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As part of the ReveNews 2010 Affiliate Industry Preview Series, I interviewed industry leaders to get a sense of their plans and goals for 2010. Today’s interview is with Jonathan Levine, Co-President of LinkShare.

How do you feel about the affiliate industry’s current health overall?

I think 2009 was the first year where our industry was the only online marketing channel that was that showed growth year-over-year.  Everybody else is basically flat or down.  If you looked at the sales figures you’ll know that traditional retail sales were terrible this past year.  Online retail sales overall were sort of marginally okay in terms of year-over-year numbers.

What we saw in the performance marketing space was completely different.  We are way, way, way up above the stated ComScore numbers for the year in terms of retail sales.  I reckon that’s true across the networks.  Because as an advertiser, if I have lots of money to spend I’ll spend it everywhere; but if I only had a very limited amount of money to spend, I’m going to spend it where I know I’m going to get a return on it. And that’s what affiliate marketing is.

I think the industry is healthy. I think the reason the industry is healthy is because this kind of marketing works.  In a world where you’re scrutinizing every dollar that you spend on marketing, if you’re measuring the results, you’re in much better position here than any other marketing industry.  That’s the feedback we’ve been getting over and over again from our advertisers that the affiliate channel is the bright spot in the marketing mix.  And the fact that we have been able to facilitate a large year-over-year growth in this economy is indicative to the fact that we’re healthy.

How has the affiliate industry evolved?

Benjamin Franklin always talked about how easy it was to build a reputation and how hard it was to great rid of it.  I think that we as an industry built a reputation around being the “coupon guys”, the “deal guys” or the “cash back guys”.  I think that reputation ignores the innovative stuff that affiliates are doing. Like you’re doing with Popshops for example, a lot of the innovation is content based and not simply deal based. I think superficially everybody still thinks of affiliate marketing as coupons and deals. Here at LinkShare, and I think our competitors are as well, we are trying to facilitate expanding the scope of the channel. The goal is to make affiliate marketing into the engine that can power the economics behind innovative publishers with innovative distribution models that cross a wide spectrum of ways to reach the consumer.

Is the industry leaving coupons behind?

I don’t think we’re leaving coupons behind and I don’t think we’d want to leave coupons behind.  The coupon vertical is certainly still the core of affiliate marketing.  Coupon as a vertical had a huge amount of natural growth this year as you’d expect in a recession.  I think the coupon sites were looking at 30% per year-over-year natural growth.  I love our coupon publishers they are really important for us as a network and for our advertisers.

What I do think is that everything that can be measured eventually will be measured.  Because of that, more and more kinds of types of marketing are becoming amenable to CPA.  If you think about the wedge of the online marketing pie it used to be that a huge amount was CPM and the other amount was CPC and the smallest wedge was CPA.  I think over time the CPA wedge will grow and overtake both CPC and CPM. I think 2009 was the year we started seeing exactly why.

One thing that obviously had a big impact in 2009 and the later part of 2008 was the so-called Amazon Tax.  Being based in New York, LinkShare has been in the epicenter of it. How did that tax impacting things in 2009?

We had a number of online only merchants pull out of all the states where they worried that they were going to have taxes from affiliates.  So it really hurt New York affiliates, I’m not the first person to tell you that; and it’s going to hurt the North Carolina affiliates.  I think in California the affiliates were able to get their act together enough to stop the bill which we were really happy about.

As a citizen I totally get that folks have to pay for roads and schools and all other stuff sales tax goes to support.  I also get the fact that all the states are hurting for revenue.  It is however really arbitrary to put that type of tax burden on the backs of the affiliates in just a couple of states. As I hear other people talk about it I really feel that whole online sales tax issue is going to have to move to some sort of national solution in the relatively near future.

One thing for LinkShare is that we do have a disproportionately large number of brick and mortar guys in our network.  So we have a lot of department stores with online presences, so that makes the problem a little bit smaller for us.  Many of our advertisers already have nexus in New York even without affiliates.  We value our online-only advertisers who are in no or low tax jurisdictions who don’t have nexus in New York.  At LinkShare we have worked very hard and will continue to work to help in the lobbying effort against these kinds of laws on behalf of our advertisers and affiliates.

How do you see do you see the Amazon Tax issue playing out in 2010?

We’ll continue to work with other networks and the Performance Marketing Association, as well as on our own, to lobby against these bills wherever they crop up.  We will do whatever we can to help our advertisers and our publishers in those states, keep those states from hatching those bills and we’re going to have to do what our advertisers need us to do to help them keep doing business if those laws are passed. And that is really all we can do.

It seems that one of LinkShare’s inherent advantages in mobile due to your parent company Rakuten.  If I had to place my bets on any particular network in the affiliate industry poised to take advantage of that it’s you.  Is 2010 the year for mobile?

If I could get the crystal ball to work (laughs)… I’m a big proponent of mobile; this is probably because I spent a lot of time in Japan. I’ve bought big ticket items on mobile devices in Japan before, so I know it’s possible to sell big-ticket items.  Rakuten is doing 15% of its overall sales now through mobile.  We have seen that the lifetime value of a customer who uses both mobile and PC is nearly an order of magnitude greater than the lifetime value of a customer who uses just one.

Where I think we’re really poised, here in the US, to leap-frog Japan is in coding. In Japan you still really have to code your websites using proprietary HTML variants.  Of the three big mobile phone companies in Japan, each have they’re own flavor of HTML.  And you wind up designing four websites for every site.

With Safari on the iPhone working basically like Safari on a Mac or a PC with the internet browser basically being a browser; I think what you’re going to see is it’s going to be a much simpler task for a merchant to put up a website that works in mobile and that is going to make it that much easier for advertisers to get on mobile.

Now the thing that nobody’s figured out yet, in the US, is the common wallet or payment system. Something we have figured with Rakuten in Japan.  Because as a consumer if I have to enter in all my personally identifiable information using that on-screen keyboard on my iPhone over and over again, I’d be like “I’m going to kill myself.” (laughs).

I think the company that figures out how to broker the common wallet hurdle is going to do very well on mobile.  It could be as simple as making auto fill work right in Safari for mobile and internet browser. That may be the breakthrough.

What are LinkShare’s goals for 2010?

We talked a lot at LinkShare Symposium last summer about how we really wanted our network to be easy, fast, and open.  When you look at what we did in 2009: with exposing Merchandiser and other functionality through API’s; with improving the publisher interface significantly; with improving the timeliness of the data provided to advertisers; with facilitating better reporting;  I think all these things make us much easier to work with then we have been historically.  Going into 2010 we really want to build on the foundation that we started in 2009.  We’ll continue making our interface easier to use and give our advertiser user interface the same facelift the publishers’ got.

We’ve been working a lot on our deep linking capabilities and we’ll be unveiling some interesting new functionality built around that this year.  Due to our success in the UK in 2009 we have very high goals in Europe for 2010. I think in some ways the UK affiliate networks have been more historically innovative than the US networks.  We want to be as innovative in all of our regions and take some of that learning back into the US.

As I said earlier I feel this will be the year where the paradigm of what we think of as affiliate marketing will change.  Currently as a publisher you setup up in your vertical, go to the network and you pull down a link and you pray that it works.  Repeat.  Pull, pray, and repeat.  That is just not scalable for anybody.

At LinkShare we’re doing a lot of work around whether we can make it more practical for people who want to run performance based ads but are not in the industry to have easier access.  We are working to broaden our tool sets to make it easier and easier for content aggregators and providers as well as social media providers to participate in affiliate marketing.

What I’m saying is if you are a coupon site it’s relatively easier for you maintain the content, creative, and merchandising on the site through the affiliate model. The barrier is much greater, if your business model is finding interesting things to write about for your blog because your advertising is incidental to your main focus.  It has to be an incidental cost to you in terms of time and resources.  We have been and will continue to do a better job providing tools for everyone to be able to participate in the CPA world.  As we do that you will see that paradigm shift.

Well, let’s piggyback on that. What is the key to shifting the paradigm and rebranding the industry’s image?

Every year we talk about rebranding the industry from affiliate marketing to performance marketing.  I really want 2010 to be the year people are thinking about us as performance marketing rather than simply affiliate marketing.  There’s nothing wrong with affiliate marketing as a model it’s just that the term “affiliate marketing”  has certain associations with it that really limit our growth as a industry.  Those associations are just associations.  They are not reality.  If we can rebrand affiliate to mean innovative publisher models that facilitate performance marketing that would be perfect.  We can then keep calling it affiliate marketing.  Otherwise I’m going to call it performance marketing because that is what it is.  You know, you pay for performance and you get performance.

I want to thank Jonathan Levine  for taking time out during his busy schedule to take part in our 2010 Affiliate Industry Preview Series. Stay tuned for our next conversation with Brian Littleton, Owner of ShareASale.

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2010 Affiliate Industry Preview Series: Interview with Jonathan Levine of LinkShare

As part of the ReveNews 2010 Affiliate Industry Preview Series, I interviewed industry leaders to get a sense of their plans and goals for 2010. Today’s interview is with Kerri Pollard, General Manager of Commission Junction.

How do you feel about the affiliate industry’s current health overall?

With the recession the new key phrase in ’09 was “flat is the new up”.  Obviously it was a difficult time for anybody whose business was tied to consumer spending. Being a performance based online marketing business, we absolutely were impacted.

But with that said I’ve been very pleased in terms of how the year has been rounded out. We’ve been very satisfied with the holiday shopping numbers that were much better than 2008, and not just for Cyber Monday and Black Friday but actually the holiday shopping season  overall. What we saw in 2008 was that Cyber Monday and Black Friday was pretty great but the rest of the holiday season was pretty lackluster. So it was wonderful to see both those key days, as well as the entire holiday shopping season, perform extremely well.

Out of all the different online marketing channels, there is no place I’d rather be than the affiliate marketing.  Having been in the affiliate industry myself for over 10 years, I have experienced firsthand the adaptability, flexibility and strength of performance based advertising which is the core of affiliate marketing.  I think the health of the channel is always good as long as the ROI and the results are there for our clients; which they continue to be.

It’s really exciting to see some of the other online marketing channels, like display and email actually come our way in terms of working deals on a CPA and performance basis and kind of moving away to a certain extent from some of the traditional impression based and click-based buying they are used to. I think we’re in a great position going into 2010.

How has the affiliate industry evolved?

The affiliate industry has evolved is in sync with how the consumer has evolved in terms of where they transact online. When I started back in 1999 affiliate marketing was about these small content sites that were very niche-focused. Today we have somewhat come full circle as niche sites are key again.  Search wasn’t even in the equation until early 2000-2001 when we started to see that promotional vertical really start to expand.  The coupon vertical has always been a strong point and has done extremely well in 2009 as more consumers not only shopped online but also brought certain expectations in terms of looking for a deal before making any purchase.  According to the Center for Media Research 62% of all online adults that shop online now seek out a deal or a coupon prior to making a final purchase; so our coupon publishers have thrived in the tough economic climate.

Here at Commission Junction we see our responsibility as making sure we enable our advertisers and publishers with the tools that they need reach the consumer as they evolve.  Maybe through search, maybe around coupons or around a niche-site how they reach the consumer is going to evolve continually.

Going into 2010 we expect opportunity in terms of social media and mobile, which I know for the last three years has been touted as the year of mobile but I really do think based on recent activity and acquisitions with the iPhone and other smart phones we’ll gain a heck of a lot more traction than in years past.

You talked a bit about mobile. Do you see video picking up as an acquisition channel in 2010?

I think people are still trying to figure video out.  I think that social media is still somewhat having a similar challenge but they’re going to figure it out a hell of a lot quicker than video. The challenge is that the advertising aspect of both those vehicles are so disruptive to the consumer and such a distraction today in terms of the overall experience,  verses being better integrated into it.

So, right now as a consumer you go to a social media platform, whether it is Facebook or MySpace or any of the others, and you have an objective. Maybe it is to catch up with friends or family, maybe look at photos and all of the sudden you have this ad pop up, which is completely not in your frame of reference. Same thing happens with video, you go there and watch a movie or video clip and all of the sudden you have this ad disrupt the video. It’s like forcing you to change your mindset and change your behavior at that exact moment when you went there for completely different objective.

Either the consumer has to evolve and start going to these vehicles for different objectives beyond just catching up with friends or watching a video; or the platforms themselves have to adapt and better integrate the advertising model in a way that is not so disruptive and that’s more so in line with the consumers interest.  Right now, with video especially that’s still what the platforms are struggling with.

What do you think the biggest lessons the affiliate industry learned in the last decade?

The entrepreneurial spirit for our industry has really been on display over the years in terms of how affiliates: adapted to the consumer, reached out to the consumer, and have constantly reinvented themselves.  I know some contacts that I’ve had over the last 10 or 11 years started as one type of publisher and now they’re a completely evolved into a different kind of publisher or they’ve widely diversified themselves.

On the other hand I think the entrepreneurial spirit is has also occasionally resulted in instances of “hey, if it seems too good to be true and it probably is”. I have seen promotional tactics over the years that were very shortsighted and are no longer around because the overall quality of the transaction just wasn’t there in terms of the long term value or life time value for the advertisers.

What do you think the biggest changes will be for the affiliate industry in 2010?

2010 is going to be really interesting.  I think 2009 was just about holding on, to be honest.  I think that was true for all of us in the industry and our competitors in other online marketing channels.  For those of us that have hung on I’m looking forward to 2010 in terms of taking this business to the next level

I think what we’ve understand well here at Commission Junction is that services and relationships are a critical part of the overall success of our business. At the same time I think there’s a lot of opportunity for us to make it easier for new advertisers and new publishers to work within the affiliate model.  We’re going to focus on technology more then we have in the past in order to create more automation, develop new tools and create more optimization within the network.

Currently none of the networks have made it simple enough for new publishers or advertisers to enter the space. There are a lot of hurdles and there’s a lot of heavy lifting involved. Our goal is to try and make it easier for anybody to become a publisher and definitely open new channels for advertiser as well. Especially in terms of getting helping advertisers get into different verticals that we haven’t necessarily worked with in the past like taking things offline which we’ve already somewhat done with our pay-per-call initiative.

I think you’re going to see a lot more diversification in the industry. If I look at our core business which is obliviously centers around retail, travel, and financial I think we’re going to be diversify on both sides of the fence.  Of course we will remain true to our core by supporting our core businesses because that is our bread and butter.  But at the same time we will attempt to diversify our distribution on the publisher’s side and the type of publisher that we work with, making it easier for them to work with us which will naturally extend to the advertiser’s side as well.

What prompted the launch of the pay-per-call?

That’s a good question. In terms of how that conversation all began, we work with a partner based out of Santa Barbara called RingRevenue. They were actually started by a couple of former employees from CallWave which has been a client of Commission Junction for a long time.  So being that Santa Barbara is a small town, the conversation started easily through our connections.  We knew how CallWave would work with our platform already so it started here as a local idea and then has expanded now nationally with our advertisers and with the other networks as well.

How are you seeing adoption among advertisers?

There is a lot of excitement around pay-per-call.  It’s different though since you’re now trying to integrate performance based advertising into an industry that’s new to the model.  So I think there’s been some education, but honestly I feel that we’re finally beyond the education point and we’re getting a lot more traction and adoption with pay-per-call.  And we’re actually going to be investing more into developing pay-per-call further on both the resource and technology front.

I know this next question played a kind of personal role for you Kerri. Last year was a big year in the fight against the so-called Amazon Tax in California, and all the craziness that happened there. Like the subsequent veto by Governor Arnold Schwarzenegger and his crazy speech to Overstock of all things.  How did all that impact you personally and how did that impact CJ directly?

Yeah, I think still the bigger question was what would have happened if it had passed?   I think there was a ton of speculation in terms of what would have happened.  At the end of the day it comes down to how many advertisers, like Overstock, would have terminated their California based publishers, and again, that’s assuming that that advertiser is not already collecting sales tax.  I think that the majority, believe it or not, do already collect sales tax in California because they have some sort of other presence based here in the state. Ultimately understanding what that the number of actual advertisers who don’t already collect sales tax is and understanding what their ultimate decision would be is key to gauging the impact.

In the role of the advertiser maybe I don’t currently collect sales tax in California am I going to terminate those relationships with affiliates. Or maybe am I going to go ahead and collect it the sales tax. These are decisions based on business reasons that are hard to determine before an event. So I don’t know if we ever will really know what the ultimate impact was of the veto because we don’t know what would have happened if it had passed.

Well, it definitely seemed like a big game of chicken

Yeah, it did (Laughs). And it’s not over.

Everybody’s been kind of out of commission here for the last couple months so we’re definitely ready and prepared now in January.  Currently we are hearing that California Assembly Member Nancy Skinner has a hearing date set for this week regarding AB-178. The question is – “will she move forward or not”.

But you know because Arnold called so much attention and visibility to this last year, I can’t see him waffling. Then again, he’s also going to be up for re-election next November, so yeah, anything can happen.

Eidtor’s Note: At this point Ashley DeVan the Director of Marketing for Commission Junction, who was also on the call contributes: I think there’s been a lot of education.  I think we’re in a different place than we were in New York. Nobody knew what to do, then and now we’re learned some lessons.

Do you feel that one of the primary objectives is educating legislators on about the affiliate channel and online marketing as a whole?

Ashley: There was a lot of effort.  There were multiple trips that the Performance Marketing Association has made last year and as did members of the Commission Junction team to Sacramento to meet with different legislators. I think in California they finally get it that our industry is kind of being the fall guys as targets of the Amazon Tax.

Kerri: I think the biggest question we always come back to is, “Well if we don’t do this we still need the money, then what”?

I love Cashbaq President and Co-Founder David Lewis’s response to that, “Hey, we’re not legislators you are, you guys are. Figure it this out.  It’s why we elected you into the office.”

Since New York passed the initial law how have you seen that play out in CJ as far as New York affiliates and those that want to advertise in New York?

Kerri: We definitely did some analysis when it first went down, and as Ashley mentioned I think all of us were taken by surprise. And reacted with, and made some, knee-jerk decisions as it relates to New York and working with New York publishers.  When we looked at the publisher revenue of New York-based publishers that were impacted it was definitely in the area of double digits.

I hope that if another state does go down that path, as we’ve had several smaller states do, where not as many publishers are based, that decisions that are made are no longer knee-jerk reactions because there’s been a lot more education.

What are Commission Junction’s goals in 2010?

Kerri: The key words for us going into 2010 are distribution and diversification. Being able to find or grow the opportunities for our advertisers and publishers, whether it be offline with advertising agencies or working with different kinds of publishers that we haven’t worked with in the past online. Also, increasing that distribution through different types of channels and especially more so on the technology side we’re going to be able to do that in terms of optimization and automation.

We’ll continue, as we always have, by listening to our clients. In 2009 we implemented the Net Promoter Score which we call “the Loop” here, internally and externally with our clients.  “The Loop” is a feedback mechanism that asks the question: On a scale of 1 to 10 how likely would you be to recommend this to a colleague or a friend?  But it’s not just about the one simple question.  It’s about how did they respond and then for us to be able to follow up on that feedback.

I, myself, make personal phone calls to clients as part of the Loop.  Somebody ranks us a two or three, or even if they ranked us a nine or ten, we call to let them know we want to learn more about what they need.  Do you like that we’re doing?  What do you not like that we’re doing?  It really helps out on the services side and it’s really an important initiative for the entire leadership team at CJ and working with our clients.

Ashley: It’s not so much the number but it’s the explanation of why they gave the number where we’ve gotten so much insight and I will say that I have seen other organizations that have used NPS but I’ve never seen a organization who follows up on each and every response like CJ’s does.  So I think that’s where we’ve done a really great job getting the conversation going more and more.

Kerri: Investments like the Net Promoter Score shows our commitment to services and to gaining feedback from our clients in areas we need to make improvements.  We will continue to invest in service; it is definitely one of our key strengths and one of our key differentiators as well. We feel that being successful will require a strong balance of technology with services and relationships.  We will continue to invest in both in 2010 and beyond.

I want to thank Shawn Collins for taking time out during his busy schedule to take part in our 2010 Affiliate Industry Preview Series. Stay tuned for our next conversation with Jonathan Levine, Co-President of LinkShare.

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2010 Affiliate Industry Preview Series: Interview with Kerri Pollard of Commission Junction

As part of the ReveNews 2010 Affiliate Industry Preview Series, I interviewed industry leaders to get a sense of their plans and goals for 2010. Today’s interview is with Shawn Collins, Co-Founder of Affiliate Summit.

How do you feel about the affiliate industry’s current health overall?

It’s a little bit tricky to get a correct gauge on it because we normally don’t see the real numbers from the networks.  But as far as I can see from my own barometer, I think it’s doing very well. I guess my indication is really seeing what happens at Affiliate Summit, in terms of participation, seeing how many people are coming out. The fact is that the show is continually growing. To me that’s a clear sign that the industry is healthy.

In the past there used to be a sort of understanding that the West was the bigger show and that the East was sort of a smaller one. That’s changed. This past summer during the East show we had a big jump from the show in Boston in 2008. A little bit more than 2,300 people were at the Boston show and we got over 3,000 for New York this past summer.  We had some big growth despite all this economic downturn.  Last January, we had about 3,200 in Las Vegas so the New York show almost equaled that so we expect about 4,000 this month which will by far be our biggest Affiliate Summit yet.

How has the affiliate industry evolved?

If you look back maybe as far back as 10 years it used to be that there were lots of one dimensional content sites with a bunch of 468 x 60 banners and some text links. These days people are using every possible method of marketing in affiliate marketing.  Whether it be pay-per-call, a video podcast, micro blogs, social network links or games, just any kind of method affiliates are out there using it to reach the consumer.

Do you think that is indicative of the affiliate industry that there is a lot of early adoption to technology?

Yeah, I do think so.  I think that there are a lot of companies that are slow to move on things; which perhaps explains why video hasn’t come faster with the affiliate marketing.  I think that some affiliates have experimented with it and done some interesting things but a lot of the companies haven’t really picked up on video fast enough.

What about network adoption?  It seems like only just recently, as recently as 2008 that video was the goal for 2009.  I still don’t see a lot of video widgets out there at least with an easy format provided to the affiliates by the networks.

I think part of the issue is that the whole thing is ahead of the consumer.  I’ve seen some widgets out there have some sort of neat functionality like clickable video but I just think the average person doesn’t know that functionality even exists. So until they are aware of the functionality, by some other means like if all of the sudden interaction with video ads become common place with Facebook and YouTube maybe then you will see more adoption in the affiliate space. But I think now people just aren’t trained to even understand that experience, so we still have yet to figure out a way to monetize video.

Has the way advertisers perceive the affiliate industry changed over the years?

It seems like pretty much every big brand that has become involved with affiliate marketing, and several for quite a few years.  But I guess there are hills and valleys for that perception.  I think sometime around 2003 when the CAN-SPAM Act was passed, there was a negative stigma attached to affiliate marketing just because there was a small minority of people that were sending out spam that somehow reflected on the entire industry itself.  I have to wonder if now advertisers will be wary of affiliates that have blogs because  the FTC has new regulations around that.  I think legislation probably has a good deal tie-in to perceptions and it often reflects on what affiliates are doing.

What do you think the biggest lessons were from the affiliate industry learned in the last decade?

The most important thing is if someone wants to build a business out of affiliate marketing as an affiliate that it’s just vital to do something you really care about and you have some kind of vested interest in.  A lot of people try to be sort of mercenaries and go with whatever the trendy issue is or whatever the most lucrative offer is but it’s tough to really stick with. I think the people that succeed in the long term are those that really focus on the areas they care about.

I think it’s the ideal approach is for new affiliate marketers to focus on whatever niche they are passionate about in whatever vertical that maybe. It could be about a breed of dog or sports team or whatever.  It may not have the highest ROI compared to some hot offer but you’re more likely to keep building it two, three or five years later then if it’s something you don’t really care about.

What do you think the biggest changes will be for the affiliate industry in 2010?

One thing I’d love to see is more focus on ethics. I don’t like seeing people in different forums outright bragging about how they are trying to cheat different advertisers or consumers. That kind of behavior is nothing new but I feel somehow people are just more flagrant about these days. That certainly isn’t going to help the reputation of the industry when you have a certain segment of people that think it’s somehow cool thing to use black hat tactics. I would like to see the networks band together and having some sort of uniform blacklist or something for those who are outright disregarding the rules. It really bothers me to see people take pride in cheating.

Recently I’ve had some firsthand experience related to that because one of the speakers who was slated to appear this year had written an article that essentially came off like he was bragging about the ways he had cheated in the past. It was all very sketchy and so ultimately he ended up stepping down from the panel.  It did sort of lead to a tricky discussion because some people were saying we should be doing some kind of due diligence for all the speakers. When you have over 70 speakers it is not practical to be able to research them all thoroughly as if you’re looking at them for an interview for a job position.  Still Affiliate Summit certainly doesn’t want to give a forum to people who are there to brag about how they cheat the system.

In terms of that type of industry clean up, who do you feel the onus is on to lead that clean up?  Do you feel that that is a network issue?  Do you feel that is an advertiser issue?  Or do you feel that that needs to be on the affiliate side?

It’s tough to put it on the affiliate side because ethical affiliates don’t really have and enforcement ability to chase off the bad ones. In the days when I was a merchant I was always frustrated there wasn’t more policing by the networks. I felt it should come down to them if they are going to be this trusted third party in the industry. From the merchant perspective there really should be some sort of real filter of affiliates before I even can consider them for my affiliate program.  It really bothered me that I’d have to go through and catch them sometimes for committing actual fraud or doing different tricky things like bidding on a trademark when it was specifically forbidden in the terms and conditions before the network would do anything.

I always found that to be a little annoying, paying a network that wasn’t doing more in that respect. I want to see more vetting by them.  It would be helpful for the networks, although maybe not practical, to maintain some kind of list of affiliates that have infractions of different stripes across networks, a grading system if you will. If affiliates were somehow graded when they’re applying for an affiliate program it would be much easier for the affiliate manager to consider them.

What impacts did you see recession wise on the affiliate industry?

As far as I can see there wasn’t a considerable impact in our industry.  Like I was mentioning before, the indicator for me is the Affiliate Summit attendance. When things were looking really bad a year ago in the fall I was very concerned with how that might impact us but we ended up continuing to grow.  We had an increasing number of advertisers and exhibitors for Affiliate Summit so maybe by virtue of the fact that the whole industry is based on performance it just wasn’t as touched as some other spaces of online advertising.

I think a lot of people in the industry were worried just because they were assaulted  by the media for for the last eighteen months on how dire the situation was. But I think while people were justifiably concerned and maybe a little bit freaked out, it thankfully didn’t translate into a lack of spending in the industry.

One thing that obviously had a big impact in 2009 and the later part of 2008 was the so-called Amazon Tax or anti-affiliate taxes.  I remember a very memorable  session last Affiliate Summit East in 2008 in Boston with Melanie Seery during the Performance Marketing Alliance’s first coming meet that turned very heated because everyone was so passionate about defending the affiliate industry.  Now we’ve had kind of a year of fighting the proposed legislation in various states: some successful, some not.  How do you feel that the Amazon Tax will play out in 2010?

It’s hard to say.  To me I feel an annoyance with the industry because  it’s so significant an issue it is frustrating to see only a small group of people are really working on it, even bothering to talk about it and try to fight it.  I’m not sure how to make it more “sexy” or “relevant” to the rest of the industry. If we maintain this level of apathy more and more states are just going to roll over and do what New York did. Then we’ll just be stuck with it and you’ll have a lot of people in the industry asking what happened a year from now. It’s just so urgent for people to get with it and really pay attention in their states and be pro-active.

Why is it important in your view?

I think it’s important just because we can essentially see a lot of affiliates terminated from affiliate programs in different states.  If it were to pass in New Jersey for me, for example, I’ve been an Amazon affiliate for 12 years now and to me it would really have an impact on my income if I was to get booted out of their program. State governments seem to think it’s this great way to grab more money and they are not really looking at the big picture. The fact that all of a  sudden they are going to see all these small business hurt. More people will have to go to the state for unemployment, and the states will collect less tax revenue from those business. I think a lot of these state government officials need to be educated on the implications of such a tax.

We will keep providing educational sessions and avail ourselves to anybody if they want to propose a panel or a session to get the word out. We also have our magazine FeedFront that comes out four times a year where we are able to get the word out to tens of thousands of people so in that respect we’re able to disseminate the information.  We did an event this past summer with that Buy.at in Baltimore where we had a bunch of people get together to speak about the tax issues.  But I’m not sure with the apathy I see in the industry that events alone are enough. We’ll, however, do whatever we can with the strength we have to get the word out there about it.

What are Affiliate Summit’s goals for 2010?

As always we’re going to focus on delivering value and giving people some beneficial tools so they can build their business.  For instance, we are introducing a couple new things this year including the Affiliate Showcase. It is similar to we’ve done in the with the Meet Market were we have tables for different vendors, networks, and merchants but in this case we are going to have a room with 15 tables and they are going to be staffed by well-known affiliates so merchants and networks can come in and have a chance to meet with these select affiliates for a couple minutes. It’s a chance to hit all these really big players in one quick spot. We are also doing a thing where we are providing a session based around different verticals, for example apparel or sports, we will have two dozen of the biggest verticals identified so merchants and affiliates can get together within their respective verticals and try work out some deals. Both of those sessions were born out of feedback we got from past conferences.  Ultimately we are always trying to improve the experience and make it a more worthwhile for attendees.

We are also expanding our brand into print publishing.  We are planning on giving away a copy of a new book we’re putting out as a publishing house basically and as long as everything works out well and it’s published on time we’re going to be giving it away to every attendee at the conference. This book is going to be the first one in our imprint which is called Velocity NYC.  It’ll be a compilation of the first seven or so issues of Feed Front Magazine where we’ll have a 100 or so different articles in there combined and set up in different topical sections so people can have them as sort of this reference book to look at in the future.

More and more I’ve seen Affiliate Summit focus on supporting various charities and non-profits, what drives that?

We started up a few years ago.  Missy Ward and I expressed how we’d love to somehow give back and figured that since we had the attention of thousands of people in the industry we could try and harness that power to do some positive things. So we just started doing it on a small level at first. Just trying to get people to contribute and raise funds for various charities. This year we’re going to be focusing on the National Breast Cancer Foundation, which we’ve done a couple times, but we worked with a lot of other charities like Big Brother, Big Sister for example.  This year we’re doing a charity poker tournament in Las Vegas among other things and our goal is to raise 20 to 30 thousand dollars for the National Breast Cancer Foundation.

Last year several new directly competing conferences sort of sprouted up and I know there have been ones in the past.  How do you feel they will impact Affiliate Summit?

There are so many different conferences out there and they to a degree serve different segments.  For us, even with competition, we just keep growing. When we started there was already CJU, LinkShare and ShareASale all had their events going and were well attended. They all seem to be going strong today, so I think there’s a lot of space for them.  Because our industry seems to be ever-growing I think there’s plenty of space for all of these other events.  It just depends on what people are looking for.

How do you differentiate yourself?

Well part of it is that we have the biggest crowds of any affiliate marketing conference which gives people the biggest opportunity to find others they can do business with.  We have a perspective, well, actually I’m not sure how much Missy shares this, but I felt like some conference bored me to tears. I’ve never been a very good student in that respect. So one of my guiding principles for Affiliate Summit was to create a conference for people who can’t stand conferences. To make it more interactive, more interesting, and more fun instead of just the plain old thing as if you’re in a dry college lecture the whole time.

I want to thank Shawn Collins for taking time out during his busy schedule to take part in our 2010 Affiliate Industry Preview Series. Stay tuned for our next conversation with Kerri Pollard, General Manager of Commission Junction.

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2010 Affiliate Industry Preview Series: Interview with Shawn Collins of Affiliate Summit

I attend a lot of conferences. Affiliate Summit, due to co-founders Shawn Collins and Missy Ward’s efforts, is one of the few shows on the conference circuit that improves every year. This year there seems to be even more in-depth sessions than ever. If there is something missing it is the lack of the one controversial session. Initially I had thought it would be the Killer Facebook Advertising session, but BlitzLocal Founder Dennis Yu a recent lightning rod for controversy has stepped down from the panel. So this year at Affiliate Summit West don’t expect any fireworks, at least in the panels.  You can, however expect to learn a lot about the affiliate industry.

So before the inevitable mixers and Vegas chaos distract you completely, here is my pick for the top five sessions you can’t afford to miss:

1) Oprah, Flogs and FTC: Hot Topics 2010
tied with
Law Enforcement Risks for Advertisers, Affiliates, Networks

Along with the ongoing battle against the so-called Amazon tax, there were so many legal changes in 2009 that it is crucial for advertisers and affiliates to be aware of how those changes impact them. Thus despite the better title of the first session I felt it necessary to include them both.

Panelists for the Oprah, Flogs and FTC: Hot Topics 2010 session include:

• Bennet Kelley, Founder, Internet Law Center
• Pete Wellborn, Managing Member, Wellborn, Wallace & Woodard, LLC

Panelists for the Law Enforcement Risks for Advertisers, Affiliates, Networks session include:

• Thomas A. Cohn, Of Counsel, Venable LLP (Moderator)
• Dean Graybill, Assistant Regional Director, Western Region, Federal Trade Commission
• David Katz, VP Corporate Development and General Counsel, Cyberplex Inc.

2) Killer Facebook Advertising Tactics

As hinted in the introduction, even without Dennis Yu this is sure to be an interesting session. Simply put Facebook is the social media community closest to becoming a viable market space for advertisers. Now is a good time to learn what these early adopters have done to make their programs work. Plus Facebook is represented on the panel and will hopefully provide insight on how to best engage with their audience.

Panelists the session include:

• Jim Kukral, CEO, JimKukral.com (Moderator)
• Mark Colacioppo, President, Globalizer, LLC
• Markus Frind, CEO, Plentyoffish
• Dr. David Klein (dk), CEO, Purpose Inc
• Jeremy Schoemaker, President, ShoeMoney Media Group, Inc
• Alex Schultz, Manager, Internet Marketing, Facebook

3) Creating Lasting Publisher and Advertiser Relationships

This panel represents a powerhouse group with three of the largest affiliates in our industry engaging with two of the largest advertisers, Target and Overstock. Affiliate marketing is relationship based, but building lasting relationships with large corporate advertisers provides many challenges. It will be interesting to hear their take on methods of affiliate outreach and activation.

Panelists the session include:

• Steve Schaffer, Founder & CEO, Offers.com (Moderator)
• Eva Klein, Director of Business Development, FatWallet
• Jillian McGary, Affiliate Manager, Target.com
• Stephen Siphron, Señor Marketer, Cashbaq
• Ryan Sorensen, Affiliate Program Manager, Overstock.com

4) MommyBloggers: Changing the Face of Affiliate Marketing?

So called “MommyBloggers” swept through the social media space in 2009 and even started their own conference BlogHer. It makes perfect sense that as their blogs grow in popularity “Mommy bloggers” will want to ad variety and depth to the way they monetize their content. With the flexibility affiliate programs allow, get ready for the MommyBlogger revolution to hit the affiliate channel as well.

Panelists the session include:

• Deborah Carney, CEO, Team Loxly (Moderator)
• Wendy Limauge, Blogger, Sweeties Swag
• Carrie Rocha, President, Pocket Your Dollars
• Kim Rowley, President, Key Internet Marketing, Inc.
• Heather Sokol, Proprietor, Inexpensively

5) CPA Affiliate Marketing Opportunities in Europe

It is important not to assume that what works a particular way in one country will work the same every where. Consumer habits, affiliate expectations very from country to country. There are both opportunities and challenges in expanding your affiliate program to Europe. With Matthew Wood, the founder of A4UExpo which can be thought of as Affiliate Summit’s counterpart, there should be a lot of insight on how to make your affiliate program multi-national.

Panelists this session include:

• Dush Ramachandran, Vice President, Sales Marketing & Business Development, ClickBank (Moderator)
• Jim Banks, CEO, Unanimis
• James Little, Head of Affiliates, AffiliateFuture
• Matthew Wood, Managing Director & Founder,  a4uexpo

Special Mention

Although not officially an Affiliate Summit session, the Performance Marketing Alliance will be will have an open meeting covering the topics of current legislation and regulation challenges, fraud issues, and developing an industry code of conduct. Definitely worth attending.

That’s the rundown of my picks for Affiliate Summit West 2010 in Las Vegas. What sessions are you looking forward to?

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Top 5 Must See Sessions at Affiliate Summit West 2010

We’ll be at the Affiliate Summit in Las Vegas from January 17-19 and we want to meet with you there to discuss how our software can improve your business profile. Whether you’re a merchant or an affiliate, we have the solution to your retail marketing needs in our robust suite of affiliate marketing software solutions.

One of the messages we want to convey is the strength of our software transparency features. In the first post of this series, we discussed how our software helps to track information and what it can do to help improve your business. In part two, we discussed exactly how we track information and how that data can be used to improve marketing campaigns and improve relationships between merchants and affiliates. And in this, the third and final part of our series, we’d like to introduce one of the most important concepts in developing transparency between merchants and affiliates: people.

Specifically, we’re talking about the people that make up our affiliate marketing team. We have a dedicated team of affiliate management professionals who work hard to make sure profitable relationships are being formed and that the right matches are being made to ensure the success of both the retailer and the affiliate.

One of the biggest parts of the affiliate marketing team’s job is to match merchants and affiliates. From the merchant’s point of view, it is important to know that reputable affiliates with solid websites are promoting their products.

We work hard to make sure that each of our affiliates is trustworthy. Our fraud detection devices allow us to track the activity of affiliates and the system alerts notify affiliate managers of anything out of the ordinary. If anyone is acting outside of the terms and conditions that apply to the program, they are immediately removed. This ensures that merchant’s brands are only being associated with the most reputable websites possible, which in turn results in invaluable brand exposure and increased conversions.

From the affiliate point of view, we’re there to make sure that they get the best products to promote from merchants with proven respectable business practices. And because it is our responsibility to pay affiliates, we make sure that the merchants are able to meet their monthly invoicing requirements. We can also act on behalf of affiliates to negotiate special commission structures, bonus incentives, unique promotions and co-branded creatives.

All of our dealings with merchants and affiliates are to make sure that each partyinvolved is meeting their marketing goals and achieving success. We take a personalized approach to all of our dealings and everything we do seeks to ensure the continued success and improvements for everyone in the Share Results network. We approach transparency from our affiliate management side with the same sense of earnestness that we do our software, and this is a big part of the reason why we have achieved the kind of growth in our network that we have in the last couple of years.

To learn more about how we can help you to achieve your marketing goals, meet with one of our representatives at booth #413 during the Affiliate Summit in Las Vegas. We’re looking forward to meeting with you and showing you how we can become an integral part of your business success.

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With so many affiliate programs available to choose from, it has become increasingly difficult to decide on one that is going to be best for you and your needs. There are several factors that make up a good affiliate program and one of them is transparency in tracking and reporting. This is just part of the message that we will be bringing with us to the Affiliate Summit in Las Vegas, which is being held from January 17-19, 2010.

In our last post on transparency, we explored the tools that Share Results provides to merchants and affiliates to expedite processes that lead to enhanced transparency. And in this post, we’re going to explore the processes whereby this is accomplished.

To keep track of creative, our software uses a simple pixel tracking system. Affiliate links contain two variables that track the traffic and transaction – their unique affiliate site ID, and the creative ID. When a visitor clicks on the affiliate link, a cookie is dropped on their computer, containing these two variables. Then, when the visitor completes a sale, an additional tracking pixel is fired on the merchant’s site, and the details of the sale, along with the affiliate’s site ID are automatically uploaded to the system reports.

And in the end, merchants and affiliates end up with a report that breaks the user interaction down from impression to eventual sale. Each side of the equation is able to see the results, creating a partnership of transparency between merchants and affiliates.

If visitors are not converting into sales or leads, then that is also tracked by the Share Results system. For example, if visitors are seeing the creative and then clicking on it, but are not purchasing the item, something is going wrong in the sales process. This information may encourage the merchant to revisit their sales funnel and landing pages, or look at the price of the item they are offering.

On the other hand, it may be that the affiliate is misrepresenting the saleable item, which causes people to lose interest once they come to the sales page. With the transparency on the sale journey, created in our system, merchants and affiliates can work together to achieve a solution to the situation.

To learn more about how our software works for you and can help you generate higher sales revenues, come and visit us at booth #413 at the Las Vegas Affiliate Summit, January 18th & 19th . We’re there to answer your questions about transparency in affiliate reporting as well as our affiliate management team that helps to facilitate this process.

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