Until late 2009, Groupon was considered a massive failure. If you looked at their Alexa rankings before 2010, you would notice they had very little traffic.
Groupon owes a huge debt to affiliates.
And one important part of their strategy was to cut out the middle men, affiliate networks like Commission Junction and the Google Affiliate Network, which took huge cuts from the revenues generated.
Instead, Groupon focused on creating relationships directly with affiliates.
That’s why Groupon took off.
Great article, definitely tough to believe Groupon made it because of their affiliate program but it is possibly one of the strongest viral growth strategy used by Groupon.
I love it when a startup I’ve been covercloning for literally years suddenly finds itself in the spotlight, and for the right reasons. In this case, Skimlinks, originally from London but now with a growing US base, has been revealed as powering the affiliate links behind Pinterest, one of the hottest startups on the map right now. For some that appears to be a little bit of scandal, at least for Pinterest. LLSocial uncovered the practice, whereby if a posts Pinterest happens to link to a commerce sites with an affiliate program, Pinterest uses Skimlinks – a third party service – to modifiy the link to add their own affiliate tracking code. Anyone making a purchase from that click through sends affiliate revenue, via Skimlinks, back to Pinterest. Kerching, everyone benefits.
Most people who use Pinterest are there for the cool things they can find and re-pin. Many of those find and pint new items themselves, adding to the experience overall. Lots of people have expressed dismay that someone might want to use Pinterest for anything commercial, while other see no problem with it so long as they don’t wind up feeling “sold to” every time they visit the site. Some items pinned on Pinterest are for sale. Not necessarily directly by the pinner, but somewhere. And, Pinterest is taking advantage of this to make money. If an item is available through an affiliate marketing arrangement, Pinterest uses a program called SkimLinks to add their unique identifier to the link, thus generating a commission for themselves if you buy the item.
They've got to make money somehow, and they must be disclosing this somehow... well i hope for them.
This is a fascinating look at how affiliate marketers use of PPC (assuming arbitrage) has fallen way off, while cash back and coupons have increased.
Content -- flat. Because it's HARD.
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