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My fellow affiliate marketers, welcome to Part 2 of the State of Affiliate Marketing Union.  I shared some of the wonderful things that affiliate marketing has going for it, including phenomenal growth despite the recession, in my post earlier this week. I feel the state of the affiliate marketing union is strong, but faces many challenges in the coming year.

And now the bad news. Surely, you knew it was coming. There are no silver lining comes without a cloud after all. First there is taxes then there is everything else…

Our Biggest Challenge

All kidding aside, there are serious challenges facing the affiliate marketing industry in the coming year. Unless you are an affiliate that’s been living under a rock, you know about the offspring of the so-called Amazon Tax which was first enacted in New York. Since that time the states of Rhode Island, and North Carolina passed similar legislation; and California and Hawaii came within a hair’s breadth of passing their own versions but thankfully the governors of those states vetoed the legislation.  Even now, though, it is still not a dead issue in those states and we face new challenges like the current one in Colorado as well as in Vermont, Virginia, Mississippi, New Mexico, Idaho, Maine, South Carolina, Florida, Maryland, Missouri, Texas, Connecticut, Illinois, Minnesota, West Virginia, and my home state of Tennessee.

Don’t see your state listed above? Consider yourself lucky, but odds are that such a tax will be proposed in your state or a bordering state very soon. Now with the aforementioned states enacting and others looking to follow, inevitable budget crises will see it occur in more states as they do whatever it takes to raise more revenue. You, Mr. or Ms. Affiliate, are the perfect target.

The time for apathy and inaction is over. The time for getting really ticked off and acting is now!

Let me put that another way: Get off your butt. Quit thinking it’s going to go away or that there is nothing you can do. Get mad and do something about it.

This is a call to arms. I don’t care if you hate politics, if you are a Democrat, Republican, or not even old enough to vote. Your jobs are at stake in some cases. Your very livelihood, if you do this full time, is on the line every time some half-witted state representative introduces legislation in a futile attempt to raise revenue through affiliates since they see Amazon as an easy target. Monkey see, monkey do.

I’ll step off the soapbox just in time and leave it at this: It’s not an exaggeration to say that the advertising tax is a serious threat to our industry so please join me and others in doing something about it!

What exactly can you do about it?

Numerous people: including Rebecca Madigan of the Performance Marketing Association, Melanie Seery of Affiliate Advocacy, to Brian Littleton of ShareASale, have made the following list of resources and ideas available.

First, get educated. Learn more about pending bills in your state. Seek out information from organizations like the Performance Marketing Association or Affiliate Advocacy. Learn what your state laws currently are and what the threat level is in your state.

The threat level is high in every state that has a sales tax. Assume the threat level is Code Red and act like it.

Second, visit the affiliate forums like ABestWeb which has an Affiliate Tax Laws category and look for the forum on tax laws in your state. If the forum does not have an active thread on your state, start something. Let others know you want to fight this! It only takes one eager and active affiliate to spark a fire in many others.

Next, get a list of state Representatives, Senators, and other important elected officials. This is easily attainable through your local state government website. Once you have the facts, be proactive, build out your network of friends, media contacts and discussions about the harmful potential of such legislation. Most importantly reach out to you’re the fellow affiliates in your state.  If your state is not a serious threat now, it could be, so the time for organizing is now.

Be vigilant; if legislation is proposed be prepared to reach out to your representative legislators. Go to their offices, get to know their staff, send them emails and letters, make phone calls, and encourage others to do the same. Tell them your story. So many of them don’t understand the details so let them know that a real person is behind this, a real person with a real job that stands to suffer greatly if such a tax is passed.

Tell them how it will cost people their jobs. Inform them that early data is showing that the states like Rhode Island that have enacted similar legislation are showing no revenue from the tax. None!

Recently, affiliates in Colorado set a great example for the rest of us with 150 affiliates very active in the fight. Unfortunately the Colorado House just passed HB 1193 and the Senate Finance Committee moved to bring to the whole Chamber. Here is an excellent article by Scott Jangro that provides a recap of what happened in Colorado.

What a wonderful example of affiliates coming together to fight this!

Apathy is the biggest enemy to beating these taxes and saving our industry. Apathy is what keeps us home on a cold day instead of driving to a boring committee meeting at the state legislature. Apathy is what makes us think that a simple email to our legislator won’t make a difference. Apathy is what leads to the tax being passed and a slew of merchant terminations (note: Many merchants like us are taking a stand and not terminating affiliates at all, or providing support in our fight).

Beyond the Advertising Tax

After the advertising tax issues, the biggest ongoing challenge for many affiliates is the seemingly fickle nature of Google. Just because Google now operates an affiliate network doesn’t mean affiliate sites don’t still get Google Slapped.

I experienced this problem first hand. Sites that had done very well for many years suddenly disappeared from both the natural listings and paid listings in Google. In about two-thirds of the cases we encountered, the sites were doing everything right, according to Google’s own best practice standards, leaving both the affiliate and me totally bewildered and wondering what to do next. In a nutshell, their demise really, really sucked.

A quick look through the various forums provides some comfort when we find that this is not some sort of attack on review site affiliates or our industry, but rather what seems to be an all-out assault on all kinds of sites combined with the fickleness of the Google algorithm. Thankfully, in December of last year and in January of this year saw many of our affiliate sites climb out of the depths and re-emerge stronger than ever, with a few tweaks that we worked out together. We are cautiously optimistic that the changes we made will work long-term.

The Launch of New Under-Prepared Affiliate Programs

On the surface that may not seem like a challenge or threat to the industry at all, but I have noticed an explosion in affiliate programs that never should have been launched in the first place. These programs end up giving good programs, and the industry as a whole, a bad name.

Now, more than ever, I am seeing programs that are run unethically, programs with horrible trained affiliate managers if they have any managers at all. These programs seem to have a general attitude towards their affiliates that borders on downright contempt and disdain. Unfortunately, they are doing a good enough job of attracting many new affiliate marketers to their programs with their offers; to only then horribly represent our industry and leaving a bad taste in everyone’s mouth.

Often times good programs never get a chance to even work with aspiring new affiliates and the advertisers who may have launched with good if misguided intentions never give the affiliate channel a chance to grow.  We all lose as a result.

In the coming year, my hope is that more and more unethical and shady programs will be brought to light and that the industry as a whole will do more to stand up to these merchants. Maybe through adopting an industry wide set of best practices. It’s in all of our best interests to put a barrier up to the bad ones, and to educate those who genuinely want to run good programs.

Thanks for reading. It’s hard to believe that there are less than eleven months left in 2010. I know for many of you, it is shaping up to be a record year.  If we stand together we can make it a great one.

Go here to see the original:
The Way I See It: State of Affiliate Marketing Part 2

With the first round of the battle against the so-called Amazon Tax in Colorado over, Rebecca Madigan, Executive Director of the Performance Marketing Association contacted ReveNews in an effort to update readers on measures the PMA is taking in preparation as the focus switches to the Colorado Senate. The PMA is just one of many excellent groups, like Affiliate Advocacy, that is involved in the fight. We urge affiliates in every state to get involved with their industry groups and familiarize themselves with their local representatives.

What makes Colorado different than other states when it comes to the so called Amazon Tax?

So my background is not politics, but with all the grassroots battles we have fought in 2009 I’ve certainly learned a lot. The thing about Colorado that I haven’t seen in any other state is the political nature of this battle. Usually the thing that hits home and reaches state legislators is that these type of advertising tax bills will cost the state jobs. They will put small business out of business. And at the end of the day the State will still not collect any revenue from the tax. That message usually hits home.

They don’t seem to hear that in Colorado. In the House they kept saying over and over, “We have a budget shortfall and we need the money”. And they just don’t seem to hear the fact that there just won’t be any money. All they have to do is look at what happened in Rhode Island. Advertisers have control over their own business decisions and we saw almost 200 terminate relationships in other states. There is no reason why they won’t terminate in Colorado.

But what we’re seeing is this very coordinated effort by the Democrats, who happen to have control, in trying to push through all their tax bills regardless of whether the tax is sustainable, enforceable, or who it will hurt. Each individual bill doesn’t really matter to them I think. That’s my entire perspective from here, after getting beat down pretty hard yesterday (laughs).

The thing that we have to remember with politicians, the thing that I’ve learned, is that they always have some sort of higher purpose beyond the bill itself that they’re trying to achieve. In Colorado’s case the fight seems very partisan. Democrats have control of the House, the Senate, and they also have control of the Governor’s office. Bill Ritter, the current Governor, announced a couple of weeks ago that he’s not going to run for re-election. Essentially he is a lame duck governor. I think what we are seeing in Colorado is a very one sided push on legislation, sort of a rush to ram every bill through just in case the Democrats lose their majority.

On top of that, for a number of the House of Representatives in both parties this will be their last session. They are hitting up against term limits so we have a lot of lame ducks on top of the Governor. Because of that there was very little negotiation in the House from either Republicans or Democrats. Unfortunately as an industry we’re just getting dinged-up in the process.

How was the affiliate turn out during the House portion of the fight against bill 1193?

We had this amazing grassroots turnout against HB 1193 (pdf). We’ve had about 150 people actively writing letters, calling their legislators, and going to visit them at their office. We had 110 people show up at the Finance Committee Hearing last week. It’s been a tremendous show of force. I believe that’s going to make a difference. That’s the main tool that we have this tremendous grassroots participation and the citizens of Colorado showing up and expressing their dissatisfaction with this bill.

I have heard some express a little bit of frustration over lack of resources and coordination right now. Can you talk to that a little bit?

Yes, well…the PMA, as an organization, is trying to manage this, and it is taking up all of our resources, so yeah, we are a bit stretched. The issue that we face is there is a lot of activity going on in the background but we’re not necessarily telling the industry about it. That decision stems from counter-efforts we’ve been seeing from the American Booksellers Association (ABA) who are pushing heavily for this bill. For example, last week during the House hearing we heard testimony from a woman, the owner of a small bookstore, who testified she was advised by the ABA.

We had a similar problem in California. There we had a bunch of affiliates reach out to the blogosphere to say,  “We need as many people as we can to show up in Sacramento.” We used the affiliate community and all the blogs in associated industries to coordinate our presence there. Sure enough, in Sacramento ABA representatives showed up (laughs). We had announced positioning in our statements on the blogs, that we’re small business, that we are not establishing nexus; we had all these very logical arguments why this law is a bad idea. The ABA went up after us with point by point counter arguments. Like they had prepped from our announcements.

So when I heard this woman mention them, I thought, “Oh no, here we are again.  They’re already watching what we’re doing.” To counter that we’ve setup a registration form on the PMA site and we’ve asked people from Colorado to register with us so we can keep in communication with everybody via email only.

It is one thing to talk to the industry, to those involved on the ground, about the status of things; but what we don’t want to do is give the opposition the tools to out-maneuver us.

How will the House amendment attempting to “exempt” electronic affiliates impact matters?

It is a unique clause (pdf) that was negotiated at the House Finance Committee hearing. On the surface it looks like it is good for affiliates but in reality that’s just not the case. Based on the amendment, the House defines an affiliate as someone who makes a public referral to an online site or a face to face referral to an online site; specifically excluding an electronic solicitation of business.

Strangely that language essentially targets groups like the Boy Scouts, PTAs organizations, and churches who have web sites that have affiliate links as a way to raise money. I’m not at all sure about the political “logic” behind that (laughs).

But here’s the reality. By the nature of the industry model an advertiser does not know if an affiliate is physically directing traffic to their web site. They have no idea if they are referring business through online advertising or via face to face interaction. Rather than take the risk, advertisers will terminate if the bill passes.

This is particularly true in Colorado because of a particular clause in HB 1193 which is very unique. It essentially says the State has the ability to subpoena out-of-state advertisers believed to have nexus, and actually says that if they fail to comply those advertisers can be arrested. Now, there is plenty question as to the constitutionality and enforceability of that clause but ultimately advertisers are risk adverse. They will not take any chance at all and will likely terminate their affiliate relationships.

The “electronic” clause does not solve anything at all. It was a political move to pacify everyone in the room.

What is the next step in the upcoming fight in the Senate? What are some of the take-aways that we can learn from the loss in the House?

For each state that this comes up in we really need to understand what the political situation is and we need to make sure that our messaging reflects what we think might be successful with the political situation. We hope that other states aren’t quite as bad as Colorado because they’re in a real political battle that has, like I mentioned, nothing to do with the reality of the bills.

The fight in the Senate might be a little easier to manage. First of all there are fewer of them, which is helpful (laughs).  Unlike the House, in the Colorado Senate there is a much lower percentage of Senators dealing with term limits, so they have re-election on their mind which is something we can leverage.

We don’t quite know what the Colorado Senate is going to do, what their next moves are, who the decision makers are going to be, or when they’re going to have testimony. So we’re in this waiting period right now. In the meantime we are leveraging the political advisors we have access to in order to determine how to approach individual legislators.

What groups is the PMA coordinating with in Colorado?

We’re working with this group of political advisors which includes a dozen or so political experts from a lot of different companies, some very large companies like Google, Yahoo, Amazon, AOL, Microsoft, and Apple. We’ve been able to work with them and synchronize lobbying efforts. And there are other associations that have to do with internet legislation that we have been working with, organizations like Internet Alliance, Tech America, and Net Choice. We are all trying to fight these bills, maybe for different reasons, but sharing our information is the most effective route.

What would you like to see from the grassroots groups that are trying to self-organize in Colorado?

The local groups are fantastic because, of course, they know who their peers are and how to reach them. It was the grassroots groups that actually found the 150 people who have been consistently participating. We’re trying to work closely with them to create tight coordination of our efforts. There are a couple of critical reasons why we need tight coordination. One is effectiveness. The more people we can get to be on message at the same time  allows us to generate the more attention. It is very easy then to get the legislators to understand what we are talking about.

The danger is that if we don’t coordinate we risk the legislators getting confused, hearing different things that are not central to our argument, and causing them to fixate on things the opposition is saying.

For example, take North Carolina. That was a state where a similar law was passed. What we saw happen was that all of the legislators on both sides of the aisle, Representative and Democrat alike, became completely fixated on Amazon. The bill became all about “get Amazon, get Amazon, get Amazon”, and there was nothing we could do to convince them that there were small businesses that were being devastated in the process.

I am concerned the same thing might happen in Colorado if we don’t stay on point, if we don’t stay with really simple messages. There are probably a hundred reasons why this law is a bad thing, but we need to stick with 2 or 3 that we think will be meaningful and will change the minds of the legislators.

OK, so what are those 2 or 3 points?

Collectively with our lobbyists we are working to figure out what the vulnerable pieces are; where the opening in the armor is, if you will. In the House we thought small business and job loss should be enough but it wasn’t. What was really frustrating was that it wasn’t even raised by the Representatives who are supposed to be against this bill. So with this next round we are trying to figure out what is the right position.

It is something we will disseminate to the group soon. If local affiliates want to be informed we encourage them to get on our email list.

What can the local small affiliate who is worried about losing their commission, their business, and maybe their livelihood do to feel that they’re not just sitting and waiting for the other shoe to drop?

With this kind of a grassroots campaign where there’s already been a big push initially, it is common for participation to diminish quickly. It’s really hard to rally people. But here we have a core group that’s really excited, that wants to keep pushing and that core group is much larger than we’ve seen in other states.

Just to give you an example, in California there are 25,000 affiliates in the state and we got about 15 people to consistently help in terms of showing up in Sacramento (laughs).  Thankfully they were a very efficient 15 folks. There are 4,200 affiliates in Colorado and we have 150 that keep pushing really hard. It’s great to see that kind of turn out.

Obviously they can write letters to the representative in their district (here is a list of Colorado Senate districts). We will be distributing letters specifically for Colorado that LinkShare helped put together.

Beyond that it is really important to coordinate the push. Our lobbyists have been speaking with Colorado Senators since Friday. They’ve worked all weekend gathering information. We will be coordinating a campaign this week specific to the Senate.

The upcoming hearing of the Senate version of HB 1193, sponsored by Senator Rollie Heath, is scheduled for Thursday, February 4th with the Senate Finance Committee which will start consideration around 9:30 a.m.  It is vital that at this hearing we have a strong turnout.

What would you like to see advertisers do in terms of supporting Colorado affiliates in this fight?

I would like to see advertisers get involved and communicate with their affiliates as well as communicate with the Colorado State legislators. Advertisers can contact Senators directly or even better, have them work through me at the PMA and we can make sure information gets to the ears of the decision makers.

Is there anything else you want to cover in terms of messaging?

We need people to hang in there and keep fighting even if they are frustrated. This is definitely one of those marathon situations. There are so many analogies: this is a football game and we are only in the third quarter (laughs). If you live in Colorado and you haven’t heard what is going on you can register on the PMA website to get on our email list so you can hear blow-by-blow what we are doing to win the fight. We just have to keep working together and leverage the tremendous grassroots participation because I think that is going to be the most effective tool we have.

I want to thank Rebecca Madigan for taking time for today’s interview.

See the original post here:
PMA Urges Patience and Coordination in Colorado Tax Fight

It has been a long week of fighting for Colorado affiliates against HB 1193 as it moved through the House. There were strong shows of solidarity by  local affiliates organized by Brian Fox, Senior Director of Business Development at  Adperio, as well as impassioned articles asking if State representatives were putting work-at-home moms out business. There was also near Machiavellian maneuvering by the likes of Overstock and Amazon using their affiliates as bargaining chips.

What all this boiled down to was one vote. As of today, the Colorado House of Representatives has passed HB 1193 (pdf) by a 33-32 vote. The bill was introduced on January 22nd, 2010, by Colorado State Representative John “Jack” Pommer, who is also Chair of the Appropriations Committee, and Senator Rollie Heath. If fully ratified the bill is expected to commence on March 1, 2010.

The battle now moves to the Colorado Senate. Colorado affiliates can take some hope in two indicators of that the legislature is feeling pressure from affiliate activity:

1. HB 1193 was amended to include an attempted exemption (pdf) for “electronic” affiliates. While this will not keep merchants from terminating affiliates simply for fear of complying with nexus issues, a stance which Representative Pommer likened to “extortion” it does indicate that small business in Colorado will be hurt if this bill passes.
2. One Democrat voted against party lines against the bill. Considering the type of pressure Colorado is in to finding additional revenue resources, for a representative to vote non-partisan, especially when that party is the one who sponsored the bill, is indicative that the pressure being applied  is starting to work.

It is time to ramp up  that pressure in the Senate.

To find out more about HB 1193 visit either the Performance Marketing Association here, or Affiliate Advocacy here. Both are great resources. There is still time to impact the outcome of this legislation.

Read more from the original source:
Breaking News: Colorado HB 1193 Passes House, Battle Expected in Senate

Despite Overstock’s maneuvering and the local efforts of Colorado affiliates organized by Brian Fox, Senior Director of Business Development at  Adperio, the Colorado House Finance Committee has passed HB 1193 (pdf). The motion passed with a 6-5 vote and with only a slight amendment, mostly in reference to appropriation.

The bill was introduced on January 22nd, 2010, by Colorado State Representative John “Jack” Pommer, who is also Chair of the Appropriations Committee, and Senator Rollie Heath. If fully ratified the bill is expected to commence on March 1, 2010.

To find out more about HB 1193 visit either the Performance Marketing Association here, or Affiliate Advocacy here. Both are great resources. There is still time to impact the outcome of this legislation.

Here is the original:
Breaking News: Colorado Finance Committee Passes HB 1193

I had a great call with Rebecca Madigan – formerly with Commission Junction, now with AffiliateClassroom – earlier today. We talked about an industry group dedicated to promoting affiliate marketing.

Over the years there has been a lot of talk and many ill-fated attempts to create such a group – like an IAB for performance marketing.

Generally, people seem to agree this would be a great idea but nothing gets done because everyone is too busy.

The solution seems to be to get funding to support a full time person to act as a sort of industry lobbyist. The best way to get money seems to
be to collect it from many dues-paying members.

In this scenario, dues-paying members would also be voting members who would vote in a voluntary board that oversees the full time person. There could be different levels of membership.

If we could get, say, $500 a month from 20 companies, $100 a month from 100 companies, or $25 a month from 400 companies, we’d have the kind of money we’d need. (With salary, travel, benefits, and overhead the amount of money would need to be significant.)

As long as the group is inclusive and has clearly defined principles, we should be able to avoid industry politics.

This would not be a group dedicated to policing or restricting networks, advertisers or publishers (I think that would be a losing endeavor) but a group dedicated to promoting performance marketing through education and publicity. For example, the representative could publicly address the New York Taxation issue and articles like the smarmy SmartMoney article. The link is to Mike Allen’s nicely-worded response. While he and others capably addressed our community, we need to reach a wider audience.

Such an organization would allow the community to provide input on its concerns and support an individual who could provide eduation, outreach, and publicity on behalf of the community.
There is currently no such organization but there is currently a need for such an organization.

Here is the original:
A New Industry Association?