I was reading an article today in an online version of a newspaper that details the creation of the Institute for Advertising Ethics at the University of Missouri Journalism School (the USA’s oldest and perhaps most highly regarded journalism school).  And I noticed an item that really upsets me…  And a backhanded acknoledgement of the Performance Marketing industry as well.

Margaret Duffy, a former ad executive who now teaches at the University of Missouri School of Journalism and is helping to organize the ethics institute is quoted in the article as saying that advertising persuasion can be done in an “Ethical and Tasteful” way.  But the sentence containing this quote is what I have an issue with.  Here it is:

But even though the industry’s fundamental purpose is to convince shoppers to buy a product they may not actually need, such persuasion can be done in an “ethical and tasteful” way, she added.

Now I don’t know if the context is from the writer at the Associated Press, or from Ms Duffy.  But it’s dead flat out wrong.  The fundamental purpose of advertising is to help shoppers find and buy products that fulfill their needs.  The shopper may not know they need it.  The shopper may be seeking out a solution to a problem.  The shopper may purchase items simply because they perceive the need even though they don’t really need it.  But convincing shoppers to buy products they neither need (or want) puts our industry in the worst possible light for no good reason.

I don’t know anyone in this industry that purposely tries to elicit purchases from people who don’t need or want their products.  It’s too much work, too little profit, too high cost, and would damage the brand if they did so.  I know plenty of people in the industry that believe in the products they promote, provide the best information they have to help consumers make the choice to buy these products.

If I suddenly started promoting a useless eBook claiming to teach you how to successfully use a left handed monkey wrench with your right hand and found a way to convince you that you really needed to buy it…  Would you (after buying it) every purchase something from me again?  No, I didn’t think so.  Which is the point.

If you look at highly successful Performance Marketing Affiliates your not going to see them promoting bad products.  It would sully their name, destroy trust in them and their sites, and hurt their bottom line.  Just the same as you only promoting products that are good for your audience.  Provide a solution to your followers potential problems.  Fit their lifestyles, etc.  You simply make more money and build a loyal base of people who will buy from you again and again.

The interesting thing about Performance Marketing in the article is it did recognize (backhandedly) a portion of our industry.  The scam diet, and “make money now” portion.  Not a huge win.  But at least a part of our industry is being recognized as part of the overall advertising community.

Now to get on with the real work.  Leading by example and showing the AP Writers and Journalism School Faculty that their impression of our industry is just simply wrong.

Yesterday I received a call from an Affiliate Manager friend with an issue.  Affiliates running ads on reserved trademarks, coupons dominating, backend tracking getting more and more difficult and the workload it was causing.  Generally, my friend wasn’t having a good day.

So I suggested that we go through each item one by one and maybe my suggestions would help, and maybe they wouldn’t.  But in any case my friend would at least have things to think about.  And as we worked our way through the high spots everything boiled down to this.  The true Value of the Affiliate Performance Marketer is being hindered by artificial means.  That instead of fighting the Affiliates they should get creative and work with the Affiliates.  And that there is “hidden” value that needs definition and measurement.

And here are the ideas along with the Value:

If Affiliates want to bid on your product names, etc. how about enabling them on terms everyone can be happy with?  Allow the bidding as long as the links go to you.  Then figure out a way to make that work in your favor.  For example,  Running special banners/text leading to specific “landing page experience” sites just for those affiliates that are bidding on your trademarks?  Make it special, and exclusive enough that you leverage the behavior to the benefit of your brand/store?

Since “Coupons are King” right now.  Embrace them in intelligent ways.  Maybe have your discounts/coupons tied to a Facebook “like” button?  Tweet this page to enable your Coupon?  etc. and by all means find a way to have the hard working Affiliates link in those “share” items so they get a little credit.  But how many high performing affiliates will promote your program knowing that your going to tie the use of a coupon/discount to spreading the affiliates links?

Leverage your Affiliates for SEO.  There’s a million ways to do this.  Some good..  and some downright evil.  Stick with the valid, honest, and realistic ways to do this.  Work with your SEO people and build up a plan that works for everyone.  When a consumer searches for your keywords, and the first couple pages of Google are totally filled with your own site and those of your affiliates (and not your competitors) there’s value that makes the two items above nearly priceless.  Take your time, be smart, and figure it out.  It’s worth it.

And lastly, the combined cost of Affiliate Commissions and Discounts.  The conundrum of a 20% discount and a 15% affiliate commission costing so much.  To that I asked a simple question.  “Does your Affiliate Program show a profit, or a loss”?  The answer was profitable.  So my response is “So What”?  If your making a profit from the program (including management costs, network costs, etc.) then the discounts and commissions arn’t completely out of line.

One final subject was discussed.  Defining how to measure the results!  Some subjective, some objective, and some objective with subjective judgements.  Sales, EPC, etc. are all good.  But go through some other things as well.  How many links from your affiliates on the first page of Google/Bing, etc. for your keywords?  Over time, when those numbers increase do your sales increase?  If you trade bidding on your own trademarks for letting your affiliates “help out” is splitting that gain 50/50 with your affiliates helping them work harder for you?  Do you have any “leading/lagging” indicators in your data used to help you predict, then measure, what’s happening?

And yes, I basked in the comments of my friend of how helpful I was, etc.  But really, my friend knew all of these things already.  It just took a little discussion to clear out some clutter and think about that program from a fresh perspective.  Are you tossing away perceived conceptions and looking at your affiliate programs in ways that help you drive sales and value your affiliates for what they’re really doing for you inclusive of the non-direct sales benefits?

Granted, the main purpose of the “Crimes against chastity, morality, decency, and good order” law in Massachussetts is to prevent porn from being made available to children.  Which is good.  Adult items should be for adults, and childrens items should be available for the children.  But what happens if in the extremely “wide” language of this new law in the hands of unelected officials?

Let’s take a look at the law itself first.  Specifically, the revision to this law extended “harmful to minors” to the Internet. In addition to smutty books, films, pamphlets, pictures, plays, dances, and statues.  Yes, statues.  And what constitutes the “intent” assumption of a violating item?  From the statue (linked above) “…denotes sexual suggestiveness or a willingness to engage in sexual activity”.

Now, I don’t want Playboy or Penthouse available to my kids.  But it really doesn’t bother me all that much that the underwear section of the Sears Robuck Catalog, Victorias Secrets, or articles from National Geographic showing ladies in various states of dress/undress are on the Internet.  But what happens if your running banner ads for Victorias Secret on your blog?  Or for DVD Classics like “The Graduate” that shows Mrs Robinson alluringly posed in front of Dustin Hoffman?  Or links to the current run of Calvin Klein fashions?  None of which have a credit card gateway preventing the under 18 crowd from seeing the advertisement in the first place?

The point I’m getting at is that at anytime a faceless, nameless, individual in Massachussetts could decide that a particular advertisement for Calvin Klein, Victoria Secrets, or even an old movie on DVD could declare that the advertising banner that your running on your sites to be “…denotes sexual suggestiveness or a willingness to engage in sexual activity”. And, in theory, you could be held responsible if any child in Massachussetts should run across your website.

Now, I don’t think this would actually happen anytime soon.  But it’s best to be aware of what’s going on where and make sure that your affiliate sites are in compliance with the laws of ALL states.  Why?  Because if you inadvertently do something that violates a law (in say, Mass) it is likely that you would be held responsible in that state for violating that states laws.  Even if your in Iowa, or Florida, or wherever.

Not unlike some states wanting to require you to pay sales taxes to them because someone in their state clicks on your affiliate link.  Sound familiar???

Are you using “Human Herding” techniques in your Affiliate Marketing efforts?  What’s that?  A simple concept really.  And more than likely your using Human Herding without realizing it.  But it’s a powerful way to generate sales, clicks, and there’s nothing wrong with the concept.

As an experienced Cattleman there is an analogy that fits.  If a cattleman is out checking his herd and there are a bunch of calfs with their mothers it isn’t unusual for most (if not all) of the “momma” cows to head on out to the pond for a drink.  And all the calfs are left with the rancher.  Kind’ve like the herd deciding that the cattleman is the designated babysitter.  Which is essentially how Human Herding techniques work for Online Performance Marketers.

Implementation, however, can be problematic.  You see, in order to use Human Herding techniques you need to first identify who you are and what your about.  In detail.  Then you give freely on Twitter, MySpace, Facebook, Ning, etc. and slowly build your “herds”.  It takes time, patience, and hard work.   And here’s the part that’s difficult for most.  You have to inspire and trust your “herd” to work on your behalf for nothing more than their desire to share with others what you are sharing.  Simple Word of Mouth advertising with the goal being to increase the herd.  Not to generate instant sales.

But there is a big payoff.  As your various social media, blog, and website “herds” begin to grow it is essential that you change NOTHING about how you continue to give to the herd.  Keep pumping out the articles, posts, e-book giveaways, tips, tricks, advice, whatever it is just keep doing it.  Rome wasn’t built in a day and neither is a good herd of cattle so don’t expect anything different when your employing Human Herding strategy.  The temptation is strong to make everything about you and generating money for you.  But herds are full of skittish flighty animals so don’t spook them.  Nothing is worse than being caught either in the path of a stampeding herd, or, having your herd run away from you.

In other words, monitize intelligently.  Use paid contests (where an advertiser pays you to give their stuff away).  Mix your affiliate links in just as you would with a blog (only products and services that will be of interest and benefit your “herd”.  Don’t slow down the giving of your time, attention, and interest in your “herd” and at some point they will trust you rather than simply follow you.  And you’ll see that in your performance advertising commissions.  When there is a big spike that stays up for more than a month…  your most likely there.

But something else happens as well.  Opportunity.  As your “herds” grow, follow, and then trust you for what you do for them they may wander off…  And leave behind something they love and trust themselves…  their friends that they introduced into your “herd”.  Which acts first as a reason for someone that’s losing interest to stay…  And then if they wander over to the pond a reason to return to the “herd”.  A built in mechanism for maintaining a large group of people that trust you in your chosen niches and that will do more than click a link and go on their way.

They’ll “return to the trough” over, and over, and over again.  Which is what you want, isn’t it?  solid, dependable, repeat business.

How are you building and maintaining your herds?

Changing offers, adding features, making your affiliate sites work better usually involves alot of tools.  You’ve got editors, graphics programs, your CMS, SEO tools, plugins, AARRGGHH!  Wouldn’t it be great to have at least a few essential tools in an easy to use all-in-one package so you could fix those glitches, see what’s happening with that Javascript, and debug without having to look at the error log all the time?

Well, did I make a little personal discovery today.  Possibly the worst named software package of all time with the ability to save Affiliate time like none other I’ve seen in a very long while.  XHTMLDBG Yes,, that’s really the name of this package.   XHTMLDBG does lots of things that are essential for Affiliates that are tired of loading a dozen different packages just to get a little hack webcoding out of the way.  XHTMLDBG enables you to:

• watch HTTP headers,
  watch _POST variables when send html forms,
  css stylesheet watching,
  dom inspector for better documents structure watching,
  indicate css stylesheet attributes,
  indicate current used cookies,
  watch javascript errors,
  auto reload function up to 60 seconds,
  analyzing SEO keywords,
  quickly HTTP_USER_AGENT switching,
  strict RFC 2109 (HTTP State Management Mechanism) validation for Cookies (validation).

Yeah…  this is an Affiliate’s Multi-Tool for getting things done.  Want to see what’s happening “under the hood” to catch that pesky form error?  No Problem.  Check to see CSS elements that arn’t being used so you can clean it up?  No Problem.  See which CSS element is controlling that list text on a page that’s been giving you fits?  No Problem.

And the best thing of all is that it’s Free (as in Beer) and Open Source.  No cash involved (but Donate, it’s the right thing to do when you use a cool tool like this one).   So do yourself a big favor and check out XHTMLDBG.

I was surfing Craigslist this morning and I clicked on the Jobs section to see what’s happening in the computing world lately.  I often use job listings to help me keep a handle on “what’s hot”, etc.  And what presented itself to me?  A WARNING statement talking about Affiliate Scammers!

Well, that’s okay.  There’s alot of less than reputable people posting bogus affiliate offers on Craigslist.  But the link they have to the phrase Affiliate Scammers is to the Wikipedia entry for Affiliate Marketing!

Here, look for yourself (Check the linkrel at the bottom left of the image:

See it?  Not a link to online scams, etc.  A link to Affiliate Marketing!  That Wikipedia page has links to very reputable companies, people, references, etc. to the larger respectable and legitimate use of Affiliate Marketing.  It’s not a page about online deception, scams, or lawless behavior.

I understand Craigslist’s position.  I really do.  I know there is a ton of scamming happening there.  Just look at the “Rent a Minion” websites where people are outsourcing Craigslist Postings, account creation, etc.  So the notice doesn’t bother me.  The inference that all Affiliate Programs and Affiliate Marketers being disreputable scammers is insulting, however.  Rather thoughtless and lazy of Craigslist I do believe.

Which is one of the reasons I think we should all be calling ourselves Performance Marketers, Performance Marketing Affiliates, etc.  Because I’m seeing examples such as this more frequently.  Where legitimate Affiliate Marketers are being grouped with scam artists.

Craigslist…  Shame on you for not thinking, researching, acting more responsibly and actively engaging with the Affiliate Marketing community to help yourselves out.  Affiliate Marketers, shame on us for not helping to raise our industry beyond this misconception.

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.

With Google IO this week comes a couple new things for Performance Marketing….    Mobile PPC and CTC (Click-to-Call) via AdWords for the Mobile Market.  With options for Advertisers, Publishers, and Developers.  I think it’s safe to say that Mobile Affiliate Marketing has arrived in a big way.

AdSense for Mobile Platforms is described (for Publishers) “AdSense for Mobile helps you earn money by displaying relevant Google ads alongside your mobile web pages or within your mobile applications.”  Which is basically saying you can make money with ads in your mobile application instead of charging for the application itself.

Click to Call is pretty cool as well.  “… Click-to-call ads for mobile content and apps work with phone extensions and appear as animated  banner text ads with a call button on mobile devices with full Internet browsers.”  Which is fancy talk meaning banner ads on mobile phones will make the phone call the merchant.

And this means that developers will gain more performance marketing opportunities in the mobile arena.  It also means that more dollars are likely to flow from traditional PPC and Affiliate Commission advertising to mobile forms.  I know what your thinking…  “How do I deal with this?”  And in the short term it’s not too difficult.

For example:  The AffSpot Blog (this thing your reading at http://blog.affspot.com) is already available for all smartphone browsers.  Take your iPhone, Android, etc. and surf us.  It shows with a radically different template specifically designed for smartphones.  It would take little to no effort at all to ad these new mobile advertising opportunities into your blog.  And the best part…  It costs nothing (except a little technical time) to do it.  No special applications are needed for most blogs.

Now, if your needing something a little more specialized you can have an application developed.  But watch out…  If your not a code person it’s not as simple as you may think.  The AffSpot Forums took a little more work.  In fact, we abandoned the browser entirely for the mobile platform.  That took alot of testing, a fair bit of database coding and some serious customization to make that work right.  It cost some serious money too.

So for now, smart affiliate marketers are going to be moving quickly to add mobile capabilities into their blogs and sites to take advantage of these two new advertising opportunities now.  Just like when you enter into an underserved niche with your websites…  There are going to be underserved niches in the Mobile Web as well.  Best stake your claim and build your audience there before the competition get’s ridiculous.

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.