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HOT COMPANY PROFILE: Affiliate marketer Skimlinks
Affiliate marketing is increasingly becoming a major money spinner for content sites, but signing up for each individual programme can be a lengthy process. Skimlinks aims to make it easy for publishers by automatically converting normal retailer links on a website into an affiliate link after the installation of a small piece of javascript to a site footer. The catch is the high 25% commission it charges, but CEO Alicia Navarro believes it is money well spent as Skimlinks minimises link errors and maximises earnings. The question is whether publishers will agree?
What makes Skimlinks different from other affiliate marketers?
We allow publishers to focus on content. We take all the pain, errors and angst out of affiliate marketing. Rather than have to sign up for all the networks yourself and manually create all these affiliate links and keep them updated, you don't have to do that. You literally put a piece of code into your site footer once and the entire process is automated. So although they could save a bit of money theoretically doing it themselves, what it would cost them to hire someone to do that and the time it would take and the amount of errors that would inevitably happen with a human doing it far outweigh the small cost that we charge.
What is your business model?
On the Skimlinks product we retain 25% of whatever commission our links make. And for our new Skimwords product, which turns product references into shopping links, it's on a cost-per-click basis. We launched in late 2008, and in our first full year of operating in 2009, we were profitable and we will be again soon this year.
We work with a range of publishers, from small blogs to newspapers and big content networks such as Future Publishing and AVForums.com. We have around 1,000 publishers as clients and run on about 77,000 domains globally. The revenues they make depend on the size of the publisher. A small blog will make enough to keep their server hosting costs paid but for others it's a massive revenue stream, we are talking six-figure sums.
Who are your main competitors?
There are some companies in the US which do what we do, well one really. But we know our innovation and our relationship with our publishers makes us the leader in this space.
What is the biggest challenge you currently face?
One that I find an interesting challenge is growing a company from being a startup to being a bigger company. We now have 25 employees and that's going to grow even further and it’s a far stretch from when it was just me and a couple of other people. As a company, it’s the fact that lots of people in the market say that they do things that are in the same ball park as us. So it's proving to publishers that we are the optimum choice. We do a good job of it but that's certainly the key challenge.
What do you think is the hottest trend in digital media?
The space we're in. There have been some very interesting developments on other in-text content monetisation solutions and I think its going to get hotter because it’s all about this concept of monetising purchase intent. There are a lot of companies, like us, looking at ways that you can harness the intent that is created by content and doing that in a way that appeals to the broad base of publishers. There are some interesting companies doing stuff out there. I think it's an interesting area because you see a lot of talks about paywalls and other ways that publishers make money because they can't rely on traditional means. Everyone is still trying to work out the best solution and there is still a lot of innovation ahead.
VERDICT
Skimlinks' main strength lies in its technology which has already won a number of awards for innovation. It offers an array of tools designed to make monetising content on the biggest possible range of platforms as simple as possible. This feature set has already attracted an impressive list of big-name publishers including Hachette Filipacchi Media in the US and UK newspapers including The Mirror. It is also the reason why Skimlinks is profitable, as it gives the startup the scale necessary to make affiliate links, which typically have relatively low clickthrough rates, a viable business model.
Skimlinks would appear to be a prime acquisition target for an online ad agency, particularly one looking to expand its range of digital services. However, Navarro says she is currently concentrating on growing the business and is planning an aggressive move into the US market. With expansion in mind, Skimlinks should consider lowering its 25% commission rate to ensure it attracts the highest possible number of publishers and can fight off competition from US startup VigLink . Amazon's affiliate programme offers commission of just 4% on certain products, of which Skimlinks takes a quarter. That could put companies off adopting Skimlinks despite its convenience.
AT A GLANCE:
CEO: Alicia Navarro
HQ: London, UK
Founded: 2006
Commercial launch: 2008
Number of employees: 25
Investors:Sussex Place Ventures, Accelerator Group, NESTA
Funding to date: USD2.5m
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