Brave New Affiliate World

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by Shawn Collins

There has been a lot of press about the exploding affiliate marketing industry across the pond in Europe. But little ink has been dedicated to the opportunities just across the border in Latin America. ¿Qué pasa?

Latin America, which boasts one of the fastest-growing online populations in the world, still remains an unconquered affiliate marketing frontier. What stands now as an online population of nearly 9 million is expected to soar to 38 million in 2003, according to Jupiter Communications.

Further, Forrester Research forecasted that Latin America will see the world's largest percentage growth in Net advertising this year: 137 percent to $121 million. It's time that you've started thinking about paying affiliates in Argentine pesos, Brazilian reals, and Venezuelan bolivars.

Free Trade for Affiliates

In July 2000, MercadoLibre.com, an online auction site, launched its affiliate program in Argentina. Soon after, regional versions were launched in Brazil, Chile, Colombia, Mexico, Spain, Uruguay, and Venezuela.

According to Nico Berman of the MercadoLibre affiliate team, its affiliate program has been a great success. The activation rate thus far has been approximately 70 percent. "We think the reason [for our success] is that we are the only online auction site in Latin America with a comprehensive regional affiliate program that pays for click-throughs, registrations, and commissions on sales. Our affiliates, known as MercadoSocios see that this is a transparent and trustworthy program, which has contributed to our high activation rate," added Berman.

MercadoLibre runs the affiliate program internally, due to a combination of limited affiliate solution providers in Latin America, and the fact that they have a wealth of technological resources. The program has been growing steadily with a generous payment structure and quality communications to the affiliates (including a newsletter that features the top 10 earners and affiliate links).

How Soon Is Now?

Be Free ventured into Latin America in March 2000 with the launch of the Compaq Affiliates Program by Compaq Latin America. The inaugural launch was in Colombia, with plans to further roll out in Argentina, Brazil, Chile, Mexico, Peru, and Venezuela.

According to Ellen Brezniak of Be Free, there are no firm plans for additional Be Free merchants to enter the Latin American market, but Be Free is in the process of developing the business model for entering the region. Brezniak commented that Be Free is focusing more on development and support in Europe for the time being.

Yen for Greater Market Share

Commission Junction announced in July 2000 that it will now pay affiliates in 30 different currencies, however the focus of this initiative is Europe and Asia, rather than Latin America.

In this new structure, affiliates being paid in non-U.S. funds must meet a minimum commission accrual of US$75 before they will be sent a check, versus the standard US$25 minimum. While commissions will be issued in the multiple currencies, reports will continue to display earnings totals in U.S. dollars.

The Mexican peso is the sole Latin American currency offered. Other currencies available through Commission Junction include the euro, German mark, British pound, Hong Kong dollar, Japanese yen, New Zealand dollar, Saudi Arabian riyal, and South African rand.

The Online Capital of Latin America?

In March of this year, PlugInGo.com announced that it has expanded into Latin America with the opening of an office in Rio de Janeiro, Brazil. The new office will also serve as headquarters for PlugInGo Latin America, with all operations taking place there.

Augusto Cavalcante, PlugInGo.com's Brazilian director, stated that
"Brazil has more than twice as many online users, buyers, and gross online sales than all other Latin American countries combined, and this is expected to continue over the next six years."

Talkin' 'Bout a Revolution

iMediation has made a number of significant moves into the Latin American market. In the iMediation model, the terminology has matured from Affiliate to Web Trading Partners and Collaborative Commerce Networks.

According to Greg Taylor, vice president of sales for the Americas and Asia, interest in the iMediation applications is typically from the first-movers who will stake out Internet markets around brand, content, or market. Down the line, the partners of these first-movers need the technology to collaborate and participate in commerce networks and exchanges. This viral effect with their solution follows similar trends in the European and North American markets for iMediation.

iMediation has licensed its technology to several Latin American companies that wanted to promote their content or commerce on partner sites, but not pull the user or customer from that partner site. Notable first-movers include book and CD merchant eSpiral.com, online mall ShoppingPark.com, and the portal multiKredits.

Nexchange is also exploring the potential of Latin American portals in a relationship with Yupi.com. YupiCompras, the shopping area of Yupi.com, is powered by the Nexchange affiliate technology. Yupi.com operates versions of their popular portal in Argentina, Colombia, Ecuador, and Mexico.

The future of affiliate marketing in Latin America is bright, and ventures into this region are poised to move quicker than anything we've seen, as they learn from the maturation and mistakes in the United States and Europe. Still not thinking about exploring the Latin American market?