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Digital Window, parent company of Affiliate Window, sold a majority stake in the business to Axel Springer and PubliGroupe, which already owns another affiliate network, Zanox.

We've been talking to Affiliate Window CEO Kevin Brown, who will continue in his current role, about the deal, and current trends in the sector...

How much was the deal worth?

There are constraints within the deal that restrict discussions regarding the actual fiscal worth. However, it might be worth highlighting that AS/PG approached us even when we had pulled out of the previous sales process due to the market downturn. Their persistence to do a deal should speak volumes regarding its worth to both parties.

Who are the main Affiliate Window shareholders?

Axel Springer and PubliGroupe jointly own 51% with the remaining 49% owned jointly by the founders of Affiliate Window (AW), Andrew Totten and myself.

Are there any conflicts of interest for the owners, in terms of trying to dovetail Zanox and Affiliate Window within the same markets?

No, Zanox is the main network in continental Europe and Affiliate Window is the fastest growing network in the UK. The opportunity this acquisition offers both publishers and merchants working with networks is greater reach with the capability of shared technology is greater reach with the capability of shared technology, innovations, and the benefit of local knowledge.

Do you believe that affiliate networks face a threat as more retailers focus on direct partnerships with a handful of key affiliates?

Networks exist as value added third party providers, and so long as they ‘add value’ then I don’t anticipate this to be a real concern. Affiliate Window’s aim has always been to make that ‘value add’ a compelling proposition, whether it be through innovative tools like ShopWindow or Darwin, or easy to use interface elements such as create-a-feed or the Firefox deeplink builder.

It’s these, and many other factors, that allow a network to offer more than just an out of the box tracking solution. Granted, affiliates need to weigh up the benefits that working direct with any retailer could bring. However, it would be wrong to assume that it’s a simple choice for any partner.

Do you think that the voucher code and loyalty models of affiliate marketing are sustainable in the long-term, as merchants start to become more savvy about customer lifetime value?

I would balance this thought with the fact that retail brand loyalty is declining and this is in some way being switched to sites that offer customers something more. Be that rewards, better value or comparison capabilities; these sites supersede some merchants’ sites as online destinations.

Appearing on these sites allows merchants to ‘piggy back’ on to an audience that one could argue is a very savvy online customer and whose lifetime value could be a great deal more than an occasional online purchaser. The fact is, not all voucher code sites and loyalty sites are the same and merchants need to appreciate the individual benefits for each one. This ultimately means that some will have a sustainable long term future whilst others may disappear once the economy picks up.

Is there any danger that Affiliate Window could now lose its focus in the UK?

Absolutely not. Our resolve has never been stronger

Do you think that affiliate marketing has an image problem? (In the US it seems to have been re-branded as 'performance marketing').

To coin a phrase, 'it just takes one bad apple'. The benefits of affiliate marketing outweigh any negativity (just look at the plethora of brands and SMEs using the channel), but so long as the press continue to publicise isolated instances of brand misplacement or low level affiliate fraud it will have the retail industry naturally questioning the value of the channel.

I would argue that only rewarding for a completed action is a compelling proposition for any marketer. Throw in what could be argued as ‘the most cost effective’ ROI and you begin to appreciate the power the channel has over others. Admittedly, the channel grew very fast and we’re still playing catch up, but this why we welcome and support initiatives like the IAB’s Ethical Merchant Charter and voucher code policy.

Graham Charlton

Published 27 August, 2009 by Graham Charlton

Graham Charlton is the former Editor-in-Chief at Econsultancy. Follow him on Twitter or connect via Linkedin or Google+

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