Sam Harrelson

Only two things in online marketing are certain: high conversions and net 15 payouts.

Wait… that’s not right.

I meant to say taxes and server crashes.

If you’re an affiliate, you should have received a 1099 form for each network or merchant that you’ve done over $600 in business with by Thursday February 1. If you’re a network or merchant, you need to make sure that you’ve got your 1099’s mailed out.

From the Wikipedia entry on 1099’s:

A notable use of Form 1099 is to report amounts paid to independent contractors (in IRS terminology, such payments are nonemployee compensation). The ubiquity of the form has also led to use of the phrase “1099” to refer to contractors themselves. U.S. tax law requires businesses to submit a Form 1099 for every contractor paid more than $600 for services during a year. This requirement usually does not apply to corporations receiving payments.

Many businesses and organizations must file thousands of 1099s per year. Thus, payers who file 250 or more Form 1099 reports must file all of them electronically or magnetically with the IRS. For further information refer to Publication 1220, Specifications for Filing Forms 1098, 1099, 5498 and W-2G Magnetically or Electronically or Publication 1187, Specifications for Filing Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding. (http://www.irs.gov/pub/irs-pdf/p1220.pdf) The IRS no longer accepts 3 1/2-inch diskettes for filing information returns, and is phasing out other magnetic media. Electronic filing will soon be the ONLY acceptable method to file information returns at its computing center in Martinsburg, West Virginia.

I’d argue that we all need an educational discussion on this topic because it’s becoming more and more complex to follow the rules due to affiliate marketing’s increasing reach beyond just revenue sharing. For example, a current thread over at ABestWeb is discussing the validity of claiming PPC losses on individual taxes. Interesting.

Some hosted solutions such as MyAffiliateProgram are even offering to handle the composition and delivery of 1099’s for partnering merchants, making the whole process a little less painful and time-consuming. That’s an very valuable and mature business selling point.

Carsten Cumbrowski has posted some helpful info here and here is an interesting thread discussion from ABW in 2002 about 1099’s and Linkshare.

So, what do you say, Shawn? Affiliate Marketing and Taxes discussion at the next Summit?

How much trouble do you have to go through to follow the tax rules?

Have affiliates adequately figured out the proper procedure for claiming earnings and losses?

Wow.

May I take a minute of your time to give you thanks?

I can’t tell you all how much I appreciate the amount of visits since CostPerNews officially launched back on November 1 of 2006.

In fact, we’ve grown by leaps and bounds.

We’ve actually grown so much that on Saturday night at 2am I was awaken by a call from my trusty hosting company, LivingDot, with a warning that CostPerNews was within a few megabytes of going over its bandwith limits for the month… which was something I hadn’t planned for this early.

So, I’ve doubled the bandwith for the site in order to keep this from happening again while CPN continues to grow. However, I simply cannot tell you how incredibly happy I am to have around 300 active daily feed readers along with a Google PR of 5 and a Technorati rank within the top 40,000 this early. For a blog only three months old, those are impressive numbers, and it’s all because of you.

In other words, please keep commenting, emailing and letting me know ways to make CostPerNews a better site. Bandwith is not cheap for someone who is attempting to make all of their income from a blog, so if you have any ideas on improvements we could make or would like to contribute to the CostPerLove fund, please don’t hesitate to contact me!

This is not a fluff piece.

This is a post about a great experience with a network sign up process that I’d like to share because it’s valuable.

I’ve gotten quite a lot of feedback through emails concerning the post about merchant or network sign up programs. I said that at the moment CJ was my favorite sign up process.

Interestingly enough, I had more than a few people email me about my omission of ShareASale’s sign up process. They were all quite vehement in their insistence that ShareASale has the best network sign up process for affiliates and publishers in affiliate marketing.

I’ve had a ShareASale account going back a few years, but not one for CostPerNews. So, the SAS team allowed me to go through the sign up process again to check out their process and sign up for CPN.

I’m impressed.

Honestly.

CJ’s sign-up form is more exhaustive up front and less friendly (how far along am I??) than the ShareASale signup…

The ShareASale signup process takes 5 steps and is rather painless, and even friendly, in its orientation….

The process goes quickly, seems to be less intrusive and really does encourage accomplishing a goal. As humans, we are built to accomplish tasks. Putting a visible “1, 2, 3, 4, 5” at the top really does make a world of difference. We play video games, we sift through emails, we collect money… and we love to accomplish goals. Take a hint from the SAS sign up process and keep the sign up process in a very visible “above the fold” situation. In other words, scrolling down during a sign up process is not a good thing.

CJ does an efficient job of collecting information and data right away and making the sign up process easy.

SAS does a great job of collecting data, keeping you on track and helping you feel as if you’re accomplishing a task. So, I was wrong. My preference for a network sign-up page at the moment is ShareASale.

Thanks to everyone who has sent in emails… now put your comments in the forums!

Anyone have any CPA networks with decent or good sign up forms?? Even if you’re a representative of that CPA network, let us know.

Which affiliate network, CPA network or merchant affiliate marketing program has the best sign up form and process?

My vote at the moment goes to Commission Junction.

When will the sign up process in affiliate marketing be revolutionized… or at least changed? Of course signing up for a program should require a level of strictness to insure quality and reliability. But let’s face it… in affiliate marketing the sign up process is threatening, boring, dull and laborious. Who wants to join a network with a sign up process straight out of Bedrock?

I know that the sign up process costs many programs at least a few dozen or hundred affiliates every month. Just imagine what people new to the affiliate world must go through when they encounter a DirecTrack sign up process.

If they could all just be as simple, friendly and complete as Google…

Do you know how many potential affiliates you are loosing during the sign up process on your network, program or merchant site??

(AdSense doesn’t count for your answer of best sign up process, so don’t even think about using that!).

Some of you may be confused at first by the connection of the following points with affiliate marketing. However, affiliate marketing is (or should be) constructed and confined within a relationship. That relationship can exist between you and one other person, or between your company and thousands (or millions) of people.

However, the base foundation for what we do in this business is the factor of relationship. In particular, if you are an affiliate manager, how well do you know your community?

One of my personal heroes (I’m sure she hates that title… oh well) is Tara Hunt. Summing up Tara’s career is close to blasphemy since she’s been involved and instrumental in so many things, but to be succinct, she is formerly with Riya, currently with Citizen Agency and instrumental in such post-Cluetrain movements as Pinko Marketing (of which I’ve been tagged as a member according to Shawn, Wayne, Lisa, Jim, Carsten, Linda Buquet and numerous others at the Summit).

Tara is contributing to the The Future of Communities Blog, which is a companion community blog (similar to ReveNews) to the upcoming Community 2.0 Conference to be held March 11-14 in Las Vegas this year. She raises a few incredibly interesting points in her first post, which I feel are particularly signficant for affiliate marketing (especially for affiliate managers)…

Personally, I think Community has turned into a garish buzzword, leading hungry marketers by the snoot down a new path of public/commercial boundaries being crossed. The outlandish ad budgets of yesteryear aren’t producing the same back-patting kudos and are looking more like cultural pollution than future award winning art direction. Word of mouth, itself, turns out the same reactions as those clever viral campaigns: an eyeroll at best. Marketers, desperate to keep their Madison Avenue jobs and yearly jaunts to Sundance, are finally ready to “take the precious time needed” to build a community behind their brands.

But we aren’t. We are marketers. Would we give a flying snake about Shari’s kitty photos if we didn’t want to sell her a new car? Would we hang around MMORPG’s all day long waiting for a customer to walk into our lame store ’cause we enjoy it? No. And no…I don’t know the majority of the people on this list, and I’m sure you are all well-meaning wonderful people, but I do know that we are all marketers. We are paid to help our clients sell stuff. And the more we tiptoe around that fact, the more dishonest this industry becomes.

Agree? I do. Affiliate marketing, in particular stands at the crossroads of having to decide whether it will continue to be a community/relationship based model of marketing and advertising or whether it will follow the path of lead generation and pure performance automation. It is a difficult choice depending which lens you (or your employer) chooses to look through. The key is that you do have a choice, and the immediate ROI lens may not always be the best choice for your program.

Tara goes on to write something that every affiliate manager needs to read, memorize and hold close to their heart…

I know that somewhere inside our desires to prove the ROI on community to our eager clients, we know the answer. It’s pretty simple. It’s where we as humans start and customers / consumers / users / community-members / call-us-what-you-will end. We can and will reach deep inside of that part of ourselves (which we are first and foremost) and empathize with the fact that entering someone else’s personal experiences and trying to sell them something is uncool. We have to be willing to lose ourselves to the community. We need to become community advocates. We need to reverse the line of communication and bring word back to our bosses and our clients that their products are hurting the environment, exploiting labor, not acceptable to be tested on animals, falling apart, causing addiction, causing health issues, hurting our children, driving us further apart, etc. We need to protectively bring the soul of the community back INTO the organization and change things…not collectively go out, infiltrate and sell things.

Yes, there is a changing role for marketers. I believe in the future, we don’t work for brands and companies, we work for customers.

Imagine an affiliate program with an affiliate manager that took that seriously. There are a few that do, and I imagine in just a few years there will be dozens more.

What are you doing for your community today?

Leave a comment here or over at Tara’s blog and share your point of view…

Is there such thing as an “exclusive offer” that only one network has access to distribute to its publishers or affiliates?

I’d argue no.

In order to be a true exclusive, a network has to basically create an offer in-house and brand it with either a partner brand (unlikely for most networks) or create a brand to superimpose on the generic exclusive offer’s backend. In this case, if a network creates such an “exclusive” and it is successful, nothing prevents a competing network to quickly develop a similar offer and impose a new brand on top of that one. This is what most networks have attempted to do when creating “exclusives” to lure in new publishers or affiliates.

I argue that it’s not the offer’s exclusivity of style that can achieve that goal, but the brand exclusivity of an in-house offer.

For instance, take the FreeSlide $1.00 pay per email (and later zip) offers that originated with the AdDrive network and quickly spread out through the CPA network world like a fast growing wildfire. FreeSlide as a brand may have been an exclusive, but there were so many knock-offs so quickly that the exclusive nature of FreeSlide quickly vanished. What remained was the brand, which did prove to have staying power and put AdDrive on the map.

In that way, AdDrive figured out how to monetize and attract new publishers with offer brand , rather than just with offer exclusivity. The fad has now passed and FreeSlide is not accepting new signups, but the brand exclusivity is permanently ingrained on the brains of every one in the email marketing world.
The trick is not to establish a unique in terms of function, but establish a unique in terms of brand. That is the selling point that many small CPA networks seem to be missing, but if they were to start thinking of creating ways to insure the long term benefit of a certain in-house brand, rather than trying to out-do competitors with payouts, they could also find the sweet spot of offer creation.

On tonight’s episode of Comedy Central’s Colbert Report, Stephen Colbert issued a $5 challenge (in the spirit of Microsoft) to the first person who changed the definition of “Reality” on Wikipedia to include “Reality has become a commodity.” I’m posting this about 2 mins after he issued the challenge, and I’m sure it’s already been accomplished. The Wikipedia watchers are going to have another long night (or morning on the other side of the pond).

However, reality is not just about our phenomenological experiences. It also encompasses our daily interactions with other humans and technologies. Affiliate marketing is a facet of that reality for most of us and for millions of users who don’t realize that they are participating in “affiliate marketing.”

How should that reality be defined? Should it be purely a commodity based reality? Or is there greater value in helping your visitors, customers or users realize that the reality of affiliate marketing interaction they are participating in with your site is not just a commodity… it is also a relational experience in which they can share, learn or grow as a human.

How to do that?

It greatly depends on your program, site or shopping cart process. Whatever your case, I would start with a the realization that relationships can make you money (if that’s what your ultimate goal is), and work from that point of realization. Try out things to accomplish that goal. Value based relationships want to occur… so don’t hold them back behind a commodity based fence.

I think there’s a great deal of value in allowing for a deeper level of affiliate marketing reality which transcends the artificially imposed boundaries of pure commodity.

Most of you are familiar with larger CPA networks such as Azoogle or CPA Empire, but should you be looking into the possibility of working with CPA networks that are smaller in scale?

What about Rextopia, MarketLeverage or LevelClick?

I asked Lindsey Kane of IceWaterMedia‘s CPA network LevelClick about such differentiating factors and why publishers or affiliates should consider working with their network rather than a more traditional affiliate network (CJ, Linkshare or ShareASale) or one of the larger CPA networks.

Here is her response:

“We have several exclusive offers that you can not find on any other network. Also, all affiliates and advertisers receive a subscription to “Lindsey’s List” which is our weekly newsletter. In addition, we offer a wide range of tools/campaigns for contextual marketing which is our specialty.”

How important are “exclusive” offers to recruiting affiliates? I’d say they can help build a network’s brand, but they are definitely not selling points for a network in a crowded marketplace.

However, Lindsey’s other two points about “Lindsey’s List” and helping affiliates and publishers with their contextual marketing via unique tools or campaigns are unique and potentially valuable selling points for LevelClick. These are the types of services that the smaller networks can provide for affiliates and publishers, and a reason to at least investigate a possible relationship.

The idea of an email subscription which takes the normal affiliate newsletter to the next level (affiliatenewsletter2.0?) could, with the right content and community development, become an extremely beneficial differentiating point. Publishers and affiliates, like most merchants and networks, enjoy putting names with faces. Newsletters with personalities can fill that need (think Adbumb a few years ago). Nice idea, Lindsey.

Helping affiliates and publishers consolidate or improve their contextual advertising programs can also gain a network a friendly reputation and increase word-of-mouth buzz about a certain affiliate manager or network.  Affiliate marketing and even email marketing is about relationships… affiliates and publishers will be much more inclined to work with people they respect and learn from.

Of course, there is no secret formula for determining which networks or merchants you should partner with if you are an affiliate or a publisher. Nonetheless, you should continually seek out new partners and investigate what is going on in the space around you.  Contact LevelClick or Rextopia or MarketLeverage and see what they can do for you.  Finding the right network or merchant to partner with early can be incredibly valuable in the long run, so keep an eye out and do your homework.

Right Media’s RMX Direct for publishers network has just completed a six month beta test and is opening to the public this morning. RMX Direct for Publishers is a simple and free solution for managing advertising networks that allows publishers to make more money from their websites by placing ads from partnering merchants and program sites.

One of the differentiating factors of RMX Direct is that it’s built for publishers who sell their advertising primarily through multiple ad networks. The acknowledgment of the economic reality that publishers are working with various networks to fill their ad inventory (whether it’s email, website placements or registration path placements) presents a different outlook than most competitors in this space who unrealistically hope to reign in publishers in a binding partnership which offers little room for a fluid relationship.

At the moment, RMX Direct is working with nine other networks. RMX Direct allows a publisher to create competition for their ad inventory by letting them create direct relationships with those nine ad networks that are participants in the Right Media Exchange. In addition, publishers can increase the competition by adding in additional ad networks such as AdSense, YPN, and Valueclick.

Michael McNeely of RightMedia writes:

“These networks see the characteristics of each ad impression such as the user’s geography, frequency of ads they’ve viewed, and more. They bid in real-time what they’re willing to pay for each impression based on those characteristics. Additionally, publishers can add any ad network they already work with to the competition, guaranteeing that RMX Direct will only earn them more money than they are making today.”

This idea of an exchange aggregation point for a number of networks is a unique twist on the CPA/affiliate network space. Right Media even has some big names giving endorsements for the program as a result. One of those is Matt McAlister, Senior Product Manager for Yahoo who writes:

“It’s plenty robust enough to serve any small publisher’s needs, and some of its clever capabilities may prove useful to large publishers as well. You get a simple self-serve ad management system where you can drop in new creative including ad code from your ad networks like YPN or AdSense or even Feedburner. I’ve also loaded in a house ad. It took only a couple of minutes to setup each ad. Then you get your Right Media ad code to post into your web page templates. Done.”

When asked for a few stats or number from the beta test of RMX Direct, RightMedia responded with these numbers:

– Over 11 billion ad impressions served
– 3.75 billion ad impressions served in the month of December alone
– Over 16 million clicks on ads
– Over 300,000 conversions
– Over $1.4 million in publisher revenue run through RMX Direct
– 750 publisher accounts
– 350 discussions started in the community forums

Interesting. Particularly interesting in my opinion is the inclusion of the “350 discussions started in the forums” stat. Most web2.0 companies collecting beta test data don’t even keep track of that metric, so it is impressive to see an online advertising networking placing value in the community forum discussions going on about the product.

Is this type of partnering aggregation exchange network a sign of things to come as platforms and traditional advertising networks continue to fragment as publishers search for the best use of their ad inventory? I think so.

Andy Beal has launched an online marketing job board as an addition to the Marketing Pilgrim blog…

Andy has partnered with JobThread.com on the site for the backend, and initial job listings include the likes of Microsoft, iProspect, High Rankings, SEO Inc, Channel Advisor, The Rimm-Kaufman Group and Fox Interactive Media.

Nice work, Andy!