Thought Leaders in E-Commerce: Tipser CEO Marcus Jacobsson (Part 2)

Sramana Mitra: What are the numbers? Typically, affiliate fees tend to be 10% to 25%. And how do you split between the media company?

Marcus Jacobsson: Our average commission is more than double the average affiliate commissions. The reason for that is we move the power from the merchants to the media. It’s the media that decides which products to showcase. The traffic stays with the media company. That means we can negotiate higher commissions if you’re selected by the media companies. If you want that endorsement, you need to pay slightly higher commissions.

Sramana Mitra: What kind of sectors are you working with? You started off by giving an example of fashion. Is that a big sector?

Marcus Jacobsson: We’re sector-agnostic, but the sectors where we’re biggest are Fashion, Interior Design, and Health & Beauty. Those are the three biggest sectors where we operate. We are selling anything from scented candles to swimming pools. Anything is possible.

Sramana Mitra: This is very interesting. You’re catching me at a time when I’m steeped in this affiliate model. I don’t know if you’ve seen. 1Mby1M has just started working with Udemy. Are you familiar with Udemy?

Marcus Jacobsson: No.

Sramana Mitra: Udemy is one of the largest distance learning platform where instructors put up courses and they sell to consumers around the world. They’re very big. They sell very heavily through the affiliate model. We have thousands of hours’ worth of educational content.

That’s what we have built our entire digital curriculum on. We have started creating short courses to further democratize this body of work. Udemy sells heavily through affiliate. If you can monetize a TechCrunch and VentureBeat for instance, that would be really cool. 

Marcus Jacobsson: Exactly. Distance education is just a great product. 

Sramana Mitra: For you, I think it would be a fantastic product. Let’s talk about the affiliate model in e-commerce. How do you see the industry evolving? Affiliate is a very interesting model. My husband is on the Board of DMGT, Britain’s largest media group. They own Daily Mail.

I used to have discussions with the top management of Daily Mail. I always thought that Daily Mail should do what you’re talking about – turning their publishing platform into an affiliate platform. Is Daily Mail one of your customers?

Marcus Jacobsson: No, but I know we are in conversations with them.

Sramana Mitra: Media is in an existential crisis vis-à-vis monetization. It can be mitigated hugely with the model that you are pursuing.

Marcus Jacobsson: We turned the affiliate logic upside down. We gave the power to the media house. The classic affiliate is actually finding traffic from media to the brands. We all know what happened a year ago when Amazon slashed the affiliate fees by half. That shows that it’s the brands and the merchants that has the power in the affiliate industry. With the Tipser logic, it’s actually the media. The traffic stays inside the media. We help the media convert. That is the most important aspect. Then it’s the owner of the traffic that has the gold. 

This segment is part 2 in the series : Thought Leaders in E-Commerce: Tipser CEO Marcus Jacobsson
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