Looking for a new online revenue stream, Wired Digital today is adding Shop Wired online commerce partners to its HotBot search engine.
The HotBot site has been redesigned to include eight co-branded partners and Wired. The co-branding deals are pure revenue sharing, with Wired Digital receiving 5% to 10% commissions on the sale of each purchase through HotBot. Each of the partners also will get rotating feature banner ads on the top, right-hand column for deals only available on HotBot.
The featured ads will be guaranteed placements under the partnership agreements in about half of the cases, while at other times, Wired Digital will select what it considers to be the best exclusive ad. That arrangement is intended to inspire partners to propose good deals just for HotBot users.
Shop Wired is Wired Digital's step beyond the banner in making money. The company initiated banner advertising three years ago.
"It's not because banners aren't a good source of revenue, because they are," said Rick Boyce, senior VP-advertising and commerce at Wired Digital. "It just seems that commerce is the next right step for us."
Gary Arlen, president of Arlen Communications consultancy, said, "This is the business model we've been proposing for a long time--that the medium gets a piece of the action."
A HIGH SHOP-TO-PURCHASE RATIO
Wired Digital's advertising revenue increased by 550% between second quarter 1996 and second quarter 1997, Mr. Boyce said. @plan CEO Mark Wright tracks search engines, and said commerce on HotBot seems like a good fit because the site has a high shop-to-purchase ratio of users.
"What's also interesting about this is they were the first commercially advertised site on the Web and now they're first to do this," Mr. Wright said.
Shop Wired partners include Microsoft Expedia Travel, Barnes & Noble, 1-800-FLOWERS, N2K Music Boulevard and other companies with targeted sites.
Wired Digital sent out 34 requests for proposals in June, narrowing down to the eight partners in August. HotBot may add apparel and ticketing category partners in the future, Mr. Boyce said.
Copyright September 1997, Crain Communications Inc.