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.

New York started this whole mess…  Declaring a “Sales Tax Nexus” to include wherever an affiliate marketer was based out of.  Then Virginia, Mississippi, New Mexico, the Carolinas, etc.  all trying to pass laws declaring the same tired refrain.

Of course, there’s the ever shining example of Missouri which takes the position that no new law is necessary and that everybody owes no matter what.  It’s all becoming so serious, and so silly at the same time.

The most ridiculous example would be that a customer in Maine buys product from Amazon (in Washington State) which ships the product from Kansas, and the click thru was from an affiliate marketer in Missouri who hosts their website in Virginia.  Meaning that Sales Tax would be charged from Kansas, Missouri, and Virginia (and maybe Maine).  Oh, each city and county in those states most likely would want their share too.

Which can only mean one of two things.  Either State Legislatures know the ramifications of all of this and they just don’t care about anything but gaining a few cents in taxes (even though it will cost four to five times the tax amount in order to collect it).  Or, they’re not paying attention to the real world ramifications such moves will truly make.

In either case, I’m considering a proposal of my own…  U-Haul.  Sam Kinneson famously stated in his comedy routine that we should not give foreign aid to countries without food.  We should give U-Hauls.  “See this..  This is Sand, YOU CAN’T GROW FOOD IN SAND”!  Give em a U-Haul and point them somewhere that food can be grown.

In a whole “Freakanomics” sort of way this same scenario may end up being played out in the Affiliate Marketing Industry.  Some smart person in some State is gonna declare that affiliate marketers in their State don’t have to be responsible for affiliate marketing taxation from another State.  And then a whole lotta U-Hauls are gonna get loaded up and on the road.

Whichever State creates this “safe haven” for Affiliate Marketers is gonna win big.  Think of all the data centers, high speed Internet connections, thousands of entire families, and all the supporting merchants, suppliers, shippers, etc. that will flock to such a place.  It would become a sustainable economic boon that will leave some States economically devastated in the process.

All because some State Legislators didn’t have a clue just how unworkable, unfair, and economically unfeasible affiliate taxation via sales tax mechanisms truly are when there are so many taxing authorities and cross border transactions there truly are.

My conclusion?  Either get a U-Haul or lay out exactly how bad this is and get onto your State Legislators right now.

How many networks are there now?  At least a few thousand.  And a continuing trend we’ve been following is the propensity of networks built out of network affiliations.  What?  You got it.  There are Affiliate Networks that are nothing but a network who’s entire portfolio of offers are in reality nothing but that network being a member of many other networks.

So what’s the point?  We think it’s consolidation.  Now think about this for a little bit.  The longest chain you probobly have right now is yourself, being an affiliate of a number of networks and enrolled in multiple programs across multiple networks.  Each with either in-house or OPM management.  It’s very easily feasible that your dealing with 10 managers for 20 programs on 12 networks and you have 20 or more sites running.

What’s the path of least resistance all around?  Shedding unprofitable relationships and consolidating your offers and management.  Which is why (we think) that so many of the newer “network of networks” are owned/operated by OPM’s.

By being enrolled in a hybrid model like this the network (of networks) is consolidating offers, management, etc. and your dealing with fewer people to be able to either reduce your workload or increase the number of offers/sites your creating.  Not a bad concept.  There is also a “dual edged sword” effect where in the long run costs will be driven out of the system (leaving more money for the merchant, the network, and you) or that this is the harbinger of an industry wide consolidation.  Where your options will be reduced.

If I had nearly unlimited funds, I’d build a network of networks myself, buy a coupld strong OPM firms, buy a couple regional ISP/Hosting companies for infrastructure, toss in a couple agencies (Advertising and Social Media) and wring all the shared costs out of the system.  Then use the cost savings to increase affiliate payouts and build the company itself.  It wouldn’t take long for someone with big pockets to literally drive the entire marketplace into a model like this.  And I do believe it’s already underway.

The big questions are if the merchants will go for it, if affiliates will see the consolidation as a profit opportunity, and if the existing “network of networks” companies continue to increase in number / scale or not.

We have all seen it in other blog posts, twits, and when talking with AM’s out there.  Offline Marketing.  The most visible of these has been in the dating segment of affiliate marketing.  You’ve seen the signs on the street corners…  “Single?  NameOfYourTownSingles.com”.  Add to that all the other methods of offline marketing I’ve seen.  Stickers stuck to the drive-thru window at Krispee Kreme, Flyers at the convenience store, etc.

But what if you can do offline marketing…  online?

Now I’m sure someone has thought of this before (as a matter of fact, I’ve seen versions of it).  But every time I’ve seen it it’s been someone promoting their own thing.  Like people entering a contest to win a prize while submitting their address, phone, and email at a Clinton Anderson horse training event.  But let’s digress and show you how I’ve come to the idea of Offline Marketing – Online.

A good example in the physical world is my brother in law.  He owns several car/truck aftermarket stores.  Does very well with it.  He rented an empty store in a shopping mall last Christmas season.  And parked a fully tricked out pickup truck in it.  Added a few items from his existing inventory.  Had plenty of his catalogs, brochures, etc.  And proceeded to “kick butt and take names”.  He paid for the entire Christmas season in one day.  Found customers he never would have had before.  Sold more product, garnered more name recognition, built his brand, and made profits above and beyond what he normally would have.  99% of the sales involved the customer driving across town for installation as well.  How is that for Offline Marketing?

This would also work at a Mall, flea market, etc.  All you have to do it contact the manager of a high traffic venue and work them a deal.  Generally a copy of the email list (which is actually entered by the people you talk to) will more than make their day.  Oh, yes, you’ll need to contact your Affiliate Manager and walk them through what your going to do.  I mean, come on…  300 email submits from the same wireless connection?  You’ll need to talk with your AM first and make sure your doing it right.

Devious people could go crazy with this… So you need to mind your Ps & Qs.  Find email submits and surveys that are very reliable, very up and up.  Mix those offers with offers of your own products and services that your website sells.  How about a Christmas Kiosk with 20 of your top selling items you demonstrate and best of all, your new customers can handle the online order themselves at your kiosk after they fill out a survey for a discount?  Adding themselves to your marketing list?  With their items being conveniently shipped right to their door?

Offline Marketing does work.  Doing your offline marketing while being online could provide a way to give your online efforts an edge over your competitors.