While it’s not out of the realm of reality to suggest that the Man of Steel could rise to the level of YouTube stardom, realizing some of the tricks that Warner Brothers may be using to push the release of the Superman Returns DVD to the top of YouTube’s subscription list opens a rusty can of kryptonite on this whole marketing attempt.
Shmuly points out that there have been over 7,500 subscribers to the SupermanReturnsDVD channel just this week. However, there are only 9 videos in the channel, and there have been less video views than actual subscribers. In other words, more “people” have subscribed to the channel than actual videos viewed, which as Shmuly comments on, is simply ridiculous.
Additionally, many of the accounts subscribing to the SupermanReturnsDVD channel were created within the past week, have no favorites listed, have made no comments, have no friends, and are just linked to the SupermanReturnsDVD channel.
Perhaps even more disturbing in this context is the threats from Time Warner to sue YouTube for use of its material as copyright infringement. Dick Parsons, CEO of Time Warner, said in October:
“If you let one thing ignore your rights as an owner it makes it much more difficult to defend those rights when the next guy comes along.”
Even worse, Mr. Parsons, is when you attempt to game a user generated content site with inflated ratings and created user accounts because your company does not understand community, markets and the future.
“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!
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…
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 (email@example.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.
If you have attended any of the adtech’s or Affiliate Summit or the DMA’s over the past four years, you have certainly witnessed the proliferation and explosion of CPA networks in the online marketing industry.
Where did they come from? Why are they here? Should you as a merchant, affiliate manager or program director be working with them? These are important and serious questions with long reaching implications for your company’s bottom line and the future of your service, program or even job.
In hopes of shedding some light on the relationship of CPA Networks to more traditional large affiliate networks from a different point of view, I asked Thoughtshapers.com’s Jeff Molander to do an interview with an industry veteran who has worked inside of a merchant affiliate program, with CJ, Linkshare, BeFree, DirectTrack and with various CPA affiliate networks. What results in this ten minute podcast is full of value and a must listen.
In this special edition podcast, Jeff interviews Ms. X, a veteran affiliate manager who suggests that traditional affiliate networks are under fire by “CPA (cost per action) networks” that are more nimble, flexible and offer what advertisers really want — leads or sales without the work. Jeff decided to protect her identity due to her current work situation and place within the industry. It would be preferable to have someone able to speak without the voice mod or hidden identity, but in this situation, the content more than makes up for the identity protection. Plus, the insights she provides is worth the protection.
In effect, the main question addressed is: “Are affiliate networks like Linkshare and Valueclick’s Commission Junction worth their salt?”
[EDIT 7:00pm Wed Nov 15]:
Upon the suggestion of Jim Kukral, I’ve installed a plugin whereby you can be notified of followup comments via email. You can also subscribe to the comment thread without commenting, but don’t lurk too long (please).
If you’ve already posted, you have to logout and then log back in to Wordress to see the subscribe option (below the comment box). This works for all comments in the past and going forward.
Happy commenting and email me with any questions.
Listen to hear raw perspectives from a veteran voice (approx 10 minutes)…
COSTPERNEWS PODCAST: ARE CJ AND LINKSHARE WORTH THEIR SALT? (mp3)
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?
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.
The rapid rise of the online ad industry in the past decade has been widely discussed and hyped in a media environment where offline spending is decreasing while online spends (and ROI) continue to grow. According to Terry Semel, CEO of Yahoo, the valuation that most analysts have placed on the internet ad industry for 2007 are underestimated…
“The growth potential of Internet advertising has been underestimated because the predictions did not include advertising on video, social media or mobiles.”
Video as you all know will become a major factor on the Internet. It will be everpresent throughout the Internet and it will find its proper way to advertise.
So whether it’s mobile or whether it’s video or whether it’s more and more community (social networking sites), these factors have not gone into those numbers, so we think the actual growth potential of advertising online is really being understated.”
Google has already recognized and cannonized this insight in the purchase of such properties as YouTube and JotSpot (wiki platform). Yahoo seemed to be recognizing and acting on this trend last year with the purchase of Flickr and del.icio.us. However, Google seems to be much more adept and willing to make the moves necessary to capitalize on the emergence of social media.
Farther down the food chain, networks in the affiliate, CPA and partnership marketing space have not moved as fast (or at all) to secure their footing in the emerging social media opportunities present. CPA marketing has an incredible potential to make relevant ads useful and profitable to individuals and consumers.
Will 2007 bring the first toe-dippings of CPA networks into the social media pool?
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?
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.
Again this week we overstepped the thirty minute barrier that Jeff was aiming for. We even went a small amount over the hour mark, but the conversation was interesting for the most part. The asides and random tangents were there, but we’re ringing them in much more effectively and the conversation is really becoming more developed (and valuable) every week. The addition of David Lewis to the regular cast of Amanda, Jeff, Wayne, Lee and myself added more depth to the insights on topics such as Jellyfish and coupon sites.
This show was particularly broad in scope, but there were some very good in depth discussions. We covered everything from the new Like.com to widgets to Marchex and Zanox with some more discussions about the nature and future of affiliate marketing thrown in. If you’re in the affiliate marketing industry and interested in cost per action, SEO or coupon sites, this is a must listen in my opinion. At the end of the show I got to throw in some comments about MyAffiliateProgram’s v9, which I will be covering early next week and we’ll hopefully be discussing on the podcast next week.
Friday November 10, 2006
David Lewis Shows Up!
Love, Hate for Like.com
Widgets, Search: Affiliate Marketing’s Future
Marchex/Domainers Marchex/Domainers Launching Ad Networks
A few weeks back I made big news and landed on TechMeme for pointing out that ZeFrank’s Gimme Some Candy promotion had been dropped by Google Checkout for not selling an actual product. In the end, this worked out for Frank’s benefit as many of his Canadian users pointed out that Google Checkout was not open to residents of Canada anyway. He moved his promotion to PayPal and it has (by all accounts) been a large success both for Frank and his viewers who are more than happy to pay for duckies (even me).
Now, it looks as if Google Checkout is going international (heading off Zanox at the pass, perhaps?). Why is this important? Think of the vertical channels, content creation/aggregation (YouTube and Wiki’s) and the limited scope Adense to adequately encompass the growing canon of user content. The international factor is a logical extension of where Google is heading with its Advertising Operation System.
Since I live in Canada, purchasing or selling items on Google Checkout is not an option. I really wanted to check out the new “email invoice” feature they just announced today, but I’m unable to sign up as a seller.
This is potentially a very important issue as Google seems to be amping up Checkout for the Holiday and early 2007 season with major discounts available to consumers in partnership with participating merchants.
Google is heading into CPA next year and it’s going to be a much larger scheme than we’ve imagined in all of our pontificating!
In his wrap-up coverage of this year’s ad:tech NYC, Scott Rewick of NextInternet writes that one of the things unique about this year’s conference was:
Rise of the “new networks” XY7, ClickBooth, CPA Empire, HydraMedia. I grew up in the early days of the Internet when the companies attracting all of the attention were Adteractive, MetaReward, and Azoogle. I sense a “changing of the guard” as the older companies mature, while the younger ones are aggressively pursuing growth.
I agree with Scott on the transformation that has been happening in the network side of the industry over the past four years. I was with SubscriberBASE at the time when the affiliate network phenomenon was just beginning to take off, and Jeff French had the foresight to see the need to expand our business to include this emerging space with the AdDrive network. Working with AdDrive in the early stages of growth and brand expansion was an incredible experience, and as Scott points out, the main competitors early on were the likes of Azoogle.
However, the market of affiliate networks soon experienced a Big Bang explosion which created an entire universe of networks along with a seemingly inexhaustible supply of material for the creation of new networks.
What’s the reason for this “changing of the guard” as Scott calls it? It has less to do with the ability of the “older” networks to keep up with shifting marketing forces, and more to do with these networks (Azoogle, Adteractive) maturing and expanding their scope in relationship to the largest of networks such as CJ or Linkshare.
As Jeff Molander pointed out last year,
I wonder… is it possible that Azoogle hopes to net a good number of the more cost-sensitive, smaller advertisers from the CJ network (during the most expensive time of the year)? Those, perhaps, who feel under-served (by CJ) and who have declined to purchase service packages for themselves? Might Azoogle be inclined to believe that they can make a better “value offer” to such advertisers… including a more affordable service offering that keys on the existing Azoogle “sweet spot” of hooking advertisers with their existing network of productive affiliates?
Spot on questions, Jeff. These questions are still not answered by Azoogle or any of the networks making the move from a publisher-network to industry competitor and are still relevant for discussions about the CPA space. With Google potentially considering a CPA move, next year could be quite interesting for everyone involved.
The stars seem to be aligning for major acquisitions in this space in 2007, so maybe the haze around the future of these networks will begin to clear then.
Adify is an interesting new player in the video space. Underneath the heading of “Community Driven Ad Networks,” their blog states that:
At Adify, we are developing a business model that “wraps around” this emerging form of content creation with a unique set of services for supporting monetization. Our community networks are designed to enable any participant – publisher, advertiser or user / enthusiast – to benefit directly from helping in the advertising sales or support process. We think that this is a breakthrough model with the same potential to democratize the business side of online media.
Of course there are alternatives for anyone seeking to spread the use of their video in either a specific vertical or across many channels. Today, however, Adify entered into a partnership with vSocial to allow publishers the option of publishing, branding and spreading their user generated content.
vSocial is a social networking for video platform that enables content owners, site operators and online marketing organizations to custom brand, target, virally distribute and monetize their message via video, so this partnership makes for an interesting platform for publishers looking outside the Revver or YouTube models.
According to the press release, this partnership shows some differentiation from competitors by enabling the publisher to include advertising through ease of use:
“Enabling in-video advertising is the next logical step in the evolution of the online video space,” said Mark Sigal, CEO and co-founder of vSocial. “By integrating our vConnect video platform with Adify’s advertising platform, we are giving video publishers a simple way to create value around their content and their brand in a manner that harnesses the power of social networking to create greater reach than has been available in the past.”
The biggest problem I see with this new platform is the reluctance many publishers may have for turning over their content to serve ads which they have limited or no control over. Revver has done a decent job at confronting this worry by allowing some control of ad content, and by building up its own brand since well-known “vlogs” are using the service.
While attempting to bring some democracy to video generation, this partnership still has a few questions of ad-relevancy and long term vision to make clear before publishers begin signing up.
Within a year we’re going to see blogs transforming themselves into customized start pages. This won’t happen with all blogs. It will start with high-traffic sites that zero in on popular verticals like tech and politics. As these tools become more sophisticated and easy to use, the trend will migrate down the Long Tail into other niches.
As I have mentioned before, you can easily transform your default home page into a one-stop-shop that covers most of your basic needs. So why can’t a blogger provide the same service to people who share a common passion on a topic?
Similarly, affiliate marketing in general (from the mom-and-pop sites up to the large loyalty sites) could see such a transformation if a 3rd party platform was made available to the industry. What would spur this metamorphosis? Limitations of scaling.
Rubel points out that one of th reasons this transformation has not occurred en masse in the blogosphere (particularly high traffic niche blogs) is because of the lack of infrastructure. Widgets require registrations (how about co-registrations??) and the ability to cope with large amounts of demand for personalized data. Simply put, most affiliates (and affiliate networks) don’t have the tech infrastructure for such an undertaking. Rubel suggests that in the next year, 3rd Parties will see this deficit and
“will handle the back end processing in exchange for a piece of the generated advertising revenue. This is a great next step for AdSense.”
Take this one step further into the realm of affiliate marketing. Providing a platform for delivering personalized data based on registrations in exchange for a piece of generated advertising revenue sounds very much like the model which most affiliate and CPA networks already operate under. That is no accident, because serving widgets and serving ads (particularly customized ads based on user choices and user registrations) have more in common than anyone in the affiliate marketing world has taken time to notice.
With the introduction of attention and more venture capital into the CPA network space, companies with familiarity of API’s and widget technology are also bringing new tools into the industry. Could the utilization of widgets enter with these newcomers?
The idea of building or morphing a high traffic affiliate site (especially think of loyalty sites such as uPromise, eBates, FatWallet or BizRate) into a widgetized one stop shop beyond the context of just hyperlinks into the realm of customized and portable content is not hard to imagine. Would this be profitable? Yes. Would this encourage user interaction? I definitely think so.
Transforming an affiliate site into a widget building blocks site requires one central thing besides the technology: relationship. Relationship is something (in theory) affiliate marketing is capable of producing across a wide variety of diaspora channels. And this producing of relationship engenders a community receptive to certain forms of communication. Of course, email marketing was effective before we killed it, and RSS has been called by many the next great hope.
However, let’s move beyond those models which still enforce that top-down dictation model and focus on models (like widgets) that produce a back and forth between user and affiliate site. That’s where affiliate marketing shines, and that’s the promise that widgets specifically have for pushing certain parts of the industry in the right direction.
For example, the new email company Gigya shows how utilizing widgets to communicate ideas, data and micro-entertainment might work in practice. Using Gigya’s interface, users can embed widgets containing music, videos, games and even their MySpace layout into an email. The person who receives the email will be able to play back the video, song or whatever has been embedded if they can view HTML email. Imagine an affiliate site or loyalty site pushing company or user generated content in such a format.
Jeff Molander makes the following lucid and well thought out insights about affiliate marketing’s scalability in the context of the relationship paradigm…
Why the freak-out by traditional affiliate managers and executives as Google enters the space? One word: Scale. It’s a word that, to many, is not comfortable in a realm that is dominated by relationships (those nasty little things that don’t scale!). The concepts of transparent (you know who, what, how, when you’re dealing with) advertising and opaque (you have less of an idea) are central as the former offers less scale, the latter more. As time goes on (competition for advertisers heats up) making performance-based ad buying frictionless is becoming more important. Hence, “traditional” (relationship-oriented, transparent, high maintenance) affiliate programs become more focused (coupon and loyalty shopping sites) and receive less attention (as they require more people power to scale).
The link is dead. Content customization based on a relationship (even as simple as user registration or co-registration) and micro-systems of delivery of that content is the new black. Affiliate marketing, with its ability to make relationships, has a great opportunity to make use of widgets and widget delivery to set the larger industry standard.
In this mode of widget usage, scalability is not a detriment to affiliate marketing. Rather than adhering to that long held belief that the non-scalability of affiliate marketing is what’s holding the industry back from the major leagues, realizing that new platforms (such as widgets) provide a way for affiliates and networks to utilize the relationship factor as a positive… an incredibly profitable and long-term solution positive.
Alterian is a provider of software for analytics and lead integrated marketing. According to their press release, the goal of their software platform is to make it cost effective for marketers to gain insight into their data and use this to drive an integrated marketing strategy, across multiple online and offline channels, from a single set of applications and infrastructure. A few of their clients include Accenture, Acxiom, Allant Group, Carlson Marketing Group, Experian, Epsilon, Donnelley Marketing, Harte-Hanks, Merkle, Ogilvy One and Euro RSCG Worldwide.
Experian is a big player in online marketing, so pay attention to this.
Merkle, who will be using Alterian’s software for email and their online marketing programs considers itself a data-driven marketing solution that enable large national organizations to maximize the results from their marketing investment. Basically, Merkle provides customer strategy, business intelligence and analytics, data sourcing, media targeting and measurement, and marketing technology solutions to medium to large size corporations.
Alterian (LSE:ALN), the leading global provider of Analytics Led Integrated Marketing software, has signed a three-year licensing agreement with Merkle for the latest addition to its marketing suite, the Dynamic Messenger online marketing platform. Merkle is one of the nation’s largest database marketing agencies, and under the agreement Merkle will roll out Alterian’s technology to current and new clients and integrate Alterian’s solution with other online and offline marketing services and solutions.
Why is this important? Let’s analyze the press release of this partnership…
“Integrated marketing promises many benefits, but achieving these benefits depends on having insight into customer, transactional and marketing data to create appropriate strategies, and the ability to leverage this across multiple channels quickly.,” said David Eldridge, Alterian’s chief executive officer. “Marketers are turning to service providers and technologies with the capability to provide this insight, combining online and offline data, and to take immediate action as a result. We are excited to be working with Merkle to deliver our solution’s unique capabilities, which we fully expect will provide significant advantages to their clients.”
The synthesis of online and offline marketing is a no-brainer, but the platforms available to large corporations interested in leveraging customer relationships across verticals and and independent channels has been slow in development and even slower in adoption.
It’s no longer effective to broadcast your marketing messages to millions of anonymous people and hope for a solid return on investment. Available information about your customers and prospects has increased exponentially. And for the first time in the history of marketing, you can base your strategy on real facts.
However, as the consolidation of user generated content and social media continues to gain momentum, this synthesis will escalate rapidly and more partnerships of this type will occur and have large implications for affiliate marketing and the way the chain of ad spending which funds affiliate marketing is done.