor Valuclick have a positive record in fighting parasites or protecting the interests of their affiliates. It is a sad fact of modern American life that small companies only get a small amount of the wealth they bring to the world.

Because of the EPC and consolidated payments, CJ is still one of the best places for small web sites to start their experiments with affiliate marketing.

Commission Junction is currently owned by ValueClick which trades on the NASDAQ with the symbol VCLK.