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Study: Apps and Content Startups Miss Out Because Affiliate Model Is Broken

Screen Shot 2013-07-25 at 15.21.14

Skimlinks, the platform which gives publishers greater control over affiliate links and content monetization, releases some major research today which could well concentrate the minds of online “publishers”, and that includes apps, startups and bloggers.

It’s white paper reveals that while editorial or social websites can point a user towards a product they might go on to buy, publishers rarely receive the financial reward for doing so because of problems with the “Last Click” attribution model used in affiliate marketing. Now, while the study is clearly a ploy to get apps and content publishers to run their affiliate programs through Skimlinks rather than through traditional affiliate platforms, the research itself does bear examination.

The study found that content sites were the first place users read about a product 27% of the time, and were in the first quarter of the user’s path to purchase 36% of the time. And when a user started their journey to a purchase with a content site, she or he was a new customer 55% of the time. However, content sites were the Last Click only 6% of the time and 94% of the time, the content affiliate was NOT awarded the sale. Plus, 65% of the time when a content site is the first click in a purchase journey, sparking purchase intent, another channel is the last click, taking all the credit for the sale.

They also found that content sites drove nearly 30% more new customers to brand sites than the average of all other channels. In addition, when consumers started reading about a product on a content site their desire to purchase grew over time: in this case, 9% of the sales would occur within one hour, 16% within 24 hours and 31% happened within 3 days.

In other words, if online marketers shifted their affiliate strategy away from the Last Click attribution model towards online publishers, apps and social sites, they’d basically get faster and more robust sales.

This would be music to the ears of many social and content sites.

Alicia Navarro, CEO and co-founder of Skimlinks says: “The general view is that better attribution is required – that distributes the cost-per-acquisition across multiple parties responsible for creating and driving purchase intent. By only remunerating the last-click publisher, you create the wrong incentives, and end up with a ton of low-value deal/coupon sites, rather than rich apps and content, who have less incentive to link out to merchants because they don’t get paid for top-of-funnel activity via affiliate marketing.”

Ryan Jones of Shop Direct, where the study was based, points out that it’s a two-way street: “Retailers are probably missing out on exposure as commercially savvy content sites tend to promote the brands they earn more from.”

For the research Skimlinks analyzed data provided by Shop Direct’s ecommerce site, Very.co.uk, which spanned all orders between July and November 2012 that included a click from a Skimlinks content site.

Skimlinks clients include Conde Nast, Gawker, AOL Europe, WordPress, Hearst Digital, Haymarket Consumer Media, Telegraph Media Group, among others.

Skimlinks’ main competitors are the Google-backed VigLink and the seed-backed startup Yieldkit. This year it completed an undisclosed growth financing round led by Greycroft Partners and others.

Reminder: The London Pitch-Off+Meetup Is Monday

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In preparation for TechCrunch Disrupt Europe I’ve been running around the Continent for more than a month, hitting the Balkans for a huge tour and Warsaw for an amazing meet-up. Now I’m back for a meet up+pitch-off with our own Mike Butcher and the rest of the UK team. Tickets are free so grab yours now.

There will be great networking opportunities, and a battle to the death to see which entrepreneurs can dazzle and excite in under 60 seconds.

PitchOff details:

LONDON INFO HERE

  • Participants interested in competing in the pitch-off will have 60 seconds to explain why their startup is awesome. These products must currently be in stealth or private beta.Application form for London is here or simply enter below.

    ONLY FILL OUT **ONE** APPLICATION.


Office hours details

  • Office Hours are for companies selected for the Pitch-off, these 15 minute 1 on 1 talks will be held on the day of the event. We’ll hear about your company, give feedback, and talk about the best pitch strategy for the 60-second rapid-fire competition. More information on Office Hours will follow in a post on TechCrunch.

Pitch-off winners

  • We will have 3 judges who will decide on the winners of the PitchOff. First place will receive a table in Startup Alley at the upcoming TechCrunch Disrupt Europe in Berlin. Second Place will receive 2 tickets to the upcoming TechCrunch Disrupt. Third Place will receive 1 ticket to the upcoming TechCrunch Disrupt.

Venue in London

  • Ground Floor – CAMPUS LONDON, 4-5 Bonhill Street, London EC2A 4BX
  • Event runs from 3 p.m. – 5:30 p.m. on Monday July 29th, 2013
  • We will de-camp to a local bar afterwards, sponsors welcome to support (email sponsors@techcrunch.com)

Remember we are holding our Berlin meetup later this week so if you don’t want to wing your way North we’ll come to you. Application form for Berlin is here.

Questions about the events? Please contact: events@techcrunch.com.

How To Become A Sponsor

  • For more information on sponsorship packages and to discuss becoming a sponsor, please contact sponsors@techcrunch.com.

And whether you’re an investor, entrepreneur, dreamer or tech enthusiast, we want to see you at the event, so we can give you free beer and hear your thoughts. Come one, come all.

This Is My Jam Team Spins Out From The Echo Nest To Build The ‘Song Graph’

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Back in January, it was rumored that hip social music site This Is My Jam might be moving out from under the wing of music data company The Echo Nest, which had incubated the site as a side project. Its creators, Matthew Ogle and Hannah Donovan, have now been given the green light to spin out the site from its parent, and are bootstrapping the next phase of the London-based music startup’s life. The Echo Nest will retain an interest in the newly formed This Is My Jam LLC, as will early Jam engineers Andreas Jansson and Ralph Cowling.

This Is My Jam was born as a sort of hack. Ogle and Donavan built the site because they wanted a place to be focused around songs, not drop off the real-time feeds as they would on Facebook and Twitter.

Despite this scrappy birth, 1.5 million ‘jams’ have been posted to date, and a few clone sites have appeared. The reason? It does one thing very well: single song-sharing. People can share their favorite music track-by-track. This has led it to become populated with obsessive music fans, instead of lots of casually engaged people (cough, Spotify, Rdio cough, etc). This means it now has quite the engagement metrics.

Because the site is all about what people are listening to now, it has a “live” experience and is more focused than the casual randomness of normal streaming services. The result is a slower, more thoughtful, but more intimate song sharing experience.

“We help you make the song look and sound great, you can customise the imagery and the story around the song and share it to all platforms,” says Ogle.

“You share one song, it lasts for a week. We are gradually building up a “song graph” around users. This is for fans, not people you went to high school with who happen to be also on the streaming music service you are on. So for music discovery it’s been very good as the signal to noise ratio is great.”

“Everyone else competes on Catalogue, but we have this core of popular songs,” he adds.

Ogle was formerly head of web product at Last.fm back in 2010, but took up a post of evangelist in Europe for The Echo Nest and “skunkworks” guy, prototyping new products. Unusually, Ogle and Donovan have been working together since university, and were part of the original Last.fm team that grew the service from 0.5 to 40+ million users. They also created accidental hit Drinkify.org at a hack day.

Ogle says: “Our users have told us ‘this is my favourite song in the world right now’ over a million times. This is data we didn’t have when we started, but more importantly, the intensity of preference expressed by every jam is unlike anything we’ve worked with previously.”

They plan to launch the site onto mobile platform – but there is no talk of fund-raising just yet.

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