Sam Harrelson

The amount of inventory in ad networks created by publishers and affiliates is too high to sustain any sort of scarcity that could drive cpm prices higher for publishers or affiliates. However, this abundance of inventory creates a viable and incredibly valuable chunk of potential revenue for both the network and the partnering publisher or affiliate.

So, the affiliate marketplace is no longer constrained by a macro supply and demand metric. That is the key problem that many large scale merchants have been grappling with in their attempts to use the affiliate channel with any degree of success.

The limitless digital reservoir of content and inventory located in the existing ad networks will only grow exponentially as the web continues to expand more into our lives and subsumes every channel of offline content. Entertainment (mp3’s and torrented movies) and comparison shopping (Amazon, eBay) have already created a sustainable paradigm shift and every market will undergo these sorts of tectonic movements – and soon.

This includes the marketing market, which seems to be an illogical oxymoron, but in reality is a marketplace just as real as entertainment or shopping. Marketing offline has translated itself online in the form of our metrics (CPA, CPM) and business plans. However, that will change and online marketing (especially affiliate marketing) will begin to create new paradigms and languages which will prove much more profitable and effective for both advertiser and advertisee.

Offline content (whether music, movie, clothes, beer or marketing campaign) was easily proprietary in nature. You could easily set up walled garens to limit access (and distribution) of the “good stuff” to select customers willing to exchange a certain commodity of currency or attention. However, the digital nature of the web transforms that because what was once a tangible product are now digital H₂0 molecules in a rushing river or digital content (and that river always leads to a vast ocean).

Scarcity placed limits on choices for networks and for affiliates in the traditional economic setup. Now, those limits are rapidly vanishing. Affiliate marketing is in a very good place to help create the marketing equivalent of bittorrent technology.

Marketers discuss the term “audience” a great deal, but what does “audience” really mean? I’d aruge it doesn’t mean anything. It is undefinable and therefore cannot adequately be contained within a box. Audiences are the electrons of online marketing.

Both Jeff and Shawn/Lisa have podcasts that tend to cover similar topics, yet their audiences are different. Zanox and Commission Junction are both affiliate networks with reach in the US and Europe, yet the audiences are different. Market Leverage and Azoogle are both CPA networks, but have different audiences. CPN and ReveNews are both blogs about the world of online and affiliate marketing, yet we have different audiences.

How well do we all know our audiences?

In the blogosphere, we use tools such as MyBlogLog, Google Analytics and Feedburner to find out more about who’s visiting our blogs and where they are coming from. However, those tools don’t tell me much besides quantitative numbers. Numbers are wonderful and can be put together and taken apart in fantastic OpenOffice Spreadsheets (use open source!). But numbers don’t tell me much about the actual visitor. They don’t give me the kind of data that I’d love to have on who you are, what you like, what you don’t like and how I can get you to do something.

So when I write a blog post, am I writing to or for my audience or am I writing to or for myself? When Shawn or Jeff does a podcast, are they doing it for themselves (and their contributors) or are they doing it for the audience. When Market Leverage finds a great new offer from Dreammates, do they help construct the payout structure and creative details to fit their own vision or do they have their network publishers in mind?

How much of an impact should our audiences have upon the nature of our marketing efforts? Think about that before you make a decision. Is playing to your audience a measurable value and an quantifiable metric? Is there a way to measure the value of audience impact over and against your (or your network’s or your affiliate program’s or your podcast’s) own voice?

There’s grand money in a solution like that. Am I trying to build one? Yes. Can you use it? No. It is completely subjective and it’s called intuition. Some marketers have it and some don’t. It’s a skill, but it does require a working knowledge of ajax empathy coding with a little python powered gut feeling. Truly, the singularity is upon us.

The truth (and that’s a relative term as well) is that you can never fully “know” your audience. To know something is to fully understand it. You can describe the basic characteristics of your audience, and you can come close to making a definitive statement about how they behave and how they respond to your offers, podcasts or blog posts… but you should give up on any attempts to “know them.” Your audience is a misty fog that can’t be contained or defined.

Better yet, your audience is like the thousands of stars in the night sky. You can see the stars and point to them, but what you are seeing, pointing to and describing are those stars (or your audience) as they existed in the past. There is a distance between every podcast/network/offer/blog and audience. The stars you see and the audiences you want to reach vary in distance from you, and that distance affects how you perceive both stars and audiences.

The electron is the best example. We can see the trail left by the subatomic particle, but we can never see the electron itself. We know where it might be located (hence quantum theory and the term ‘electron clouds’) but we can’t positively define their location.

Even if you are within touching distance, you’ll never be able to put them under your thumb because what we see, and what we perceive, are always actions from the past.

So, learn to see the trails left by your constellations of quantum audiences. But don’t ever try to define them, and don’t get frustrated when you can’t completely reach them because your audience is constantly changing, and constantly moving. Such is the nature of all things… even affiliates, publishers, listeners and readers.

Do datafeeds have a future?

Will the micro-fication and niche-ification of the web render them useless or cause even more adoption of them?

Why don’t CPA networks use datafeeds?

At the hipster coffee shop across the street from the university where I teach (and where I have my “office” for office hours, advisees and pontificating about online marketing), I got the following cup wrapper on my daily cafe mocha this morning…

Interesting.

It’s an ad for NyQuil and DayQuil from Proctor&Gamble on a coffee cup. I understand advertising such things in heavy rotation during this time of the year (Affiliate Summit will also be Affiliate Flu Summit, I’m sure… that’s why I’m staying out in the desert at night!). I also get the reference of “… Keeps You Going” to caffeine.

However, this must be a branding attempt rather than an advertising attempt. Having a cold and needing NyQuil is not an emotional experience that I share with being at a hipster organic coffee shop. Branding yourself as relevant to the audience of such a coffee shop (where the slogan is “Community in a Cup”) is a smart move, though.

Who you are is partially defined by who you associate with.

The company behind the ad placement is BriteVision.

Who you work with, what offers you run and what networks you are a part of has a great deal of importance to how people perceive your brand.  Short term monetary gains are nice, but you can’t buy a good brand.  Keep that in mind when the payout might be higher and the grass might be greener in a less reputable field. That is especially true in the CPA Network affiliate/publisher bidding wars!

My first job in this industry was in the email marketing side of things, so I’m constantly thinking about that sphere and playing with tools to improve its efficiency, relevance and overall karma. Let’s face it… email marketing has a black eye (or two).

However, I still keep in touch with many of my contacts from that side of things, and they are telling me more and more everyday how hot list management and email marketing is becoming again. If you were involved in either of those markets in 2001-2003 (or BCS as some of us call it… “Before Can-Spam“), you know the serious amounts of money that were flowing in from large advertisers and networks and out the other way towards anyone with a few thousand names and emails. That money brought even more blood hungry sharks into an already vulnerable situation and eventually brought the house down.

However, email is coming back in a big way largely due to social media such as RSS, blogs, and emerging media (or “web2.0” for lack of a better term) sites. It’s ironic because RSS was to be the savior of the inbox and cause all of us to re-examine how we consume data. That is true in some circles, but for the vast majority of individuals, RSS is still virtually unknown.

For instance, I get blank looks from the students in my college classes when I mention that they can subscribe to our class blog feed in a reader. They’ve all subscribed to receive updates in their email inboxes (with an alarmingly large number of @hotmail.com and @aol.com addresses for 18 year olds!). GMail and the new Yahoo Mail are helping to change things towards RSS consumption with integration of feeds, but most users of webmail are still on platforms which allow them to function inside the inbox with enough ease and comfort to not be bothered with RSS.

Amazingly, 34% of the over one hundred subscribers to CPN use the FeedBurner email option instead of using the feed inside of a feed reader. So, let’s not expect the general public to hop on the RSS bandwagon while online marketers and thought shapers are still using email subscriptions as well.

Which brings me back to the original point. Email is becoming hot again because spam filters are working, individuals are smarter and email is still highly relevant.

Make your affiliate site or network based on a community based theme, and you’ll see the validity of “email marketing 2.0” On both the backend (data collection and aggregation) and front end (marketing to email addresses), the forecast is sunny.

Every day (depending on the quality), I’ll be posting a “comment of the day.”

Yes, it’s cheesy, but sometimes visitors don’t dig down into the comments here and miss out on some great insight. There’s better content in the comments here than the actual posts, so make sure you’re following those!

Here’s the CPN comments feed (which is just the comments. The full feed is over to your left in the menubar).

And here’s the quote of the day…

Jeff Doak of Kowabunga responds to the question of innovation in affiliate marketing…

Specifically, something like datafeed-driven storefronts (GoldenCan, KBStores, etc) comes to mind.

But generally, a focus on more measurability and more analytics — CPA as a metric allows full measurement of channel vs. channel; also marketing to niches by allowing influencers in those niches to get compensation for referrals. This latter concept is going to affect everything moving forward.

Thanks, Jeff!

And thanks to all of you for reading and commenting!

Google is an ad company, and a very good one. Yahoo is an ad company as well, but they are smart about social media.

However, the way people and consumers search is going to continue to shift away from Google towards a more social model (that is what Yahoo is positioning for with its recent acquisitions).

When this happens, CPC will explode and the split between CPC and CPA will finally be bridged.

Yahoo knows this, and so should you.

[Edit:  Ask.com knows this as well.  Check out their sandbox project, AskX.  Thanks, Andy!]

What innovations is affiliate marketing providing for the larger universe of online marketing?

1) Go micro.

2) Bridge the gap between the ABW flavored affiliate marketing community and the CPA network flavor of affiliate/performance marketing.

3) Leverage the tremendous amounts of inventory inside of the affiliate and CPA networks in a relationship with the tremendous (and exponentially growing) amounts of ad space available on the emerging media platforms.

4) Read the Long Tail.

5) Stop trying to reach consumers by letting people reach you.

6) Blog

7) Read blogs.

8) Listen to podcasts and watch Ze Frank.

9) Pull, don’t push.

10) Own your niche.