Market Share - which networks have it - who are the BIG 3?

[Malcolm Cowley]

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Hi all

The term big 3 may not be familiar to some of the newer affiliates and merchants who frequent this board but to some it will mean :

TD , CJ and DGM2

For those that dont know thats Tradedoubler , Commission Junction and Deal Group Media

When I first got into affiliate marketing people used to talk about the Big 3 as the hugely dominant forces in affiliate marketing as far as the UK is concerned.

I can remember sitting at work and starting the network and thinking - one day I want the buy.at affiliate network to be part of that big 3

As that time draws closer I wonder how many merchants and affiliates know anything about the networks size and scale in terms of payouts to affiliates?

I dont know everything myself about these companies but my quite educated guess would have:

TD way out in front - 300+ programs predominantly brand programs they have to be the market leader in terms of payouts to affiliates in my book.

Next I'd pick CJ , 150+ programs maybe 70-80 well known and some decent earners imo they would have to come second

So that leaves DGM2 in 3rd imo - 4 or 5 really big programs and 130+ programs in total

Id say these 3 are still for now the big 3 but maybe Im wrong - I dont know so much about Aff Window or OMG or Aff Future but I would be impressed if they are up there with these guys in terms of payout to affiliates.

I read Kbuddens blog the other day and one thing struck a cord which I think merchants should definately ask networks is how many affiliates do you cut cheques to and how much do you payout a month to your affiliates as opposed to how many affiliates do you have - using this as an indicator of size and scale would be a better benchmark although still not accurate.

At the buy.at affiliate network I would say we only have around 3500 - 4000 affiliates in total - Our business would currently function at the same level if I slimmed that down to 400

So where does that leave the buy.at affiliate network in terms of market share?

Well I think we sit a precarious 4th - I say precarious as I imagine it to be a tight squeeze on a any given day there could be turnover levels from 2 or 3 other networks to match ours.

I have a prediction though that by end of August we will be 3rd - end of December we will be 2nd - I make this from a position of knowledge as opposed to too many glasses of wine :-)

1st is a long way from second by my reconing so I wont put a time scale on that but if anyone who cares is reading that wont put me off giving it a go

Just thought Id share my thoughts with the board and give you an insight into what the lay of the land is in the UK network scene at the moment.

For those affiliates who know us well hopefully this gives you piece of mind that a real affiliate advocate in terms of networks may eventually sit on top and that can only be good news for affiliates that want to be treated as partners!

Thanks for reading

Mal

[drivetowin]

Mal

Glad you're one of my blog readers - must confess it came as a real shock to me at last weeks g2g just how many people read my blog - blimey I might have to think of something contentious to write soon !! - in fact I think my blog gets more visitors than some of my sites do!!

I would agree with your current analysis of top 3, though I think no3 is only holding that position because of 2 of their merchants.

Given what I know I'd personally place you 5th at the moment on your criteria - but the gap between 5th and 4th is pretty small so you and I could argue all day about who's right and I agree with you that it would probably depend on the day we were arguing which was right - nonetheless I'd say at the moment you're probably 5th more months than you're 4th.

All of that said and from what I've picked up at the Speakeasy and rumblings on the proverbial grapevine I wouldnt disagree with your assertion or timing on taking 3rd spot, likewise I also wouldnt be at all surprised to see a.n.other network take 4th place soon after you taking DGM down to 5th.

Whether you can take 2nd place from CJ I dont know - I'd like to think you could and obviously that far ahead the jungle drums merge too much into thunder for an outside observer like me to detect what is happening.

I agree with you the climb from 2nd to 1st is huge - but not impossible - especially if TD continue to make monumental cockups like they have this week - affiliates have the ability to vote with their feet if a merchant is on more than one network.

I have to confess to initially being concerned at your recent growth for fear that with growth would come an abandonment of company culture as so often happens - I'm pleased to say that Saturdays Speakeasy put my mind at rest on that point - you obviously have a canny knack for recruiting people who share your philosophy.

Oh - and if that merchant you left me chatting to on Saturday provides the opening you're looking for I reckon you owe me a damn good night out on the toon.

[loquax]

To me it doesn't matter if you're #1 or #5 - you could be say the top network and not be able to communicate with your affiliates, or the second best network and not be able to communicate with your affiliates, or indeed the third place network and not understand the difference between a ppc affiliate and a web based affiliate.

Without wishing to boost your egos, imo Buy.at swamp any other network in terms of communication, and having spent a couple of days in London came away feeling that what little we do in the affiliate world buy.at wise is respected.

You can't factor in respect, admiration or ability to treat affiliates fairly as unfortunately when talking about top services - most people like big numbers or pound signs.

Obviously (and hopefully) the message you portray to affiliates is noticed by merchants when considering where to take their programs and if buy.at continues their progress then there's no reason why you can't achieve the goals you're aiming for.

Just mpv - maybe i should get more interested in ££ signs

Jason

PS. Please send cheque to....

[lowndsy]

there might be a big three, but my fave three are AW, AF and POR. Go figure.

[stevenm]

Although I hadn't really discussed the relative size of the networks I had come to the same conclusions about who were the "big three". I don't think that being one of the "big three" is any guarantee that you will stay there. Real effort has to be made to engage with the affiliates and to take their views on board and in my view this is just not happening enough with some of them.

I'm pleased to see relatively new networks coming through who seem to have a different ethos and who are more affiliate friendly and I hope that Mal's prediction comes true.

With best wishes.

Steven
--
Virtual Cards UK
http://www.virtualcards.co.uk

[aclarke656]

How a company with a site that simply doesn't work most of the time can be considered part of a big 3 in this industry, I really don't know. A simple request for a list of your merchants is just too much for the DGM servers.

If they are no. 3 then they won't be for long...

[Malcolm Cowley]

Thanks for the kind comments - esp Jason :-)

I agree with the thoughts very much so.

In reality how you are is more important than how much you make and so maintaining focus on that as we grow is the most important thing.

Lowndsy I hope one day were in your Fav 3 as much as I hope were in the big 3 so if you need anything let me know.

Obviously I have a goal in mind and I think you have to whether its as an affiliate or a network but I'd like to acheieve it through being favoured for our good points as opposed to just chasing the money - one day I wont be here and Id like to leave a legacy which makes sure the ethos here is to give a certain level of service back to the guys and girls who make us our money.

There is also a certain sense that not all was right when we entered the market and some of that still happens today and I dont like it and would rather see the dominance switched somewhere else - Although I would be slightly poorer I would still be well happy to hear POR had taken top slot as I like their stance on things and their ethics.

Once again thanks for the replys was just rambling on last night and dreaming away :-)

Mal

[Rich]

I'm surprised the consensus is that DGM are a clear #3 though I can see they have a couple of programs that might be doing the bulk.

As few affiliates have a significant share of the network's payout across the board, its not surprising that each affiliates personal rankings would be different. Looking at the big picture I see TD & CJ out front, then the rest I cant really differenciate.

Any merchants reading this shouldn't think its a obvious decision to go with the big networks. Size isn't everything, rate of growth is probably a better indication. Do you want to to be with a elephant thats unable to move quickly (8 days to give affiliates back sensible access to banners), or a tiger thats quick on its feet.

TD publish their growth rates (april volumes up 13% on March, 93% on the year; sales up 4% & 42%) which should give the other networks a benchmark to measure their performance against, though those are europe-wide figures so may not be that typical.

[c4u]

Both DGM and Tradedoubler publish their figures - DGM turned over approximately 15 million last year, Tradedoubler 45 million (65 million euros) but that was Europe wide, CJ figures are all messed up with ValueClick now so hard to seperate but I would say the big three are closer than people think (Unless more than half of TDs revenue is in the UK).

In fact, these figures give a revealing insight into the total size of the market, I think its fair to say that the market is around 100 million last year. Which means that if you turnover a million pounds a year - you are 1% of the market! Not that I'm anywhere near that but if some of you lot are, it gives you an idea of your worth.

I think Buy.at have got a lot of momentum behind them and I would imagine that they will continue to grow rapidly, I'd like to see a situation where there is no such thing as the "Big 3" as it kind of implies a "premier league" situation, which I don't think exists in anything other than turnover terms.

[Malcolm Cowley]

Hi

The turnover figures may be skewed as they are company figures and not affiliate payment figures.

So for DGM2 and TD you would need to know how much is paid to affiliates each month that is the real turnover I am interested in . DGM2 does not turn over quite that much in those terms . TD might do though on the figure above but again I couldnt be sure.

Like you say its a figure most people dont care about too much as what matters is the day to day dealings on specific programs you care about if your an affiliate and who is the biggest in turnover terms isnt really that relevant .

When we set out we wanted to be number one - more for the fun of trying than anything else and I will base reaching it on the metric of affiliate payouts but am well aware that actually being number one in reality is more about how you are with the people that make your money and on this score maybe we are nearer the top than on my metric so I am already very happy with our lot as it is today.

Just got to go and find some more turnover now :-)

Thanks

Mal

[drivetowin]

Dont think we ought to get too hooked up on turnover, for two reasons, one as Mel says DGM2 in particular derive a good proportion of their income from activities other than affiliate marketing, and unlike for example IBG (parent company of Affiliate Future) they dont break out the affiliate marketing element in their accounts.

Secondly, none of us should count turnover as an indicator of our success - as the old saying goes 'turnover is vanity, profit is sanity'

What I would be interested in seeing is for networks to commission independent customer satisfaction surveys of their affiliates and merchants and then have the courage in their convictions to be open with the results - this isnt a dig at you Mel, I'm 100% convinced that Buyat would be open with the results, you've always been prepared to put your hands up when things arent right, but I think being this open would come as a real culture shock to some of the other networks.

We did a survey like this with a company I worked for 10 or so years ago, and we were genuinely surprised by the results, it supported our theories of where we were strong and where we were weak but also threw up issues by asking questions like "what do you think of our company newsletter" and 7 out of 10 of our clients at the time responded that they had never received the newsletter and didnt know we had one - certainly caused a few red faces in the marketing department!!

[pistol101]

Interesting thread. Where the real work is establishing who actually pays out the most commission in the UK. I wouldn't have the top 3 in that order, and the battle between 3-5 is probably very close at the moment. There's a big merchant merry go round with some of the brand names, it'll be interesting to how it pans out this year.

PM if you want to know more.

[Malcolm Cowley]

Hi

I think and independant survey would be a great idea - you know how I work Kbudden Id rather know how bad we are than have praise as then we can get better.

As Pete says payout to affiliates in commission is the one for me as a figure.

Mal ( not Mel :-) )

[pricethat]

I think you will see a huge clash in the UK, its esculating now and will really meet head to head not just in the UK but europe wide. To suggest that tradedoubler or CJ are going to sit back and let buy.at eat the cake really must be a little niave eh? We all know what affiliates want, ok they dont get it from some places which is why buy.at has been successful, but only because your size allows you to be quick and dynamic to situations, CJ and Tradedoubler dont have that luxury as they have to consider much more the impacts on their processes than a smaller company does.

Lock that in with internal communication of a company that size and you can quite clearly see that the difference is just the humans behind it, as you get larger you wont have the backup of established perfect faces as you are.

Finally, and its certainly not a critiscm but when faced with other european networks the size of CJ and Tradedoubler in their respective countries start investing millions into the UK to establish themselves how is that going to effect the buy.at position in the uk with trying to get to number 3?

I for one would love to see buy.at get there but i am just wondering how is a smaller network going to fight for that number 3 spot in the future when you have more GIANTS entering the market at the same time? Theres only so long that any company can sing from the songsheet of added value and the difference with using us.

[Malcolm Cowley]

Hi

Good post Price that ( and dont forget to get in touch on your feed issue from the other thread as Id like to make that easier for you )

There are some Monsters lurking and even already here - CJ is so big in the US its scary and they all have the money to compete but small is a relative word :

buy.at are small compared to Zanox overall but Zanox is small compared to buy.at in the UK

buy.at is small compared to CJ overall but maybe 2/3rds of CJ in the UK

I am sure there are a couple of other networks like AF or Awin who also feel in similar position to us so for the companies at the top of the chain it must be challenging times and of course they are gearing up for it as they have done all year so we all expect a hopefully fair fight.

We are already a fairly big company in terms of a UK network ( around 90 programs - mostly brand names ) - not as big as TD by a long shot so I couldnt comment on whether we could hold ourselves together if we were that size but ultimately our ethos wouldnt change and that imo is the route behind the difference as opposed to the service levels.

We care about affiliates and we run the network - those few words mean we operate a certain way and believe certain basic things should happen day to day. Its our baby and we look after it as such - yes we want to make millions of pounds , of course we do , but only in a certain way.

I and many others on this board know that there are only a few other networks built on this ethos - as we grow and those other networks grow we may get bogged down by more red tape but for as long as the people who sit on top are here the ethos remains the same even if the work load slows us down in the future.

This point is integral to why I think we can fight off any challenges from abroad and still look to continue our rise. The people who make all our money are our friends and collegues not our numbers on accounts sheets.

Like Pete said it will be an interesting back 9 this year and the landscape may be changed for the greater good of everyone involved.

Fingers crossed

Mal