Digital MarketingStrategiesExclusivity Sucks

Exclusivity Sucks

For years, would-be market leaders Be Free and LinkShare have forced their merchants to sign exclusivity clauses. For many, that's too great a price to pay. Consider the impact of being forced to do an exclusive deal with DoubleClick no 24/7 for you. After all, malls in the dirt world don't prevent you from opening stores across town. Well, those very walls of exclusivity have actually become entry points allowing other affilate networks to enter the kingdom.

Can I vent for a minute? Exclusivity sucks. But affiliate marketing’s shameful little secret is secret no more and it’s about time. For years now, would-be market leaders Be Free and LinkShare have forced merchants wishing to tap their respective networks to sign exclusivity clauses. For many merchants (myself included), that’s been too great a price to pay.

If you’re having a hard time understanding my angst, consider the impact of being forced to do an exclusive deal with DoubleClick no 24/7 for you. Or imagine Yahoo‘s prohibiting its advertisers from running ads at AltaVista, Excite or some other portal. Or picture Fidelity‘s trying to prevent a mutual fund manager from peddling her wares at Schwab or E*Trade.

After all, malls in the dirt world don’t prevent you from opening stores across town. Think of UPS trying to prevent you from using FedEx or the USPS. That would be preposterous and arrogant. The list of examples could go on. Frankly, it seems to me to be a much more predatory business practice than anything currently in the FTC’s sights…

Be Free and LinkShare hoped to build walls of exclusivity. But interestingly, those very walls actually became entry points allowing other affilate networks to enter the kingdom. While Boston-based Be Free reported 258 customers at the end of Q4 1999 (the last period for which I could find data on its site), it has taken them at least five quarters to amass this number. In New York, LinkShare’s S-1 filing reports 450 merchants. A nice stable of vendors, to be sure, but it has taken LinkShare almost two full years to acquire them all.

Don’t get me wrong. I think Be Free and LinkShare are both great businesses and I’d love to work with them. They’re just not so far ahead to merit tying my company’s hands for years to come. Things on the Internet just move too quickly to get oneself locked into an exclusive agreement.

Meanwhile, down in Santa Barbara, 16-month-old Commission Junction already boasts over 580 merchants happily driving business on a non-exclusive basis. (Note: I run the affiliate marketing program for Entertainment Sleuth, which was CJ’s 500th merchant.) At the same time, CJ has built a network of over 120,000 affiliates a number that has tripled in less than six months.

Out in Chicagoland, another recent entrant, DynamicTrade, is quickly gaining ground, too. Already three dozen merchants have joined its non-exclusive network, gaining access to its 40,000 affiliates. Its product-centric placement capabilities have proven especially interesting to retailers like Spiegel and Orvis.

And speaking of the folks in Redmond, Microsoft bCentral’s ClickTrade is perhaps the granddaddy of affiliate networks. The ClickTrade directory lists over 7,000 affiliate programs and boasts a network of over 120,000 affiliates. (Note: I run six affiliate marketing programs at ClickTrade.)

Also chasing Be Free and LinkShare are a host of alternate performance marketing solutions: ePod, Yo.com, Vstore, Nexchange, Affinia, OneMinuteShopper, SuperSig and epidemic.

So why will exclusivity clauses eventually disappear? Well, for one thing, someone (besides me) finally decided to shine a big spotlight on them. Besides their being a theme at the AffiliateForce panel I moderated last week, Commission Junction has launched the “When Will It End?” sweepstakes. Check it out and make a wager there are two $25,000 prizes up for grabs!

(By the way, if you couldn’t make it to the AffiliateForce conference last week, you can check out some of the presentations for free.)

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