The Wall Street Journal had an enlightening article a couple days ago about “The Web’s New Gold Mine: Your Secrets”.  Enlightening indeed.  And after reading this interesting piece (with a few more to come out in this series) the “lightbulb” lit up…  How many Affiliate Programs are planting beacons, etc. for the specific purpose of tracking your site visitors/audience/customers?  So I did a little experiment.

I built out a new OS load on an ancient computer.  Then visited a few known sites that are nothing more than lists of affiliate advertisements.  Nearly every network had programs on these sites (Coupon/Deal/Bargain listings w/o much content).  And what I found was shocking.  100% of the sites planted tracking cookies and beacons that didn’t come from the network or the site.  They were from the advertisers!

And the other shocking finding is that there were more pixels, beacons, and cookies set than there were advertisements!  Accounting for simple innocuous tracking (the affiliate program tracker, password save cookies, session cookies, etc.) the numbers still leave no doubt.  Some advertisers were setting multiple ways to track with a single advert.

And where does this data go?  Why, to tracking companies who accumulate specific data about specific computers and then sell the data for around $0.001/identity.  Now let’s add these numbers up.  Your average small to midsized network is displaying 5 million adverts / day (more or less, depending on the network).  Which means 5mil * .001 = $5,000.00 / day in potential revenue for doing nothing more than selling the data on open exchanges to other advertisers.  And where is the Network’s and Affiliates share in this?  Why, it doesn’t exist!  The Network is paid a retainer and a percentage of sales, and the Affiliate is paid a percentage of sales.  Neither are being paid for distributing tracking pixels/beacons of other companies.  But they’re being set.

$5,000.00/day = $150,000.00/month.  That’s alot of money.  Divided out it isn’t much money per affiliate/network.  But given that most networks have hundreds of programs and most affiliates do too.  It adds up.  And right now Performance Marketers arn’t getting paid for it.

Now, don’t get me wrong.  I don’t much care for the concept of aggregated tracking beacons.  It’s a little creepy when I look up something and then every advert I see is about that subject.  Give me the “creepy willies” when that happens.  But I also don’t like it when I work hard to promote affiliate offers on my sites and am not paid for it.  Like when an offer is setting a tracking mechanism that the advertiser is either using, or selling, without getting my fair share of it for my efforts.

I’ve started tracking my sites with TrackerWatcher and if I find an advertiser that has anything more than the network tracking set…  They’re gone.

What are you going to do?

It would be simpler if they would all just say that their network/system/widget was the best thing since…..

But they’re not.  A network is nothing but a tracking system.  An OPM is just a management company.  A “method/system/formula” is nothing but an outline, and it seems that the only thing new I see out of most of these is the hype surrounding them.

And it really doesn’t and shouldn’t be this way.  If a new network is truly different then they should clearly say why they are different.  “Bigger Better Offers with High Conversions and Fast Payouts” doesn’t cut it.  OPMs need to distinguish what it is about their firm that is different and better.  People selling SEO software should make it clear about how using their product is an advantage.  Otherwise, they’re just celebrating the 82nd anniversary of the invention that all other inventions are measured against.

I firmly believe that by evidence and action that some networks are far superior to others.  I also know for a fact that some OPM firms bring tangible results for their Merchants and Affiliates in superior ways.  I have historical tracking to show that some tools I use for SEO and organic ranking simply work better.  And in every case not one of them told me why they were superior outside of self promotion equating to the equivalent of comparing themselves to the invention that all other inventions are measured against.

Soon…  And I think sooner rather than later, we’re going to see serious consolidation in the OPM arena.  And it wouldn’t surprise me one bit if it’s a network that starts rolling up OPM firms in order to distinguish themselves from other networks.  And it is my hope that this will be heralded for the competitive advantage it would give both Affiliates/Publishers and Merchant/Advertisers instead of the usual hype.

Because on July 7, 1928 the Chillicothe Baking Company of Chillicothe, Missouri introduced Sliced Bread.  And although many inventions can be said to be “The Biggest Thing Since Sliced Bread”.  The equevalent hype in our industry simply cannot stand up to just simply telling what you have and why it’s better.  Even if it is the biggest thing since sliced bread.

Okay Scouts!  Pay Attention!  Scott has “let me out of my cage”  to rant a little again…  This time, it’s on being spammed by Affiliate Networks (the scummy ones).  He won’t let me name names and call out a few specifically.  Seems that the legal types don’t like that (lawyers are evil too)….

But I’ve received a TON of craptastic affiliate network “Come Join Us” emails in the past couple weeks and they’re disturbingly the same.  As in total spam.  So I’m reprinting one here (guilty parties names removed to hide their stupidity) and vent/rant on just what’s wrong with it so maybe someone at a network will be educated a little…..

The original email is in italics and my comments are in BOLD (because what I say is important and you should pay attention).

From emailservice@domainsbyproxy.com

SO, SENDING ME AN EMAIL FROM ONE OF MY DOMAIN REGISTRATIONS…  STUPID, YOUR JUST SPAMMING.

Hi There J

MY NAME ISN’T J, NEITHER ARE ANY OF MY INITIALS, NOR THE DOMAIN NAME.  TOMMY LEE JONES (J IN MEN IN BLACK) ISN’T HERE EITHER.  JACK MAY BE HERE BUT YOU’VE PROVEN THAT YOU DON’T KNOW JACK ANYWAY.

This is (NO CLUE NETWORK DUDE/DUDETTE) from (A NETWORK NOT TO BE NAMED), a (INSERT MEANINGLESS ADJATIVE HERE) affiliate network. I noticed your site specializes in web-based marketing (LIAR!  IF YOU WERE AT ANY OF MY WEBSITES THERE ARE CONTACT FORMS, EMAIL ADDY ON THE TOS AND PRIVACY STATEMENTS.  BUT YOU LOOKED UP THE SITE WITH WHOIS AND BLINDLY EMAILED THAT EMAIL ADDY).  AND NO, IT DOESN’T COVER WEB-BASED MARKETING.  I PROMOTE AFFILIATE OFFERS TO PEOPLE. Here at (A NETWORK NOT TO BE NAMED), we have many exclusive campaigns that aren’t available anywhere else.  (DROPPED A WHOLE SENTENCE IT WAS SO SILLY).

We also offer a very generous affiliate referral program, where you earn (A STUPIDLY SMALL COMMISSION) lifetime earnings (CAN YOU SAY REBILL) for every active affiliate you recruit.

WHY WOULD I RECRUIT AFFILIATES (I.E. COMPETITION) FOR A NETWORK WHEN I CAN MAKE MORE MONEY JUST PROMOTING ONE OFFER IN MY NICHES????  MY SITES HAVE NOTHING TO DO WITH RECRUITING AFFILIATES..  THAT’S AN AFFILIATE MANAGERS JOB.  MY JOB AS AN AFFILIATE IS TO PRODUCE FOR THE PROGRAMS I PROMOTE!

Your site seems like it would be a great fit for our network of offers (WHY?  SINCE YOU OBVIOUSLY GOT AN EMAIL ADDY FROM A WHOIS CRAWLER AND NEVER VISITED ANY OF MY SITES), so I encourage you to sign up by going to (A CRAPPY NETWORK THAT WON’T BE NAMED’S ADDRESS). We are very aggressive with pricing on our campaigns (PRICE FOR CAMPAIGNS?  OH YEAH, RIGHT, YOU DON’T KNOW IF I’M A MERCHANT OR AFFILIATE SO YOUR GONNA COVER YOUR BASES), and we pay our affiliates on a net 30 basis, but as we build a relationship this can be adjusted.

OKAY, NO INFO ON NICHES, TYPES OF OFFERS, WHY YOUR DIFFERENT THAN ANY OTHER NETWORK.  AND YOUR PROUD THAT YOU PAY NET-30???  SO FAR THERE IS NOTHING TO ENTICE ME TO DO ANYTHING OTHER THAN DROP YOUR DOMAIN INTO MY “DELETE AS SPAM” FILTER AND IGNORE YOU.

In order to have your account approved quickly by our compliance team (NOW THERE’S AN ASSUMPTIVE CLOSE), please mention that you were referred by (SOME IDIOT).

If you have any questions, I’d be happy to answer them.

THEN THEY PUT SINCERELY, NAME, ETC. AND THE LETTER IS OVER.  AND SO HERE’S MY FINAL THOUGHTS ON THIS EMAIL (AND THE 20 OTHERS JUST LIKE IT I RECEIVE EVERY WEEK).

Quit being stupid!  Lying to me won’t get me to sign up to your network.  If you said that you just did a whois search for every domain name with the word “widget” in it because your network specializes in “widget affiliate programs” then I’d read your email.  At least that’s honest.  But telling me you looked over one of my sites when it’s obvious that you didn’t insults my intelligence.  And I’m not stupid.

Tell me what makes you different!  If your no different that the other 900+ networks out there then tell me what’s different.  Better reporting?  Better pay cycles?  If your offers are so exclusive and good then what are a couple of them?  Every single network says they’re cool, they’ve got quality compliance, that their offers are high paying and exclusive.  IT DON’T MEAN JACK IF YOU DON’T BACK UP YOUR CLAIMS!

Guess what?  Affiliates don’t want alot.  It doesn’t take much for us to give a new network a try.  But the two things you’ve got to be is to be honest, and be different.  Saying your “exclusive” have “high paying” and “high converting” offers makes you just like everyone else.  Now, if your going to have conference calls about specific programs once a month…  I’m sold.  You specialize in blogsite, coupons, e-store, etc. instead of being generalized..  I’m sold.  Your program managers are required to physically call every affiliate four times a year to touch base… I’m sold.

Act like a spammer?  I’m not only not sold..  I’m gonna badmouth you to every affiliate I every communicate with.

(doug52 is an active participant in the AffSpot Performance Marketing Affiliate Forum, Curmudgeon, and a general malcontent that has made his living in Affiliate Marketing for over 10 years.  His opinions are his own and not necessarily those of AffSpot.)

I normally don’t dedicate an entire blogpost to a single company.  But this morning Andy at MoreNiche posted on AffSpot that they are now giving merchants the option to credit the First Click, the Last Click, and even the ability to split commissions between the First, Middle, and Last clicks that lead to a sale.  (CLICK HERE to see the MoreNiche Announcement).

For as long as there has been Affiliate Marketing (and earlier with offline) the age old argument has been which click should get paid?  Especially since (most of the time) people don’t simply click a single link and buy.  They may click your affiliate link, take a look at the product your promoting, and then go think about it.  Especially if it’s for something more expensive than $19.95.  And a percentage of those people come back and buy that product later.

But, people being people, they forgot to bookmark your site, can’t remember where they saw it (and if it’s an online store instead of a Brand they don’t remember that either), and so they Google it and guess what?  Someone doing PPC on a Brand Name, a Coupon site, or a Voucher site get’s the Last Click.  And we all know who got the Affiliate Commissions…  The “Last Click Wins” rule.

Which is why I think this is a real winner for everybody.  A merchant can choose to pay on the First, Last, Split between First and Last, and even Split Commissions between three or more Affiliate clicks that a single customer has made during the process.

Now before you get your email started telling me how awful this is let’s think about it first, shall we?  Just because your used to “Last Click Wins” doesn’t mean it’s advantageous for the merchant.  It also doesn’t mean that it’s always fair to the First Click affiliate.  In many cases the First Click got the customer interested, and the Last Click helped the customer take action.  Those arn’t mutually exclusive events.  And MoreNiche is enabling Merchants to make decisions about the worth of both of those events (indeed, every clickable event in the chain) so that a Merchant can encourage Affiliates in ways that make sense for that Merchant.

I’ve been part of many discussions about “Which Click Should Count”, and the arguments for all events.  But really, what and who are we here for?  The Merchant, that’s who.  They are the ones who pay us to promote for them.  And in my eyes anything that would encourage Merchants to really think about how they pay, what Affiliate activities are best for their Brand and Business is a good thing.  And maybe even a little bit of the dishonest “Get that Last Click No Matter What” fever that infects fraudsters can be moderated by this.

A perfect example of the kind of systemic fraud our industry has been suffering from was brought to my attention today.  A person that deals in bogus bank accounts was trying to sell his wares on AffSpot.  And no, his posts didn’t see the light of day…  until now.

If you’ve been around at all you’ve seen the seedy posts on Facebook and Twitter about “1000 gmail accounts $50.00″ and the like.  Which is part of it.  But the worst part of it is people selling bank accounts.  Lots of bank accounts.  Accounts you could use to (in combination with a fake gmail account) create accounts with any number of networks and merchants.

But I’ll let a couple pieces of the spammers post tell the tale for you.  Here’s the Title of the thread he tried to post…

selling good ccv bank logins dumps fullz and many more

What?  Bank Logins?  What’s up with that?  I’m certain it isn’t legal (and yes, I submitted the data to the proper authorities) and if legal it’s not legitimate business to deal in this way.  Here’s just a portion of what they claim they can provide to you:

Fulls come with this info
Firstname:**
Lastname:*
Address:*
City:*
State:*
Zipcode:*
Phone:*
SSN:*
Mother’sMaidenName:
DOB:*
CardBank:**
CardType:*
Cardname:*
Cardnumber:*
Expiry Date:-*
CVV2:**

Oh yes, this looks like stolen credit card data, or fake accounts built by the dozens.  And just which banks are these people claiming to have accounts from?  Why yes, they even tried to post that:

BOA LOGIN + FULLZ
CITY LOGIN + FULLZ
HSBC LOGIN + FULLZ
WELLS FARGO LOGIN + FULLZ
LLOYDS LOGIN + FULLZ
WACHOVIA LOGIN + FULLZ
ABBEY LOGIN + FULLZ
RBC LOGIN + FULLZ
Chase LOGIN + FULLZ
First Trust Bank LOGIN + FULLZ

They even supplied a Yahoo email address and an ICQ number to chat with them (of which was also given to the proper authorities).

The point is this…  fraud is rampant and it’s up to ALL of us to put a stop to it.  It’s hurting our business.  It hurts Performance Marketing Affiliates, it hurts the networks, and it hurts the Affiliate Managers and the Merchants.  The only way this is going to stop is if we quit ignoring the problem and put an end to it.

Affiliates…  If a network doesn’t require your real email addy (on a business domain you own) along with a landline or cell number and a full IRS EIN (and they check it all out) I’d be suspicious that (as Niecy Nash says)  “Mayhem and Foolishness” is going on.

Merchants…  Trust me, affiliates LOVE when you just accept them into your programs.  But realistically, if a fraudster gets approved they can do you alot of damage.  Make your Affiliate Managers check people out.  No valid EIN, real phone number, etc.  Don’t take them.  Don’t just reject everyone either.  Do the work.  You’ll have a more successful program with real affiliates.

Networks… Your caught in the middle…  Sorry, that’s life.  You can stop the “Mayhem and Foolishness” right now if you want to.  With a few thousand networks I know it’s tough to take the high road.  But do it.  Make merchants be real and honest.  Make affiliates be real and honest.  Do it with a minimum of hassle but do your affiliates and merchants a favor and do the work.

If we all pull together we can stop this.  Noone is going to do it for us.  We may even endanger our industry if we don’t do it..  So let’s all do the work.  Affiliates, check things out before you promote.  Merchants, make sure you have real affiliates.  Managers, educate the merchants and your affiliates.  Networks, set reasonable standards and uphold those standards.

We all want it..  Now it’s up to us to do it.

2008 seems like so long ago.  But you need to be aware, and prepare, for changes in Affiliate Marketing due in 2011 because of the Housing and Economic Recovery Act of 2008.  You see, a new IRS form (Form 1099-K)will be required from payment processors.  You know, PayPal, Google Checkout, Amazon Payments, Credit Card Processors, etc.  And the rules are pretty simple.

If you receive more than $20,000 in payments during the year and have a total of more than 200 payments then a 1099-K is going to be sent to both you and the IRS from your payment processor.  I’ve done a little math and although nowhere near the majority of Performance Marketing Affiliates will be affected…  The “Super Affiliates” most certainly will be affected.  And most fraudulant affiliates churn enough money to qualify.

Which means that the Evil Ecosystem of Affiliate Fraud will expand.  Because the basic tactic of fraudsters is to have multiple accounts of every type (including multiple PayPal type accounts).  Which will make it easier for Networks, Payment Processors, and Affiliate Managers to identify both the services that are enabling fraud, and the affiliates who are using those services to commit fraud.

Now, if the Networks step up and require affiliates to be organized like real businesses (and face it, affiliate marketing is a business) AND the payment processors are reporting incomes.  The frauds are going to become very easy to identify.  Some fraudsters will fall through the cracks to be sure.  And International Fraudsters will still be tough to deal with.  But it’s a start.  And it would benefit all of us to help weed out the bad so the good won’t have to become a regulated industry.

In the realm of tactics used by fraudulant affiliates (those persons/entities who use affiliate marketing but damage our industry) it never ceases to amaze me the amount of work and effort a fraudster will do for a few quick bucks.  Only this time, I’ve seen it myself.  First Hand…  And someone at one or more networks had to have known about it.

You see, last summer I went somewhere with my son.  “Guys day out”.  And we were greeted at the entrance of a public venue and asked to register on our way in.  Okay, free event, I get it.  They had a couple tables with computers with new screens/keyboards.    So I go to the screen and proceeded to register into the event.  Okay…  this looked familiar.

Way too familiar!  It was a web browser in “kiosk” mode where you were supposed to put in your name, email addy, phone, etc.   So, I used a Google Voice number, a spam bucket email addy, etc.  And later when it wasn’t so busy I saw a guy that was obviously in charge of the registration area.  I chatted him up.  Got a touch “techy” and found out they were a “outsourced” company for doing registrations.    The computers were connected (with a switch/hub) to a WiFi setup.  Cool…   I asked them what they charge for doing this and was told that their “fee” was sharing the registration data with the event promoter…  Huh?  Where’s the profit in that?

I asked them how they could do that?  I was told that the surveys went through a “survey company” that paid them for the opinions.  That made me curious…  So I walked back later and put in a bogus registration and paid real careful attention to the screens…..  AHA!  I got the URL…..

After getting home I went to that URL and really checked out every page, read their code, etc.  That second email address “verification” line??  Yup, it was in an iframe..  But the first one wasn’t.  I smelled “email submit”.  Then I saw some curious javascript…  And without the server side I can’t be totally certain..  But.  Given the uptick in email in the “spam account” I think about 4 email submits happened.  I also think a zip submit or two happened as well.  And curiously enough, .edu offers started flooding the spambox email account.

Now, that WiFi couldn’t have had more than one IP address…  So here’s what I think was really going on.  Whoever was doing the registrations sold the promoter on being their registrar for the free event.   Then the “registration company” was using some clever page javascript to effectively “multiplex” answers to the registration and “survey” questions…  And putting in multiple email and zip submits to affiliate programs.

How much money would that be?  Let’s say two email submits and two zip submits (and all the email addys to a targeted list) for the 3000+ people attending the event?I’m guessing $12000.00 or more.  Not bad for a days work.  And just how did all that happen on a single IP address????  The network carrying the offers had to know.  A call or email with an AM at one or more networks asked by the “affiliate” who told them they were doing registrations and wanted to offer an “optional” survey or offers, etc.

Pretty fraudulent if you ask me.  If they took the registration, asked if I wanted to take an optional survey, then be shown “Would you like information from these companies”? and offered the choice to submit my info or not?  Okay.  To mask it all and the networks not stopping it dead in their tracks…  Not good.

I don’t know which networks in this case.  It was a year ago.  But the network had to know.  I’d place odds on the “affiliate” chatting up an Affiliate Manager with some BS story to get permission to do it.  And just what AM in their right mind would approve of this?  One that either didn’t care where the submits/clicks came from, or just too lazy to think things through.  And a “Compliance Department” that isn’t being run well at all.

Remember the movie “The Prime Gig” with Vince Vaughn?  And “Boileroom” with Vin Diesel and Ben Affleck?  Well, some of those very same tactics illustrated in these two movies are being employed in the seedy side of the  Affiliate Marketing industry.  I’ve been looking a little harder at organized affiliate fraud and the very same attributes of telemarketing boilerooms are being used.  Which hurts our bottom line, reputation as an industry, and increases our workloads (networks, merchants, and affiliates alike).

Only these arn’t physical boiler rooms.  These are physical, virtual, and outsourced.  Those participating have very advanced computer systems.  I thought my setup was big (5 servers for my desk alone).  But no, this isn’t anything like you’ve ever seen before.  Tens of multi-core systems and 4 monitors minimum.  All set up in an apartment where two or three people are cranking out Craigslist ads, bogus blogfarms, and pushing “guru” how-to’s 24×7.  And they are connected with JVs (Joint Ventures) with individuals and are outsourcing other tasks across the globe.

And what is it that they’re doing?  The answer is simple…  Anything for a buck.  Preferably anything where they can make a “big hit” and pull in several thousand dollars per month per cycle.  With any deceptive means possible.  Examples?  Craigslist posts for Apartments for Rent, then subject interested parties to a link where they can get their credit report in order to be qualified to rent the non-existent apartment (or house, or car)!  Then they take the affiliate commission for the credit report and build email lists to sell to others (and use for their own email campaigns) later.  And the link they gave the person hunting an apartment?  Why yes, it stuffed a few dozen cookies along the way and maybe one or two email submits happened as well.

And these groups get caught and banned from networks frequently.  Their PayPal accounts dropped.  Their program accounts dropped.  Even their hosting and email accounts cancelled.  But they continue because their tactics bring them money.  Email accounts?  They hire Indian, Pakistani, and Malaysian contractors to create Gmail/Hotmail/Yahoo emails by the hundreds.  They do the same for Craigslist posters.  They hire out (or use JV) for all the background gruntwork to create, track, and use thousands of false identities.  And when you have thousands of emails tied to thousands of Craigslist/Ebay/Amazon accounts and are creating network and affiliate program accounts with these same emails the “inventory” is sizeable enough that if one gets banned, they just delete it from their list and go to the next one in line.  Sometimes 8 or 10 per day!.

Do you know anyone that has 100+ email accounts tied to 1000+ domains, with matching PayPal, Ebay, Amazon, and 10 network accounts?  Each enrolled in hundreds of affiliate programs?  And if you had a way to organize and manage that many accounts how much would you make?  Let’s do a little math.

100 bogus Craigslist ads for an Apartment for Rent or Roommate ad.  Every response directed to provide a copy of a credit report..  Only accepting the credit report from one of your 100+ bogus sites.  Capture their info from the bogus site and toss it at an email submit along with the credit report offer.  Stuff some cookies while they’re on the bogus site.  Then after your banned on all of this do it all over again (and sell the email list to a list broker).

500 email submits = $2500.  500 credit reports = $6000.  Sell the email list = $100  Total = $8600.00!

Split that profit with a JV, pay off your contractors and general overhead and your taking home $5000+/month. And the really hard workers will do this 8+ times per week with different targets, different programs, and all on different fake accounts.

The big catch is that these boiler room affiliates are not operating a sustainable business model.  But they’ve figured out a way to “Wash, Rinse, Repeat” to turn it into a sustainable model.  You see, they KNOW their emails will be dropped, their accounts banned, etc.  So, what do they do?  They’ve created a system that relies on their ability to purchase email accounts, network accounts, PayPal accounts, even shell corporations.  And an entire micro industry has built up around that demand.

How do we stop the scammers from ruining our industry?

There are a few things that can be done.  Simply not allowing free email provider addresses to be used for Networks and Affiliate Programs is a start.  If you don’t have a domain and emails in that domain you don’t get a network or program account.  And the domain must have public listing that matches the name/phone/addresses.

Require a real business entity.  If there isn’t a personal or business IRS EIN (Employer ID Number) then access to networks and merchant programs should be denied.  And the networks need to verify all this information.

Those two items alone would be enough to nearly break the ability for these fraudsters to simply inventory fake business identities.  And would have the lowest impact on true Performance Marketing Affiliates.  It might be a little inconvenient.  It will certainly cost everyone a little money out of our profits in the short term.  But all of us in the industry will benefit from less competition from those employing deceptive practices and managers for networks and programs will end up gaining more time to concentrate on our needs instead of chasing down those that damage our industry.

The sheer extent of the problem of fraud in the Affiliate Marketing space was very well pointed out this week when a specific issue was raised on the AffSpot Forums (and elsewhere) by Peter Bordes of MediaTrust (You can read the original thread here).  Which highlights the evil ecosystem of affiliate marketing fraud.

Some people were posting on “freelancing” sites that they needed freelancers to obtain and sell accounts on more than a few networks!  Now think about this for a second.  People are actually advertising for (and willing to pay for) accounts on affiliate networks!  And what kinds of things are keeping them from just signing their own accounts up for themselves?  Well, the first thought is that they’ve been “kicked and banned” from every network for one.

It was pointed out (in this thread) of a possible scenario.  Which seemed to me to be valid.  Let’s say there is an person that has learned over time that they can put up a particular style of landing page..  And that it converts well if they can forward traffic from Craigslist.  So they do.  And they make a few thousand dollars a week.  They receive their first check from the program (via the network carrying the offer) and then the merchant gets a message from Craigslist to “cut it out”.  So they tell the network, the network looks at the affiliate…  And they kick them off the network (to make the merchant happy).

Okay..  Work the money side of this scenario.  Affiliate..  makes some bucks.  Network…  makes some bucks.  Merchant… makes some bucks but needs to make Craigslist happy.  So what does this particular person do?  They find similar offers on other networks and do it all over again!  And over time a cycle of account creation, destruction occurs such that before long the affiliate can’t get onto networks and/or programs.

What to do?  Why, get someone else to qualify for the networks and programs and sell the accounts to you!  All so you can maintain the cycle over and over because you can make some dollars.

So, it’s obvious that this is not a sustainable business model.  But so many disreputable people are doing this very thing that there is actually an open market for network accounts!  And PayPal accounts.  And such a large market that there are pages of postings on “freelancing” type sites with people willing to buy and sell these accounts.  And they’re hurting your business!

And this cycle only highlights an ecosystem where the dishonest are defrauding merchants and networks.  And collaborating with others such that an entire underground industry designed to defraud merchants, networks, and affiliates alike is occuring.  Thus is an evil ecosystem of affiliate marketing fraud that we must fight against.

For the vast majority of us in this industry behaving in this manner is unthinkable.  And rightly so.  But the few who are engaging in such behavior are forcing costs to increase for our merchants, OPMs, networks, and that’s less money available for our profits.  Let alone that engaging programs and offers for your sites are getting more difficult as ethical networks are having to do more intensive screening of affiliates.  With time = money that’s costing your business too.

Here’s the real mystery….  I’m not seeing many networks willing to take a powerful public stand to end the continuing practice of buying and selling their accounts!  It seems to me that some networks care more about keeping the status quo (and short term profits) instead of building a more sustainable business.

Is this going to change?  Well, not as long as Affiliates are not engaged with their networks about it.  If every affiliate would add in their communications with the networks they are active with (and applying to) about where is their public blog and are they taking an active role in both preventing fraud on their network and encouraging others to do the same..  well, the networks would listen to that.  Same if the merchants and OPMs did the same.

The blackmarket dealing in network accounts is hurting our profits, our reputations, and our industry.  And this issue is just as important as fighting unfair affiliate taxes.  It’s time we focus not only on our own endeavours, but in advancing our industry for our collective long term benefit.

Okay, so my head is all wrapped around my recent post where I fleshed out the need to redefine ourselves from Affiliates to Performance Marketers.  And in writing that post I was interrupted by news about some of the Affiliate Tax efforts happening in some states.  And it came to me that this may be the bad thing (Affiliate Tax Legislation) that gets us to stop and redefine ourselves as Performance Marketers, a good thing.

Now this gets a tad involved (and remember, I’m NOT a lawyer and don’t play one on TV).  But it did occur to me that by embracing Performance Marketing as a vernacular for what we do we may very well enable our industry to more closely “mesh” with the advertising and media industries.  And what does this mean?  It means that we gain valuable allies, easier to understand language, and maybe most importantly…  legal grounds.

How can this be?  Think about it.  Harking back to my previous post.  We’re NOT Affiliate Marketers, Affiliates, or any such thing.  What we are is a segment of the Media and Advertising communities.  We produce, sell, and publish advertising.  We are renumerated in direct proportion to the effectiveness of our efforts.

We are Performance Marketing Professionals.  More specifically, we are a Performance Marketing CPC firm, a Performance Marketing CPA publisher, a Performance Marketing CPS publisher…  etc.  And in redefining ourselves in this way we open ourselves up to a wider advertising, publishing, and media community.

But even better than that.  Let’s compare what we do to an independent TV Station.  We have merchants who engage us as Performance Marketers to publish advertising to appeal to our audience.  This is done via OPM firms (specialized advertising agencies, really) and our effectiveness is tracked by a Performance Marketing Network.  Simple enough, right?

Now, let’s look at an independent TV Station (this also happens in Radio, and Newspapers as well).  A merchant acts via their advertising agency to engage a TV Station to run a commercial for a percentage of sales.  In other words, renumeration for the TV Station would be directly proportional to the effectiveness of the advertisement and the TV Stations audience. With the effectiveness of the advertisement being measured by a specialized call center.

If every “link” in the Affiliate Marketing world were to redefine itself as Performance Marketers and integrate ourselves in the overall Advertising and Media communities (indeed, the “Marketing Industry) what would be the effect of so-called “Affiliate Taxes”?

I think a case could be made that TV Stations, Radio Stations, Newspapers, etc. that accept any form of Performance Marketing would then be “in danger” of having to comply with “Affiliate Taxes”.  For no other reason than that they accept Performance Marketing programs.

And what happens to politicians who make enemies of EVERY form of media?  What’s your State Rep or State Senator gonna do when EVERY TV, Radio, Newspaper, AND Internet media is mad at them over the Affiliate Tax?  One, they are more likely to listen.  Two, they are more likely to reject such taxes.  And, well, you get my drift.

Additionally, by promulgating this updated (and more accurate) vernacular for our industry we are actively building a foundation that some sharp lawyer types can use to help us.  If a state passes an “Affiliate Tax” would we be obligated in our legal defense to point out that the State has established a law that applies to one segment of business but not another (taxing Internet, but not TV/Radio/Newspaper) for the very same activity?  And couldn’t we point out forms of advertising in other mediums that are promoted on a TV/Radio/Newspaper stations website that are exactly what we do for a living?  And are the Affiliate Tax laws being applied to them?

Especially if we redefine our income streams as Revenue Sharing arrangements or Advertising Fees.  The same way that TV/Radio and Newspapers define those occasions where they are doing what we do..  Just in their own medium.

Nothing has endangered portions of our industry quite like the movement for Affiliate Taxes.  And in redefining ourselves as our industry already needs to do we are also enabling a better case for why those taxes need to be abandoned.