Sam Harrelson

Steve Rubel writes

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.

This piece from Merkle’s homepage sums up this sentiment…

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.

Big week for MediaWhiz. Last night in NYC to celebrate ad:tech, MediaWhiz threw a poker tournament. Today, it was announced that they’ve acquired Text Link Ads.

Was this a good buy for MediaWhiz? Where are they looking to move with this buy?

Text Link Ads doesn’t use “no follows” for their links, which has given the platform a good deal of suspicion and has given rise to some debate about its long term health as a model.

Isn’t the link dead in terms of long term value to the market?

New Yorks’ Media Whiz advertising firm has acquired Cincinati’s Text Link Ads. The deal was announced this morning, but the financial details aren’t being disclosed.

Text Link Ads typically sells small text ads for a fixed monthly rate, not pay per click. They advertise on blogs extensively (disclosure: including this one). The company recently released a product called “Feedvertising” that allows publishers to easily place ads from Text Link Ads, ads the publisher sells themselves directly or other messages into their RSS feeds. We use this service to promote other sites in the Crunch network. I hope that this product continues to flourish post acquisition.

Techcrunch » Blog Archive » Text Link Ads Gets Bought by MediaWhiz

Techcrunch features the new Turn CPA network, which is launching with 18 million in venture capital. What is interesting about the new network is its approach on CPA and a growing trend “up the food chain” of utilizing CPA but doing so in a more automated fashion (think BrightRoll or RightMedia).

One thousand advertisers are said to be participating along with 30 publishers. That seems like a small number compared to traditional CPA Networks (smaller networks having in the hundreds of publishers up to the larger networks with many thousands), but the platform needs quality, not quantity, and doesn’t have time to educate or steer webmasters and mom-and-pop affiliates.

Marketing through CPA networks farther down the chain involves working with publishers and affiliates in a dynamic based on relationships. Affiliate marketing teeters on the edge of long term sustainability by a few entrenched and well deserving sites or being subsumed by the contextualization of advertising on the web, turning affiliate marketing into something like an automated widget.

This transformation is already occuring within the realized limitability of affiliate marketing to scale effectively. Hence, new platforms like Turn are looking for a work around…

Buying ads in the Turn Network doesn’t require keyword selection and management. Instead, buyers identify actions they want their audience members to take and how much they would be willing to pay per time those actions are taken. That action might be a site visit, email sign-up or completed transaction.

When visitors come to a site, data about those users, contextual analysis of the site, of the ads and of every ad permutation’s success in that and related sites are all considered in determining each ad’s probability of success. That probability of conversion is then considered relative to the price being paid on a CPA bases. The CPA bid divided by the probability of the action being takes equals an ad’s effective revenue per thousand impressions. And thus an ad is served!

What is at stake is a ten year history (and some would say promise) of performance marketing on a more individual and even democratic level. Continued automation of the space at the higher levels doesn’t bode well for the plethora of CPA networks paying for booths and parties at this year’s ad:tech NYC right now.

How will this affect CJ or Linkshare or Azoogle or AdDrive or VendareNetBlue in the near or long term future?

Along with the start of a very crowded ad:tech NYC today, the online marketing world is buzzing with news of Google’s print ads program. According to BusinessWeek, the most notable part of Google’s print program is its size and scope at launch…

Google Print Ads is notable for both the number of newspapers that have signed on, as well as the participants it’s attracting. Among the participating papers are some of the nation’s largest and most renowned: The New York Times, The Washington Post, The Boston Globe, the Chicago Tribune, The Philadelphia Inquirer, and The Denver Post. More than 100 advertisers will take part as well. (The test hasn’t yet started, and Google declined to release the names of virtually all advertisers.) Tom Phillips, director of Google Print Ads, says he expects the program to be expanded to include weekly newspapers “sooner rather than later.” He says weekly magazines eventually will be involved as well.

Print publications have long been wondering about their future with the competition of online advertising showing increasingly higher returns and shares of advertising budgets. By bridging this gap, Google is issuing forth a strange extension of life for offline content publications. In one respect, the new influx of ads and interest (and relevancy) which Google brings to newspapers and eventually magazines is a blessing. At the same time, there is a fang’s edge to the print content industry in that Google is positioning itself as a metric setter, as it has done with search.

Google Print Ads differs from Google’s AdWords search-term auctions, in which advertisers bid for space adjacent to search results for selected keywords. The new program allows newspapers to set minimum prices. Another difference: In at least one early move into this arena, Google simply bought ad space from publishers and auctioned off pieces to advertisers. But with Print Ads, “rather than create some artificial scarcity by buying [ad] inventory and then auctioning it off,” says Google’s Phillips, advertisers will “bid on inventory and then allow [newspapers] to decide on whatever makes sense.”

So, there’s the crux of this whole development (which has been in small testing since late last year and was seen as inevitability). The question was not if Google was going to go print, but how, and would their move into the space create disproportionate and falsely increased ad rates as the print publishers and advertisers sought to find the market equilibrium. It seems as if Google is inverting what it does with AdWords and bidding on the space already in existence.

The new Weekly Insight podcast that we recorded on Friday is now up. The show is getting better and better every week, and I’d definitely suggest checking out this new episode if you haven’t done so already. We grill affiliate educators, grill Wayne on ReveNews and have a great debate on the state of affiliate marketing (you can only imagine what Jeff, Amanda and I came up with!).

Thanks to Carsten for the plug on ReveNews as well!

Weekly Insight – 11/03/06 (83 MINUTES)

This Week’s Gossip and News:

– MonkeyPhonecall to Scoble
– Affiliates: To Educate Them or Not?
– A Critical Look at Revenews, Gurus, Conferences
– Is Our Industry Looking Backward?
– Deep Thoughts: Search, Memetics & Affiliates

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George Michie, VP of Client Services at The Rimm-Kaufman Group, has sent me a detailed and illuminating response to a previous post where I questioned some of his conclusions about Google’s AdWords Broad Match. Thanks for the bak-and-forth, George! Let us know what you think of the issue in the comments.

“Brooooooad match as you ably define it is a nice crutch for advertisers who don’t want to take the time to billed a massive term list with carefully assigned landing pages and targeted copy. The bottom line is Google’s matching algorithms are the best in the world, but they’re no where near as good as those of a smart human, and imho never will be. Language is really hard.

But the proof is in the pudding. Every time we’ve pulled terms off of broad/extended match and put them on phrase or exact match, the conversion rates on those terms have improved. The tough calculus is whether that improvement gives enough ability to bid more and gain higher position and traffic, such that you get better performance and just as much volume. Often it turns into a volume versus efficiency game.

Particularly with the added complexity brought in by the local advertising network, it seems that Google’s brain center has too many ads to choose from within a retailer’s portfolio, and they aren’t making choices with the best interests of the retailer in mind. We think retailers will benefit by shrinking the choices for them until they learn to better prioritize among them.”

Here’s the plot summary: Yesterday on the Weekly Insight Podcast, there was a discussion of a Monkey Phone Call that Microsoft MVP and Google VIP Wayne Porter had sent my way. He then hatched the plan to send one to Robert Scoble because we were discussing LinkedIn and I brought up Scoble’s infamous post on his hatred of that platform. The rest follows from that. You have to read this for yourself (Ender’s Game meets On the Road).

btw, I’m building an API for WordPress that will translate Porter-ese in the future…

“Hi Scoble, hey, few of us on a podcast (not drunk although I suspect someone hit the rubber cement a bit- host)…It should be coming out soon perhaps when Tipper Gore is done labeling it. In truth, really it is that long and I advise you just to skip to the last 10 minutes where there is some real insight into AIs affecting algorithms (unlike this totally ridiculous crap on broadmatch) and save the other valuable time in your life to do anything else….or listen to the monkey phone call piece.

One guy, that Ze Frank loving- Summerian babbeling (ok listen to podcast for that) was on too- Sam Harrelson. Sam and I were wondering did you get get the monkey phone call I sent over earlier? If so- how was it? Was it performed well for the $10 bucks? (I prefer Lindex$)

Scale of of 1 to 10 with 1 being equal to having your linkedin url scrawled on a restroom wall of a Second Life Gor convention and a 10 having naked conversations hit the bestseller list and only to find you had accidentally encoded the location of the Holy Grail and even random passages of the Da Vinci Code….(btw I’ll work on a way to make LinkedIn fun for you- I did it for spam- I can do it for dry business networks.)

Thanks for the time.. if you have a moment to give us a numeral- we need a number to settle the bet (it decides the amount of times I get to punch Jeff with my MSFT MVP pin in his eye)…if you haven’t gotten the call yet (Sam Harrelson got his and it worked out pretty well, but he said it was kinda weird and I think in a fatal attraction kind of way) Please tell me so I can ensure the call was delivered. see http://www.monkeyphonecall.com

I’ll work hard on your christmas gift maybe something you can blow up in a podcast or an old Apple PC- no real difference really. Btw- if you know Rubel’s cell number please let me know (I’ll treat it respectfully- well most of the time- I swear never to put on the wall of a truckstop)- we figure the whole Edelman- Walmart thing has Rubel down a bit, like from A to B – status maybe a C…. It really isn’t him totally- I have dealt with various aspects of Edelman over the years and well…idiots pretty much.

So I think three or four monkeycalls in a row has got to make him smile or have a transient ischemiac attack…which could erase the memory….or perhaps get me sued by Edelman. Both equally entertaining given Edelman’s lawsuit would probably get kicked out when they figured out they sent in one-two year graduates to do jury manipulation lies halycon laced drinks influence…. really if you are going to do it- do it with style, nothing worse then bad WOM- it doesn’t even approach memetics.

Anyway thanks and so long for all the fish. Note- 42 is no good… need integer from 1 to 10.

Listen to Podcast in MP3

“Working on a way to create a strain of syphillis to transmit in a VRML environment”.”