Advertising.com Announces Deal to Enter Japanese Online Advertising Market

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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?

Superman and Time Warner Cheating YouTube?

kryptonitesuperman-749431.jpgShmuel Tennenhaus has just compiled an incredible video on his YouTube channel exposing some of the potential for fraud that exists on the YouTube platform.

Specifically, Shmuly has uncovered some of the dirt on this week’s #1 subscribed to YouTube channel, “SupermanReturnsDVD.”

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.

http://www.youtube.com/watch?v=ybFOu6d6y0k

Windows Live on Mobile Phones: Implications for CPA and Affiliate Markets?

20051106_msnlivesearch.pngIf 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?

Weekly Insight 11/17/2006

weekinsight.GIFThe 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.]

Cost Per News Special: Affiliate Networks vs CPA Networks

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)…

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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.

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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.

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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.

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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.

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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.

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

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

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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.

What is Affiliate Marketing’s Brand?

cookie.jpgJim 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

ze Frank’s Video Post on Brands

A Modest Proposal: Homework Assignment for Readers (Due Friday)

modest.JPGI 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.

CostPerNews Special: Are CJ and Linkshare Worth Their Salt?

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.

[/EDIT]

Listen to hear raw perspectives from a veteran voice (approx 10 minutes)…

COSTPERNEWS PODCAST: ARE CJ AND LINKSHARE WORTH THEIR SALT? (mp3)

http://www.hipcast.com/playweb?audioid=P7014bf789a5011610c79b41947311fcdZVB5RVREYmV8&buffer=5&fc=FFFFFF&pc=CCFF33&kc=FFCC33&bc=FFFFFF&brand=1&player=ap21

End of Co-Registration Craze in CPA Marketing?

coreg.gifDo 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.