Pepperjam Growth Could Double: Internet Service Provider Adds New Line
By Ron Bartizek, The Times Leader, Wilkes-Barre, Pa.
Apr. 4–WILKES-BARRE — Already growing by leaps and bounds, e-commerce service provider Pepperjam has added a line of business that brought in $5 million of revenue in less than three months.
Company President and CEO Kristopher Jones said Thursday the new Pepperjam Network could grow even more rapidly than last year’s 150 percent increase in sales from its core marketing services and potentially could “dwarf” them. His projections have the core business doubling revenue to $35 million in 2008.
The new service, launched Jan. 15, raises the bar for communication between an internet retailer and the Web sites or blogs on which it places advertisements, Jones said. The dialogue starts before the two sides even agree to work together.
“Once we accept you, we provide technology that allows you to review the program terms and conditions” of advertisers, Jones said.
A chat feature allows for immediate questioning, comment and response, which Jones said is superior to the e-mail and phone contact offered by firms Pepperjam competes with.
The network also provides better tracking and reporting that helps advertisers measure the referrals they’re getting from each affiliate marketer and whether clicks become sales. Advertisers can use that information to determine which affiliations are paying off and which should be discontinued.
“We take the guesswork out,” Jones said. “Ultimately we empower that advertiser and the affiliate marketer to build their relationship.”
The other major feature, which Jones touts as perhaps the most important, is “affiliate transparency.” Through the Pepperjam Network, an advertiser can find out if a potential partner is compatible or instead has content that conflicts with the brand image.
“The other networks have failed to provide the advertisers with enough information about the affiliates,” Jones said.
Pepperjam has created a “transparency meter,” with ratings from 0 to 5. The highest rating means the affiliate is judged to offer good potential and has provided reliable and verified information. In many cases, Pepperjam has worked with those companies.
Lower ratings apply to affiliates seen as less appropriate for the advertiser and that are unwilling to disclose information.
The approach fits with a new focus on quality among Internet marketers.
“This technique is an attempt to provide advertisers with help to manage and control their brand,” Jones said, and to reduce fraud.
The company announced Wednesday that it had signed 175 new network customers in the first quarter, including high-profile names, such as New Line Cinema, BabyPhat and Teleflora. The affiliated Web sites pay nothing for the service; Pepperjam makes money by collecting a fee from advertisers on every transaction that is tracked through the network.
The network was in development for two years, which meant employing high-paid programmers with no revenue coming in. “It’s clearly the biggest initiative that we’ve taken on,” Jones said. “We’re finally getting paid for that work.”
While the new venture is less labor intensive than Pepperjam’s core marketing services business, the rapid growth has already required filling 10 full-time positions, pushing total employment over 100.
Jones said some of Pepperjam’s customers have told him they are being affected by a slowing economy and are lowering their budgets. But because Pepperjam consistently adds new clients, he expects employment to continue rising. Still, he said 2008 will be as much about organization and efficiency as growth.
Also on the company’s agenda is finding a permanent home. Pepperjam occupies rented space in the Innovation Center @ Wilkes-Barre, owned by the Greater Wilkes-Barre Chamber of Business and Industry. Jones has considered buying the building but worries the company will outgrow it. He said a couple of options are under consideration, and he expects to make a decision later this year.
He has said in the past he is committed to keeping Pepperjam in downtown Wilkes-Barre if possible.
HOW AFFILIATE MARKETING WORKS
Affiliate marketing is the term applied to the relationship between an Internet retailer and the affiliate — a Web site or blog that carries the retailer’s advertising. When someone clicks on an ad that appears on the affiliate’s site, it is recorded by a service like Pepperjam. While some advertisers still pay a few pennies per click, most pay a commission on sales made through the affiliate’s link.
Pepperjam Network tracks the clicks and sales and also allows the two parties to communicate in real time. It also screens potential marketing partners and provides education and support services.
Ron Bartizek, Times Leader business editor, may be reached at 970-7157.
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