6/07/2009

Affiliate Marketing as an Institutional Fundraiser

As part of my shul’s building campaign, I came up with the idea of creating a “virtual mall” to help with the fundraising effort. Thus far, in its 2 months of operation, it has generated about $113 – not a tremendous amount, but we’re just getting started. In truth, once its set up, there is very easy to maintain and it’s “passive income”. The trick is to get the members of your community to do their online shopping through your portal. I’m getting ahead of myself, though. I’ll explain from the beginning.

Most online vendors have affiliate marketing programs. The idea is that you create links to the vendor’s site, and then you get a certain percentage of any purchases generated by traffic that you drive (Amazon pays the best commissions). As a simple example, my shul has my own affiliate account with Amazon. This link to Amazon is a unique link that tells Amazon that the traffic was driven by me. There is no need for the buyer to enter any code or anything.

When it comes to institutions, it’s all about loyalty. If your constituents shop online, and you can educate and convince them to do their shopping through your affiliate links, then you can make money. The best thing about it is that it costs the buyer nothing. It’s essentially an advertising cost paid by the vendor. In fact, I’d say that if you shop online and DON’T go through some sort of affiliate link, then you’re leaving money on the floor.

Setting it up can be complicated. There are three main companies that manage affiliate programs for the most popular online vendors – Commission Junction, Linkshare, and Google Affiliates. The problem is, unless you have a lot of traffic, many affiliate programs will reject your application. Amazon, which has its own affiliate program, does not have an application process – they’re smart that way. You can, however, create links using other sites – such as visitourmall.com, onecause.com, and other “charity mall” sites. You can create your own site within those sites, or you can ‘harvest’ links and embed them in your own site. The problem with these “charity mall” sites is that they take a hefty chunk of your earnings. For example, if Vendor A pays 4% commissions, the charity mall site will take 50-60% of that, leaving you with 2% or even less. It’s better to set up your own accounts, but, like I mentioned, it’s not always so easy to get approved.

On my shul’s site, most of the links are through charity mall accounts; as we generate more traffic by getting friends and family to shop at our “mall”, we will hopefully get more and more of our own accounts approved, and our commissions will go up. Whoever sets it all up for the institution should spend some time learning the ins and outs of affiliate marketing.

There are no privacy concerns. The account manager can not see who buys what, and often not even what was bought.

In all, if your institution has a decent number of loyal constituents who do a decent amount of online shopping, it is worth exploring the possibility of creating a “virtual mall”. It could generate a decent amount of revenue. Until that time, however, feel free to shop at my shul’s mall. You’ll help a great young community in Israel.

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