Company using subtlety to deliver online ads

LONDON — Convinced that online advertising is dead, an e-commerce company says it has found an “unintrusive” way to help websites make money. But critics find it more secretive than subtle.

Skimlinks works with Internet publishers to insert affiliate links from merchants into text on their websites, rather than selling what many see as annoying banner and pop-up ads. When a customer clicks on a link and buys, Skimlinks and the affiliate marketer each get a percentage of the sale.

Skimlinks says it works with more than 28,000 websites and takes 25 percent of the money that publishers make from affiliate links.

The London-based company says it has solved the affiliate marketing problem that has made it difficult to bring in more than a few pennies each pay period. Some of its top customers, Skimlinks says, have raked in six figures a month in sales.

Skimlinks touts its access to more than 18,500 merchants, including Amazon, eBay, iTunes Store, Wal-Mart and Macy’s.

“We can help websites make money in a very unintrusive way,” Skimlinks co-founder Joe Stepniewski said. “So something like Skimlinks is a good thing for them to use.”

Some Skimlinks users, however, said they have felt tricked into buying products.

That seems to be the case with Pinterest. The popular social network, which began using Skimlinks in March 2010, was one of the company’s top publishers, according to Skimlinks. But the network cut ties with Skimlinks this year after Pinterest users discovered that the service was being used without their knowledge.

Pinterest said it was a “test” that “we have since discontinued.”

“Our focus right now is not on monetizing, but we have tried a few things out to better understand how people use the service,” Pinterest said in a statement. “We want to be a profitable company, but we want to make sure whatever model we eventually use works with customers. We havent decided on one way to do it.”

Mr. Stepniewski called the situation unfortunate and pointed out that Pinterest went two years without the discovery of its Skimlinks ties. “That’s a testament to the fact that no one really realizes that it’s happening,” he said. “It’s non-disruptive to users.”

Mr. Stepniewski said he hopes Pinterest will return as a customer at some point.

“We have a good relationship with them, and we think they might put it on again in the future,” he said.

Of the websites using Skimlinks, Mr. Stepniewski said, forums tend to be the most successful.

“Forums convert really well because it’s often people discussing products they’re interested in buying online,” he said. “People trust other people talking about products. They convince people to buy.”

Social shopping sites convert about 3 percent to 4 percent of clicks into sales, he said. These customers, on the other hand, “are not concentrated just on buying stuff online.”

Editorial sites, such as blogs, news sites and online magazines, convert about 3 percent of clicks into sales, according to Skimlinks.

“We think publishers should just be focusing on their content,” Mr. Stepniewski said. “So they just write about what they know, what they’re good at. You focus on your content, and we will find all the relevant stuff and help you monetize that.”

Merchants in the fashion industry tend to pay the highest affiliate commissions at 10 percent to 20 percent. Sporting goods merchants pay 5 percent to 10 percent. General shopping merchants, such as department stores, pay about 5 percent. Consumer electronics merchants pay about 2 percent to 8 percent. Travel merchants pay about 2 percent to 3 percent.

“We want to make publishers more money by helping them optimize their websites,” Mr. Stepniewski said.

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