Month: November 2006

Last week, the brilliant Hugh McLeod issued a call-for-papers for short (500 words or less) manifesto’s for anything people are passionate about.

Here’s my Affiliate Marketing Mini-Manifesto. Will it apply to you? Probably not. I’m a dreamer. But I’m not the only one…

1. Affiliate Marketing is Not About Money
If you are doing affiliate marketing in hopes of making large sums of money, you are not going to succeed. Marketing, in the larger scope of the term, is moving past the ill-conceived notion of short term dollar and sense metrics. CPA, CPC and CPM should not be seen as valuations of successes, but directional arrows of sustainability. In affiliate marketing, we have to move past the notion that what we’re doing involves only direct action payouts. Consider the longtail and think ahead.

2. Affiliate Marketing is Not Mainstream
Those of us involved in the affiliate marketing galaxy often wonder why we are not treated with more respect by the rest of the online marketing universe. The easy answer? We don’t belong there. Affiliate marketing, in principle, seeks to democratize and engender the monetized web by allowing producers of quality content, products community situations with the means to continue their efforts. It’s not about gaining riches, it’s about moving past the hubs and nodes of networks.

3. Affiliate Marketing Transcends Links
Links hold affiliate marketing hostage. Just as Jeremiah wore a yoke around his neck to show the coming servitude of Israel to the Babylonians, we affiliate marketers should heed the writings on the wall pointing us towards the dangers of positing all of our hopes and futures of industry sustainability and industry credibility on the link. Clickfraud and AdSense farms are just two examples of the sinful state we will enter if we continue down the path of praising the link while ignoring the individual doing the action of clicking. Give readers, consumers and individuals the chance to elevate themselves and your program by not insulting their intelligences with links.

4. Affiliate Marketing Demands Relationships
Although many will decry such a statement, affiliate marketing must, by its nature, embrace the relationship paradigm. However, this relationship situation between content publisher and individual need not be a handicap. Instead, relationships may open doors to affiliate marketing which other marketing platforms are not able to accomplish and position affiliate marketing as a viable platform of personalized performance. Scale is not everything.

5. Affiliate Marketing is the Future of Marketing
Affiliates, networks and merchants involved in affiliate marketing recognize the power of a platform which celebrates the individual and their involvement in the interaction of a person with a company or website owner providing content. Realizing the personalized conversation inherent (and essential) in affiliate marketing is not a hindrance, but a potential of fulfillment, will allow affiliate marketers to inherent their due place in the world of online marketing.

(Disclaimer: This mini-manifesto reflects my own personal viewpoints and biases and not the viewpoints and biases of the larger Cost Per News and Cost Per Network which strives for meaningful objectivity).

What do you think? Send Hugh your own mini-manifesto or send me your own Affiliate Marketing Manifesto. I’ll post it up to the sight with full credit given to you.

Impulse Marketing Group, associated in the industry with sub-prime credit card offers and lead generation, has been acquired by an unknown entity.

Interestingly, the deal was facilitated by AdMediaPartners who was the same investment bank that providedstrategic advice to aQuantive in its acquisition of sbi.razorfish.

Impulse has had some questionable associations in the past which has landed them in hot water as well (Google search).

Whether or not this begins 2007’s “Silly Season” of online advertising/marketing/lead generating company buyouts by larger entities revolves around the question of who the unknown entity might be.

Why can’t Affiliate Marketing become Performance Marketing or Traffic Marketing or Referral Marketing or SuperCoolLeadGeneratingMachine Marketing?

• Jacob became Israel.
• Allen Konigsberg became Woody Allen.
• Alphonso D’Abruzzo became Alan Alda.
• Archibald Leech became Cary Grant.
• Margaret Hyra became Meg Ryan.
• Issur Danielovitch became Kirk Douglas.
• Tom Mapother became Tom Cruise.

Are those in the affiliate marketing industry stuck with the name “affiliate marketing” forever?

Yes.

There’s no getting around it

Why? Because what “affiliate marketing” represents is a collection of vasts interests and parties without a spider present to keep the web together. That means that as much as we’d like to rebrand, we can’t.

Why? Because in a network structure with very few hubs and mostly nodes, entities outside of the network define the name and identity. Try as we might, we don’t have the ability to change the name of the affiliate marketing industry, but we do have the power to transform it from the inside-out.

The actors listed above made the name changes early, before they were tagged with an emotional aftertaste. You can’t think of Tom Cruise without thinking of Mission Impossible or jumping on couches. After his image troubles last year and being dropped by his studio contract, it seemed that his career might be fading and in trouble of collapsing in on its own weight. Did he rename himself again? No. Instead of rebranding himself via his name, he had a baby and married a young attractive female.

So instead of trying to rename the industry, let’s push forward and escape the 1999 paradigm that has ensnared our industry.

How do we do that??
Conversations.

Online marketing, for all of its vast niches and insider clubs, is a small community.  In some way, we all know each other and we all are affected when there is either good news or bad news.  We celebrate the births of babies together, we send congratulations for marriages and we mourn when there is a death in this large and extended family we’ve created.

So, this week many in the industry have been touched by the loss of Jai Rajkumar.  Here is a memorial thread at WickedFire with a touching obituary by Jon…

Jai Rajkumar – Affiliate Manager and Good Friend

Over the last few weeks I’ve had more and more people ask me for five or six tips to help them get their program out of the online performance marketing doldrums.

This is especially critical advice during the Holiday Season when more consumers (not just individuals, but people actually looking to consume) are online and actively seeking out deals, offers and services.

You can let this potential traffic (and conversion) spike slip by, or go on the offensive and tweak your online marketing program. It’s really not hard… it just takes dedication and a good staff.

So here are is my 12 Step Program to create a better online marketing program or presence culled from my years of experience online as a network rep, publisher, advertiser, software marketer, CPA Network COO and SVP and email marketer…

1. Try all the services you can and crunch the numbers right away. Give MyAffiliateProgram9 a look. There’s some interesting things going on in the program that could transform how and why you use data either as an affiliate or a publisher or a network. Investigate co-registrations. Consider other types of placements you might not have yesterday.

2. Along those lines, investigate CPA Networks (but don’t replace CJ or Linkshare with them if you’re a publisher or affiliate… more on that later). Call Azoogle, Hydra, AdDrive, Rextopia, CPAEmpire, RocketProfits or FiliNet and speak to a rep who handles your side of business depending on your status as a publisher, advertiser or affiliate. These networks have people dedicated to your particular side of the business. I know… I used to be one and loved it when potential advertisers or publishers called me up.

3. Call CJ, Linkshare, Kowabunga and ShareASale and ask them what they can do for you. Talk to a human at the companies and don’t rely on word of mouth or industry reputation.

4. Blog and send trackbacks to competitors, news blogs like this and people you want to reach (many networks and publishers have their own blogs… whether business or personal). People are much more likely to read your content and take the time to hear you if you’ve taken the time to send them a trackback.

5. Read blogs. Read lots of them from all different viewpoints. Don’t know where to start? Get the Google Reader and start subscribing. Don’t have the time to find quality material? Email me and I’ll send over my OPML file, which is a file of all my subscriptions at the moment that you can upload into your reader. That has taken a lot of time/energy/love to create and maintain. You’re welcome.

6. Optimize your page for organic search engine growth. Also optimize your conversion page if you have one.

7. Interact with existing, potential and even non-potential consumers/customers/individuals. How? Blog, answer the phone, open a forum, check Google Groups for your company’s name, watch the forums of the industry/area you are serving.

8. Focus on organic growth of your program. SEO is wonderful and great, but it has a glass ceiling. Don’t blow your budget as an advertiser, network or publisher on keywords (unless you are purely a search marketer, which is short-sighted in this market). Realize the power and effective ROI that organic growth distribution can supply to your site.

9. Research potential affiliates, publishers, networks or partners that you think you could (or could not) do business with in the near future. Make a file and keep that data. It’s invaluable to you. Read that file before bed every night and allow your brain to work its wonders as you sleep. You just might stumble upon a new platform, campaign, metric, keyword, incentive or recruitment tool that could make all the difference. This has worked more than a dozen times for me, and now I have an impressive file cabinet filled with priceless data on everyone I’ve done business with and hope to work with one day. In case of a fire, I’m running for that cabinet.

10. Attend conferences. Affiliate Summit is in Vegas this January. Don’t miss it. Not interested in affiliate marketing? It doesn’t matter… this conference has outgrown its namesake and is helping to create a new brand for partner/performance/affiliate/traffic marketing.

11. If you’re a network or work with publishers and affiliates, give your account representatives a face and a name. The most successful programs in the industry have personalities that have grown out of the collective personalities of the account reps. These people are not easily replaceable. They are your generals, your eyes and your ears. Treat them like royalty because they can make or break your program depending on their enthusiasm or their apathy. If you’re a publisher or affiliate, get to know the people on the phone. Make business personal. If you think business is not personal, you’re a fool.

12. Know Thy Partners. Research, research, research. Listen to account reps, have an eye on the traffic flow and don’t allow people with less-then-ethical standards to bring your program down. In online marketing, you only get one strike and then you’re out.

Agree? Disagree? Anything you’d add? Comment!

If you’d like to see something covered or participate in the conversation here without commenting, there are two simple options.

-If you use del.icio.us, tag a page with “costpernews.”

-Or, if you use ma.gnolia.com, you can also tag a page with “costpernews.”

Most of you are already using one of these two services in your daily browsing, so if you see something interesting, don’t hesitate to tag “costpernews” and I’ll take notice.

I’ll feature the top taggers in a special article/interview/podcast/video post every week or month depending on their preference.

If you’re not following Shmuel Tennenhaus throughout the interwebs, you’re missing some interesting reads and insight. There are three seperate links in that last sentence, and as you know I am not a fan of links.

The fact that I’ve put three links into one sentence should alert you to the potency of the content that Shmuly is producing.

Hell, he’s even been credited with the destruction of a TV show.

For another example to learn from the Shmule…how should bloggers position themselves for the the longtail of coupon searchers and consumers looking for a deal? Shmuly has an answer…

You see, I just checked by blog stats for the day. And of course, it was another pitiful day of traffic. However, there was a glaring glare facing me in the face.

The blog got a bunch of traffic from people googling for a “j crew coupon code“.

Makes sense. After all, today was Cyber Monday. Many moons ago, I wrote a post titled “yahoo suggests jcrew coupon code“. As a result, if you make a search for “jcrew coupon code“, my blog is on the first page of results. (If that achievement alone does not make me sexy, I give up.)

Problem is…that specific post does not contain any coupon code. So, essentially, people are coming here for nothing; cause you and I both not, there aint nothing to read in this joint. (To defend myself just a bit; that blog post does inform people how to find current coupons…)

Follow along or get left behind in the path of content providers who are taking the road less traveled in a yellow wood and realizing that it makes all the difference. Learn from these early trailblazers and make sure that you are not being left behind in the content consolidation of Web3.0.

Grab the longtail by the horns… it’s going to be a bumpy ride.

ValueClick has launched valueclickvideo.com in preparation for their soon to launch in-stream video advertising network.

On the site is a preview of their in-stream video technology (with footage from a recent adtech nonetheless) meant to show the quality and texture of what they can deliver. Underneath the video is an option for “In-banner video” as well as “In-stream video.” The in-banner video seems to be powered or associated with Eyeblaster.

Here are the pro’s for publishers and advertisers listed on the site:

Publishers

• High revenue with premium CPM rates
• Easy to implement – integrated into our existing publisher platform
• Insert video, rich media or graphical ads into existing pre-roll/post-roll inventory
• Quality creative and effective campaigns
• Compatible with most popular video formats

Advertisers

• Two video products: in-stream (pre-roll/post-roll) and in-banner
• Leverage extensive reach and ad network management expertise
• Accomplish brand and direct response objectives
• Improve ROI with higher response rates
• Behavioral targeting and optimization capabilities
• Complete transparency

How will this integrate with CJ?

What will Linkshare do?

How will this impact online and affiliate/partnership/referral marketing?

Will Google make a play with Google Video?

Shoutwire, a Digg competitor, won’t let you submit a story that includes the keyword “Digg.” A fan of the Shoutwire service sent me an email earlier tonight with the tip to try and submit the previous’ post here entitled “Pay Per Digg” to the service.

This is the result (try it for yourself if you’d like)…

Netscape, on the other hand, does not restrict the “digg” keyword…

And neither does Reddit…

Interesting move by Shoutwire, but if the site is going to play catch up to Digg and build a community of loyal users, they have to let their users be the judge of the merits of their own keywords.

I say it is interesting, because at this very moment the top three stories on Shoutwire are:

1. Fox News’ Bullsh*t Has Hit The Fan
2. Was Jesus an Asshole?
3. 9 Reasons Why I Love Sluts

Glad to see that for Shoutwire “Digg” crosses the line but “Bullshit,” “Asshole” (particularly in reference to a figure over 2 billion people consider divine), and “Sluts” are acceptable keywords.

First there was PayPerPost. Then ReviewMe.

Just this morning Jim Kukral blogged on ReveNews about Agloco, which “pays you to surf.”

Now, we have Pay Per Digg.

Where Digg Submitters Pay for Digg Users to Promote their Stories.
And, Where Digg Users Make Easy Money.

Users are paid $0.50 for every 3 stories they digg. You can also submit a story to be amped by paying $20 plus $1 per desired digg. The value of a digg has certainly fallen off over the past year, so the market forces alone should be able to clean up this type of less-than-ethical gaming.

Considering market forces as a primary reason for this type of scheme, it is logical to see where the monetary drive to experiment with valuation platforms such as this come from. However, those same economic forces which put value on actions such as diggs also places the operator of these sites in a continual struggle to keep up with the micro-economic structures of supply and demand in a commodity style fluid market. That’s too much for most to accomplish, so I see the market driving this out of business quickly. However, the gaming of Digg will, of course, continue.

These same market forces extend to Agloco, ReviewMe, PayPerPost and the host of other new platforms allowing users to assign a certain value to actions they were already committing (surfing, blogging, clicking). In order to keep up with the market valuations of the actions needed for payout, and values of intangibles such as attention, user experience, ethics, these platforms must have a firm hold on a good deal of data. I suspect most do not and beyond the ethical implications of getting paid to post or surf or digg, the market will drive them into an escalating situation of irrelevance to the individual user.

See why we need to kill links to help affiliate marketing survive as a brand?

It’s Black Friday here in the US and countless Americans are driving from store to store looking for deals and the season’s newest gadgets and toys.

In honor of the shopping season, over the next few weeks I’m going to be pointing out a series of acquisitions made by players in our space and asking your opinion on whether these where a bargain or a dud.

Our first buy follows the theme of shopping but goes all the way back to 2004: ValueClick’s acquisition of PriceRunner. ValueClick made the purchase for $29 million during a buying spree which had included three other major buys within the previous year Search123 (May ’03); Commission Junction (Dec. ’03); Hi-Speed Media (Dec. ’03). PriceRunner, a shopping comparison provider, already had a large presence in Sweden and Germany and has since expanded into the larger European market as a whole.

Chairman and chief executive officer of ValueClick, James Zarley said about the acquisition in 2004:

“We have been looking to add comparison shopping services as part of our strategic growth plan, and in PriceRunner we have found an established partner that will help us take our first step in this rapidly-growing and profitable area of performance-based online marketing.”

In July 05, ValueClick also launched PriceRunner in the US. In October of this year, MSN announced it would use PriceRunner as the engine behind it’s European MSN Shopping service.

Did ValueClick make the right move by adding this B2C portal to its now expansive B2B offerings (CJ, FastClick, HiSpeed, Mediaplex, Search123, E-Babylon)? Has ValueClick been successful at leveraging this shopping portal in a highly competitive sector? Has PriceRunner allowed ValueClick to expand into the blooming European marketi? Is ValueClick integrating PriceRunner’s B2C consumer network with its other services such as CJ?

Great Bargain or Buyer’s Regret?

Following up on Wednesday’s post, here’s my podcast with a little more depth into my opinion of how and why we should move beyond links in affiliate marketing.
Agree? Disagree? Contribute too the conversation.

Homework is due Tuesday (see previous post)!

http://www.hipcast.com/playweb?audioid=Pcecb7099049d634f584717933e8d1ca4Yl9wRVREYmN3&buffer=5&shape=6&fc=FFFFFF&pc=CCFF33&kc=FFCC33&bc=FFFFFF&brand=1&player=bp14

dailystatsheet2.mp3

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Are links, as we know them in online and affiliate marketing, done for?

In order to answer this question, I’ve narrowed the discussion down to three areas: Leverage, Authority and Long Term Encouragements. Certainly, there are other areas and in the editing process of this post I cut a few of these out and merged them with the three categories above.

However, as online marketing continues to mature, we have to confront this question about the long term establishment of links as the primary tool for connecting advertiser to publisher or merchant to affiliate or network to partner because links, by their nature, do not offer enough flexibility and data gathering for developing trends (RSS, social web adoption, social networking, more intelligent web users, uses of the internet outside of World Wide Web).

Should you ditch the entire concept of linking in order to be progressive? No.

Am I advocating the complete replacement of links with something that can accommodate for attention data? No.

However, online (especially the affiliate) marketing should realize the importance of the need to look beyond the link.

So, here’s your Holiday Homework:

Think about and respond to the notion that links are dead, especially in relevance to affiliate marketing. I’d like to prescribe the areas of Leverage, Authority and Long Term Encouragement as the fields of discussion, but if your point is valid you can certainly travel outside those lines to make your point.

Here are some connections you should consider when thinking about the issue:

-Technorati, Techmeme

-Like.com

-Monetization

-Jellyfish.com

-AdSense Gaming

-Page Rank Problems (or Alexa)

-Participation from Readers/Audience

-Types of Traffic Delivered (Sustained or “Digg Effect” waves)

-Relevancy for Consumers and Individuals

-Value of “Attention Data”

Leave your comments for quick thoughts, or you can submit a longer piece similar to last week’s homework submissions on CPA Networks and Affiliate Networks. I’ll be posting some of your results next Tuesday after the Holiday and include a link to your blog or company. You can email those in, or if you prefer you can send in a voicemail (828.338.2129) on my Skype line which I’ll publish as a part of the post. The deadline is 3pm Friday Tuesday Nov 28 (thanks, Jonathan).

I suspect most of you will initially call me an idiot (I’m close) for questioning the present and future leverage and authority of links. However, put some thought into it, be creative and think of how using other means to reach users can enhance your program/network/platform/offer.

Every day, very early in the morning, I’m going to be recording a 3-4 minute episode of Cost Per News Daily Stat Sheet in partnership with the great folks at BlogTalkRadio.

This is the first episode and very experimental, so go easy, but do let me know what you think and what recommendations you have. I’m doing this day-to-day experiment in the spirit of a Coltrane concert… it’s jazz and heavy with flaws, highlights and brief moments of inspiration.

Feel free to leave a voicemail on the number below and I’ll play it during the show.

Daily Stat Sheet Show Notes (Episode One, 22 Nov 2006)

-Thanks for listening – very beta
-Shmuly’s (General Zod) Video on Digg and Netscape
-CPA Network Transparency? More Than Meets the Eye
-Response to Shawn Collins(Affiliate Summit), Deanna Key (Rextopia) Brian Littleton (ShareASale)
-Leave a VoiceMail for Tomorrow’s Show (828.338.2129)

As I said, there will be a new episode posted every morning, so grab the feed and let me know your thoughts. Yes, I know there is a botch at the very beginning, but I wanted to preserve the live, dynamic and jazz nature of the show.

Thanks for listening!

CPN Daily Stat Sheet Page

http://www.blogtalkradio.com/feeds/costpernews

At the beginning of the month, word spread that many affiliates using their links on MySpace were being terminated from networks such as Azoogle. However, it seems that the networks haven’t reigned in all of their affiliates.

Marketing on MySpace normally uses viral means of spreading a hot topic, issue, movie, album or tech product. However, in this scenario, affiliate marketers use the ease of collecting a large number of “friends” on the MySpace platform (can be easily done with automated software) to blast out numerous bulletins a day to these “friends.”

The result is a large number of eyeballs with a decent conversion rate. In order to compensate for declining click-thru rates, these marketers simply add more and more “friends” and blast their bulletin messages to larger crowds. Its akin to the email marketing vicious cycle a few years ago before CANSPAM.

MySpace says it does not approve of such commercial actions by members:

“Non-commercial Use by Members. The MySpace Services are for the personal use of Members only and may not be used in connection with any commercial endeavors except those that are specifically endorsed or approved by MySpace.com. Illegal and/or unauthorized use of the MySpace Services, including collecting usernames and/or email addresses of Members by electronic or other means for the purpose of sending unsolicited email or unauthorized framing of or linking to the MySpace Website is prohibited. Commercial advertisements, affiliate links, and other forms of solicitation may be removed from Member profiles without notice and may result in termination of Membership privileges. Appropriate legal action will be taken for any illegal or unauthorized use of the MySpace Services.”

This morning, someone alerted me to the blog DropShipArea.com and this post outlining a case study on MySpace marketing with an Azoogle iPod offer. The author of the post says he hopes to get a steady stream of traffic coming to his sites through MySpace, which is not inherently against the MySpace rules in the letter of the law.

The case study he outlines, however, does break some rules, and networks such as Azoogle must be careful about the actions of their affiliates in a post-acquisition MySpace platform which NewsCorp is continually seeking to monetize and clean up.

This is from the case study quoted on the site:

“First, I selected an appropriate offer from Azoogle.

Name: Superb Rewards – Free IPOD Nano (Brand New!)
Payout: $1.40

Why did I choose this offer?
– Pays for just the E-Mail; a simple action that can be completed by 99% of people.
– Decent Payment ($1.40); One of the higher paying iPod offers so I thought it was a good choice.
– Good Reward (iPod Nano); iPods are all the craze lately, some may say it is saturated but a lot of people still don’t have, and want an iPod.
– Appeals to my demographic; It’s usually the younger people wanting iPods, so 18-25 is usually a good range.

I have a MySpace account with 5400 friends (as of now) and I posted a simple bulletin with the following fields:

Subject: WOW!!! THIS IS SO EASY!!!
Body: Anyone with a MySpace account can get a FREE iPod just by entering your email address into this form!!!” CLICK HERE!!!

The results of his endeavor?

“Nothing too spectacular. I got about 10 people clicking on my Link and half of them completed the offer, so I didn’t make too much.

Why? Probably because I’ve used this account for advertising in the past and people have become wary to avoid my bulletins. I did convert at 50% though, so that’s very good – I just needed more clicks.”

And then he goes on to describe how he ramped up the clicks and concludes that MySpace marketing is now a matter of scale.  That’s dangerous for any network allowing this to continue due to MySpace’s state rules.
I can’t imagine this is the type of promotion advertisers within CPA Networks such as Azoogle are hoping to be a part of, even if it is an email only iPod offer. There is still liability to be had, and NewsCorp does have the resources to follow the money trail.

Online marketing continues to grow in scale, reach and shape.  And now it is blooming in the international market as well.

Advertising.com announced today that they have formed a partnership with Mitsui & Co., Ltd. to create a new joint venture to serve the Japanese online advertising market under the name “Advertising.com Japan”.

Japan is the second largest online advertising market ($3.4 billion) and expected to grow rapidly over the coming five years to $4.9 billion by 2009, according to 2006 data from Mizuho Corporation Bank Research.

Advertising.com is an AOL property, so this partnership can be seen as AOL’s attempt to gain traction in a US/Japan cross market strategy already pioneered by Rakuten in it’s acquisition of Linkshare.

Might we see more moves like this in the coming months between European powerhouse affiliate networks (TradeDoubler, Zanox) and US networks (CJ, Performics)?  What about China?

If you use search to reach new or existing customers, or rely on search marketers to expand your program or network, you need to pay attention to the blooming mobile market.

This week, Microsoft announced a deal with Sprint to place Windows Live Search on phones to enhance its local and national search reach…

“It’s very easy to use, and it automatically comes up on the [screen],” says Michael Inserra, Sprint’s director of strategic alliances. “This is the first use of Windows Live Search on phones.” Inserra says the alliance is broad and covers product sets and sales initiatives. Local searches with targeted advertising will be featured. Users simply type in their zip codes or addresses; later GPS technology will automatically pinpoint users’ locations.”

Users can access Google, Yahoo! or MSN from their phones if they are savvy enough to use internet-enabled phones. However, with mobile companies aligning with specific search platforms, it’s important to remember the growing influence of this realm in the search (especially local social) platform.

As we discussed on the latest Weekly Insight Podcast, Linkshare is making moves in the mobile area. Will other affiliate or CPA networks follow? Have affiliates themselves begun to adopt to this new marketing medium? How so?

The podcast this week was an interesting experience. Only three of the regular cast were able to attend (Lee, Jeff and myself), so the conversation felt more personal and directed than it has in the past. There’s always a different dynamic in a conversation such as this when only a few people participate as compared to four, five or six.

Again, I think we are slowly increasing the quality of talk and Jeff has done a nice job of improving some of the audio attributes.

Of course we cover the debate over CPA networks and affiliate networks which has raged on the comments here on the site over the last week. I have to defend my policy of not regulating comments in terms of requiring subscriptions, and voice my reasons for having this site in the first place. Jeff elaborates on some of his points he was hoping to get across in the podcast, and Lee provided a couple of great points (which need to be discussed further) in terms of affiliate value and the nature of the industry as the paradigm of online marketing continues to shift.

After listening again, I do realize there were a few points I let Jeff off the hook when I should have stepped in and corrected or disagreed with him (I’m sure you’ll hear them). For example, as a point in our discussion on affiliate networks and his point that the networks seem to be whithering on the vine. That’s not a completely accurate statement, and I wish we could have gone deeper into defining how many things affiliate networks (such as CJ) are doing well in some respects. I’m working hard to call out people on their mis-steps and over generalizations on the podcast, but it’s a work in progress.

Oh, and I make the point again that LINKS ARE DEAD. That might be a subject discussed here on CPN in the near future.

All in all, I’d recommend this as a supplement to the week’s previous discussions on networks.

I encourage thoughts and responses in the comments section!

Weekly Insight

November 17, 2006

• CPA vs. affiliate networks
• Social media, podcasts & video
• Long term views: affiliate networks
• Sam says, “Links are dead!”
• Lee: Pubcon review

Download the Show (mp3)

http://www.hipcast.com/playweb?audioid=Pf05ad45fce8db477c45667b6e43f63dcZVB5RVREYmR1&buffer=5&fc=FFFFFF&pc=CCFF33&kc=FFCC33&bc=FFFFFF&brand=1&player=ap21

[EDIT 11/19 2:00AM: This will be my last time of participating on that podcast as well.]

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After the conversation over the Molander / Ms. X podcast, I decided it would be a good idea to solicit ideas from you on a main question that was raised from the podcast and the ensuing debate in the comments.

“Are CPA Networks a threat to affiliate networks? Why or Why not?“

If you’d like more material to ponder, here’s an interesting thread at ABestWeb on the subject which I’ll be blogging on later today.

Here are the answers I received from around the affiliate and online marketing industry (in no particular order)…

Deanna Key from Rextopia:

With such similar business models, clientele and customer base, it would seem that this would be a rhetorical question. They are the same. Both act as intermediaries between an entity that desires a customer who is willing to commit a certain action and an entity that can deliver that desired customer.

No matter the lingo, lead or sale, advertiser or merchant, affiliate or publisher, the same principles hold true in order to be a successful network; choose your partners wisely, be fair and just to your partners and work as a team for the greatest collective good. The threat is found in the companies that do not follow these principles and cause a broad stroke to be used when diminishing the worth or validity of either kind of network.

Missy Ward from CPA Empire and Affiliate Summit…

As much as I would prefer to concur with Ms. X’s opinions given my day job ;-), I vehemently disagree that CPA Networks are a replacement for Affiliate Networks.

Saying to an Advertiser that a CPA Network can be a substitute for an Affiliate Network is like saying to a person waiting for a heart transplant that you’re going to give him a lung. While both organs have extremely important functions, one can not stand in for the other.While I am of the same opinion as Ms. X that CPA Networks can generate substantial volume for an advertiser if the conditions are appropriate, not every advertiser will benefit from working with a CPA Network.

Multi-sku retailers for example, would be hard-pressed to find success in a CPA Network. While a large portion of CPA Networks possess the technology to handle rev-share programs and even provide datafeeds, page creators, etc., it is near impossible to find a CPA Network that is doing it. And, it’s not because they don’t know how. I believe it’s simply a matter of realizing that they can’t be everything to everyone and focusing on what they do best, is what makes them successful in their own right.

Additionally, while Advertisers do receive the benefit of not having to manage Affiliates by using a CPA Network, there are inherent flaws that come along with that (transparency issues, brand concerns, etc.) That being said, no advertiser should delude themselves into thinking that whether they are working with a CPA Network or Affiliate Network, that they should take their eye off their baby.

Lastly and probably the least known to advertisers (yet, probably the most important) is that there are Super Affiliates that will NEVER work with CPA Networks. These are the folks that should not be overlooked because while they may not deliver a thousand sales in one day, they will always be consistent.

So while I am a believer that CPA Networks have become a force to be reckoned with (for lack of a better term), they should not be looked at as a substitute for Affiliate Networks for every advertiser. Rather, they should be viewed as a viable supplemental channel for the appropriate type of advertiser who wants to diversify their marketing efforts.

Jeff Doak from My Affiliate Program and Kowabunga…

CPA Networks are not a threat to affiliate networks simply because they serve different kinds of advertisers and, in most cases, different types of affiliates.

Working for a company that has both an affiliate network and a CPA network under the same umbrella, I see the differences between the two client bases quite clearly, and there is very little crossover.

In fact, when one of our company’s sales associates is contacted by a potential advertiser, we have trained them to understand the difference between a Primary Ads prospect and a Kowabunga prospect, and here are the differences:

1. Are they a retailer who sells a product or products (Kowabunga) or are they a company looking to gather leads from a landing page (Primary Ads)?

2. Does the prospect want continuing, long-term relationships with the sites that drive the traffic (Kowabunga) or are they only interested in traffic only, regardless of the source, and they may actually have a limit on the amount of leads they will pay for (Primary Ads)?

This differentiation doesn’t exist simply because we need to share prospects, it exists solely based on the types of clients that are acceptable to each division. If any threat exists at all to affiliate networks it is that they may lose their current lead gen advertisers (if they haven’t already). But since most affiliate networks tout clients who are big brands and big retailers, this is of little concern.

Wayne Porter (of his own fame and with Facetime)…

Traditional affiliate networks rely on long-term programs aimed at retailers. CPA networks tend to work verticals, and will do so more in the future, becoming adept at their particular niche.

As a result, they do not threaten affiliate networks, and in certain circumstances complement them.

However, transparency has been issue with CPA networks that must be overcome. In 2007 we should expect to see the most advanced CPA networks, and or those who have dominated high margin niches become prime acquisition targets.

Shawn Collins from Affiliate Summit and AffiliateTip…

I think the talk of the sky is falling is more symptomatic of people trying to either sell something to fix the “problem” or simply to garner attention.

In reality, I don’t see CPA networks as a threat to traditional affiliate networks.

No more than AdBrite, AdSense, BlogAds, Chitika, and any number of other opportunities for people to make money online.

Actually, I think CPA networks should be embraced by affiliate networks as learning opportunities.

If some affiliates prefer certain aspects of CPA networks, these things can be part of the evolution of affiliate networks.

Not to mention the fact that different types of affiliates promote per lead offers vs. per sale offers.

Since the vast majority of affiliate programs are based on per sale offers paying out a percent of the sale, the affiliates running CPA network deals could well be considered incremental to the existing crop of affiliate network affiliates.

Therefore, they could be potential affiliates of the affiliate networks down the road.

David Lewis from 77Blue (with the most original contribution)…

The answer is no, they are not a threat in any way.

Linda Woods from Partnercentric…

No, they are not. Here’s why – they are intensely focused on “offers”, primarily leads, and only in pushing high volume, easy to understand, consumer oriented offers. Affiliate networks are based on the relationship between retailers that are focused largely on product sales and the commissioned sales people (affiliates) that are interested in helping promote their brand and/or products for a performance fee.They care about the quality of the brand, the demand for the products by consumers, and to some degree things like customer satisfaction and site quality. This is a “people-driven” marketplace, not an “offer-driven” market place. Plus, there’s just too darn many CPA networks, they will start cannibalizing each other soon, and to some degree already have.

The responses here do run the gamut. My own insights into these comments will be coming later today, but first I want to get your thoughts and ideas on what has been presented here from around the industry.

So what do you think? Add your voice to the conversation in the comments. You can also subscribe to them without commenting if you would like to just follow along.

There’s still time (two hours) to participate.

Email me your answer to my question…

“Are CPA Networks a threat to affiliate networks? Why or Why not?“

Jim Kukral, publisher of ReveNews and operator of BlogKits, has submitted a short but intriguing piece on MarketingProfs Daily Fix.

The main question he poses has reverberations that continue to expand like a rock thrown in a pond if you consider the essence of what he’s asking.

Here’s his question:

What is affiliate marketing’s brand? When you think of it, what comes to mind?

I should also point out that this is a good exercise for any marketer to put to use. I think what you’ll find, as I have in other areas, is that what your customer and/or the rest of the world thinks, is drastically different than what you think.

As you begin to form an answer in your head, remember that the audience of MarketingProfs is different than ReveNews or this blog. He’s asking this question to individuals who stand outside of affiliate marketing in general, but who also are deeply entrenched in other online marketing platforms.

Why be concerned over the definition of affiliate marketing’s brand? Why do some of us use the moniker affiliate marketing while others of us shun that term, but continue, in practice, to be associated with affiliate marketing?

For insight into this answer, I think back (as I often do) to an episode of ze Frank’s The Show where he launches into a brilliant tirade of why John Mark Carr would want to associate himself with Jon Benet Ramsey (it was August and that was the only news, remember).

Like Jim’s rock in the pond, Frank’s observations also expand outwards from his three minute video and have implications for the brand that many of us associate ourselves with: affiliate marketing.

ze Frank’s comments go along these lines:

“What the hell do you mean by brand?

Brand is an emotional aftertaste that is conjured up by, but not necessarily dependent on, a series of experiences.

Everything has an aftertaste, and everything is a brand.”

Nothing earth shattering there, unless you like to limit the definition of brand. Frank nails it on the head by saying that everything is a brand and has an emotional aftertaste, however… including affiliate marketing.

If everything is a brand (including affiliate marketing) why associate with a particular brand? Why seek out these types of definitions as Jim is aiming to do? Frank gives more insight:

“Right now platforms are fracturing. There are fewer specific places that have access to a large market share and it’s getting harder to speak to lots of people.

But the shared emotional aftertaste of brand is platform independent.

If you leverage those aftertastes, people pay attention regardless of where they are.”

So, I don’t have an answer for Jim’s question. But I do hope he finds one. There are such a wide variety of emotional aftertastes experienced within (and without) the realm of affiliate marketing, that to figure this out will require more than a few minutes of pondering.

Great question, Jim.

Visit the links below for more information and please do watch the episode of The Show…

Sources:

Jim’s Marketing Prof Daily Fix Article

• Jim’s ReveNews Blog

• BlogKits

ze Frank’s Video Post on Brands

I have a proposal for anyone interested…

I want to bring together a number of different insights into a specific question brought up over and over on the Molander/Ms. X podcast and in the debate raging in the comments below. It’s a question that I’ve been pondering for about three years since I was there at the launch of AdDrive (a CPA network) and have worked on but never come up with a satisfactory answer.

If you’d like to see and respond to the question, email me (sam@costpernews.com) and I’ll send it to you. The catch is that I want a response from you by this Friday. That’s not a lot of time, but the iron is hot, and we all need a good homework assignment. You should email me your response back as soon as possible (at the latest by Friday at noon est).

On Friday at noon est, I’ll post all the responses (with links to your respective programs and your pic if you’d like) at once in an amalgamated post. I’ll post your answer in full and respond to them as a whole and then to each of them individually with my own insights.

I’d like to get at least 10 of you to do this homework assignment. So, if you’re interested in my question and promise to respond by Friday noon, send me an email and I’ll get the question (and a copy of these instructions) over to you immediately.

Looking forward to a good debate.

Do a search for “co registration.”

It can be a scary thing. Consumers have complained voraciously. As Wayne Porter and the brilliant Jan Hertsens point out, there are also serious security concerns over these types of offers.

Nevertheless, companies have made millions on co registrations in the CPA network space. Not only that, but new firms are popping up every day attempting to monetize the reg path and make use of the path that users take to confirm purchases or prize sign ups. Is it worth it? Has the coreg market met its plateau of revenue?

Registration path offers (co-regs) have had a storied history in our industry. The platform has suffered from a lack of real time reporting, a lack of real time validation and a lack of transparency. What was once primarily a broker driven market eventually received enough traction to hit the big networks, portals and merchant offers. In addition, the data points gathered are now greatly enhanced to full lead forms that mimic the advertisers’ web sites, which gives rise to even more concerns over brand recognition and recovery.

The simple “yes/no” opt-in platform has morphed into a very lucrative model. The leads produced in the co-reg model are now held to be of higher quality than other channels such as email, banner or pop (in many circles). Whereas many advertising networks kept registration path offers separate from their email counterparts, many advertisers and publishers are re-examining the co-reg and finding it a very successful model. But, the hotness of 2004 is beginning to wear thin with consumers and advertisers (lead quality lagging). Is the platform still valid for CPA networks and affiliate marketing?

The UK blog One Little Duck (Ze Frank homage?) makes a very good post about this issue. Jason there includes four examples of issues that he has with coregs within the scope of affiliate marketing…

As an affiliate we promote Co-Reg competitions from a number of networks, but I have to admit to being increasingly concerned about the quality and standard of the merchants involved in this sector. Furthermore, comments from our userbase indicate quite strongly that they are far from impressed by the quality of the competitions and this has led to less promotion and diminishing revenue.

Check out his four examples. He’s on to something and this is an area of the online marketing galaxy which needs to find exposure and spotlight. Coregs are and can continue to be a profitable revenue stream for new and existing CPA companies which sale leads, but the consumers have to find trust within this platform to make it work in the long term.

Today brings the launch of another partnership marketing network, AllAdSpace.com. However, this network is putting a twist on the common notions of what being a network means. As more of these networks launch, what sorts of implications do their hybrid way of doing marketing online have for more traditional affiliate and CPA networks?

AllAdSpace’s hook is that it is free for both webmasters and advertisers. So, webmasters and site owners are able to sell ad space by listing it for free, and advertisers are able to search and browse listings of ad space, also for free. Unlike other online ad marketplaces and auction services, AllAdSpace.com charges no fees to ad buyers or sellers, and doesn’t take a percentage cut of any sales made.

According to the site, the network was conceived as a response to the online marketing industry’s lack of a completely free ad marketplace where site owners can sell ad space without having to pay a fee or give up a percentage of the sale.

The founder, Joseph Messina writes:

“No one should have to settle for only a percentage of their ad revenue. The future of buying and selling ad space online is definitely heading in a new direction, and AllAdSpace.com is proud to be taking the initiative to lead in this revolutionary idea.”

Essentially, these networks eliminate the middle-person in the publisher/network relationship. Just as importantly, this platform also eliminates the tracking, paperwork and bandwidth issues that can plague CPA networks which grow too fast or which are not equipped with adequate resources.

The real question is about the publishers. Will publishers see an opportunity for transparency and full reclamation of their generated commissions, or will they see these platforms as lacking essential protections in terms of reporting, payout dates and insertion orders. The publisher must decide if it is worth the 10-30% margins that most networks take to provide these services.

For all of their problems, networks do bridge the vast expanse which exists between most advertisers and publishers. For that reason, I don’t see these platforms cutting into the margins of CJ or Linkshare who rely on larger merchants and relative anonymity of relationship within the publisher base. The smaller CPA networks, however, should pay attention.

Affiliate (or partnership-based) online advertising can and must change dramatically in how it is executed. We are truly in the junior leagues with “affiliate marketing” and “shopping comparison” in terms of cost and delivery structure. There are too many limitations. There are tectonic shifts occurring, today, beneath our feet and driven by advertisers.

Specifically, systems flexibility will drive change. Are you a vendor to advertisers who doesn’t provide flexible delivery and payment options for advertisers? You will lose.

Once the inflection point is reached certain vendors will win and others will lose. Innovative shopping solutions — either search-based (Like.com, Jellyfish.com) or relationship based (FatWallet, CouponMountain) — stand to benefit but only those who achieve adoption in critical mass for their market segment.

Like.com has made an interesting move in search-based shopping solutions for advertisers and consumers (I use that word because the individuals using Like.com are, in all likelihood, seeking to consume something). I chatted with Beth Kirsch, the Marketing Director at Riya/Like.com (and ReveNews blogger) about her thoughts on the future of partnership marketing and Like.com’s goals at helping to shape that future…

What parts of your previous experience with affiliate and performance marketing help you the most in your role at Riya/Like.com?

Riya has two teams that are in charge of revenue generation: the biz dev team and the marketing team. My role at Riya is running the marketing team and I’m not managing relationships at all since that is handled by Biz Dev. Riya hired me for two reasons. First, I understand the blogosphere and second, my experience on the advertiser side generating traffic as well as developing and optimizing campaigns and websites. I think a focus on ROI driven advertising helps me everyday at work and is clearly derived from my affiliate and performance marketing background.

Also, as we all know, the affiliate business model is a challenging business model. From my first day on the job, I was thinking about ways to overcome those challenges because I have a performance marketing background. Let me provide two examples: (1) I’m thinking about reasons to give the consumer to buy though us in the first place; and (2) I’m particularly concerned with retention, in other words, a reason for consumers to come back and buy though us again and again. Watching affiliates and other marketers develop solutions to these issues over the years clearly has helped.

What is interesting is in my interview with Riya, I did not mention affiliate marketing once. I just interviewed as a marketer than happened to blog. My affiliate marketing background is just an added perk for them, but it clearly helps.

In your latest series of posts on ReveNews, you write: “I thought transitioning to a smaller company than Audible and LowerMyBills.com would be fun, smooth and simple. I figured I know how to open up channels and grow them, how hard can this be?” How does the new aspect of Like.com further complicate or simplify that paradigm?

We have been working on Like.com for a while and kept it in stealth mode for PR purposes. When I wrote that statement, I knew about the release, so nothing changed that much in that perspective. What does feel different about the launch are the expectations from everyone. My colleagues in research and engineering are looking at me and my partner in biz dev waiting for us to monetize their product. I also feel the eyes of affiliate marketing community looking at me too wondering if I can pull this off. This is my first time leading the marketing strategy and a department, so the pressure is on. I tend to like working under pressure, so I welcome the challenge. But I expect it to be hard and that I will stumble a little along the way.

In that same post on ReveNews, you write that: “When I got to Riya I realized that search was important and we needed to win at the search game which to me means the need for a serious bid management tool.” You thought this was an important insight but later your CEO, Munjal Shah, helped you to realize some new insights into the growth of your company. In retrospect, what advice would you give merchants or affiliates in regards to the importance of search in growing a site, program or company?

I still think search is an important channel for the company, we just staffed it differently that I thought we would. As for advice, that is a hard one, search is different for companies at different points in their growth cycle. I do believe that search will become even more important over time though and we all need to understand it as well as we can as marketers. I think it’s important to career success if you are interested in online advertising.

How do you answer critics about the celebrity/bling nature of Like.com (given Riya’s original mission of a facial recognition search platform)?

I’ve heard one person doing this and I’d call it link baiting. 😉 More seriously, we took money from investors and it’s our job to give them a return on their investment. Companies change business models all the time. Here is a blog entry by Peter Rip, one of our board members about the change in biz model called “the Riya Pivot.” I think this talks about the change in biz model very well and the reason why.

As an experienced affiliate marketer, what implications do you see for the future of the industry in terms of what is going on with Like.com?

Riya has been very fortunate to be embraced by the Web 2.0 community. I think there is a lot of synergy between Web 2.0 and affiliate marketing. First there are affiliates that are using Web 2.0 tactics. Scott Jangro has Costumzee and Vinny Lingham has Synthasite. Both have been featured in TechCrunch, the bible of Web 2.0. To me affiliates will embrace Web 2.0 because affiliate marketers are the first to adapt to new technology.

Second, As Web 2.0 companies learn how to monetize their product, I think they might turn to affiliate and performance marketing. Riya did, ThisNext has and so have others. This in combined with the release of CJ’s long awaited web services might lead to interesting affiliate business models. It will be fun to watch. I can’t wait to see what people come up with.

I’ve spent a small amount of time working with marketers devoted solely to the mobile side of things, and to be sure the space has taken off in the past 18 months.  The United States does seem to behind Europe and Asia both in terms of mobile technologies and mobile ad serving (large use of mobile internet, or WAP, in Europe is just one example).

As these technologies continue to drop in price here in the States and users continue to demand more features pertaining to quick internet access, expect this sphere of marketing to explode.

The implications of mobile marketing for affiliate (or partnership) marketers are particularly enticing (delivery of relevant content, ads or messages to interested individuals on a cheap but effective platform).  Will Google get involved in this area as well?

This is from the mobile technology blog MobHappy…

Without being too trite, I think we can say that the future for mobile advertising is already here, despite not being on many marketers’ radars yet. Hundreds of millions of ads are already being run, click-through rates are much higher than online (8% is still not unusual, though 5% is more common) and millions of dollars of revenue are being generated through the channel.