January 2010 – Feature: The Big Deal

Brad Wilson, Founder and Editor-in-Chief of BradsDeals.com, Shines a Light on Superaffiliates and the Growth Opportunities that Await Retailers and Marketers.

By Vitisia Paynich

In 2001, Brad Wilson was just your typical undergrad college student trying to make it through when he decided to launch an online business called BradsDeals.com. Little did he know at the time that his venture would not only make him a major player in the affiliate marketing space, but also transform him into a sought-after online shopping expert. In fact, Wilson has appeared on such programs as the “Today Show,” “Oprah & Friends,” MSNBC” and “CNN Money,” as well as in publications like The Wall Street Journal and USA Today.

It’s no wonder that ERA asked the founder and editor-in-chief of BradsDeals.com to speak at the Affiliate Marketing: From the Front Lines session on February 2 at The Great Ideas Summit in New Orleans. Electronic Retailer sat down with Wilson to learn more about how BradsDeals.com has garnered superaffiliate status and why affiliate marketing is a low-risk investment.

Electronic Retailer: How did you enter into this business?

Brad Wilson: I started as a poor college student and I was able to find great deals on all the stuff I needed for school. I started BradsDeals for fun to help show my friends and fellow students how to get the same deals. It’s been about seven years since I launched the company.

ER: How did you evolve into a superaffiliate?

Wilson: I think it was just by keeping that same approach of doing a lot of work and research as if I was doing it for my friends and families still. And eventually, being able to spread the word to a lot more people. That focus on our audience and what they need in a very long-term way is what has helped us get to the point that we are at right now. And I think that’s paid off in a sense that we’ve developed a very loyal following.

ER: Were you surprised by how your company has progressed, or did you know from the get-go that this was something that was going to really take off?

Wilson: Absolutely not. I was very fortunate in the sense that I was in school so I didn’t really need to make the business work for a long time; I had a lot of runway. I could just do it for fun and I didn’t need to use it to support myself [financially]. So, if I had to make it work out of the gate, it wouldn’t have worked. And, I think I’m pretty lucky in that sense.

The team at BradsDeals.com hand picks the products that they deem to be the best deals for consumers.

ER: To get a better understanding of just how much revenue a site like yours can generate for a marketer, could you please provide some revenue statistics?

Wilson: Every product on BradsDeals is sorted by popularity based on what our audience’s reactions have been to it in recent history. And things that are up pretty high have a good potential of driving a fair amount of sales to retailers. With the right deal, we can generate $50,000 to $100,000 in gross sales pretty easily.

ER: What do you generally look for in a marketer?

Wilson: It’s funny because I still get a ton of e-mails from people who are inquiring about what kind of data feed we’re using when it’s very obvious that everything we’re doing is hand-picked. It says: posted by Brad at x time of day. Those people don’t scratch the surface enough to realize that before they contact me. We need people who understand what we do and understand our business. The best relationships we have are with people who can really facilitate that. An example would be a store that we can go to and say, “Here are five products that we really like and that our audience would like at a better price. You’re selling them for $100, why don’t we set up a page on your site where they can sell for $79.99? Or, why don’t you give us a coupon code for $25 off these five products for the next 48 hours?” Now a) there has to be an interest level; b) logistically, they would have to be able to do it; c) they have to trust us and like our audience; and d) they have to think we’re adding value to the process. Those are the kind of relationships that we’re looking for.

ER: What type of compensation arrangements do superaffiliates tend to command?

Wilson: It has a lot to do with what kind of value the affiliate is bringing to the table. It’s really on a case-by-case basis from a retailer’s standpoint. If you’re doing something with a really high-value add and you’re reaching an audience that the retailer couldn’t reach themselves, then I think you usually can come to good terms with the retailer. It has to do with the margins. There are plenty of times where we’ll forego a higher compensation to get a better deal for our readers.

On the flip side, a retailer might not feel like they’re receiving quite the same value from big affiliates. And, if they feel that way, then they’re not going to compensate them the same. For example, maybe a retailer doesn’t think that they’re really getting exposed to any new customers by those people; maybe the retailer thinks that they’re just churning the same customer base that they always have and are offering cash back. You’re not really adding value to a retailer or helping highlight the positive attributes of a retailer simply by giving someone cash back on purchases at that store. So, there are all kinds of different scenarios where a retailer might or might not see value.

ER: So, there is flexibility in offering different types of compensation packages, depending on the size of the retailer?

Wilson: Yes, that’s exactly right. [In December], we did 12 days of holiday giveaways. And each day, a different retailer offered a pretty substantial giveaway. Dell, for example, gave away four notebooks in one day, which cost them somewhere between $1,200 and $2,000. So, if that hadn’t been a part of our conversations with Dell, maybe we could have gotten better compensation from Dell. But we ">preferred to take this time of year to give back to our readers and do something interesting and fun, and I think Dell understood that pretty well, too.

ER: What makes some marketers more successful than others? Is it the product? The offer? Or, is it about supplying the affiliate with killer and fresh creative?

Wilson: It depends on what the affiliate specializes in. In our case, it’s about the product and how compelling the offer is to consumers. The rest of the information, content, images and data are all something that we pull together personally and not in an automated kind of way or with anything that’s provided by the retailer.

ER: Could you offer some tips for selecting a network?

Wilson: Selecting a network has a lot to do with your particular needs and budget. If I were a small, startup retailer with a different marketing budget, my choice would be a lot different than if I were Target. And my choices if I were Target might be different than if I were Pottery Barn–just because there are different brand issues and concerns with the two of them. I think it runs the gamut a little bit.

ER: What tips could you offer for working with a superaffiliate and managing that relationship?

Wilson: The biggest thing for managing a relationship with an affiliate is to understand their specific needs–to go that extra mile. We’ve seen that pay off year after year with some of relationships with people who really try to understand what we’re doing. And it makes all the difference in the world, because they can really get in there, facilitate and work with us, be creative and come up with good ideas.

ER: How can you make sure to avoid conflict between the marketer and affiliate with regard to pay-per-click? In other words, how could you avoid both bidding on branded terms and essentially competing against another?

Wilson: It comes down to the marketer or the retailer clearly establishing a set of policies and making sure everyone follows them. If they do that, chances are they’re going to have very few problems. And, any affiliate that is worth having a relationship with isn’t going to cause problems if there’s a clearly established policy.

As far as bidding on branded terms, it depends on the needs of the retailer. For example, maybe the retailer has a very generic name and while bidding on that name discovers there are nine competitors. In that case, the retailer is probably best served by letting their affiliates bid as well to flood the page a little bit so that they get as much coverage as possible, especially because the retailer can only show up once on their own. So, it just depends on what the retailer wants and ultimately, it’s up to the retailer to communicate and enforce their policy.

ER: What are the overall benefits of engaging in an affiliate marketing program?

Wilson: The economics of this business are really positive for retailers. What’s clear about the affiliate relationship is that you don’t have anything to lose. You can create something that works for you, works for the affiliate, and it doesn’t cost you anything. So you get exactly what you want in return.

In our case, it’s really a triangle of mutual benefits where we create a very compelling consumer offer, the retailer gets sales and traffic and then there’s something for us as well. Let’s say a retailer has a 20-percent gross margin. Then they can come up with a 10-percent-off coupon or 10-percent-off discount on a product and then pay the affiliate 5 percent. In that case, the retailer knows in advance that if any transaction happens with their affiliates, they’re going to net 5 percent. You can’t get that kind of precision or guarantee with any other kind of marketing or advertising. I think that oftentimes retailers who aren’t too involved in this to be hesitant, but I think that quick economic analysis is simple enough to make them realize that it is a very safe scenario for them.

And during these past 18 months, we’ve seen a lot of retailers actually shifting their energy, team and budgets more towards the affiliate space for that same reason. Assuming they know what they’re doing, the return that they’re going to see will be a positive one and it’s just very low risk, which is interesting because there are not too many things on the Internet that are low risk.