Close
Join 237,000 weekly readers and receive practical marketing advice for FREE.
MarketingSherpa's Case Studies, New Research Data, How-tos, Interviews and Articles

Enter your email below to join thousands of marketers and get FREE weekly newsletters with practical Case Studies, research and training, as well as MarketingSherpa updates and promotions.

 

Please refer to our Privacy Policy and About Us page for contact details.

No thanks, take me to MarketingSherpa

First Name:
Last Name:
Email:
Text HTML
Aug 25, 2005
Case Study

How ConsumerReports.org Gains New Subscribers via Affiliate Partnerships

SUMMARY: Every couple of months ContentBiz reporters get yet another press release announcing ConsumerReports.org has nailed a marketing partnership. The lineup to date includes deals with:

Yahoo!
AOL
MSN
Babycenter
WSJ Online
Yellow Pages Group & CTV (in Canada)
CNET Computers.com and
mySimon.com.

Do these partnerships really work? Can you grow your online sub base aggressively via deals with partners? Check out our exclusive interview with two top ConsumerReports.org execs for answers.
CHALLENGE
"Our whole mission at Consumers Union is to make an impact," says Jerry Steinbrink, General Manager Information Products.

As a (vehemently) non-advertising-based publisher, Consumers Union (the non-profit behind Consumer Reports) relies on subscription revenues to stay afloat. A pioneer in Internet subscription sites, they hit half a million paid online subscribers in late 2000. (Link to our original 2000 Case Study below.)

The marketing team knew the brand name alone -- famous offline for 70 years -- would continue to bring in a steady stream of new online subscribers direct to the site. But that's a bit like preaching to the already converted.

How could they use online marketing to impact millions more consumers, without breaking their moderate budget?

CAMPAIGN
Starting in 2001, the team tested affiliate partnerships. Like most affiliate programs, the partner got a cut of revenues generated. However, to protect their reputation and brand, Consumers Union's partner rules were unlike most other publishers. For example, affiliates couldn't:

- Use Consumer Reports' logo without express permission.

- Run blast email campaigns, search marketing campaigns or ads on third party sites promoting ConsumerReports.org.

- Run any third party ads against Consumer Reports' content on the partner's own Web pages.

As you can imagine, negotiations were tough and the affiliate list is still under a dozen. However that group includes some of the most trafficked sites on the Web such as Yahoo!, MSN, WSJ.com and CNET. Here's how the process worked:

#1. Deal negotiations and relationship management

First the team makes sure their goals are clearly emphasized. Most traditional affiliate relationships are about making money, and negotiations center around how much of a cut the partner will get plus how much is guaranteed and possibly payable up front.

But online advertising latency studies show you have to touch most new prospects a number of times and wait a bit before they'll convert. (Example: A comScore/Yahoo! study of consumer electronics search ads found this February that only 15% of buyers converted immediately online, and 18% converted 90 days later.)

Plus, Consumers Union's mission was to some degree served by simply getting their brand message out there, whether or not the consumer converted.

So, the team required the partner market the co-branded site section and content perhaps more heavily than they would for other partners. "When our negotiations begin to take a while, it's not on revenue, it's on marketing and maintaining our integrity," notes Steinbrink.

Key:

o Start with a small deal and then work up to larger ones. "Don't give away the store at first. It's easier to do more than it is to pull back."

o Ask for unique visitor counts not just total traffic. Despite cookie wiping problems, unique visitor counts give you a better idea of how many people you're actually reaching on a partner site than total traffic will. Plus, don't be impressed with registered user data -- registrants may have visited once and never come back.

o Don't wait for final contract signatures to begin a few tests. "We'll start doing co-marketing in a smaller way before the deal is signed." That way both partners see the real potential value of the deal and scope out potential pitfalls as the haggling goes on. Plus, the formal launch is that much quicker when you close.

o Make sure your potential partner understands your content's quality and brand value on a gut level. If they are only in the deal for the money (and not brand association or enhanced site stickiness), both their marketing tactics and loyalty could be suspect.

o Deals should always be in flux. Everything on the Web can change quickly from partner business models, to site design, to visitor behavior. Expect changes. Keep in touch with key partners on at least fortnightly if not a lot more.

#2. Campaign creative

Just as several other content sites (such as Encyclopedia Britannica) have tried, ConsumerReports.org places a selection of its content on the partner's site as a teaser.

Figuring out the precise amount is ultra-tough. You have to give enough value that Web visitors will be satisfied and return to your partner's site having had a great user experience. On the other hand, you can't give away the store, just a tempting teaser to inveigle users to click to your site and convert. (Link below to ConsumerReports.org samples.)

The team tested both banner ads and a variety of buttons and textual click links to get visitors to jump to the landing page.

These tests continued on an ongoing basis -- no online promotion or presence was static for long. (As should be expected, the text links outpulled banners, and the more specific the copy "click here for reviews of 423 cars," the better the conversion.)

Naturally the team co-branded landing pages with the partner's name, (i.e., "Special deal for WSJ.com readers!").

#3. Measuring results

Traffic was segmented so it could be tracked by referring partner. The team used a complex calculation to determine deal value, including:

o Immediate paid subscriptions o Typical churn rate/lifetime value o Assumed deferred/latent subscriptions (people who convert days or months later in part because they saw the landing page earlier)

o "Marketing value" of partner's promos and unique traffic



RESULTS
"We're breathing down the neck of two million paid subscribers online," says Steinbrink. At 430,000, fewer than a quarter of these subscribe to both the print magazine and the Web site although the content is different enough for subscribing to both to be of high value.

(In comparison, WSJ.com is at roughly 750,000 paid subs now.)

To us this indicates that online marketing awareness has brought ConsumerReports.org a vast number of new subscribers who were never touched by the magazine. The partnerships are working and worthwhile.

That said, Business Development Director Carol Lappin is careful to note, "If we looked at raw revenue, it would not nearly be 20%. As a traffic driver and putting the brand in front of the online public, it's very important and very valuable. It's not just about revenues. That's just one metric."

As most online merchants' affiliate programs rarely hit more than 15%-20% of total revenues, this falls in line with our expectations. However, it may surprise more traditional content marketers. Key: Don't think of partnership deals as big moneymakers, especially to start. It's a long-term brand building play with a long-term payoff.

As such, Steinbrink tells other publishers considering similar deals, "I would warn against any tendency to devalue your content. Content is the thing that's made us successful. We're standing by the quality and what we provide, and not really giving an inch as far as that goes.

"There's a tendency among content providers (especially those who are ad-based) to almost immediately devalue the quality of your content. You must work against that -- sell and support the value of your content."

That quality may be the reason why ConsumerReports.org's price tests have shown they could move their traditional online price of $24 a year up by $2 without losing conversions. Now the site is $26.

Useful links related to this article

Creative samples from some ConsumerReports.org partner promos: http://www.marketingsherpa.com/consrep/study.html

(Very old) ContentBiz Case Study Consumer Reports Online "Within Shouting Distance" of Half a Million Paid Subscribers: http://www.contentbiz.com/barrier.cfm?ContentID=1128

MarketingSherpa's 2005 special report on affiliate marketing: http://library.marketingsherpa.com/sample.cfm?contentID=287


ConsumerReports.org; http://www.consumerreports.org

See Also:

Post a Comment

Note: Comments are lightly moderated. We post all comments without editing as long as they
(a) relate to the topic at hand,
(b) do not contain offensive content, and
(c) are not overt sales pitches for your company's own products/services.










To help us prevent spam, please type the numbers
(including dashes) you see in the image below.*

Invalid entry - please re-enter




*Please Note: Your comment will not appear immediately --
article comments are approved by a moderator.

Improve your marketing

Join our thousands of weekly Case Study readers. Enter your email address below to receive MarketingSherpa news, updates, and promotions:
Note: Already a subscriber? Want to add a subscription?
Click Here to Manage Subscriptions