Hello, SVP of Marketing for Hydra here to throw in my 2 cents… or fuel for the fire. First off, we aren’t going to pull our ad just because the discussion puts us under a harsh spotlight. We really truly have nothing to hide. The fact that people use adware is not news. It is not illegal. Some advertisers even request it. And for the record it represents just a small fraction of our overall business.

Does allowing adware by some affiliates hurt all others? In theory, It could. Is it truly a widespread problem in reality? Frankly, we hadn’t thought of it before - as I said, it’s not a big part of our business. But now that our attention has been called to it, we’re looking into it.

If you recall, Hydra was the first to eliminate cash incentivizers due to shadiness. We have made heavy investments to provide rigorous compliance - in fact we are widely regarded as exceptionally aggressive in that area. We also spend legal and research dollars to vet claims by advertisers. And more.

I don’t bring these points up thinking they can counteract the this whole adware brouhaha. The point is this: Hydra does not wish to engage in shady black or grey hat practices - NOR do we feel it is in our economic interest to do so. Do you think we want to jeopardize the inroads we have made with major brand name advertisers in order to score a quick buck? (the answer is no) We have had great success playing by the rules… and we want to be even more successful.

So we welcome any efforts to set professional standards, monitor and police, and generally clean up the affiliate marketing space. The better advertisers understand how reputable affiliates and networks work, the safer they will feel, and the more ad dollars they’ll pump in. That would be good for affiliates. That would also be good for us. Our interests are totally aligned on that one!

Anyway it’s end of day Friday so I will stop for now. But i do look forward to continuing the discussion.

If you have your two cents about Hydra specifically, CPA networks in general, or the proliferation of adware, the comment section below is a good place to express those opinions.

Why on Earth would any merchant look at performance based marketing as an option when they read headlines like this? Linda Buquet already addressed the acual issues with a much better titled post on her blog “VistaPrint VPRT and Hydra Allow Adware“, here also is a direct link to Ben Edelman’s report which includes extensive video Edelman Report.

One of the goals of an association that is a lot easier than lobbying is a PR effort on the behalf of our industry that can educate lawmakers as well as journalists about the industry. If journalists have a person who is the duly appointed spokesperson for the industry (as the director of a trade association is regarded), then they can reach out for comments when they have a juicy article like this - and that same spokes person can make sure that they understand what is going on here.

The real headline is that a few adware affiliates earns commissions deceptively, not that affiliates in general are using adware to earn through deceptive tactics. The real issues are that this is going on with the full knowledge of pretty much everyone involved. Was one affiliate interviewed for the article? It appears not.

Every time I read a headline like this, or hear about a talk at a conference that disparages this industry that helps good honest people create a living for their families I just get really pissed off that we don’t have anything done yet. I can’t say if this latest attempt to start an association will work, but it is moving forward and perhaps the pace can be quickened. Let’s get something off the ground before the next article like this is written!

The videos for Affiliate Summit East 2008 in Boston are out, so I thought that an update from my part is kind of required hehe.

(more…)

This doesn’t, of course, mean that affiliate marketers have to become part-time video producers. Consider that 10 hours of content is uploaded to YouTube every minute. Chances are there’s some kind of content on the video sharing site that can be used to promote product. After all, seeing another every day person interact with a product is something that can really influence a user’s mindset. Not only does this give the user a chance to see the product in action, but it bolsters a site’s credibility because it provides a richer user-experience.

Simply search YouTube for a video that’s appropriate for you landing pages, and embed them below the product or in the sidebar (hint: you can fit a YouTube video into a side bar by editing the width and height parameters in the embed code). Even if you can’t find a video of that specific product, embedding video that is related can put the consumer in a purchasing mood. For example, if you can’t find a video about ringtones, specifically, then see what there is in the way of music videos for whatever ringtones are most popular at that moment.

In fact, many affiliates already use YouTube as a resource for landing page content. Take Mark from 45n5: he uses mashup scripts that pull relevant content from YouTube and displays it on his product pages. All he does is input a couple of keywords into the script, and it finds and embeds relevantly tagged video content.

Alternatively, you can also just get a handy cam and shoot a quick video of yourself using the product. That way, you not only get complete control over the video’s content, but you never have to worry about that video getting deleted. As John Kerr, Director - Southeast Asia for Edelman, once pointed out, “the shaky cam is now seem as the most trusted form of media.”

Overall, videos are great way to increase conversions. They (1) let the consumers see the products (or lifestyles) in action, and (2) create a richer user-experience on your product pages, which increases the perceived credibility of your site. So whether you get some professional grade videos made, use other people’s uploaded content, or simply make your own pro-amateur clips, sourcing video content for your landing pages is so easy that you shouldn’t overlook it as a way to increas conversions.

1. Make Meaning (Not Money)
Make the world a better place because of what you do.

2. Make a Mantra
Mission statements suck and don’t mean anything. You can use the Dilbert Mission Statement Generator and come up with one just about as good as any off-site retreat or committee ever will. A simple mantra such as Nike’s “Authentic Athletic Performance” or Wendy’s “Healthy Fast Food” can actually be remembered by your employees and acted upon.

3. Jump to the Next Curve
Most companies start, stay, and die on the same curve. You need to jump the tracks and make a revolutionary change. Don’t just improve something, come at it from a new angle and solve the problem differently. Early refrigeration came from blocks of ice carved from lakes in the winter. While some companies found ways to capitalize and become rich on this, the guy who created the factory that made ice was the one who could keep going. Same for the first refrigerator.

4. Roll the DICE

Deep: The Fanning Reef sandal with a bottle opener in the sole. Twice the functionality!
Intelligent: A Panasonic flashlight that takes three sizes of batteries. You might be out of D cells, but you can grab an AA from a remote.
Complete: Lexus has superb after sales support. Use forums, manuals, VARs…
Elegant: Look at the design of the Mac Book Air. Maybe not the best laptop ever, but it is a great looking device.
Emotive: Generate strong emotions. You either love or hate a Harley Davidson.

5. Don’t Worry, Be Crappy
If you can make something that jumps the curve, it does not have to be perfect. The Mac 128 didn’t have a hard drive or much software. Ship something that jumps curves and has elements of crap.

6. Polarize People
The worst thing that can happen is that people don’t care. Look at the Scion, MacIntosh, and Harley  Davidson brands.

7. Let 100 Flowers Bloom
The real world happens - you may find that people you never anticipated buy your product. Figure out why they are using it and give them more. Without desktop publishing, there would not be an Apple Computer.

8. Churn, Baby, Churn
Take your version one and keep re-inventing and innovating. As soon as you ship, look to see what customers are looking for and use that information for the next thing.

9. Niche Thyself
This one should make sense to all of you as the affiliate marketing area is pretty much based on this. Guy loves TiVo, Fandango, the Clear card, Zappos, and more. But it does not have to be for the mass market. If you want an automatic transmission on your bike, you get a Trek Lime. If you need a Kimchee refrigerator, look to LG.

10. Follow the 10/20/30 Rule
When you make the rounds with the pitch for your company, or make a pitch to a customer, “life is a pitch.” After listening to hundreds of bad pitches a year, Guy tells us the rule:
10 slides in your pitch
20 minutes is as long as the pitch should last
30 point font is as small as you should use

And then he added in a bonus:

11. Don’t let the Bozos Grind You Down
There are two kinds of Bozos in the world. There are slovenly losers who are easy to ignore and there are the rich Bozos who dress in black, like Italian products and are dangerous. Why? Because people look at them as assume that rich & famous equals smart. But the reality is that it really means they are lucky. Resist Bozosity.

I’m in the process of getting LASIK and Monday was my final exam before my scheduled procedure on Thursday. After four months of wearing glasses to prepare, I’m really ready to get this done with. Part of the final exam was dilating my eyes and checking the retina. The doctor saw some spots that she was not comfortable with and told me I had to see a specialist. This was a few minutes after 5 PM last night. The specialist’s office closed at 5. Crap.

I got in to the retinal specialist at 8:30, expecting maybe an hour or so appointment that would still give me ample time to get my stuff and head off to Santa Barbara since it is about a two-hour drive under normal non rush-hour traffic. Two hours later the doctor is telling me that I have a slight retinal detachment and he’ll take care of it right away. Just a little LASER blasting to re-attach the retina around the flap where the fluid was getting under the retina. Pretty minor and LASIK should not be a problem after the procedure.

Another hour or so later, I’m in the room with the YAG or Argon LASER (I’m pretty sure it said 532 nm) waiting for the doctor to come in and do the deed. The device is pretty cool. He wears the same microscope goggles used for an exam, but it is fitted with two LASERs. A red for aiming and the green for “photocoagulation”to create small burns around the edges of the tear, producing scars which will hopefully seal the borders of the tear and prevent fluids from leaking toward the retina.

The worst part of the procedure was not the really bright green light, but the Q-tip he used to jam behind my eye to press on the back side to I assume get fluid to flow out and get the LASER to seal the retina. THAT was painful. It still hurts 12 hours later. I wonder if I’ll have a bruise tomorrow.

It only took a few minutes for me to guess that the repair was not going as smoothly as I thought when he kept calling out high power numbers for the LASER and it got brighter and brighter until my eye was overloaded and went dark. That was actually easier since the bright light made it hard to keep my eye open and look to the top right and hold that while he prodded and zapped.

Luckily, vision came back pretty quickly, albeit everything was purple and dark. It slowly got better, but was still pretty blurry. I postponed my LASIK appointment and set up a one month checkup to see if the reattachment took. Now of course it was almost noon and I was really late. I rushed home and gathered my stuff and ate a quick lunch. If I was really lucky and traffic was light and I broke the speed limit by 10 miles per hour I might make it to CJU by 2 PM when I was supposed to man the PMA booth.

Of course this didn’t happen and I finally made it to the Fess Parker at about 2:30. Thankfully, word got out that I was late and a few of the other volunteers were at the booth. Already exhausted, I went to work at the booth and eased into trade show mode. I put in some time and made sure the other volunteers had things handled and got a chance to look for some goodies for my daughter (don’t tell her yet - I said there weren’t going to be any) and talk to people at the expo.

The expo was a mini show floor with lots of basic tabletop displays where you could learn about merchants and OPMs who all work in the CJ universe. Walking the tables was tough because I wanted to talk business and also educate them about the PMA at the same time. Lots of talking and I got to meet some great people and get a few pledges of varying support for the trade association.

I then headed off to the Zoo for the cocktail mixer with Lisa Picarille and Connie Berg where we sampled the delectable food (I’m not sure if the mini-Reuben or the skewered beef was better) and wandered the grounds. After a few hours of networking and talking to old and new friends I was beat and ready for the hotel, where you find me writing this…

“I have an Affiliate company with 1 other person and right now we have a little over 1000 SEO-based sites. We want to add product data from different Affiliate NW’s, particularly CJ, ShareASale and Pepperjam. We’re looking for a tool/application that will allow us to perform ‘Keyword Product Searches’ from these various Affiliate NW’s.

We want to store the product results in our database as we already have an infrastructure for basically everything, with the exception of adding these additional NW’s.I could take the time and write this code myself (I’m a Classic ASP developer) but we’d rather buy a tool, or pay a consultant to customize an existing tool, write something from scratch, etc.

The requirements are pretty basic although I would formally document them if/when needed: query the available APIs (starting with CJ’s Product Search API) and perform some straightforward logic processing (i.e. add new products if not in our DB, update for price changes/out of stock, etc)”

The question is very specific already, but I decided to generalize my answer a little bit to show also other options that this person might not considered yet, because he didn’t know that the options exist. I also address the advantages of the options that I do not recommend for this particular case, but which are relevant for other cases, where I would make a very different recommendation. (more…)

The recent glut of new OPM firms who provide third party affiliate management services for merchants is a direct testimony to those challenges. One firm that has been doing it right for a long time is multi-award winning AMWSO. I sat down with Chris Sanderson, Director of AMWSO, to discuss the challenges of being an OPM.

AD:What brought you to affiliate marketing?

CS:As part of Web Studio One, I was working on Mondera back in 2001. During one of my off periods from web development, I was invited to look at the site and see if I could help out the marketing programs. That’s when I first took a look at this thing called affiliate marketing and I thought to myself, that’s kind of interesting.

At that time their affiliate program was on BeFree and was doing approximately $50,000 a month, which was a pretty big chunk in those days. I kind of looked at it, saw opportunity and decided to play with the program since no one was working on it. I dug in and the first thing I noticed is that the BeFree platform actually required a software application for you to be able to login. Being that I was based in Thailand and it was a painfully slow process to even look at the reporting. I’m unsure if it was a BeFree issue or a distance issue but being the client we couldn’t have something slow down interaction with our affiliates so drastically. Plus BeFree support would hardly give us the time of day. In terms of what issues we were having it seemed that in their mind any technical problem was our fault.

So I looked around for a new network but CJ wasn’t very open. That was the reason we ended up moving Mondera over to LinkShare because their response was very friendly and helpful. At that time my direct contact at LinkShare was a woman named Lisa Hass. She helped me with affiliate issues and she was the one that recommended I check out ABW. I joined and learned a lot. Over time the Mondera program grew significantly from around $50,000 to $400,000 sales a month which became a healthy portion of their overall marketing effort.

As I say it was kind of accidental, our stepping into affiliate marketing. It really grew out of playing around with a client’s program and our company ended up adopting affiliate marketing as kind of like a lost child. Things just sort of grew from there.

AD:At what point did you think about becoming an OPM firm?

CS: At that time I was the general manager of Web Studio One which was actually owned by the same company who owned Mondera. I kind of took on the affiliate program, as I said, for fun. At the time we really didn’t think of it as a business model for Web Studio One. But then as we were more successful we started getting calls from merchants who saw what we were doing with Mondera and wanted us to help grow their program.

Sometimes it takes someone banging on your head enough times with a baseball bat before you realize what is in front of you. Despite multiple requests we really didn’t think of it as a potential new business. We just sort of took on new clients like KegWorks, and Forzieri. Again we hadn’t planned this growth and didn’t really realize how big it was until we found ourselves six-months down the line with several clients in tow.

AD: What does AMWSO stand for?

CS: I get that question a lot. What’s funny is it stands for Affiliate Marketing by Web Studio One. That was the brand that grew out of our former web development business. As the brand became well known there came the question of whether we should change the name but our brand recognition was already so strong that we stuck with it.

AD: What is the biggest challenge when dealing with merchants?

CS: These days, our biggest challenge is probably in closing the deal with a new client. When we first started there weren’t many companies in the OPM business. When we contacted merchants or when merchants came to us the distance factor of being in Thailand wasn’t an issue. They were happy to have a company that knew what it was doing in affiliate marketing space.

Nowadays there are a lot of new OPM companies in America and in Europe. When we pitch to American clients the common question is why we should work with you since you are overseas. That has become the primary barrier for us. In many ways this is just a perceived barrier on the part of the client because once things are set up everything runs very smoothly. We get some firms that are surprised to hear we are in Thailand. The bigger companies especially seem to want to have their firms local. For example it’s often easier from them from the legal aspect in terms of contracts and many prefer bringing in vendors for meetings on a regular basis.

AD:What is the biggest challenge when dealing with affiliates?

CS:I think the biggest challenge as an OPM is to maintain a privacy curtain between the different programs you manage. You tend to want to pitch out a new client program to all of your affiliates. You got to realize sometimes that isn’t the right or ethical thing to do. To try and recruit them very swiftly across new clients isn’t the best course.

First of all, it’s not really the right thing to do in terms of your relationship with the merchants; using their program as a recruiting pool for another program especially when the affiliate signed up specifically for a particular merchant. At the same time even when an affiliate has been working directly with an OPM for a long period they don’t necessarily want you to move their information from client to client in terms of the kind of niche they occupy. Especially if they haven’t given you direct permission to do so. There are of course affiliates that don’t mind and are quite happy to hear that you have in a new opportunity for them. In many cases however an affiliate can feel that it is a violation of their privacy that you are suddenly sharing their information or using information about them and their tactics on programs you run but that they haven’t shown interest in.

Of course a merchant comes to you because you have those relationships so you need to make sure you don’t abuse them relationships and have it backfire on you. Finding that balance between leveraging your contacts and making sure you are not unethically taking advantage of the information is the biggest challenge in being an OPM.

AD:Is there a success story you would like to highlight?

CS:For us Forzieri is a huge excess story. They were one of our very first clients and they’ve been with us for almost five years now. In this very competitive industry when you’ve had a client with you for five years that kind longevity is a big success in and of itself in a.

When we took over the Forzieri program in 2003 it was riddled with fraud. There were many overseas affiliates running fraudulent orders to claim the commission and then reversing the orders after the commission was approved. We went in there, cleaned up the affiliates and drove increased sales year-over-year with the program, helping Forzieri expand in the US and the UK. For us that’s a great success.

What’s funny is that we’ve worked with them for five years but we just recently met Andrea Forzieri, the owner, for first-time. So when we talk about the ways relationships work in this industry and the challenges of working overseas in many cases we haven’t actually met many of our clients in person. Andrea happened to be on holiday with his fiancée and Thailand was one of his stops in Asia. It was great after all these years to meet him and put a face to the voice.

AD: It’s funny that anybody can go to a meeting in New York or Las Vegas, but if you have a meeting in Thailand you might be on vacation. Do you find advantages being overseas?

CS: At first we never saw any clients in Thailand but lately there has been a spade of people that are heading over to Asia. Bangkok is a very central place geographically. Sure, some come because they are on vacation but a large part of it is that companies are looking at Asia in terms of how they can expand their business overseas. They want to know how they can get into Japan and China and the other Asian markets. In the US the OPM market is very crowded but in Asia it is still pretty empty. Being in Bangkok has become an advantage because many US firms are looking at ways to expand in Asia. A lot of merchants are heading in our direction.

AD:What changes do you see in the affiliate industry?

CS:Personally, it would be nice to see better integration between the social media side of things and affiliate marketing. Whether that’s going to happen or not I’m not sure but there is definitely experimentation where people are seeing if affiliate marketing can really generate sales in the social space.

I see this being a big challenge because many social media sites are very anti-selling. They don’t want to see ads, they don’t want to see links, and they often don’t want to see people’s products. It would be nice to see developments that smoothly integrate affiliate marketing in such a way so social communities will accept them and social media can be a viable outlet for affiliates and merchants.

Technologies like video have been hyped up over the last few years but still present a challenge in terms of making the process easy enough so the majority of affiliates can be involved. ShareASale has launched their video system recently which helps make it easier for their affiliates. I think what you’ll see is continual refinement of tools that will generate sales through social media.

AD:What about Google’s impact on the affiliate industry?

CS:A lot of people are concerned about Google stepping into the affiliate space, wondering if they are going to flex their muscles and how that will impact things. They could easily say we’re doing affiliate marketing now so how do we block off everyone else’s affiliate programs within our search engine results. Do they suddenly block affiliate sites who are not promoting Google affiliate programs? Of course people are concerned about it.

As an OPM I think it’s great to see Google in the affiliate marketing channel because it will help them to understand better exactly what affiliate marketing is. People in our industry remember Google cracking down on affiliate sites in the past, pushing results for those sites to the side and pushing down their rankings in search. I think now with them more involved it will give them more understanding about what affiliate marketing is and what we do and hopefully improve results in terms of Google search for everyone.

AD:What about future plans for AMWSO?

CS:We actually have an investor coming aboard this year. It will allow us to open a sales team within the US for the first time. This will get rid of the perceived overseas issues with potential new clients. Myself, unfortunately  will still have a VISA issue to resolve but what’s important is that we will have an AMWSO team in the States. We hope to get that set up in the next six months.

Our goal is to help merchants reach new markets. We are also looking at growing our Asian clientele to take advantage of the trends I mentioned earlier. We see a lot of talk about mobile marketing in the US while mobile marketing in Asia has been massive for years. So we are looking at how we can help US clients get involved in the mobile commerce overseas. We see a lot of potential growth for us in that sector.

Of course, this has led to some speculation that other, so-called second-tier affiliate networks are doomed. The reasoning goes that with a brand name like Google now behind the former Performics network, advertisers and affiliates alike will be loath to work with these other networks.

In reality, however, that’s just not the case. As good as Google is at some things, one thing it doesn’t do so well is relationships.
What does this mean for other networks and affiliates? It means that we’re all going to share in the very rosy future of affiliate marketing.

Now that GAN is on the scene, large brands that have previously shied away from affiliate marketing are probably going to give it a second thought. Being completely new to the affiliate marketing model, however, they’re going to need help setting up and managing their affiliate programs. The networks that can step up and help with program promotion and affiliate recruitment are going to gain, and so will their affiliates.

Relationships in Affiliate Marketing
Affiliate marketing is a business model that is founded on the idea of an ongoing relationship. In fact, it’s through solid relationship building that merchants and affiliate collaborate to drive sales and increase their respective profits.

Investing in the advertiser-affiliate relationship is also an integral part to any viable affiliate marketing strategy. The networks that take the time to build those relationships and are known for their personalized approach will benefit from mainstream brands being attracted to the affiliate marketing medium

The Trust & Relationship Factor
Arguably, what’s kept many conventional retailers from embracing affiliate marketing is the nature of the merchant-affiliate relationship. As with many other kinds of online media, the challenge that affiliate marketers face is that relationships can rarely be established in person — and that makes them harder to build.

Relationship Management
If affiliate networks want to capture on the upcoming market growth they are going to have to focus on more traditional business development tactics, such as networking and account management. The affiliate networks that don’t have a household name behind them are going to have to focus on building new relationships and then managing them.

In addition to sales, business development, and lead generation, affiliate networks will need to establish themselves as respectable members of the online marketing community. They will need to show their faces in more places than ad:tech and Affiliate Summit and shake hands with other members of the business community, including marketing gurus and agencies, as well as marketing executives with brands they want to see in their networks.

Once a relationship becomes a working one, it’s going to require management, and that’s where the account management comes in. Affiliate networks will need to work closely with advertisers that are new to the industry to make sure that (1) their program is set up properly, and (2) they understand how to run it. This will help ensure that the program performs and prevent the relationship from becoming strained.

Part of the network-merchant relationship also rests with affiliates, so there’s also an account management aspect to there. By focusing on building relationships with their affiliates, networks can:

1. better promote their new advertisers,
2. better align their new advertisers with the appropriate affiliates, and
3. save on the time and costs of affiliate recruitment.

This will help networks increase not only the performance of their various (and newer) affiliate programs, but also the loyalty of their affiliate-base — something that both saves on costs and increases revenues.

Relationships at the Heart of Business
All business transactions are based on trust. People are willing to invest enough trust in a brand to do business with them because of they either (1) have a relationship with that brand, or (2) perceive that brand as having an established relationship with the marketplace at large.

Affiliate marketing is becoming more and more of a mainstream industry, so affiliate networks need to focus on more conventional business practices if they want to grow along with the rest of the industry. This means that they have to develop a relationship-focus. Relationship building generates trust, which not only reduces costs, but drives growth by making you a more desirable business partner.