ZiXXo for Affiliates
Coupons Reinforce Print and Online Advertising
“Half the money I spend on
advertising is wasted; the trouble is I don't know which half.”
John Wannamaker -- Merchant
John Wannamaker’s quote above is famous
for its timeless truth. Companies selling print advertising can provide
all sorts of demographic information about their readers, but they
cannot quantify the impact an advertisement will have on a particular
business. Nor can the advertiser easily track the results of such an
advertisement. Because of this, print advertising is largely sold on the
basis of vanity, employing quotes like: “Our readers are you target
customer”, “You need to establish brand awareness”, and more. But ask
any merchant how many of his customers find his business through the
yellow pages, and he’ll have no clue.
Online display advertising does a better job of tracking metrics such as
page views and click-throughs. Online stores can even track sales back
to specific online ads, if they are sophisticated in their advertising
implementation. But only stores only account for 2% of the commerce
transacted in the United States. What about the 98% of commerce that is
conducted offline? The impact of online advertising on offline sales is
very fuzzy, because the online metrics don’t extend into offline
transactions. Sure you can get information on clicks and page views, but
what does a click or a page view mean to an offline business? The answer
is very little.
ZiXXo’s coupons uniquely bridge the online and offline worlds. Every
day, users bring those coupons to local businesses. This reinforces the
value of coupons to local merchants. With ZiXXo, coupons can be
integrated into a comprehensive advertising solution. For example, take
a yellow pages vendor that offers advertising through both printed
yellow pages and online yellow pages. Adding a coupon to that solution
reinforces both the print and online advertising and strengthens the
relationship between the merchant and the advertiser. Let me explain how
this works. Every time a customer redeems a coupon with that merchant,
it reinforces the value of the complete advertising package in the mind
of the merchant. It says, “Your yellow pages advertising works, so keep
doing it!”
ZiXXo’s syndication multiplies this impact, because consumers might be
printing that coupon from AOL, Google, Yahoo, or any number of other
affiliate websites. But regardless of where consumers are finding and
printing that coupon, it still sends the same message to the merchant:
“Your yellow pages advertising works, so keep doing it!” This is because
in the merchant’s mind, it is the complete advertising package that is
driving the redemption of coupons.
This makes it easier for that yellow pages vendor to sell the merchant a
larger ad in the next edition of the yellow pages. It makes it easier
for that yellow pages vendor to upgrade the merchant’s online
advertising as well. It also makes it much harder for a competitor to
sell advertising to that merchant because the merchant’s current
advertising is working so well.
The diagram below describes how coupons provide merchants with a daily
affirmation of their Return on Investment for their advertising dollars
in a way that no other advertising mechanism can today.
Coupons Increase Your
Website Traffic
“Over 50% of Sunday newspapers are
purchased for the coupons.”
Coupon Research Firm, CMS
People want coupons. If you use Yahoo to
search the web for the term “coupon”, you’ll get 51 Million results. I
can’t say I’ve gone through each one, but the vast majority of these
websites offer web affiliate coupons. You might recognize them, they
offer “deals” at online stores such as “Zappos free shipping both ways”,
but you go to Zappos.com and it says “Free Shipping BOTH Ways!” right at
the top of the page. But the mere existence of these millions of
coupon-based affiliate marketing websites validates the fact that people
want online coupons.
A few of these web affiliate coupon companies offer about five or six
printable coupons from national retailers. The owners of these websites
admit that they receive no revenue from these coupons; instead they
merely add them to their website because they generate 80% - 90% of
website’s traffic. These webmasters just hope that there is some
cross-pollination to the web affiliate links that generate revenue for
them.
In short, coupons add value to your website as content. Coupons don’t
compete with banner and contextual text ads, which typically reside
along the borders of the content. Instead coupons are part of the
content. Coupons are integrated into the content just like other
value-add services such as “Driving Directions”, “Visit Website” and
“Map this location”. But more than any other form of content, people
actively search for coupons. As a result, adding coupons to you website
will increase your traffic.
ZiXXo Coupons: An Excellent
Revenue Source
In addition to reinforcing your offline and online advertising, and
increasing traffic on your website, coupons are also an excellent way to
generate revenue. When ZiXXo begins charging a 50¢ “Pay-Per-Print” fee
in 2007, it will share that fee with affiliates via a 2-tier revenue
sharing model diagrammed below.
When a coupon is printed, 40% of the revenue
from that 50¢ print fee (which is paid by advertisers) goes to the
affiliate who sold or referred that advertiser. In the diagram above,
this would be Yahoo Local. Then 10% of the affiliate revenue, or 4% of
the 50¢ fee, is paid to the affiliate who referred Yahoo Local. ZiXXo
then pays 15% of the 50¢ coupon fee to the affiliate who published that
coupon, in this case AOL. Then ZiXXo pays 10% of the affiliate revenue,
or 1.5% of the 50¢ fee, to the affiliate who referred AOL.
Is this a significant market? Well last year, in the United States only,
there were 4.5 Billion coupons redeemed. ZiXXo believes that this market
will grow considerably as a result of this superior syndication
solution. But as it stands today, this market would generate $2.25
Billion in revenue at 50¢ per coupon.
Let’s use an individual example to identify the revenue potential. Let’s
say you sold a local pizza parlor on offering their coupons through
ZiXXo. Let’s also assume that between lunch and dinner the pizza place
redeems 20 coupons a day, six days a week. Here is how the number would
work:
(52 weeks a year) X (6-days a week) = 312 days per year
(20 coupons per day) X (50¢ per coupon) X (40% Share) = $4 per day
Annual Revenue from that one sale: (312 days) X ($4 per day) = $1,248
per year
And it might take all of 20 minutes of discussion to convince that pizza
parlor to put their coupons on ZiXXo. If you sell just one coupon a day,
selling 5 days a week, you would earn $250,000 per year after just one
year of selling.
Summary
Affiliates who sell online and offline advertising can reinforce the
value of their advertising solutions by adding ZiXXo coupons to their
solution. These affiliates can also earn a great deal of revenue from
these sales. Those affiliates who add ZiXXo’s coupons to their websites
will not only increase their traffic, but they will generate an
additional revenue stream from coupons.
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