Shawn Collins provided the post from ValueClick related to Q3 earnings (an earnings summary was posted here in outline form earlier in the week). The interesting thing in the release is CJ is the CEO saying it takes: “three to six months for new clients to reach full scale.” I assume Mr. Zarley is only looking at large brand name customers in the Commission Junction lineup. Smaller high quality merchants are finding it difficult to be found in the CJ system by the high quality affiliates it takes to really make a program move quickly. Added to this disparity is how Commission Junction espouses creating relationships with affiliates as the key to program growth, yet the CJ admin offers no direct email or phone access to any affiliate. Only if you pay for much higher service levels will affiliates be emailed or contacted, and then only by CJ employees.
What is happening is that good quality smaller merchants, who many times if not always are more responsive and creative with affiliates than large brand names, are being left behind due to CJ’s closed system. In questioning brought up a CJ University by this writer, the response was: “We are studying the issue.”
I hope they study fast. Stick
ValueClick on Affiliate Marketing
By Shawn Collins from AffiliateTip.com
Nov 4, 2006, 12:05
ValueClick, Inc. (Nasdaq: VCLK) had their Q3 2006 Earnings Call on November 1, 2006 and there were some interesting comments about the affiliate marketing piece of their business.
According to James R. Zarley, Chairman of the Board, President, Chief Executive Officer for ValueClick, “Affiliate marketing had worldwide product revenue growth of 14% year-over-year in the quarter. As we have said in prior calls, growth trends in this business are still very good because of some anomalies in our 2005 growth; the comps for 2006 are tougher.”
“We anticipate growth trends to normalize next year and we continue to have record numbers of sign-ups. It takes three to six months for new clients to reach full scale,” continued Zarley.
James R. Zarley also commented that ValueClick’s CJU (Commission Junction University) was completely sold out with 600 advertisers and publishers in attendance.
Samuel J. Paisley, Chief Administrative Officer of ValueClick, added that “affiliate marketing revenue increased 12% to $21.2 million in the third quarter of 2006, compared to $19 million in 2005. Inter-company revenue in these amounts was approximately $2.2 million in Q3 2006 and $1.7 million in Q3 2005. Affiliate marketing segment revenue does not include international affiliate marketing revenue, which for SEC purposes is part of our media reporting segment.”
Paisley added, “Including international revenues, worldwide affiliate marketing product revenue grew 14% year-over-year in Q3 2006. Affiliate marketing segment gross margins were 87.3% in the third quarter of 2006 compared to 88.5% in 2005.”
Read the Q&A from the ValueClick Q3 2006 Earnings Call at http://internet.seekingalpha.com/article/14792.
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