Profit ploys for increased income

Profit ploys for increased income

Compared to the life of an Internet commerce vendor, Miguel de Cervantes' idealistic Don Quixote travelled on Easy Street. Don Quixote roamed country roads expecting the world to change. But nearly destitute and half-mad, he had little more to lose.

Legions of established companies and embryonic entrepreneurs have staked their claim on the Internet. Alas, most merchants have found that, at least for now, the road they travel is filled with rocks, not paved with gold.

Wired consumers continue to be reluctant to buy merchandise or services via the Net. Until the time comes when sales of goods and services generate an adequate revenue stream, some online merchants have adopted alternative ploys to bring profitability to their Net ventures.

Augmenting a Web site's revenue stream via banner ads and .GIFs is commonplace, especially on search sites.

For example, Yahoo reportedly collected $US214 million in advertising revenue in the second quarter of 1997, according to the Internet Advertising Bureau.

But a growing number of site owners are forced to look beyond traditional banner ads to cover their fixed costs. And a growing number of companies want to give their help - by providing incentives in exchange for a small piece of on-screen real estate.

Receiving commissions for funnelling sales to another, more established online store is one way Web sites can augment their income. (, the Goliath of Internet booksellers, offers an "associates" program to any Web site that believes it can sell books to its visitors. Amazon pays a generous 15 per cent of the sale price for the 400,000 or so main titles in its current catalogue.

But is not the only site offering a commission program. Among the alternative income producers is Stratis International, a West Indies-based gambling company that operates a lottery-like site at Its Link and Win site ( promises to pay 5 per cent of gross sales garnered from any participating site.

The sponsoring site's role equates to that of a carnival barker: it funnels the people into the virtual casino with a small animated .GIF link and, hopefully, the money starts flowing. As for the consumer - well, as some might have said in ancient Rome, "Caveat surfer."

Banner ads, the cyber equivalent of flies at a picnic, often go unnoticed. CyberGold, (, plans to change that dismal state of affairs. CyberGold pays consumers who pre-register on CyberGold's site anywhere from 50 cents to $2.00 or more to view various sales pitches. CyberGold's advertisers include several magazines such as Wired, US PC World, and Red Herring, as well as AT&T's WorldNet Service.

How else can new technology improve the effectiveness of banner ads without making them more intrusive? Self-transacting sales are one answer, according to Markus Stamm, director of the retail business segment for Open Market, developers of Transact 3.0. He envisions a model where customers pay for a product at whatever site they first see it.

"Banners can now be more than an awareness ad. Commerce enabled banners can perform secure transactions directly," Stamm explains.

A click speeds the user directly to a secure transaction page, which automates the entire sales process, including paying the commission due to the sponsoring site. After completing the transaction, the system returns the purchaser to the original site.

Ironically, a new breed of intermediary allows merchants to market their products on the Web without even having a Web site of their own.

"Soon there will be other places where URLs will start to show up," OpenMarket's Stamm says. "For example, in HTML e-mail and push tools like PointCast's.

"With the Net-integrated desktop promised in Windows 98 and Windows NT, almost anything - including applications, CD-ROMs, even word-processing documents - can be a place to sell products or services," Stamm adds.

Pursuing profits

Until Web-based sales generate sufficient revenues, many online merchants are boosting their bottom lines with innovative marketing schemes, aided by a host of potential partners. By Howard MillmanWeb siteAmazon.comCoolsavingsCyberGoldMotivationNet StratisInternational StrategyAs much as 15 per cent commissions for book sales made through "associate" sitesDigital coupons redeemable at retail storesCash payments for viewing adsPoints program merchants use to reward repeat customersOnline gambling; 5 per centCommission to referring sites

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