If you’re an Internet marketer making sites, the link economy is vitally important to you and your success. In the age of the Internet, it’s simply impossible for a business to survive without links, but as an affiliate, do you know enough about the link economy to prosper from it and help it flourish? Recently, the link monetization and optimization company VigLink released an in-depth whitepaper on the link economy and did a great job of explaining what it is, how it works, and why it’s so important for affiliates. Today we’re sitting down with VigLink CEO Oliver Roup to chat about his company’s case study, and hear his thoughts on the link economy in today’s Internet marketing industry.
Can you tell us what the link economy is, exactly?
The link economy is essentially the term we use for describing the market for links to and from sites around the web. It’s an economy of link buyers (advertisers) and sellers (affiliates). Overall, the link economy determines the value of those links. While all links are part of this economy, it’s the links in content that are particularly interesting.
How is VigLink participating in the link economy?
Overall, we’re building software to make the market more liquid. In practical terms, this means we work with a lot of different advertisers and publishers, we record and evaluate data from our clients’ sales, and we find out which advertisers are offering the highest payouts. We then make sure that those links are on our affiliates’ pages—our publishers aren’t in business to lose money, so we find the most lucrative links, and insert them in their sites, ensuring that they’re receiving the most money for their referrals. By doing this, we’re creating competition amongst advertisers to try and offer the best payouts in their niche, and win more clicks. We’re also able to optimize existing links that they currently have on their pages, making sure they getting the highest payouts.
Who is determining the value of a link in the current link economy?
Right now, the merchants are and they do this by determining what the value of a click is for them. The commission rate is only one part of the formula that merchants use when evaluating the worth of a click—there are many things that go into the final price per link. However, if every publisher uses the highest earning link that’s out there, the merchants will no longer be in the drivers seat when it comes to the price of a link, thus creating competition amongst the different advertisers, and ultimately driving up the value of affiliate links. Right now, most links are placed once and forgotten about. With the help of technology, this is changing—affiliates can make sure they are getting the best price per click at the time of the click.
What are the challenges facing the link economy right now?
The link economy is relatively new, fairly complex, and extremely inefficient. Plain and simple, publishers aren’t capturing the full value of their links right now, and that’s because people don’t understand what the link economy is and why it’s important. In the traditional brick-and-mortar world, the prices of products are very established, whereas online, the value of a link can fluctuate immensely from one advertiser to another. We’re trying to help solve that problem and strengthen the link economy, but it’s going to take everybody understanding the value of their links before we really see the link economy take off and reach its full potential.
Clearly there is a lot to learn about the link economy, but it’s a worthwhile investment, especially if you’re a publisher. Not only will using the highest paying merchants lead to more money in your pocket, but it will also help stimulate competition among merchants and help grow the link economy as a whole.