Affiliate Programs Make Up for Tight Ad BudgetWith only a $150,000 online advertising budget, gift and greeting card site Kardz.com is relying heavily on affiliate programs to stand out in a crowded market.
The site, which is to launch next week, is offering a 30-percent commission and has attracted teen-friendly IcanBuy and RocketCash as well as loyalty points' sites such as Beenz and FreeRide.
But Kardz.com may be in for a tough sell as established brands such as Things Remembered Inc. and Web-only newcomer Bravo Gifts have already launched. And competitor American Greetings offers a 40-percent commission.
"It may be tough for them to get their share of the market since their commission isn't as high," said Chris Paul, outreach program manager for Be Free Inc., Marlborough, MA, an affiliate networking company that works with American Greetings and Egghead.com. "There is no loyalty among affiliates. They're fickle. They'll go where the money is."
Affiliates are generally offered anywhere from 5 to 40 percent depending on the supplier's profit margin, according to Paul.
However, Allan Levy, president of New York-based Kardz.com, hopes the use of affiliate programs combined with other strategies, such as becoming a gift-with-purchase supplier to e-retailers will serve as an ace in the hole.
The site recently beta-tested such an offer with pointandshopmall.com, and saw outstanding results. During a two-day span, 25 percent of shoppers who redeemed the unspecified offer with Kardz.com went on to buy another item.
"I don't believe the rate will stay that high, but at least they'll know we're there," said Levy. "We're being creative with our online budget. It's a matter of not throwing a lot of dollars around to create the brand."
Levy is discussing banner advertising, keyword buys and sweepstakes programs with Yahoo, Excite and others. Targeted e-mail campaigns are also in the works, and partnerships with online incentive companies Cybergold and E-centives are on the horizon.
Offline, the site has invested $300,000 in wraparound commercial spots with Snap.com and Xoom.com that feature comedian Buddy Hackett. The 10-second spots will also run on NBC in prime time.
Kardz.com will feature a selection of 5,000 greeting cards and 1,000 gift selections for $10. As part of the promotional tie-in, Hackett wrote 100 of the greeting cards.
"We're trying to find sweet spot in between greeting card and gift market," said Levy.
Some of the site's features will include a staggered order form where consumers can place orders to be delivered at key dates such as birthdays, anniversaries and holidays.
Levy sees a key opportunity for growth in the business-to-business market. "We hope 70 percent of our business will be b-to-b. Business associates can use our site to send golf gifts for closed deals and toys for client's children," he said.
Kardz.com, which up until this point was seed funded, is currently in discussion with several venture capital firms. While its initial marketing efforts will be modest, the company expects to have enough revenue coming in to increase ad spending to $1 million by the end of the year, possibly peaking at as much as $5 million next year.
With the bigger bucks come bigger plans as Kardz.com expects to compete with upscale sites by providing more expensive merchandise in the future.
"We hope to compete with Hallmark and American Greetings as well as 911gifts and eventually Amazon.com," said Levy.
The site was designed by Imirage, Allentown, PA.