Revenue Performance Magazine, Spring 2010 Edition
Content
ISSUE 3 | SPRING 2010 | REVENUE.MTHINK REVENUE.MTHINK.COM .COM
BigBucks, Bad Business Who’s Getting Google-Slapped and Why Does DirectTrack 8.0 Change The Game? Full Review Geno Prussakov on The Year Ahead in 2010 How To Stay Legal With Negative Option Billing
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Spring 2010 | Revenue.mthink.com
Contents
Feature Article
Big Bucks, Bad Business
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Google has been cracking down on some affiliates. Are you at risk of losing your business to a decision that can’t be challenged? BY LISA MORGAN
Product Review
Taming the Affiliate Network Jungle
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DirectTrack 8.0 offers certified tracking, DirectTrack cross-network publication of offers and more. Does it change the game? BY LISA MORGAN
Publisher’s Letter
Are You a Velocirapto elociraptor? r?
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BY CHRIS TRAYHORN
Manager’s Minute
2010: The Year Ahead
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BY EVGENII “GENO” PRUSSAKOV
Social Media Watch
What Are you Buying?
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BY IAN ROSENWACH
Legal Web
Putting The Positive on Negative Option Billing
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BY DAVID O. KLEIN & JONATHAN E. TURCO
Affiliate Corner
What New Affiliates and Merchants Need to Know
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BY PARESH VADAVIA
Visions of Performance
Are You A Value Added Affiliate? BY GEORGE HANSEN
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Publisher’s letter SUPER-AFFILIATE INSIGHTS FOR ONLINE PUBLISHERS AND ADVERTISER ADVERTISERS S
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elcome to 2010. This is the year in which we can look to the horizon once more. A year of rebirth, of gaining the high ground, of winning again. Never before has such a tough year been followed by one of such massive opportunities. If you’re you’re not excited by 2010, you should be. Just look at what’s coming. Everyone is talking about the impact of social media but we are only at the very beginning of the changes it is going to make in our lives. Mobile web access is growing faster than any previous technology has ever done and is going to be at least twice as big as desktop web access. Cloud computing will mean that everyone has all their data available to them all the time. New non-governmental currencies and payment systems are being invented. Entertainment is changing as people move from passive TV-watching to interactive games. And then there’s climate change and all the green technologies that are being introduced. This is a meteorite-load of disruption. The world of commerce is going to heat up dramatically. Established industry dinosaurs will have to try and evolve with the new environment, which will provide lots of opportunity for faster, smarter smar ter competitors. Big beasts are going to die off while the smaller and more intelligent thrive. 2010 is going to be the year y ear of the Ve Velociraptor. lociraptor. Take a minute to consider: are you y ou a Velociraptor? Velociraptor? Or are a re you prey? Welcome Welco 2010 Performance. havetolots plansyear. for this t his year. Stay withme usto and let and us beRevenue your trusted guide. It’sWe going be aofgreat
PUBLISHER & EDITOR Chris Trayhorn ART DIRECTOR David Witcomb SENIOR WRITER
Lisa Morgan PRODUCTION MANAGER Yvonne Schellerup CLIENT LIAISON Jennifer Neaves CONTRIBUTING CONTRIBUTI NG WRITERS George Hansen, David Klein, Evgenii “Geno” Prussakov, Ian Rosenwach, Paresh Vadavia. VICE-PRESIDENT, SALES Tobias Siegel ADVERTISING/SALES DIRECTOR Kelly Joseph Lemos To advertise, subscribe or obtain reprints, call 415-371-8800, or visit: revenue.mThin revenue.mThink.com k.com Revenue Performance Performance is published by mThink 55 New Montgomery, Suite 216 San Francisco, CA 94105
Chris Trayhorn Trayhorn Publisher
mThink: Intelligent Performance Marketing CHAIRMAN AND CEO Chris Trayhorn
Contributors Lisa Morgan is an independent journalist who covers technology, business, and marketing issues. She is also a
Evgenii “Geno” Prussakov , writes, blogs, speaks and consults about affiliate marketing and program
strategic strate gic con consul sultan tantt and and writer writer serving serv ing tec techno hnolog logy-dr y-driven iven organizations.
management.
George Hansen is Hansen is Director of Sales and Business Development Developme nt at Digital River – oneNetworkD oneNetworkDirect. irect.
Disclaimer : Disclaimer
Paresh Vadavia adavia is is a veteran affiliate manager who recently launched his own agency for outsourcing program managemen management. t.
David O. Klein is a partner with the New York law firm of Klein Zelma Ze lman n Roth Rotherm ermel el whe where re he
Ian Rosenwach is Rosenwach is a product manager with LinkShare overseeing product planning and execution, as well as social
pract pr actice icess inte interne rnett mar marke ketin ting g law law..
media.
Revenue Performance and revenue.mThink.com include editorial and/or advertising that refers to affiliate programs that often include many different websites. Occasionally those programs may include websites offering education in casino or card games. In such cases no promotion or endorsement of those sites should be inferred or implied – our editorial coverage and/or and/or advertising relates only to the affiliate program itself. itself. Revenue Performance magazine magazine and revenue.mThink.com com do not accept advertising advertising that promotes promotes online gambling. gambling.
VICE PRESIDENT, MARKETING Yvonne Schellerup DIRECTOR, WEB DEVELOPMENT Ron Snow COMPTROLLER
Julienne Riveong While every effort has been made to ensure the accuracy of the content of this publication, the publisher will accept no responsibility for any errors or omissions, or for any loss or damage, consequential or otherwise, suffered as a result of any material published here. The information published in Revenue Performance is not intended as a substitute for legal, accounting, tax or other professional advice. The publisher assumes no responsibility for statements made by advertisers in business competition. All editorial submissions, whether solicited or unsolicited, become the property of mThink. Statements and opinions expressed herein are not necessarily those of Revenue Performance, mThink, its affiliates, advertisers or any other agent. The name “Revenue Performance” and the phrase “Super-Affiliate Insights” are the intellectual property of mThink. The entire content of this publication is protected by copyright; full details are available through the publisher. All rights reserved. These trademarks or copyright materials may not be used in any media for any purpose without the express written consent of mThink. © 2010 mThink ISSN: 1549-7615 Cover Image: © Diego Cervo, Sandra Van Der Steen | Dreamstime.com
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Manager’s Minute – Evgenii “Geno” Prussakov
2010 The Year Ahead Let’s face it. 2009 is a year that many of us are pleased to put behind us. We want to look to the future. 2010 beckons. New mobile phones and tablet computers are appearing every ever y week. We are seeing crazy-fast take-up of social media like Twitter,, YouTube Twitter YouTube and a nd Facebook. Add those developments to a rebounding economy and it all indicates an inflection point: one of those moments in history when everything comes together to enable massive change and opportunity. 2010 is going to be a big year politically, technologically, globally. We invited Geno Prussakov to take look at what we can all look forward to in the coming year.
I
t’s that time of the year when half the world is making predictions, while the other half is reading them. The one thing that unites us is the desire to have some solid information that can be relied upon along with practical ideas on how to turn the knowledge into action. Here are my thoughts on what will work in 2010, together with some of the most important data points on what the trends are in the industry.
Social Media to Blossom I know this will come as no surprise to the majority of the readers, but it’s it’s worth looking look ing again aga in at some of the more interesting research data. data . Forrester’s Forrester’s US Interactive Marketing Forecast, 2009 to 2014 – which projects a substantial growth in online marketing over the next four years (hitting nearly $55 billion in 2014) – also estimates that social media will play an increasing role and demand increased attention from marketers. More concretely, Forrester forecasts that social media marketing spend will grow faster than any other sector sec tor (more (more than tha n fourfold). Additionally, out of the top seven interactive channels which are expected to increase in marketing effectiveness, two are directly related to social media: what Forrester calls “created social media” (expected to show the greatest g reatest increase in effectiveness) effectiveness),, and paid social listings.
Transparency is Central Transparency and trust are going to become ever more important to online marketing in general and affiliate marketing in particular particula r during 2010. With the recent introduction of newrules Commission endorsements/ ments/testimonials testimonials rFederal ules andTrade the rapid development of social media, online marketers are going to find that th at success comes from increased transparency leading to better customer engagement.
>>
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Manager’s Minute – Evgenii “Geno” Prussakov
>>
Engagement is no longer something that is solely driven For merchants or affiliates, there is no better New Year’s by a marketing decision. Consumers are participating in resolution than to spend time every day on practicing conshaping brands at will, on an hourly basis, and social media version optimization skills. Nothing will pay off of f better. in all its variety is enabling and accelerating this process. Publishers and marketers can either monetize this trend Online Video to Boom by offering the necessary tools and opportunities to help In 2010 video will be increasingly presented as part of gentheir customers participate. part icipate. Or eral search results and both affiliates af filiates they can risk destroying what and etailers should keep this in mind. they have previously built by Some merchants are already providing You thought the Internet choosing to use social media affiliates with video creative, but expewe’ve seen so far is big? carelessly, spamming and abusrience is already showing that the best ing the trust of their readers converting creative is often that made According to Forrester, and followers. by the affiliates a ffiliates themselves. themselves. And they mobile web is going to be Affiliates and a nd publishers that do not have to be professionally shot. make the effort to combine In the present disintermediated world,
twice as large.
greater with the demandtransparency for more social media participation, will find that they can create new value-added tools and services, and by doing so will win big.
Mobile Marketing to Grow …and fast too! Morgan Stanley predicts that mobile Internet usage will be “at least twice the size of the desktop Internet” Internet” within a few years. Smartphones are expected to “out-ship the global notebook + netbook market in 2010 and out-ship the global PC market (including desktops) by 2012.” Other sources support this forecast of massive growth. eMarketer, for example, forecasts steady growth in mobile ad spend from $416 million in 2009 to $593 million in 2010, to $1.5 billion in 2013. The increasing demand for mobile services serv ices created by social media combi combined ned with the growth of mobile technologies offers any number of interesting marketing opportunities. This will be big play for many aff iliate marketers in 2010.
The Year of CRO Rand Fishkin, CEO & co-founder of SEOmoz, has christened 2010 “the year of conversion rate optimization.” He believes that most companies are now at an “inflection “in flection point …[able] to assess their spend and where they derive value.” As a result, he believes belie ves that th at CRO, with w ith its reasonable costs that deliver high ROI, will be the area a rea where most will focus. Tim Ash of Site SiteT Tuners has been stressing the importance of for a long time toand affiliate marketers, increasingCRO numbers of affiliates eta ilers etailers are now and paying attention to landing page optimization. Those that have learned to tweak, split test, improve, test again, and again, will be the ones that beat their competition in 2010.
honesty and objectivity counts for more than glamour. The Forrester’s report quoted above also forecasts that over 80% of polled marketers believe that the marketing effectiveness of online video will increase in the course of the next three years, which will make this channel second only to created social media in influence.
More Legislative Fights With more and more states facing budget deficits, more will turn tur n towards the “affiliate tax” t ax” as the t he panacea. If it hasn’t happened in your state yet, it’s just a matter of time and as an affiliate marketer you need to be prepared to be proactive. These legislative initiatives can ca n be fought, but it needs merchants and affiliates to join the fight, writer letters and campaign. Be aware and be ready. Here’s to a fruitful 2010! Stick with your goals, take the most out of the emerging trends, and success will surely follow.
References: • Forrester’s Forrester’s US Interactive Marketing Ma rketing Forecast, 2009 To 2014 –http:/ –http://ww /www. w.forrester. forrester.com/rb/Research/us_incom/rb/Research/us_interactive_marketing_forecast%2C_2009_to_2014/q/ id/47730/t/2 • Morgan Stanley’s Stan ley’s The Mobile Internet Report – http:// http:// www.m ww w.morgansta organstanley. nley.com/institutional/techresearch/mocom/institutional/techresearch/mobile_internet_report122009.html • eMarketer - Tre Trends nds to Watch - All of eMarketer’ eMarketer’ss 2010 Predictions - http:/ http://ww /www. w.emarketer. emarketer.com/blog/index.php com/blog/index.php// trends-watch-emarketers-2010-pr trends-watch-emarketers2010-predictions/ edictions/ • Rand Ra nd Fiskin - 8 Predictions for SEO in 2010 - http://ww http://ww w. seomoz.org/blog/8-predictions-for-seo-in-2010. |rp EVGENII “GENO” PRUSSAKOV is an author, blogger, speaker and consul-
tant in affiliate marketing and affiliate program management.
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Social Media Watch – Ian Rosenwach What Are You Buying? ive million people use Twitter Twitter every day. Each month, more Americans visit v isit YouT YouTube ube than tha n watch the t he Super Bowl. It’ It’ss clear that the Internet is fundamentally changing. What does this change in online behavior mean for e-commerce?
F
The Great Attention Stream Migration
By allowing consumers to share links on social sites you open up a vast new distribution opportunity, so long as your content and offers are compelling enough to be shared. Every publisher and advertiser should be thinking about how to incorporate social sharing links on their site. BradsDeals.com is a great example exa mple of how it should be done, with nice integration of Twitter, Twitter, Facebook, and email options for every deal on the site.
By now we’ve seen that Black Friday and a nd Cyber Monday numbers were stronger than expected. E-commerce continues to be a vibrant force in the t he economy, economy, even during Networks Plugging In uncertain times. But at the same time the online shopping shopping CPA and affiliate marketing are channels well-suited to landscape is changing. As people spend more time on on social helping marketers marketers capture the new attention attention stream. At a networks their online behavior is evolving. evolving. Consumers 10,000 foot level, social sites represent represent distribution opportuare doing the same activities as nities. As more marketers turn to before such as shopping, browssocial media as an actionable chaning, and searching, but on social nel, affiliate programs can assist E-commerce continu continues es sites. Increasingly, on Increasingly, they a re to are finding the distribution to be a vibrant force in recommendations what buy on social sites. of their products from their friends or others that Networks, such as ourselves, the economy, even during they trust. The 00’s 00’s saw a migraalso need to think about how they tion of the attention stream to can help their customers be aware uncertain times. social places. of and involved with emerging It’ss the job of networks, pubIt’ shopping trends. At LinkShare, lishers, and advertisers to adapt to the changing online what we call our ou r Bento Box is a sandbox for plug-ins plug-ins where shopping landscape and find ways to use social networks to we offer a number of tools like WordPress WordPress plug-ins and engage consumers. a Google Gadget that make getting links outside of the LinkShare Dashboard seamless. Tweetshop and the Social Social Media Grows Up LinkGenerator bookmarklet enable publishers publishers to create According to eMarketer’s eMarketer’s 201 2010 0 Social Media Marketing tracking links to advertiser pages and then share it on their Benchmark Report, social media marketing is now reaching social sites, with a click of a button. As a demonstration, go maturity, meaning that th at it’s becoming more measurable. to Twitter and take a look at all the tweets with the hash tag Whether it’s the numbers of followers, fans, or subscribers, #tweetshop. You’ll You’ll find Twitter users recommending prodadvertisers are able to set measurable goals and then track ucts to their followers in real-time. real-time. We see social networks ROI. Until now social media has been used primarily for as a distribution channel for our customers to not only to branding and customer service but more marketers are seedrive awareness, but also to drive sales. ing the direct response opportunities that lie within social As social networks net works have come to command a greater networks. As social media matures as a channel, marketing share of shoppers’ attention so online onl ine marketers have adaptobjectives will focus towards sales growth and lead generaed. Now it’s it’s time to take it to the next level and treat social tion. MarketingSherpa reports that the retail/e-commerce retail/e-commerce media as a mature channel not only suited for branding and sector is poised to increase social media spend by an average customer service but also for sales and leads. |rP of 79% in 2010. Social media is not an a n experiment for marketers anymore – it’s a must-have. Smart publishers are using social networks to promote their own brand and drive sales, as well as enabling their IAN ROSENWACH is a product manager with LinkShare overseeing customers to share deals within their own social networks. product planning and execution, as well as social media.
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BAD Bucks, Who’s Getting Google-Slapped and Why By Lisa Morgan
BUSINESS Google is cracking down. Last month, Google filed a trademark infringement infr ingement lawsuit against aga inst Pacific WebWorks WebWorks and several others as part of an effort to stop fraudulent “Google Money” schemes. These are scammy offers that use Google’s brand to attract unsuspecting customers and then trap them into hard-to-break continuity programs, often via negative option contracts. contracts. In a move that many see as being related, Google has also moved “to remove remove scammy URLS from our index,” and to, “permanently “perma nently disable AdWords accounts that have a poor or harmful user experience whether or not they use Google’s Google’s trademarks illegally.” illegally.” Unfortunately, it’s not just scammers that are getting hit by these new measures.
Public forums and blogs are rife with complaints from affiliates whose businesses have been adversely affected by or obliterated obliterated by what has come to be known k nown as a GoogleG oogleslap. A common story is that a business may have existed for some time, with perhaps six or seven figures having been spent on AdWords, when suddenly with little or no warning war ning Google disables the account. ac count. Often, O ften, there seems se ems to be no way to identify what caused the problem and therefore no way to fix it. Even if the problem could be identified and fixed, the end result would be the same with Google being unresponsive and the account remaining unusable.
“Google-slaps are just Google trying to correct the market so consumers can have h ave a better user experience, ex perience,”” said Michael Krongel, president president of Intermark Intermark Media, Inc. “But the process is very arbitrary. People comply comply and still get slapped or their listing gets poor Quality Scores.” Although most advertisers adhere to Google’s terms, policies and guidelines, there are nevertheless some aggressive advertisers that try to take advantage of consumers, said a Google spokesperson. MediaTrust MediaT rust CEO Peter Bordes feels that th at a lack of industry industr y standards is driving Google’s actions in a situation in which it is trying to protect itself and consumers. “We’re “We’ re seeing a contraction of the CPA market which points to this as a root problem, problem,”” he said. “My fear is that things are moving so fast and so hard [remedial action] won’tt be done in a manner that reflects fair won’ fa ir play.” play.” The word, “fair” is at the heart of the debate. debate. While Google does provides terms, conditions and exhaustive guidelines for advertisers, it is still often accused of not revealing all of the relevant factors. “Many affiliates feel Google is acting in a way that is unfair by failing to disclose important, relevant information with regard to policies and decisions that affect af fect their livelihoods,” said John Lemp, CEO and founder of IntegraClick, LLC. “The frustrating part about this is affiliate marketers have no idea why their account account is being terminated. It’ It’ss unfortunate that many publishers and advertisers with no
The process seems random has begunIf to have a chilling effect on affiliates andand advertisers. only Google’s guidelines weren’t weren’t so ambiguous, some say, and if there t here was some recourse, then perhaps honest affiliates affil iates could avoid the sanctions intended to deter scammers.
ill have had to experience account terminations andintentions worse, blacklisting within the Google network due to heightened security security measures. These are Google’s Google’s core customers and [they] should be at least treated with some form of dignity.”
Are Google-Slaps Arbitrary?
revenue.mThink.com
Potential Pitfalls Google’s desire to eliminate “poor or harmful user experiences” makes sense from corporate risk and a nd consumer protection standpoints, but the policy is a point of great debate because it is subjective and not necessarily tied to fraud or intentional misdeeds. What factors fac tors may lead to a user experience ex perience being considered poor? poor? Landing page quality, Quality Scores and thin or irrelevant content are the most obvious, obv ious, but there seem to be several others that are undisclosed. “If you’re running a PPC campaign your landing page will count toward your Quality Score,” said Jim Lillig, director of Networks at ClickFusion. “The real question is whether your organic Quality Qua lity Score differs from a paid listing. And the biggest incongruence is you need good information but will you get slapped for a form on a page? Is it ambiguous? Yes, but not to Google.” A common situation that has perplexed p erplexed many m any adverti a dvertissers has been when they have found that their Quality Score has plummeted overnight. What caused it? it? There is no simple way to know for sure so people have to keep guessing. According Accor ding to Google’ Google’s spokesperso spokesperson n a number number of factors are included in the measurement of a keyword’s relevance to ad text and a user’s search query. Quality Scores are updated frequently and are closely related to the performance of a keyword. Because there are a variety of factors involved in the calculation of a Quality Score, Google says it not possible to give a simple explanation for a Quality Score’s decline. IntegraClick’s Lemp wonders how any affiliate can be confident about the future when their livelihoods may depend on Google’s subjective subjective judgment on the meaning mean ing of landing page quality. Because there are so many different landing page types and search encompasses hundreds of thousands of different business types, he feels Google has a responsibility to understand the nuances and provide specific feedback. “The only people that will learn the system if Google continues to do business this way are those that do business the wrong way,” way,” he said. “In the end, Google may end up pushing partners towards using unethical tactics to diversify their risks, which is exactly what Google was trying to avoid in the first place. place.”” Many agree that Google’s approach may actually encourage the kind of practices it is designed to stop because gaming Google’s rules can provide big increases in traffic volume and ROI, with the result that honest affiliates affil iates are either forced to follow suit or become the victims of higher bid prices and lower margins.
Who Decides? Google says it uses both automated and manual processes to measureadvertisers. site quality and distinguish scammers from legitimate The to company disables the accounts of offenders that repeatedly breach its advertising advert ising policies and landing page quality guidelines, or that place ads that promote sites considered considered to be egregiously harmful ha rmful to users.
Given the ease with which new accounts can be set up and the sheer number of accounts that exist, some sort of automated review is accepted as necessary by everyone. Where it comes in for criticism is when it appears arbitrary a rbitrary and overreaching. “When you talk about destroying someone’s business, Google needs to do so in a sniper-based sniper-based fashion,” said IntegraClick’s Lemp. “It’ “It’ss easy to say ‘some people people will be affected for the greater good’, but it’s it’s different once it’s you and your livelihood that is axed.” Part of the problem is that it seems to many that Google takes no account of a history of good behavior by the affiliate. Having an account that has existed for years without problems but but with great g reat Quality Scores and big ad spends appears to carry little weight with Google. One advertiser’s big big ad spend may just be regarded as a tiny drop in the Google bucket. It is a sensitive issue for victims v ictims of the Google-slap that consider themselves to be some of Google’s best customers. “A million dollars is not that big a deal dea l to a company Google’s size,” size,” said ClickFusion’s Lillig. “Their strategy is
Who Should Define the Guidelines? Google’s power over its advertising customers is creating great concern among publishers, advertisers, and networks. Some have decided that the industry as a whole needs to take action to selfregulate before the government decides to step in or Google’s rules become even more onerous. John Lemp, CEO and founder of IntegraClick, IntegraClick, LLC says he and the CEOs of some of the largest affiliate networks are talking about creating a notfor-profit for-pro fit entity that protects protect s advertisers, affiliaf filiates, and consumers. Peter Bordes, CEO of Media M edia Trust hopes that perhaps something might be accomplished through the Performance Marketing M arketing Alliance (PMA) although at the present time the group is busy handling Internet Internet tax issues. issues. In the meantime his network has launched a compliance directory so people can educate themselves about issues like blogging policies. Jim Lillig, director director of networks at ClickFusion ClickFusion is talking with some of his colleagues about potentially launching launching a certification authority. authority. His company is currently working on technology that will monitor the quality of traffic sent by publishers to advertisers. “Affiliates have done a poor job of policing them“Affiliates selves,” said said Lillig. Lillig. “I’m for anything that will will help legitimize affiliate marketing.”
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to weed out bad people but even our court system s ystem convicts innocent people. The problem is there’s there’s no recourse with Google.”
What Happens If an Account is Disabled?
The lack of recourse is a common complaint among those who have had their accounts disabled. “Think about the guy who has spent his career building a reputation with Google as far as Quality Scores and bid pricing go. All of a sudden he is is shut down and has no way to appeal the process,” process,” said IntegraClick’s Lemp. Lemp. “The legitimate affiliate who has worked his whole life in search and has built his reputation the right way faces disaster. disaster. I know more and more people every single day that have faced this with Google and it’s a shame.” shame.” According to the Google spokesperson, an escalation escalat ion process does exist. Advertisers can reply directly to the notification email they’ve received to ask further questions or request appeals. Google then conducts a review and makes judgments on a case-by-case basis. But that doesn’t satisfy most who have been affected and there are increasing calls for a different approach. Lemp and others say Google’s unilateral actions underscore u nderscore the need for some sort of industry self-regulation or arbitration that has a clear set of checks and balances.
Should You Be Worried? It depends. Opinions differ greatly about who should be worried and why. Theoretically, if you follow the Google’s Google’s guidelines and make a point of conducting business ethically then you should not have to worry about a Google-slap. In practice, results may vary. va ry. Google’s sheer sheer size and market share put the company in a position of defining rules that continually shape and reshape the industry, especially in the absence of a selfregulated industry forum. And even if such an industry industry body was established est ablished and new guidelines g uidelines published, published, Google would still have h ave significant influence by sheer force of market presence. That will remain the t he situation unless and until Google’s market share is eroded at some point in the future. What to do in the meantime? meantime? In addition to adhering to Google’s published published guidelines and a nd following sound business practices, the best advice seems to be that the push towards quality of user experience ex perience will continue and so publishers and advertisers need to take responsibility for providing that experience and being careful about what they choose to promote. “Your standard online marketer is trying to figure out what is or isn’t isn’t OK,” OK,” said ClickFusion’s ClickFusion’s Lillig. “If you’re you’re just going to follow a getget-rich-quick rich-quick formula and provide no value then expect the t he worst. Although the guidelines g uidelines may be vague, content is still king.” king.” |rp LISA MORGAN is an independent journalist and consultant who covers
technology and business business issues.
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Legal Web – David O. Klein and Jonathan E. Turco Putting the Positive in Negative Option Billing
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ith a name like l ike “negative option billing” it should come as no surprise that this practice has received a lot of negative attention lately from the Federal Trade Commission Commission (“FTC”), various state attorneys at torneys general and other regulatory bodies. Despite this trend, marketers and consumers alike have found this billing method to be a convenient and useful payment option over the years. With proper and prominent prominent disclosures, a reasonreasonable price point, an equitable refund policy and a responsive customer service serv ice department (complete (complete with w ith a user user-friendly -friendly cancellation policy), there’s there’s no reason to think t hink that th at negative option billing cannot continue to be a respectable business model for years to come. First, some background for those unfamiliar with this billing method. The phrase “negative option” option” billing (also (also
Last May, the U.S. Senate Committee on Commerce, Science, and Transportation launched an investigation investigat ion into various companies, compan ies, including Webloyalty, Webloyalty, Vertrue and Affinion, in response to an avalanche av alanche of complaints alleging that consumers were being enrolled in negative option billing programs without obtaining informed consumer consent. The common feature of these complaints complaints was that consumers were being enrolled in the applicable programs without consumers providing their credit card information
referred to as “continuity” or “recurring” billing) refers to a billing method whereby the customer is automatically charged on a periodic and recurring basis for goods or services ordered up until the point that the customer cancels his or her membership membership or account. account. The most frequent model involves a monthly charge, though shorter and longer intervals are sometimes offered. “Free-to-pay conversion” billing (a close cousin) refers to a billing method whereby the customer is offered a free trial period for a given product or service, and if the customer does not cancel before the end of the trial period, the consumer is charged the applicable product or service fee. Frequently,, freeFrequently to-pay conversion models convert to negative option billing after the applicable trial period expires. Given the fact that both
directly to the program providers. providers. The process worked worked as follows: after first completing an Internet Internet-based -based transaction using a credit card, a pop-up window would appear on the consumer’s computer screen featuring a different product offered by a separate company, as well as an an incentive to sign-up. After the consumer entered his or her e-mail address only (not (n ot credit card ca rd information) in response to this second offer, of fer, the consumer’s credit card would be billed for the underlying product offering because, unbeknownst to the consumer, his or her credit card information was provided by the first company to the second company. Earlier this month, the Commerce Committee extended its probe to include Visa, MasterCard and American Express, Ex press, seeking answers as to how these programs were tolerated by credit credit
of these models involve a process whereby the consumer is billed at a later time without obtaining subsequent consent or pay-
the initial interaction, there is a heightened level of scrutiny surrounding the suitability and comprehensiveness of the disclosures required during the initial consumer/business operator sign-up event.
Common Complaints and Regulatory Action
card companies that are normally vigilant about pre venting such abuses. This past November, a settlement in
ment information from the consumer after
18
excess of $1 million was reached between
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Web – David O. Klein and Jonathan E. Turco Legal Web
the FTC and online business operator Commerce Planet, example, if you are charging $60 a month on a recurring Inc. in connection with a negative option billing program basis for access to a database of government auctions that is that was packaged with a “free” offering. The FTC alleged made available for free by the government, you are asking that consumers were not made aware that they were enrollfor trouble. ing in the negative option program when obtaining the free offering, and that the Commerce Planet refund policy and Do Not Underestimate Customer Service practices were excessively difficult and onerous for agLast, but not certainly not least, it pays to ensure that grieved consumers to successfully navigate. your customer service department is easy to access, responThese are just two recent examples of regulatory action in sive and that a process is in place to facilitate cancellations this space, though they are by no means isolated instances. with as little hardship ha rdship for the consumer as possible. It The level of scrutiny that these practices are receiving looks doesn’tt hurt to have a liberal refund policy either. doesn’ either. The more like it is only going to increase as regulators attempt to weed responsive and accommodating you are, a re, the more likely it is out the industry’s few bad actors. that the consumer will feel respected Should you engage in these billand made whole. Healthy customer When done right, ing methods, it would be prudent relations remains the cornerstone to ensure that you conform to the requirements of law, as well as industry best practices. Below is a rough guide to help you do just that.
recurring billing methods provide a convenience for both businesses and their customers by doing away with the need to revisi revisitt the purchase/payment process each month for a product or service that the consumer plans to use for an extended
of any successful business, whether or not you employ negative option billing mechanisms as part of your business. When done right, recurring billing methods provide a convenience for both businesses and their customBest Practices Guide First and foremost: disclosure, ers by doing away with the need to disclosure, disclosure. And, just revisit the purchase/payment process to be certain, some more discloeach month for a product or service serv ice sure. It is absolutely vital that that the consumer plans to use for an the price point of your product extended period of time. Likewise, if or service, the applicable billthe details of the offer are communiing schedule, the cancellation cated adequately to customers, freemethod (complete (complete with an 800 80 0 to-pay conversion programs provide number for customer service) ser vice) consumers with the valuable opporand the description of how the tunity to try out a product in advance period of time. charges will appear on the conbefore committing to a purchase. On sumer’ss credit card statement are all sumer’ a ll clearly and a nd conspicutheir own, neither of these billing methods is suspect or ously displayed directly above the “call to action” (usually unethical. Marketers that use these vehicles need need to make the order “submit” “submit” button). button). Do not hide this information in sure that the consumer is well informed as to the material the fine print at the bottom of the sign-up page. terms of the offer, that the fee correlates to the value of the Further, a link to the t he applicable Terms Terms of Service Serv ice and Priproduct or service and that the means to cancel is easy and vacy Policy must appear above your order “submit” button button hassle free. If properly properly implemented, implemented, negative option billing billing so that the consumer is made aware of the material terms can provide value to both sides of the transaction. prior to consummating the transaction. To reiterate, do not Please note that this is only a brief overview of some of relegate these links to the fine print at the bottom of the the legal issues surrounding negative option billing prosign-up page. grams. Remember to obtain guidance from a licensed and While it is important to ensure that the consumer is made experienced legal professional prior to offering such billing aware of the price prior to purchase, that is not the only options as part of your marketing campaigns. |rp price-related issue that you should be concerned concerned with. Regulators have also increasingly shown an interest in products and/or services that are marketed via negative option and/or free-to-pay conversion conversion methods where the applicable price of the product and/or service bears little rational relation to
Turco is an associate, with DAVID O. KLEIN is a partner, and Jonathan E. Turco the firm of Klein Zelman Rothermel LLP in New York, New York, where they practice Internet marketing law. law. David O. Klein can be reached at
the value of the actual product and/or service provided. provided. For
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(212) 935-6020 or via email at [email protected].
Affiliate Corner – Paresh Vadavia What New Affiliates and Merchants Need to Know.
A
ffiliate marketing is a much-coveted in the business of online moneymaking.career After path all, it’s convenient, it looks easy enough and everybody’s e verybody’s doing it. But make no mistake: it’s a virtual jungle out there. Many affiliate newbies believe it is the cash cow of their dreams that will make them rich overnight: an unfortunate misconception, really, given the overwhelming number of well-established competitors who stand in the way of any newcomer’s success. And for those new retailers, merchants and advertisers who think an affiliate program will inarguably bring in the big bucks, it is a rude awakening when they discover they are swimming against a heavy current in the company of much bigger fish. So how does the new guy thrive against such odds?
Tips for the Affiliate Novice Tip #1: Study your competition. competition. Create a dummy email account and sign up to as a s many relevant publishers’ newsletters as you can to see what kind of deals they are offering their subscribers. Then explore their websites to see what promotional tips and trends t rends you can pick up. You You should be offering something similar or better. Tip #2: Level your playing playing field. Chances are, because you are new and have virtually v irtually no credibility, credibility, advertisers will give you lower commissions than what they are giving better-known and more successful players. Sway them into increasing your cut by promising them a hot spot on your homepage and a nd proposing a three-month trial at a higher commission. Then work work hard at maintaining that privilege. Tip #3: Make your merchants shine. Don’t just plop logos, links and coupon codes on a page and hope for the best; sell each brand. Create a merchant page that showcases images and logos, a proper look and feel, copy about the company and reasons why their product is worth buying. This takes time, but it also makes your affiliation seem legit in the eyes of wary consumers, and consequently optimizes your chances for click-through and sales. Tip #4: Create a sense of partnership. Rather than promoting random coupon codes, ask your advertisers for vanity codes that include your affiliate site’s name, like OPM25 rather than 54321. And propose co-branded landing pages that ensure continuity and consistency in the messaging between your site and theirs. For instance, your logo, a customized welcome message and the offer you are promoting should appear in a greeting on the advertiser advertiser’s ’s page. Again, this ups your credibility credibility and a nd makes you trustworthy tr ustworthy to cautious customers. Tip #5: Keep an eye out for new advertisers. More often than not, the bigger and better affiliates are too busy with long-lasting partnerships par tnerships to bother fostering new ones. Jump on every opportunity to partner pa rtner up with new retailers retai lers
product, because one of Remember: themmber: mightthe justearlier be the t heyou pot build of gold you’ve been hoping hoping for. Reme a relationship with the smaller retailer, the more you will get out of it when they finally succeed.
Tips for the New Merchant Tip #1: Compare yourself to competitors. Set up a publisher’s publisher ’s account for yourself in the affiliate affi liate space in order to see what competitors are doing. What kinds of promotions are out there? How long are offers extended? How big are the discounts and how great the commissions? Who has the hottest creative? Compile what you find and assess a ssess it. Then turn yourself into a worthy opponent. Tip #2: Give the little guy a try. Your first instinct in stinct might be to push for reputable affiliates to promote your product, but you’d you’d be surprised sur prised at how much you can get out of a collaboration with a promising newbie affiliate. The green ones are so eager to succeed, they will give you better exposure and will work twice as hard to promote your brand. Keep in mind that every big guy started out small… Tip #3: Give out the goods. Customize coupon codes and landing page greetings g reetings for the more devoted affiliates. Provide them with a list of top-performing top-performing keywords so they hit h it better rankings. And give them any marketing material they might need to properly promote your brand: copy about your company, logos in various sizes and any other relevant creative. Tip #4: Begin with a bang. In order to get noticed in the affiliate space, you’ll want to kick start your program with aggressive offers and bonus incentives for your partners. This may cost you in the beginning, but it is a worthwhile expense in the long run. Think long term ROI: this isn’t supposed to be an overnight delight. Tip #5: If you have it, spend it well. If you have the financial means to hire an experienced affiliate manager who has longstanding relationships with key publishers, do it. Whether it is someone in-house or from an outside agency, this is a sure way of growing your program much more quickly and ensuring faster returns.
Affiliate Conferences: Key to Success Lastly, but most importantly, whether you are an a n advertiser or an affiliate that is new to the space, be sure to invest time and money in attending at tending conferences. It is the best forum to meet the right people, build partnerships, seek opportunities and learn a fundamental lesson about the business: relationships go a very, very long way. So go on: spread your wings w ings and fly. (And network your way to the sky.) sky.) |rP agency, short for OutPARESH VADAVIA recently launched the OPMpros agency,
and advertisers that show potential and have an innovative
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sourced Program Management. OPMpros.com. OPMpros.com.
Tam amin ing g th thee
Affiliate Jungle J Network ungle By Lisa Morgan
Networks Go Wild If there is one recent development that has changed cha nged performance marketing it is the explosion in new advertising and networks. know for sure how manyaffiliate there are now butNobody a guessseems of overto500 active networks, and several thousand in total, is probably correct. It is easier than ever for someone – anyone – to set up a network and start brokering offers. It’s almost become a standard career path for successful affiliates to start their own CPA network. All of this frantic f rantic growth growt h has been driven by the t he easy availability of network platform software. It is no longer the case that a new network has to build their own software. Longtime providers such as DirectTrack, LinkTrust and HitPath have been joined by newcomers such as HasOffers, creating increased competition, the rapid introduction of new features and more aggressive pricing. The granddaddy of affiliate network platforms is DirectTrack. It’s It’s sufficiently well-established that t hat 19 out of the top 50 performance marketing networks use it with the result that most experienced affiliates are familiar with the interface and have learned to trust the tracking and reporting. We decided to take a closer look at the latest version, DirectTrack 8.0, 8.0, to see if it’s still holding its own as the leader of
the pack.
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What’s New? DirectTrack is provided by Direct Response Technologies, a business unit of Digital River. It’s a hosted affiliate management platform which is designed to be used by small, startup networks and scale all the way up to multi-national operations with to hundreds of thousands publishers. It’their s flexible enough cope with merchants of needing to runIt’s own affiliate programs and even ad agencies who wish to syndicate offers from f rom their clients of record. Approximately 600 companies in 45 countries are curcurrently using DirectTrack, some of which are using the t he platform to build global affiliate networks. To support these kinds of efforts the software can be customized in any language and is already being used in twelve different languages including Chinese and Hebrew. International currency support is also included so users can run truly global campaigns that include offers tailored to specific local markets.
Tracking And Reporting Here at Revenue Performance we support and promote best practices in the affiliate marketing community. One of the reasons we decided to review DirectTrack at this time is that with version 8.0 they have taken the unique step – at least unique to our knowledge – of having their affiliate tracking systems independently audited and certified. At a time when the industry industr y is preoccupied with fraud prevention and issues of trust and legality, we feel this is an initiative that is to be applauded. The Internet Advertising Bureau (IAB) certification program was carried out by Interactive Media Services Group, Inc. (ImServices), (ImServices), which provides online onl ine media auditing and forensic forensic investigation services. The certification was designed to assure merchants, affiliates and network operators that DirectTrack’s tracking is accurate and glitch-free, and that it reports clicks, impres-
DirectTrack’s commitment commitment to proving out the t he reliability and accuracy of its solution is intended to help it appeal to new networks who need to manage their risks effectively. Unreliable network software, or tracking that can not be trusted is a startup killer in this business so we may see more platform providers IABonly certification time goes on. For now, DirectTseeking DirectTrack rack is the one that’sastaken the initiative.
Network API DirectTrack 8.0 has clearly been designed to provide everything one needs. It consists of a solid framework and open architecture, rich features, straightforward administrator and affiliate interfaces, and flexible, open source application programm programming ing interfaces (APIs (APIs). ). The APIs allow customers to build networks and user interfaces on top of DirectTrack. They can also export data from DirectTrack to third party applications or proprietary tools. “The API suite is great because it provides a method of getting information in formation in and out of DirectTrack,” said Frank Ioppolo, Jr., Jr., COO and general counsel at MarketLeverage. MarketL everage. MarketLeverage’s affiliate network uses the platform to track millions of sales and leads. In addition to providing an expanded portfolio of APIs, DirectTrack 8.0 also allows a llows users to build private-label interinterfaces to reflect their own brand identity. identity. Agencies running several affiliate networks for different entities or brands can establish and own multiple private domains without having to worry about third party code appearing on the page.
Fraud Prevention For a long time one of the biggest bigge st factors holding back the growth of the performance marketing industry has been the difficulty of identifying high-risk or fraudulent affiliates before they can ca n cause problems. We’ve We’ve heard stories of
sions, sales, and transact transactions ionsleads reliably reliably. . other network We spoke with ImServices’ CEO Richard Bennett who told us that the audit and certification process checked the integrity of the tracking architecture that is the foundation of the DirectTrack D irectTrack platform (and (and thus applies to all networks using it)) but it didn’t it didn’t extend to third t hird party part y add-ons. Bennett also said the IAB certification process is sufficiently rigorous that companies often have to modify and improve their product in order to achieve compliance with the standard. “Our clients include Yahoo, AOL, Microsoft, and eBay – companies that have the facilities in place to ensure they qualify, qualif y,”” he said. “It’ “It’ss a
Fraud prevention features include a central database of potentially high-risk affiliates
big step for a smaller company.”
that is shared across all DirectTrack networks.
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networks having to reject up to 50% of their t heir applicants – it’s a massive time-waster and a nd one bad apple slipping through can cost a network a lot of money very quickly. DirectTrack 8.0 addresses this issue via the t he creation of a central database of affiliates that have been red-flagged as
running international campaigns that are subject to regional restrictions. Some parts of Europe, Europe, for example, regard cookies as spyware. Without cookies, it can be difficult to track transactions and properly credit credit affiliates. To solve the issue, DirectTrack provides cookieless tracking using a
fraudulent high-risk means by any that network the platform. This sharedorrepository suchusing affiliates can be instantly identified as soon as they apply apply.. The affiliates are rated based on internal data from DirectTrack and also from TARGUSInfo so networks can make informed decisions about which affiliates they accept. Although affiliate acceptance or denial can be implemented manually, the process can also be automated. Red-flagged affiliates cannot simply avoid the taint of past substandard substa ndard behavior simply by re-registering because their identities are tied to several different parameters. “When an affiliate signs up, they go through a validation process that involves our repository and a 40-point checklist from TARGUSInfo,” TARGUSInfo,” said sa id George Bordo, group vice v ice president and general manager of Direct Response. “Our network clients love it because you can quickly identify and manage ma nage higher-risk affiliates.” ForgeBusiness CEO Jonathan Miller finds the fraud management capabilities are invaluable because the OfferFo Of ferForge rge network has tens of thousands of affiliates. “We sign up about 200 affiliates a week. About 50 to 100 of them will try to do something fraudulent,” fraudulent ,” he said. “Direc “Directt-
combination of attributes session IDs, and more. including IP address, proxy ID, “About three percent p ercent of Internet users block cookies so affiliates may not be credited the way they should,” said Direct Response’s Response’s Bordo. “With our hybrid tracking, which combines cookie and cookieless technologies, both affiliates and networks receive the optimal credit.” Internet marketers, merchants, and agencies concerned with brand consistency will appreciate the fact they can upload creative to DirectTrack which affiliates can then grab with a simple mouse click. click. What’s more, DirectTrack DirectTrack automatically generates and embeds the affiliate’s code in the creative, which saves previous time and eliminates manual coding errors. “[With some other networks], you have to create new creative for each affiliate which is nearly impossible when dealing with agencies,”” said ForgeBusiness agencies, ForgeBusiness’’ Miller. “With DirectTrack 1,000 people can instantly generate customizedd tags that are all customize tracked in one place.”
Track is helping helping to clean up the industry.”
Mobile Campaigns DirectTrack 8.0 also includes new features that help publishers leverage emerging channels such as SMS. “More affiliates are demand-
Those who create and manage cross-platform marketing campaigns will find the integrated delivery capabilities particularly appealing. Using DirectTrack DirectTrack it is easy to track the effectiveness of search, email, advertising, video, and now mobile campaigns. It is is also easy to create new campaigns, rotate ads, and target or retarget ads based on time of day, demographics, and
ing saidmobile Direct functionality,” Response’ss Bordo. Response’ “With the rise of smart sma rt phones, campaigns can ca n be delivered to handsets and optimized according to the t he preference of recipients.” In addition to SMS campaign delivery, DirectTrack 8.0 also provides mobile reporting and client portals which enable publishers to be updated anytime, anywhere. “There are 14 million mill ion mobile users in South America,” said ForgeBusiness’ Miller. “Being
geographic location. DirectTrack also provides cookie-based, cookieless, and hybrid tracking options which
able to send and track SMS messages is a killer app for us. We plan to expand our focus on mobile because our clients are
Campaign Management
Improved mobile integration allows campaign reporting on affiliates’ mobile phones.
are important for organizations
26
extending their t heir reach.”
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Inter-Network Ad Marketplace One innovation that we feel deserves praise is what Direct Response ca lls “cross publication” publication”. This refers to a sharing and a nd distribution ad marketplace in which DirectTrack networks cross-publish offers, campaigns, or links to othercan networks. networks. In turn, they entire can also pick up offers from other networks and push them t hem out to their own publishers. “With cross publication you can have an offer up and running on another a nother network in about five mouse clicks,” said Direct Response’s Bordo. This is going to be really useful in helping networks improve the distribution of their offers and expand the scope
has been continued with version 8.0. Comparatively, the new interfaces are a little better organized and are easier to customize than previous versions. But the simplicity of the updated UIs conceals a lot of functionality. f unctionality. ForgeBusiness’ Miller said anyone planning to adopt DirectTrack should be should readythat to commit co to it to because of its capabilities means it mmit takes time learn, the anddepth as you learn you will wil l realize that th at there’s a lot lot more that can be done with it. “You can’t can’t go into it lightly because bec ause your business model will evolve with w ith DirectTrack,” DirectTrack,” he said. “If you really want to make the most of the platform you should take time to study the training materials available from DirectTrack. The demo is simple but you really need to get the training to understand [the complete depth of functionality]. f unctionality].””
Conclusion
DirectTrack’s inter-network inter-network ad marketplace allows networks to trade offers with other DirectTrack networks simply and easily.
of the campaigns offered to their own publishers. To take one example, an agency will now be able to set up their own network and immediately find distribution dist ribution for their clients without having to leave the familiarity fa miliarity of the t he DirectTrack environment. “No one else is offering cross publication,” said ForgeBusiness’ Miller. Miller. “We can pull offers from other networks networks without having to worry worr y about [software] integration integration or manipulation. It allows competitors to collaborate. collaborate.”” DirectTrack 8.0 further provides improve lead management capabilities that allow networks to capture data from leads and broker the information to advertisers. adver tisers. “Network clients who use lead management software can buy and sell leads based on quality score,” said Direct Response’s Bordo. “Advertisers get the highest quality leads for the price paid and agencies can ensure they’re paying the right price for the leads.”
There is no doubt that DirectTrack has been listening to its customers and working hard to maintain its position as the offthe-shelf network platform of choice. The cross publication of offers across networks is a killer feature. And as affiliates have more and more networks from which to choose, the ability to offer a familiar interface and tracking that has been independently certified is a big plus for any new network seeking to grow. There are other options out there of course. Price competition in this sector is intense
and if“free” is always attractive. But you are thinking of setting up a network of your own, ow n, it’s worth remembering that it’ss hard to move from it’ f rom one platform to another. As a result, our recommendation has always been to choose a platform that provides an upgrade path so that as you grow you can add new capabilities without having to change your whole network. We’re We’re told that DirectTrack is willing will ing to scale their pricing according to the features a customer needs, which means you can start with a very cost-effective, lean-andmean set-up that’s that’s still highly usable and a nd then add functionfunct ionality along the way. All in all, a ll, networks, agencies, affiliates affil iates and online marketers will find DirectTrack Di rectTrack 8.0 a robust and reliable option for streamlining campaign creation and management, lead management, affiliate management, and a lot more. Highly recommended. |rp
One of the strengths strengt hs of previous editions of DirectTrack has been the straightforward affiliate interface and this
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LISA MORGAN is an independent journalist and consultant who covers
technology and business business issues.
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Advertiser Adver tiser Index Prime Lead . . . . . . . . . . . . . . . . . . . Inside Front Cover
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AffiliateReporting.com AffiliateReporting. com . . . . . . . . . . . . . . . . . . . . . . . . 21
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Ipsos Affiliate Program. Program. . . . . . . . . . . . . . . . . . . . . . . . . 9 MaxBounty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 MarketHealth.com . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 ClickBank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Search Engine Strategies Strategies . . . . . . . . . . . . . . . . . . . . . . 29 Classifieds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31 LocalPages.com LocalP ages.com . . . . . . . . . . . . . . . . Inside Back Cover Cover
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Counsel to the Online Marketing Industry CONTRACTS, PRIV PRI VACY POLI P OLICIE CIES, S, Sweepstakes Rules, LITIGATION, LITIGA TION, ETC. Contact David O. Klein today at: (212) 935-6020 x 244 | [email protected] 485 Madison Avenue, New York, NY 10022
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Visions of Performance – George Hansen Are You A Value Added Affiliate?
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erchants thetotrue ‘va lue’ofof affiliates:often what ask theyme reaabout really lly add the value the merchant’s products products or sales campaign. c ampaign. Now most merchants have a pretty good understanding of the general value of affiliates – they drive traf fic, generate revenue, and in some cases are strategic partners. But beyond that, they sometimes lose sight of just how much value af affiliates filiates can add. So I ask the question: do merchants really understand what it takes to be a value va lue added affiliate? Do you? In technology sales they use the concept of Value Added Resellers (VARs). (VARs). VARs are a re businesses that buy products, add extra value to it and then resell the product for a higher price. Most often VARs VARs add value by bundling services into the package to provide a complete customer solution. They sell solutions rather than products. In affiliate marketing and with the direct to consumer model that is so prevalent on the web - there are no resellers. There are only affiliates. But would it add understanding if we used the term Value Added Affiliate? Actually, I think it fits our industry perfectly and represents the essence of ev-diferywhat day. affiliates Considerdothe ferent business models that affiliates commonly use and think about the value they add to the merchants’ sales channel: • Experts in search add value through their intimate knowledge of Google and other search engine platforms, and of key technologies required to succeed as a PPC affiliate such as ad groups, quality scores, display and destination URLs, CTRs and optimization. Google’s recent Caffeine update shows how important these value added areas of expertise are. I don’t always agree with Google, but if you want to see which affiliates are truly adding value (in Google’s eyes anyway), just look at who is left standing and you can get a pretty good idea. • Coupon affiliates are aware of the many nuances that go into using discounts to generate sales. The knowledge of
which merchants andhuge platforms have exclusive discounting capabilities adds value for merchants. Data feeds, XML, RSS, data dedupe & parsing are all elements that coupon affiliates must master in order to effectively merchandise what may be hundreds of merchants and thousands of offers. Using coupon updates to rank well organically is another ‘trick’ that coupon sites employ to drive additional additional traffic to their sites. Every one of these value added elements must be mastered by affiliates to drive sales in the coupon vertical. • Review affiliates use unique and expert content to transform information gathering shoppers into decision making buyers. Solo reviews, head to head comparison charts, expert reviews - all add value and help customers make informed buying decisions. How to compile this information, transform it into a sales focused website, while also balancing editorial integrity and managing new FCC regulations are elements review affiliates struggle with everyday. • Email affiliates, a segment that has probably been around the longest, are always testing new methods to monetize their lists. CAN-SPAM, double opt-in opt -in and list scrubbing are all critical elements to successfully ma rketmarket ing offers via email. Listsegmentation, A/B testing, dynamic personalization: all these processes add value and assist the conversion of email lists into customers. The fact is that affiliate marketing is a fairly simple business model, but but requires affiliates affi liates to balance bala nce a complex set of techniques. techn iques. For merchants serious about optimizing their online sales channel, the skills of a value added affiliate are inherently valuable. So if you are a merchant, take some time to consider just how much value your affiliates add to your business. And if you are an affiliate, think about about how how adding value can benefit benefit your business business – and that of the merchants merchants you work with. with. |rP
when to deploy standard, premium, and exclusive offers; offers; when to use coupon codes vs. direct to cart discounts; and
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GEORGE HANSEN is Director of Sales and Business Development at
Digital River – oneNetworkDirect.
