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Webvertising for free
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July 2, 1999: 1:02 p.m. ET
Getting your company's name out there doesn't have to break the bank
By Staff Writer Shelly K. Schwartz
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NEW YORK (CNNfn) - A Web site. It seemed the perfect solution. What better way to market your company nationally?
If you're like many small business owners, however, the time and hard-earned money you've spent building and maintaining your Web site haven't done much for your bottom line.
"Most companies have Web pages now, even if it's just a one-page [online] brochure," said Ben Isaacson, acting executive director for the Association for Interactive Media. "Now, the question is what do you do with it? Just having a Web site is not enough."
If this scenario sounds familiar, Isaacson said it's time to give your Web site a jump start. And don't worry, it doesn't have to cost a fortune.
"[Online advertising] is extremely inexpensive and in many cases free," he said. "It's probably the most powerful way of reaching the broadest audience possible."
Partners in profit
Online marketing deals are one of the fastest growing trends on the information superhighway, not to mention the small business community.
Ad swapping partnerships appeal because of their wide audience reach and next-to-nothing out-of-pocket cost.
There are several ways for small businesses to make the most of the Internet, without breaking the bank.
For starters, you can subscribe to one (or more) of the dozens of banner swapping membership groups out there, including MSN LinkExchange, Banner Mania and Ad Swap.
At no charge to you, the online service companies will help your company find partners to swap banner ads with.
Some companies, including LinkExchange, offer other services as well. Its all-in-one service packages (at $12.95 and $19.95 per month) enable clients to purchase discount advertising on Yahoo!, Excite and other high-traffic Web sites. It also ensures that the client is listed with a large group of search engines and helps create a working e-mail list of customers they can contact regularly.
Small businesses who pay for the packages also get help in setting up their own affiliate partnership programs, in which the small business owner advertises on related Web sites in exchange for compensation.
"The benefit to the small business is that we help them find new customers online and to keep those customers coming back," said Deborah Whitman, vice president of marketing for LinkExchange.
"I think a lot of small business owners want to [advertise online], they just don't know what to do," Whitman said. "We get so many people clients who say, 'I spent all this money to build this Web site and it's really beautiful, but nobody's coming.' "
Brayton Johnson, president of Webnet-Marketing in Bethesda, Md., said banner-swapping Web sites have been an invaluable resource to small businesses.
"The Internet has really leveled the playing field in allowing even the smallest of commercial ventures to compete with [the big boys]," he said.
Networking
Another increasingly popular way to plug your business is to become a member of one of the affiliate network programs available online, such as those offered by LinkShare and Be Free.com.
Small business owners who join LinkShare as an affiliate, for example, agree to place on their Web site the links or ads of merchant companies in the network for free. Each time that ad leads to a sale, however, the merchant company pays the affiliate a commission.
Affiliate membership is free and LinkShare handles the entire merchant relationship, leaving you free to focus on your business (and collect commissions).
Currently, industry insiders estimate the majority of all Internet advertising revenue is allocated to the top 50 Web sites.
"There are millions of Web sites out there that can't get ad revenues because it's going to the bigger players," Messer said.
The LinkShare network also helps out the online merchant since they have affiliates helping to sell and advertise their goods or services. They only pay their partners if the link leads to a sale.
"That helps out small businesses because a lot of times they don't have the money to pay in advance and they don't really even know what they are going to get (with their online advertising results)," Messer said.
Merchants also pay LinkShare an additional 2 percent to 3 percent of each link-generated sale, plus a $5,000 one-time start-up fee for use of LinkShare's technology.
"It's a great way to drive traffic," Isaacson said.
As a merchant, you can structure your commission structure any of three ways. You can pay your affiliate a negotiable commission - usually about 10 percent -- on each sale brought in, pay them a fixed fee per thousand hits to their Web site containing your ad, or both.
The company allows merchants to choose as many partners as it likes from LinkShare affiliate network.
"It's like a trading floor," Messer said. "The merchants go in and they can find all types of different Web sites that they can partner with."
Be Free.com operates in a similar way, but provides merchants in its network with the tools and resources to set up and manage their own affiliate networks.
The company charges merchants the same 2 percent for sales made through its affiliates, and it charges them $5,000 to get started.
Once a merchant's affiliate base climbs to more than 2,000, which can be achieved in months, Be Free said most clients report that 10 percent to 20 percent of their total online sales are generated by affiliates.
It's tough to determine how much affiliates earn in average commissions, but Be Free spokeswoman Patricia Travaline said one affiliate involved with the company brings in $10,000 a month in commission alone.
"We know of another affiliate Web site owner whose goal is to quit his daytime job and just be an affiliate Web site," she said. "A lot of small businesses are really starting to bring in some very good revenue from this."
Travaline noted, however, that the most successful affiliates are those that spend time with the site reports, adjust the ads on their home page and work hard at boosting traffic.
Success stories
It's a bit larger than the small businesses we traditionally think of, but if you're looking for some inspiration, you might find it at Recreational Equipment Inc., or REI.
The Seattle-based outdoor gear and apparel retailer, founded in 1938, launched its own Web site several years ago and sales and customer traffic on REI.com surged 360 percent last year over 1997.
More than a million Web users visit the REI.com site each month and the number is expected to triple this year.
"These numbers reinforce that it is possible for a traditional brick-and-mortar retailer to also operate the leading Web site in their category," said Matt Hyde, REI's vice president of online sales. "There is a lot of talk about the difficulty retailers have picking up an e-commerce model. REI has aggressively leveraged its 60-plus years of experience serving customers, operating retail stores and a mail order company, and built a Web site that is profitablesmallbiz
LandscapeUSA, a Salem, Ore.-based company has also found its piece of the Internet pie.
The e-tailing arm of the landscape design firm Farwest Gardens, Inc., sells everything from sprinkler parts to grass seed to online consumers nationwide.
Tim Fahndrick, vice president of Internet development for LandscapeUSA, said business is growing between 300 percent and 400 percent a month compared to year-ago figures.
The company joined LinkShare as a merchant client in 1997 and estimates its affiliate network partners bring in 20 percent to 30 percent of its annual business.
Fahndrick, however, cautioned small business owners to look before they leap.
"It's more work than we ever imagined," he acknowledged. "But there's much greater potential, and the market is much bigger than we ever imagined also."
Fahndrick said the same level of customer service required of brick-and-mortar retailers is also required of online retailers. If you don't meet the needs of your buyers, he said, the competition will.
"I think the small business owner needs to realize that it's not the 'if you build it they will come' philosophy," Fahndrick said. "It's going to take time and it's a lot of work."
Isaacson, of AIM, said that's good advice.
"You can't stress customer service enough," he said. "I think the small business market understands that better than anyone. The more you scale (up your operations), the more you have to maintain your small business feel, the one-to-one interest, so the customers will come back."
Pitfalls
Lastly, experts say if you do decide to take your marketing to the Net, you'll need more than merely luck on your side.
Isaacson said you'll need the support staff, technology infrastructure and a well-thought-out business strategy to navigate your company's growth.
"Scaleability is a big issue," he said. "Once your marketing plan takes off, you have to fill those orders."
Just because you develop online marketing partnerships, of course, doesn't necessarily mean you'll be overwhelmed with traffic. "But you should be prepared for it," Isaacson said. 
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