Patrick Gavin is One Smart Marketer

Patrick Gavin is one smart marketing guy. Patrick is one of the founders of Text Link Ads and after TLA was acquired by Media Whiz, Patrick joined their team. Most recently, Patrick was co-founder of Auction Ads, an eBay affiliate monetization option and it too was acquired by Media Whiz recently. Media Whiz is a NY-based company located in the financial district of Manhattan.

I first came across Text Link Ads in early February 2005 at the SES Conference in NYC. My buddies Till, Darshan and I were walking around the expo when a sign called out to me. It read, "$100 in free text links" and since I had sold a few text links in the past on my properties, I thought I would go speak with them. They had offerings for both the site publisher and the advertiser. The publisher would make 50% on any ads they sold (net-30!) and the advertiser would receive $100 in free text links (minimum purchase $125). As a publisher, if an advertiser uses a coupon, you would receive the net-after coupon amount.

Till, Darshan and I left and headed for lunch and I kept talking about how smart of an idea this is. They didn’t have tons of publishers or advertisers yet but they had a great infrastructure built with plugins. What does offering new customers $100 off $125 really cost TLA? Let’s take a look:

• Customer orders $125 in ads and pays $25
• Assuming the $125 went to one site, TLA pays the publisher $62.50
• So the net loss for TLA is $37.50
• Most customers order more than the minimum $125 and if they order at least $160, TLA loses nothing and gains a customer and a publisher
• In month two, they are already a profitable customer for TLA - and in the two years I have used TLA, most of the ads have remained for at least a year if not longer

Now let’s take a look at Auction Ads. Auction Ads launched earlier this year and is a very simple way to become an eBay affiliate. They offer lots of options and are geared towards the blogger. They pay 100% of the earned commission from eBay. So how does Auction Ads make money if they pay out 100%? Easy. eBay pays bonuses to their affiliates based on total volume and since all Auction Ads publishers appear as one affiliate to eBay, they make money on the bonuses. And so far the Auction Ads growth has been exponential. I wouldn’t be surprised if they offer programs with other companies in the near future.

Ok so Auction Ads can help me generate revenue from my blog, great. But what makes Auction Ads even smarter than your normal affiliate program? Two things: referrals and bonuses. They offer 5% (just raised from 2%) on anyone who signs up through your Auction Ads ad. For me, this is how I have been able to generate revenue through the program. It hasn’t worked well on CN, a bit better on HTMLC, but way better on the referrals. And last week they announced a $25 bonus to any new publisher. Sounds like they start in the negative, right? Think again! They changed the payout minimum to $50 and so it should be a wash once someone gets to $50 and since the more sales a site makes, the larger a bonus they receive from eBay. Smart!

I share this with you because sometimes the easiest route from A-B is not always the smartest route. Patrick has been able to create two great companies that not only generate revenue for him and Media Whiz but also for his publishers and creates great value for his advertisers. As you create your startups, clear the whiteboard and think about creative ways to generate revenue and also make your publishers and Web site visitors happy and more importantly, loyal.

Editor’s note: Text Link Ads is a Mixer sponsor.