White Paper by Vadim Kotelnikov

Summary Introduction to the Problem Scope Boundaries of this Paper What is Affiliate Marketing? Outsourcing Advertising, Marketing and Competing Skills Real Time Market Feedback Introduction to the Solution Conclusions

Summary

Affiliate marketing is one of the biggest thing happening on the Internet today. Eco E-Commerce (E2-commerce), or sales of competitive green productivity solutions, can be increased multifold globally with relatively little effort through building affiliate marketing networks. If you have a competitive product, you can build an international E2-commerce network of marketing affiliates within hours at almost no cost. The affiliates would make the necessary marketing efforts and deliver your product to the end-user. Affiliate marketing will help you to reach new markets and increase your sales. However, for some reason, suppliers of green productivity solutions do not utilize these very effective mechanisms. The paper analyses these supply side problems and suggest solutions for boosting E2-commercing globally by harnessing the power of affiliate marketing.

Introduction to the Problem

The search for solutions to the problem of dissemination of green productivity instruments among businesses, especially SMEs, has brighter prospects with fast growth e-commerce worldwide. A special term Eco E-Commerce (E2-commerce) was coined recently to describe trade in environmentally sound products and services by means of e-commerce. However, recent efforts to boost E2-commerce, made in particular by the new-generation business web-portal Technology e-ncubate, e-nnovate, e-nvest (Ten³) (http://www.1000ventures.com), revealed problems at the supply side - there is not much on offer. The sellers of green productivity solutions are not aggressive enough and are not fast enough to apply latest e-business and e-marketing instruments to win customers and to compete successfully on the marketplace. One of the main reasons why businesses do not buy green productivity solutions through e-commerce leis with solution providers themselves - they are not active sellers. In particular, they do not utilize the power of affiliate marketing mechanisms that would enable them, with almost no effort, to increase multifold their reach of end-users through thousands of the web-sites owned by their affiliates. You can find plenty of sites offering information on economically viable environmental products and services, but when it come to E2-commerce, search for providers of "green productivity", "cleaner production", or "environmental technology" solutions in major e-commerce web-portals matching sellers and marketing agents returns invariably the "zero" result. So, we have:

• On the supply side, suppliers of green productivity solutions. These solution can make business more profitable and thus can be provided on commercial terms. And many of these suppliers do sell their products from their corporate web-sites.

• On the intermediary side, a choice of e-commerce-enabled business portals who are ready to deliver these green productivity solutions to their client SMEs globally on sales commission basis.

• The enabling environment for creating global E2-commerce networks between sellers and affiliate intermediaries within hours at almost no-cost.

And still, though all the necessary components for boosting E2-commerce are in place, the links of this chain are not connected. For some reason, suppliers of green productivity solutions do not participate in affiliate e-marketing networks.

Why providers of green productivity solutions ignore this powerful and very cost-effective marketing tool? Aren't they interested to increase their sales and reach new markets? Is it "resistance to change"? Are they over-subsidized or just lack marketing and competing skills? Or services provided by web-portals matching suppliers with sales agents are not suitable for environmentalists? Finding the answer to the problem would make it possible to identify the weak links in the delivery chain of green productivity solutions to industries and strengthen them, thus making the whole delivery chain stronger.

Scope Boundaries of This Paper

Let's delineate what's inside and what's outside this paper.

1.    It will concentrate only on providers of commercial competitive sustainable business solutions - products, services, technologies - that are or could be provided at a price. Main types of these E2-Commerce products include materials, products, equipment, e-business tools,  business coaching software, training materials, and publications. Suppliers who are already selling their products through Internet, but do not use affiliate marketing networks are especially targeted here.

2.    Suppliers of free green productivity solutions are not targeted in the paper as free solutions can not be marketed through commercial affiliate networks. (It does not mean however that free solutions stay above competition because they are free. It is actually vice versa. They do have to compete for the manager's time, and in today's rapidly changing world, time is more precious and scarce resource than money. In addition, free solutions face the "easy come, easy go" problem - if a company did not invest any money in a solution they are less likely to follow up on it.)

3.    The focus will be on marketing efforts aimed at winning new customers and expanding the market niche for green productivity products and services.  Marketing that targets business managers who are unaware of green productivity solutions is of special interest here.

4.    Both business-to-business (B2B) and business-to-consumer (B2C) E2-commerce operations are be targeted though the main focus is on B2B E2-commerce. The E2-Commerce issues related to "green procurement", or contractor - sub-contractor relationships, where the customer is predefined, are not discussed in this paper.

What is Affiliate Marketing?

Affiliate Marketing is one of the biggest thing happening on the Internet today. Affiliate Marketing is online marketing that makes it possible for web sites to share traffic on a revenue-sharing basis. It use the pay-for-performance advertising approach. Advertiser sites (Advertisers) offer commission to Affiliate sites (Publisher) in return for referring visitors and a specific action occurring. Affiliates earn commissions when a visitor to the their site clicks an advertisers banner or text ad and one of the following actions takes place:

Let's look at a sample of 1000ventures.com daily performance report at the Commission Junctions: 3264 advertisements were seen by site visitors; 268 visitors clicked on the advertisements and visited the advertiser's web-sites. Special indicators show sales made today through this affiliate marketing exchange and provide important ratios, such as sales-per-click. This is an excellent feedback that allows to measure the performance of different marketing strategies and adapt them to the market needs. What else providers of green productivity solutions are looking for?

Outsourcing Advertising, Marketing and Competing Skills through Affiliate Marketing

"Any fool can draw a picture but it takes a wise man to be able to sell it", said Samuel Butler. Indeed, advertising, marketing and competing in today's overcommunicated world requires advanced communication skills. To compete successfully, you should:

• Know your customer

• Outsmart your competition

• Enjoy solving customer's problems

• Learn the tactics of competitive warfare

Another key marketing skill is positioning. To be able market and sell your product successfully, you must touch base with reality. And the only reality that counts is what's already in the prospect's mind. In the communication jungle out there, there are just too many products, too many companies, and too much marketing noise. The mind, as a defense against the huge volume of today's communications, screens and rejects much of the information it offered. It accepts only that new information which matches its current state of mind. It filters out everything else. Positioning is a new approach to communication, advertising and marketing.  It is an organized system for finding a window in the mind of your prospect in order to position effectively over there a product - a merchandise, a service, a company, or a person -  against its main competitors. The advertising people spend their time and research money looking for positions, or holes, in the marketplace.

Suppliers of green productivity solutions could tap into all above resources of professional sellers through affiliate marketing exchanges and networks.

Real Time Market Feedback Through Affiliate Marketing Exchanges

"Feedback is the breakfast of champions". The neuro-linguistic programming (NLP) describes the way to success as a combination of four elements:

1. Define precisely what you want - set your goal

2. Start acting to achieve your goal

3. Watch the changes produced by your actions

4. Be flexible - change your action plan if the current one does not produce the required results

The essence of the last two elements is in continuous monitoring of the feedback and correcting of the action program based on this feedback.

In Kaizen, the Japanese strategy of continuous improvement, the same success formula is prescribed by the the Deming Wheel or PDCA Cycle that asserts that every managerial action can be improved by careful application of the sequence: plan, do, check, act. Without timely feedback no success is possible. Affiliate marketing exchanges provide both suppliers and intermediaries with real-time market feedback and allows them to make the necessary changes in their marketing and selling strategies.

Introduction to the Solution

Indeed, none of major affiliate marketing exchanges has a special section relating to "Environment", but many of them do have a "Productivity" section. Thus, affiliate marketing exchanges are technically equipped to promote E2-commerce by matching advertisers and publishers. There are may be some "cultural" limitations however as traditionally affiliate marketing exchanges are dominated by suppliers and promoters of "simple-to-describe" products, as opposite to intelligent solutions such as decision support management tools. As green productivity solutions are mostly management tools, these practices may be a reason why environmentalists shy away from using affiliate marketing portals. A critical mass of member publishers specializing in marketing of management tools could make affiliate marketing exchanges more attractive for suppliers of green productivity solutions.

The supply side problems need to be researched further to find out the reasons why green productivity solution suppliers don't use affiliate marketing exchanges and what could prompt them to start using this effective marketing tool. For instance, the Ten³ portal (http://www.1000ventures.com) has recently started integrating a module on Green Productivity and Sustainable Growth in its first-ever Online Business Coach. The Business Coach, having led a business manager to the decision to go for a green productivity solution, is supposed to put him or her immediately into contact with relevant solution provider. This is the most effective marketing strategy, as, according to the Positioning strategy, the mind accepts only that new information which matches its current state of mind.  However, unlike other parts on the Ten³ Business Coach, the Green Productivity module does not contain at present any links to solution providers (see Ten³ solution delivery strategy). The reason is simple - there is no offers from green productivity solution providers at affiliate marketing exchanges.

The problem-solving process could be initiated by coordinated efforts of a group of green productivity solution providers and affiliate marketing partners. This test field within 3 to 6 months would make it possible to analyze the market feedback and develop a wide-scale strategic program for boosting E2-commerce. It would also help to start the ball rolling. The first market success would attract many players very fast - this is the market law.

Another possible solution would be establishment of an affiliate marketing exchange specializing exclusively in business development and management solutions. In today's overcommunicated society, such a well-targeted lean service with considerably reduced advertising noise would be more attractive for both advertisers of green productivity solutions and publishers targeting corporate world.

Conclusions

• The huge potential of affiliate marketing exchanges for boosting E2-commerce is largely ignored by green productivity solution providers

• The reasons for non-utilizing of affiliate marketing resources by environmentalists need to be researched

• Pilot project involving a critical mass of solution providers and marketing affiliates need to be launched

• The market response to the pilot project need to be analyzed and serve as a basis for a long-tern strategy development