Do you think Affiliate (Performance) Marketing is a Virtual Sweatshop?  It seems that the folks over at pcpro.co.uk think so.  In an article titled “Inside the online sweatshops“ there is a section denoted as “Affiliate marketing schemes“.  And no, they don’t mean “schemes” like your thinking.  That’s what the Brit’s call an Affiliate Program.

The interesting thing to me is that they (pcpro.co.uk that is) contends (citing an eConsultancy study) that 13% of websites earn just under $100,000.00/month while around 33% generate $90.00 or less per month.  And more shockingly to me is that just over a third of all Internet purchases happened via an Affiliate Program!  Now, that’s the UK (and yes, I did a conversion from Pounds to Dollars).  Which I think is the real story here.

It’s not that Affiliate Marketers make a pittance.  It’s that over 1/3 of all Internet Sales in the UK came from Affiliate Programs!  How much did you earn your first year as an Affiliate?  Not much I’ll bet.  And for most of the newer Affiliates I deal with they don’t do much initially as well.

But, the Affiliates that treat their activities like a real business.  Organize their activities like a business.  Implement a Marketing Plan/Business Plan, and Accounting/Bookeeping structures like a real business…  Tend to stick it out, learn the trade, master the craft, and go on to be successful Affiliate Marketers.

Which doesn’t mean that those earning $300/month are failures.  Far from it.  I have many friends who earn $100/$200..  $300/month and that’s their goal.  A little extra cash.  They consider themselves successful, they are meeting their own goals, and I wouldn’t call them failures.

Just as I don’t think that Affiliates that arn’t serious about the business (by their actions) are “Sweatshop Workers” either.  Sweatshop workers have no choice.  Affiliate Marketers enter the industry because they want to.  It’s their own business and their not slaving away for the benefit of others by being locked up in a building sewing beltloops.

Some make it, some don’t…  But Affiliate Marketing is by no means a “sweatshop”..  And I think being lumped into that category by pcpro.co.uk is a continuation of the bad rap we receive as Affiliates in the greater Performance Marketing Industry.

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?

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???

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.

Sometimes you get busy and forget what’s important.  Busy building sites.  Tuning landing pages.  Busy managing your affiliate business, your family, your life.  That’s why we have holidays.  It gives us time to get unbusy.  To be able to surround yourself with your friends and family and mix, mingle, and to get in touch with what’s important.

It’s that kind of day in the USA today.  Americans will celebrate the date we declared our independence and began the long hard road to creating a Constitutional Republic.  A form of government unheard of at the time.  And it all started out with a simple one page document.  The Declaration of Independence.

So as the rest of the world is having a regular Sunday, we in America are getting ready to be unbusy with our “normal lives” and get busy doing special things.  Celebrating in our own ways.  Some with fireworks, picnics, family gatherings, and more.  But before you do…  Consider the following text in original spelling and format (and an image of the original document) of the Declaration of Independence.

The Unanimous Declaration of the Thirteen United States of America

When, in the course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the laws of nature and of nature’s God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

Source: The Pennsylvania Packet, July 8, 1776

With the realization that Facebook has decided to take on Google the challenge of SEO is the changing landscape itself.  And this changing landscape will help smart, aggressive, and forward thinking affiliates to grow their business.  And those stuck in the muck of the past will lose.

Before it was all Google, MSN, and then Yahoo.  Now it’s Google, Facebook and Bing.  The good/bad part of it is that getting your sites on Facebook is radically different that with Google and Bing.  Remember Meta Tags?  Well, they’re back and in a huge way with the Facebook Social Graph.  Site internal links, external links, follow/nofollow, etc. are all part of Google (and to some extent Bing).  But it appears that it plays a very small part in how Facebook is doing it.  Facebook is paying attention to it’s Meta Tags and you putting a “Like” button on your pages.

Which brings up the largest factor in how Facebook will be ranking sites…  The Like Button.

You see, if you charge up your pages full of the Facebook Meta Tags you can define your niche.  Target your potential customers and help Facebook give terrific results.  Thinks like Title, Location, Whether it’s a Blog, Page, Application, and even an image to display, etc. can all be defined.  But the one thing you can’t control is the Like Button.  Which means you can have the greatest page of all time and if your potential customers click on your Affiliate Links instead of the Like button your going to get a commission…  And lose the Facebook equivalent of “Link Juice”.

It is possible that if you convert too well that your Facebook “Page Rank” will go down (because your links are being followed).  And if people love your site and click the Like Button that they may be “leaked” over to Facebook instead of clicking on your Affiliate Links.  Essentially, Facebook may become big enough (and some contend they already are) to force you into installing “leaky links” onto your affiliate sites.

Which won’t affect Google or Bing results one little bit.  That could change too.  But for now SEO is morphing into a Triple Headed Hydra where Google, Bing, and Facebook will all have to be accomodated in some fashion.

What are you gonna do?  Let’s talk about this on AffSpot and crowdsource this one together.

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.)

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?