Make Money Online

Sign the petition

Before I start, I am going to ask that you sign the petition I started. It is all explained below. To sign, just tweet the following on Twitter:

petition @nmevans to Stop the #affiliatetax. Don’t hurt small biz in CA! http://act.ly/q retweet to sign

From the beginning… AB178

Brook Schaaf has a good write up on the California Affiliate Tax.

act.ly and my petition

My friend Clay Johnson told me about a new website, act.ly that launched this week. It is a brilliant idea. You can read the inspiration for it here. It is a service to post petitions that get signed when people retweet on Twitter. It requires that the person starting the petition select a single Twitter account to receive all of the votes.

I decided to give it a try. I found the account for Noreen Evans, the chair of the California Legislature’s Budget Conference Committee (or an account that appears to be hers). I hope that she reads the petition, the e-mails she is getting and this blog post. I hope that she sees that the bill, while well-intentioned, does not achieve it’s goals and will hurt some of California’s small businesses.

As you know, changes to the definition for nexus were proposed in February as AB178 by Assemblymember Nancy Skinner. She was unable to get the votes required to send the bill to the full Assembly so she tabled it (made it a so-called two-year bill which gave her until January, 2010 to get it through the Revenue and Tax Committee). There wasn’t a hearing on the bill. I know that because I received an e-mail telling me that the bill would not be heard as my cab pulled up to the state capital when I was going to testify.

It’s baaaaaaaaaaaaaaaack!

Things work differently in government than in business. The Budget Conference Committee spent the better part of a month working out the details of the budget. At 6pm on the last day of negotiations, a trailer bill was introduced with 9 provisions, one of which was AB178. There was little or no debate and no opportunity for public comment. It was passed along party lines.

Amazon says “NO!”

This week, Amazon sent a letter to state leaders letting them know that Amazon would terminate its California Associates (affiliates) should the definition of nexus change. Many other online retailers will follow suit and terminate affiliates.

Failure to achieve its goals

Lawmakers state 2 goals in AB178:

1. Increase the State’s revenue
2. Help brick-and-mortars

Should retailers terminate affiliates, neither goal will be achieved. Affiliates from other states and abroad will find ways to pick up the sales as those of us hurt by the bill see our userbases disappear and our revenues decline. That means that there may be a net decrease in revenue for the State.

Brick-and-mortar, if they have been hurt by stores such as Amazon not collecting sales/use tax, would see no benefit as Amazon will continue to not collect sales/use tax from Californians. So the B&Ms aren’t helped and businesses that use affiliate marketing are hurt.

Or are we?

I try to run my business in a way that is good for our store partners and our shoppers. I spend time looking for ways to build sites that add value, not looking for loopholes. Should this bill pass and we get terminated by the likes of Amazon and Overstock and others, there is a HUGE loophole that was created in the latest draft of the bill.

If we are terminated by stores for using commission-based compensation, why not switch to using links from comparison shopping engines? Of course, this solution works for some business models and not others. We can’t offer cash back from those links but we can maintain the relationships until we see some rationalization in the market.

Budget Vote Crisis

The state legislature voted on parts of the budget yesterday and did not pass them. The change in nexus for out-of-state retailers is in a separate trailer bill. So there is still time. Please sign the petition by tweeting the following:

Sign the petition!

petition @nmevans to Stop the #affiliatetax. Don’t hurt small biz in CA! http://act.ly/q retweet to sign

Source:

A huge thank you to everyone who made it up to Sacramento for today’s lobbying efforts!

• Karen Garcia, My Co-Organizer, GTO Management
• Rebecca Madigan, Performance Marketing Alliance
• Rob Smahl, eBates (Rob has come to be recognized as our own “Great Communicator” for his knack with legislative staffers.)
  
• Lisa Picarille, Independent Consultant
• Alan Gray, NewsBlaze.com
• Ryan Owen, Savings.com
• Jennifer Arnold, Commission Junction
• Nicole Williams, Commission Junction

At the end of April we thought that we had killed California’s affiliate tax bill when AB 178 was moved to a two year bill. Unfortunately,  “nothing ever dies in Sacramento,” as they say. Last week the nexus language returned through the state budget committee, which included it in a grab bagof “acceleration provisions.” The new language, inspired by AB 178, reads:

Extends sales tax “nexus.” Requires out-of-state sellers, such as Amazon, that pay commissions to California firms or residents for sales referrals (often through a website link) to collect sales tax on their sales to California residents. This provision improves compliance, but does not change tax liability. Existing law requires Californians to pay equivalent use tax on these purchases, but compliance is low. Provisions reflect AB 178 (Skinner). The estimated General Fund revenue gain is $48 million in 2009-10 and $110 million annually, with additional revenue increases in local sales tax revenues.

This is being voted on this week but most people seemed to feel more negotiation will push thinks out at least until next week. Our goal today was to press our point on the negative economic consequences this legislation would have. We split into three groups and met with about 45 legislative staffers. We advanced the same main argument as before: this legislation will harm small businesses in California by discriminating against a specific type of advertising. New since last time were

• Commission Junction’s recorded 50% drop in New York publisher revenue, attributed to New York’s nexus law.
• Amazon’s pledge to sever relationships with California affiliates if the legislation passes.

The short of the long is that no one is sure where this is going to end up.  I think our argument on the damage to small businesses has started to penetrate and I personally felt better about this trip than the last time I was up. Governor Schwarzenegger has pledged to veto any tax increases. This may or may not count as a tax increase (as opposed to a collection effort) but we definitely have some allies who want to strike this language. Moreover, there are two other proposals, 711 and 469, that would bring in sales tax revenue without harming affiliates.

Earlier today Google Affiliate Network, Commission Junction, and LinkShare all dropped emails to their California affiliates. These efforts, along with all the Tweets, posts, and smaller email blasts, are VERY helpful to our cause. We definitely heard that we were making our presence known. If you are a California affiliate and you have not yet written your representative regarding this issue, please do so ASAP. We are having an impact and we have a realistic chance to derail this destructive measure. Huge props to everyone doing their part.

Read the original:
California Anti-Nexus Lobby Day 3

First Quarter Numbers from Big 4 Show Online Ad Recession

According to Techcrunch, online advertising revenue for the big four internet companies (Google, Yahoo, MSN, AOL) indicates a recession in the online advertising market. Combined earnings in Q1 of ‘09 show a 2% drop year-over-year from $8.05 billion to $7.87 billion.

California Ant-Affiliate Bill AB 178 Losses Traction

California affiliates won a small reprieve with news that California Bill AB 178 will not be heard until January.

Mixx Tests User Ranked Ads

Digg competitor Mixx has launched an ad platform called Sifter that allows Mixx users to rate ads displayed on the site. Users are incentivized to vote on their favorite advertising in order to be entered into prize drawings. Interesting thing about the model is that an advertiser with better ads will get the impressions.

Ad.com Goes for $1.4 Million at Auction

During Moniker’s TRAFFIC conference this week, the domain Ad.com sold for $1.4 million dollars at auction. The domain was purchased by Divyank Turakhia CEO of domain parking company Skenzo.

Read the original post:
Cashing Out: Week of April 26-May 2nd, 2009 in Online Marketing News

As efforts to slow down the barrage of poorly conceived anti-affiliate legislation modeled after New York’s so called Amazon Tax seemed to get some traction in California with the delay of AB 178, other states have fast tracked their bills. Most recently Connecticut bill SB806 has moved out of committee and is up for a vote in both houses. The Connecticut Senate could vote on the bill as early as Tuesday, April 14th.

SB 806 is especially troubling because it drops the threshold for nexus to $2,000, the lowest threshold for nexus of any bill to date. Its passage through the Joint Finance Committee was swift with no opposing votes. It will take considerable effort to slow down.

A number of companies and lobbyist groups are working together to fight this bill, including the Performance Marketing Alliance and the newly formed Affiliate Voice, all agree the best chance to beat the bill is for all the hundreds of performance marketers in Connecticut to reach out to their legislators.

“Legislators respond to simple and straightforward messages,” stated Rebecca Madigan, Founder, PMA. “We have learned, in other states, that legislators care most about the impact on small businesses in their districts and their states.”

Below are steps on how you can reach out to your legislator (thanks to the PMA for providing them):

Find your local representative

Here is a list of Connecticut representatives. Click on the District Number under the Senate or Representative columns to be taken to the contact page for your Legislator. If you do not know your district number, you can find your district by entering your address on this search page.

Call your Senate and House representatives

Since the bill is up for a vote in the Senate first, make sure to make that call the priority. You’ll probably just leave a message or talk to a staffer. It is a very brief conversation. Here’s what you say:

My name is [ ], and I am a small business owner in your district. SB 806  will jeopardize my business. There are hundreds of small businesses just like mine in Connecticut, which will be devastated if this bill passes. We are affiliate marketers and we advertise on the internet. SB 806 assumes we sell on behalf of out of state retailers, but that is not true. I urge you to oppose SB 806.

Send a letter, email or fax to your house and senate representatives.

These are 2 quick messages. It is important to stick to some very simple points, which will have the most impact to these representatives.  Form letters aren’t as effective as sending something personal. Fax is probably the best and fastest approach.

Here are key points to include in your message:

1. Who you are, where you live, and any ties you have to the community.

2. Include this information, or a variation:
I am an affiliate marketer and I earn a living through Internet advertising. I do not sell merchant products, I do not even know who their customers are. My business earns revenue through advertising for out-of-state merchants. XX% of my revenue comes from out-of-state merchants (it is important to add an approximate percentage, so legislators can see the impact). I know out-of-state advertisers will stop working with me, because that is what happened to affiliates in New York.

3. Emphatically state:
I am against SB 806. As my representative I need you to vote to oppose SB806.  Can I count on you to be against this terrible legislation?

4. Ask your legislator to contact you and provide an update on SB 806. Be sure to include your telephone and email.

Remember that it is crucial to take these steps by the morning of Tuesday, April 14th which is fast approaching.

Read more from the original source:
Connecticut Anti-Affiliate Legislation SB806 Up for Vote in Both Houses

As efforts to slow down the barrage of poorly conceived anti-affiliate legislation modeled after New York’s so called Amazon Tax seemed to get some traction in California with the delay of AB 178, other states have fast tracked their bills. Most recently Connecticut bill SB806 has moved out of committee and is up for a vote in both houses. The Connecticut Senate could vote on the bill as early as Tuesday, April 14th.

SB 806 is especially troubling because it drops the threshold for nexus to $2,000, the lowest threshold for nexus of any bill to date. Its passage through the Joint Finance Committee was swift with no opposing votes. It will take considerable effort to slow down.

A number of companies and lobbyist groups are working together to fight this bill, including the Performance Marketing Alliance and the newly formed Affiliate Voice, all agree the best chance to beat the bill is for all the hundreds of performance marketers in Connecticut to reach out to their legislators.

“Legislators respond to simple and straightforward messages,” stated Rebecca Madigan, Founder, PMA. “We have learned, in other states, that legislators care most about the impact on small businesses in their districts and their states.”

Below are steps on how you can reach out to your legislator (thanks to the PMA for providing them):

Find your local representative

Here is a list of Connecticut representatives. Click on the District Number under the Senate or Representative columns to be taken to the contact page for your Legislator. If you do not know your district number, you can find your district by entering your address on this search page.

Call your Senate and House representatives

Since the bill is up for a vote in the Senate first, make sure to make that call the priority. You’ll probably just leave a message or talk to a staffer. It is a very brief conversation. Here’s what you say:

My name is [ ], and I am a small business owner in your district. SB 806  will jeopardize my business. There are hundreds of small businesses just like mine in Connecticut, which will be devastated if this bill passes. We are affiliate marketers and we advertise on the internet. SB 806 assumes we sell on behalf of out of state retailers, but that is not true. I urge you to oppose SB 806.

Send a letter, email or fax to your house and senate representatives.

These are 2 quick messages. It is important to stick to some very simple points, which will have the most impact to these representatives.  Form letters aren’t as effective as sending something personal. Fax is probably the best and fastest approach.

Here are key points to include in your message:

1. Who you are, where you live, and any ties you have to the community.

2. Include this information, or a variation:
I am an affiliate marketer and I earn a living through Internet advertising. I do not sell merchant products, I do not even know who their customers are. My business earns revenue through advertising for out-of-state merchants. XX% of my revenue comes from out-of-state merchants (it is important to add an approximate percentage, so legislators can see the impact). I know out-of-state advertisers will stop working with me, because that is what happened to affiliates in New York.

3. Emphatically state:
I am against SB 806. As my representative I need you to vote to oppose SB806.  Can I count on you to be against this terrible legislation?

4. Ask your legislator to contact you and provide an update on SB 806. Be sure to include your telephone and email.

Remember that it is crucial to take these steps by the morning of Tuesday, April 14th which is fast approaching.

Read the rest here:
Connecticut Anti-Affiliate Legislation SB806 Up for Vote in Senate

I was optimistic all week about fighting these misguided tax bills that make affiliates the losers in the state governments’ quest to tax Internet sales.

We had a great and amazing week in California.  Brook Schaaf, CEO SchaafCo, and Karen Garcia, Co-Owner GTOManagement, organized a lobby day in Sacramento to fight AB 178. All the feedback I got from other lobbyists in Sacramento was that the State legislature was blown away by our story and the education the affiliate lobbying team provided.  Count one for the good guys!

And I was even more pleased as I watched our local community organize politically and fight to protect our businesses as opposes to being steamrolled.

When the critical vote in Sacramento was delayed and our little super surgical strike activist team immediately started trying to figure out how to leverage the delay to put more pressure on legislators.   We were already setting up meetings with press and elected officials.
I was so excited since I truly believe we can win that vote.  California has always led the way for state legislation, and other states look at us for leadership.  I thought if we could win here, it would send a strong message to other states and we could create a model to fight these bills on the state level.

I wanted to try to help facilitate the following

• Create strategies that works
• Draft templates of letters and documents for other states
• Develop leaders and mentors like Brook and Karen to help affiliates and OPM’s in other states.
• Generate network awareness to help – i.e. LinkShare and ShareASale have been great leveraging affiliates throughout the state to help.  They now have all those templates for networks to use in other states.  (Thanks Mark Kirschner and Brian Littleton!)
• And most importantly, help deliver a win! This will help teach this community it can make a difference working together.

The California campaign is working because we put a very, very strong strategy in place.  We developed an effective message and set of lobbying tools. We have executed very well.  I was just so excited on Friday.

But in the back of my head, I kept thinking affiliate tax bills are moving so fast, we might be a little late, but we only have so many resources. Then, my optimistic mood came crashing down when I got this email at 5:00 that day:

“Introduced without warning only days ago, Maryland’s version of the “affiliates tax nexus” legislation likely will be enacted late Monday or early Tuesday, without any hearing in the House. The legislature is set to adjourn within a week and plans to adopt a broad revenue/spending bill Monday/Tuesday.

The affiliates tax nexus is part of this big bill, which almost certainly will get an up/down vote, and the governor does not have a line item veto. The Maryland Senate is unlikely to change course, so it’s crucially important to contact the Speaker of the House over the weekend. Unfortunately, affiliates in Maryland have had almost no opportunity to learn of this proposal and react, so they need to engage within hours, not days.” -AffiliateTip

As the case of Maryland illustrates, the problem is we have no time, now.  I have no doubt other states that we are unaware of are working on this tax and we don’t even know which states are working on it because we have no one monitoring it.

Our greatest strength is our ability to organize and create pressure on elected officials. We have such wonderful stories to tell. And each network has an amazing database where it can identify affiliates in key districts and then help them participate in the political process.

Think what would have happened if all the affiliate networks were working in tandem to fight these bills and they all blasted out emails to their affiliates in Maryland on Saturday asking them to call and write their state Legislature over the weekend.  My guess is that bill would not pass on Monday or would at least be slowed down enough to give us a fighting chance.

We need the PMA, all of the affiliate networks, ABestWeb, grassroots efforts such as – Fight Against the AdvertisingTax and NY Affiliate Voice -  to come together now, not in 6 weeks.  All these stakeholders have the grassroots databases that can match affiliates up by state and assembly district to blast out action alerts to affiliates.  And we can get feelers out in every state to see if an advertising tax bill is coming down the pike.
I know people are working on coming together, but the issue is we have no time now to have all of our differences and politics to fall aside over time. We need action now!

Mature industries understand that you fight it out in the marketplace and work together in a political arena.  Five or six of us are making a huge difference in California.  It’s time the industry comes together to stop these bills.  What we have done in California can be reproduced easily.  We just need leadership and to put our differences aside.

And if you think your segment of affiliate marketing can win this alone, then stop and think about the pressure the states feel to raise revenue due to the economy and the very focused pressure of the booksellers lobby which initiated the legislation in California and several other states.
Political campaigns are won and lost based on how well a coalition works together.

I always think a symphony orchestra is a good analogy.  The lobbyists are the flutes, the media mavens are the violins and all the instruments are the grassroots.  If all the musicians are on a different page of music, the symphony sounds awful, but when everyone is playing in concert that is when everything works.

Let’s just remember what the great Mahatma Gandhi said in India’s fight for independence: United we stand, divided we fall.” Or what a good friend and industry leader said to me this morning via IM “Whatever this is stupid, people just need to work together.”

Go here to see the original:
Affiliates Lobby Against California AB178, While Maryland Piggybacks Similar Legislation onto Larger Bill

There has been plenty of chatter about AB 178, the anti-affiliate bill in California. My concern is that as I looked at a board in our community the other day and there were 73 posts on AB 178.  And it was not until post 72 that there was a call of action to do something about the legislation.

It reinforced what I’ve been thinking: we are spending so much time talking to each other and not enough time talking to legislators (my focus here is California but what follow remains true for those in the affiliate industry to reach out to their legislators).

I just wanted to ask everyone to reach out to your legislature in California and write a letter.  Better yet, pay a visit to your state assembly member.

If you don’t think grassroots action can make a difference, think again.  When I was working on Capital Hill, I literally watched a Member of Congress getting ready to vote on a bill look at two piles of letters from opposing sides on an issue on their desk.  Then go and cast his vote from the side that had the most letters in their pile. In another case, I watched a Member of Congress look back at his schedule count the number of people on each side of an issue that had visited him, and then vote for the side for whom more constituents had paid visits over the last six months.

If you are concerned about the ramifications of AB 178 and live in California, you need to write a letter – here is how – or visit your Assembly member. Next week, the California State Assembly is going out on recess and we need to get people to visit their members in 4 key districts.  You really have a chance to make a HUGE difference here.

The list of members is below.  If you live close to their district office, can you please check this link and see if you live in their district.  If you do live in their district, and you know how to visit an elected official,  just do it!  If you need a little help let me know, and I’ll walk you through it and make sure you have some people to help. Caaffiliates (at) gmail.com.   This is not hard, elected officials work for you and they want to hear what you care about and how they can help serve you.

Thanks so much!

Coto, Joe
100 Paseo De San Antonio
Suite 319
San Jose, CA 95113
(408) 277-1220
Assemblymember.coto@assembly.ca.gov

Ma, Fiona
455 Golden Gate Avenue
Suite 14600
San Francisco, CA 94102
(415) 557-2312
Assemblymember.Ma@assembly.ca.gov

Portantino, Anthony
215 N. Marengo Ave
Suite 115
Pasadena, CA 91101
(626) 577-9944
Assemblymember.Portantino@assembly.ca.gov

Saldana, Lori
1557 Columbia Steet
San Diego, CA 92101
(619) 645-3090
Assemblymember.Saldana@assembly.ca.gov

See more here:
Want to Stop AB 178? Talk to a Legislator

As the vote on California’s version of the misguided Amazon Tax, Assembly Bill 178, nears LinkShare has stepped forward to help provide a face to the affiliate business who will be impacted by if the bill is passed. Thanks to Mark Kirschner, Chief Marketing Officer, Linkshare for compiling the letter and kudos to LinkShare for providing it.

Below are highlights of that letter (click here to read the letter in its entirety):

On behalf of our tens of thousands of online advertising, affiliate publisher partners in California, we urge you to oppose AB 178.

AB 178 is of great concern to Linkshare and our clients because when a similar bill was passed in New York State, hundreds of online merchants terminated their advertising relationships with thousands of affiliates in order to avoid collecting New York State sales tax. This directly resulted in a significant decrease in revenue for small affiliate marketing and advertising businesses in New York.

As you consider AB 178, we believe it is important for you to understand the people and faces behind affiliate marketing and advertising and the impact passage of AB 178 will have on their businesses. At LinkShare, we know that our community of affiliates is composed of some of the most talented small business entrepreneurs around.

Attached are profiles of six of our small business, affiliate publishing partners. Profiles like Ben Chui, a California small business entrepreneur:

When Ben Chui started Ben’s Bargains in January 2000, he was a sophomore at UC Berkeley looking to make some extra money. Five years later, his site, BensBargains.net, not only supported him in earning his undergrad degree, but also funded his Masters in Mechanical Engineering. Today, Ben is running the site full time, and has 2 employees.

Perhaps the most touching story of our profiles is that of Todd Martini:

In 1998, Todd Martini developed a web site to post photos of newborn daughter Alexandra so friends and family could see them. That all changed when Alex was diagnosed with Leukemia. To raise money for his daughter’s multiple surgeries, he turned to the LinkShare affiliate program for help. Today, AlexsCoupons.com has 214 LinkShare merchants, who play a key role in helping the
Martini family pay the massive bills related to Alex’s treatment, and sustain her miracle recovery.

Both Ben and Todd manage coupon websites. They are no different than the weekly coupon circular in the local Sunday newspaper or a local value pack mailer, except both Todd and Ben publish these coupons on the web.

Like Ben and Todd, all affiliate marketers work within an advertising model that allows small businesses to display advertising on behalf of retailers whom they normally would not have exposure to without with an advertising agency. The affiliates do not own the customers nor do they transact a sale.

AB 178 singles out the small businesses of affiliate markers and this creates an extremely uneven playing field for them compared to other types of online and offline advertising. This will in turn, will reduce California-based affiliates’ ability to compete with other forms of advertising, as well as with affiliates in neighboring states.

The passage of AB 178 will mean lost revenue and lost jobs for California’s small affiliate marketing, web publishing businesses. This will
devastate these small, entrepreneurial businesses like Ben, Todd and the other affiliates featured in our profiles.

We urge you to read the attached profiles and take the time to understand affiliate marketing before you vote on AB 178. We have also attached a list of all the California cities where we have partnerships with affiliates for your review, so you can understand how many small advertising businesses will be impacted by this bill.

Here is the original post:
LinkShare Puts a Human Face on Affiliates for California Legislators

I wanted to share my letter in opposition to AB 178. Thanks to everyone who gave me feedback, in particular Angel Djambazov. Writing letters does make a difference, especially on this issue because education is so important. People in decision making positions do not understand what affiliate marketing is or the consequences of this legislation.

March 26, 2009

To Members of the Assembly Committee on Revenue & Taxation
State Capitol (Assembly)
P.O. Box 942849
Sacramento, CA 95814

Dear Assembly Member:

I am writing in opposition to AB 178 (“The Amazon Tax”), which would have negative consequences for online businesses based in California. If this bill passes the state will experience a decrease in business activity and probably a drop in net tax revenue.

The goal of this measure is to force out of state retailers to collect and remit sales tax (use tax) by categorizing their California-based affiliates as nexus. While the desire for increased tax revenue is clear to understand, this is a destructive and ineffective approach based largely on misperceptions about what affiliate marketing is.

Before reviewing the likely short and long term negative effects, it may be useful to review two topics:

1. The current language of the bill is overly broad. Any business which accepts “commission or other consideration” for “directly or indirectly” referring “potential customers” is deemed nexus. This is basically a definition of advertising. While this may be intended to apply to affiliates, it could equally apply to any television, radio, outdoor, mobile, print advertising, or non-affiliate internet advertising, such as Google Adwords.

2. Affiliate Marketing is a form of advertising; affiliates are not a sales force. The retailer who engages with a California company on an affiliate basis has no more direct relationship then if they had purchased advertising from a television or radio station. The term affiliate marketing simply describes one of three main advertising models used on the internet:

a. CPM (Cost Per Impression) – If you buy an advertisement on television, radio, outdoor, mailing list (including email), or in print, you’ll pay based on the number of estimated viewers and the value of those viewers.

b. CPC (Cost Per Click) – If you buy an advertisement on Google Adwords, Yahoo Search Marketing, or Microsoft adCenter, you’ll pay for each individual click that is sent. Many affiliate programs also pay out on a pay per click model.

c. CPA (Cost Per Action) – This is the typical advertising model used by affiliates. If you have a retail affiliate program, you set a commission rate to pay affiliates per sale.

CPA marketing allows the advertiser to engage with a large number of affiliates (better known as publishers) who are rewarded if they can prove their value. In contrast to a sales force, distribution center, or maintenance team, an advertiser enjoys no advantage by working with an affiliate in a particular physical location. As a case in point, many large affiliates are based outside the United States. The affiliate marketing model benefits affiliates by allowing small business to display advertising on behalf of retailers which they normally would not have exposure to without an advertising agency.

If affiliates are considered tax nexus, their ability to charge for advertising on a CPA-basis will be seriously disadvantaged compared to their competitors in other locations and their competitors using different advertising models – CPM or CPC. If California affiliates change their locations or their advertising fee structure, this nexus is avoided.

The following items should be considered in opposition to this legislation:

• Online retailers without current nexus in California have a high likelihood of severing their relationships with California affiliates to avoid nexus. This has already happened in New York, where hundreds of merchants dropped all their New York affiliates – most famously, Overstock.com terminated 3,400 relationships. This loss in revenue greatly hurt small business owners in New York.
• As a form of advertising affiliate programs are only so valuable to online retailers. The average affiliate program might generate, through advertising, about 10% incremental revenue for an online retailer. Small businesses which participate in affiliate programs are widely dispersed nationally and even internationally. If you divide this percentage by the national population, you’ll note that even in California, the most populous state, revenue from affiliate advertising would only account for one or so percent of an online retailer’s sales.
• Tax collection compliance is difficult. Most online retailers could not immediately charge sales tax even if they wanted to because the tax code is complex and the change would have to go through the development queue. Faced with a choice between losing one or so percent of their revenue and a possible lawsuit, they’ll probably choose to end their affiliate relationships.
• The overly broad language will cause confusion and hesitation in the marketplace. If the bill applies to affiliates, it should also apply to Google Adwords, which the vast majority of online retailers advertise through. It might also apply to advertising agencies, such as my own.
• Passage of this legislation would virtually guarantee a costly lawsuit against the state by its own small and large businesses.
• Companies without affiliate programs will avoid launching them. My business makes its money managing affiliate programs so you can see the impact this would have on us. My business currently employees seven people full time. This legislation would put a damper on our expansion plans.
• California will lose current and future jobs because affiliates – highly portable businesses – will move out of state, sell to out of state entities, and not start up in the future.
• The current and future jobs lost will include a high portion of skilled, well-paid, work-at-home jobs. Becoming an affiliate publisher is an accessible business model, requiring very little capital and is a great model for self employment. California’s unemployment rate is currently 10.5%.
• In California, call centers and web hosting companies are granted safe harbor status, presumably because the state realizes many of these relationships would be severed and these businesses damaged. The same is true with affiliate relationships.

Thank you for your time and consideration on this matter that is so important to my business and so many other businesses in California.

Sincerely,

Brook Schaaf

CEO

CC: [Note: this list is comma instead of line break separated to save space.]Hon. Charles Calderon, Hon. Chuck DeVore, Hon. Nancy Skinner, Hon. Jim Beall Jr.,Hon. Joe Coto, Hon. Diane L. Harkey, Hon. Fiona Ma, Hon. Jim Nielsen, Hon. Anthony J. Portantino, Hon. Lori Saldaña

View post:
A Letter in Opposition to AB 178

I  knew when Performance Marketing Alliance started on the project to stop California’s anti-affiliate bill (AB 178) that we would need to build a coalition to help is stop it. The good news is we found a coalition of tech businesses that dislike this bill as much as we do, with some names you will recognize including: Amazon, Ebay, Yahoo, and Google. What we bring to this coalition is a crucial small business element and grassroots voice which will make a difference.

Legislators will vote against big business, they will vote for increased taxes, but they wont vote against small businesses in their districts. That is why our voice as affiliate marketers is so important and will play a key part in stopping this bill.

I thought people might like to see the letter from the broader coalition to a key members of the California State Assembly to know we are not alone. (And no, it does not mean you get out of sending a letter or visiting your assembly member, it just means we can stop this if we all can work together. )

Here is a copy of the coalition letter (pdf).

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The following is a message from the Performance Marketing Alliance which lays out the alliance’s plan and argument against California Assembly Bill 178.

As you might have heard, affiliate marketing is under attack in California. Assembly Bill 178 is a California version of New York’s “Amazon Tax”. Plain and simple it is an ugly situation. This post is a summary of the situation and how you can help.

The situation
AB 178 – you can read the bill here - would establish that a nexus is created in California when any out of state retailer enters into any marketing agreement with a California resident or business in exchange for compensation or commission, such as by a link, website, or other form of advertising which generates referrals in excess of $10,000 in sales. Once a nexus is established, AB 178 would require retailers that receive direct or indirect referrals from online advertising on websites to collect sales tax in California.

When New York State enacted such a bill, 100s of retailers immediately severed their relationships with affiliates residing in New York State including Overstock.com and the Home Shopping Network.

Bills like this will have a chilling effect on the affiliate marketing industry.

We need to stop this legislation and we can! With the support of CalChamber and CalTax, California affiliate marketers and the Performance Marketing Alliance is launching a coordinated grass-roots campaign that targets congressional representatives. A similar bill was killed last year by the CalChamber coalition, so we can get this done.

How you can help
We have an attack plan that includes sample letters, fact sheets, congressional contacts by zip code, and a “Visit Sacramento” day, to put faces in front of decision makers. We have two weeks to make a difference.  Time is critical here.

Everything you need to make a difference is itemized below:

• Sign our group letter – we want over 200 California businesses to sign this letter. Click here to see the letter and sign up. It’s important we gather as many names, company names, as possible. We have made it easy, if you do nothing else do this! You just need to fill out a form.

• Write a letter to your State Assembly Member – this really does make a difference.

• Sample letter to write your State Assembly Member here - make sure to personalize it.

• Find your State Assembly Member here by zip code.

• Assembly member’s address here – click on the Assembly Member’s name, then find their contact info on their web page. Please sent your fax to their local office (not Sacramento). It’s best to fax AND email.

• Join our lobby day in Sacramento on March 31. We need to put a human face to this story and the best way to do that is to meet with your Assembly members face-to-face. Brook Schaaf and Karen Garcia are organizing this. You can get in touch with them via email here: lobby_day (at) performancemarketingalliance.com

• Visit your State Assembly member and tell them to stop this bad bill.  This will have a huge impact!   To find out more email caaffiliates (at) gmail.com

• Editorial board visits – you can email caaffiliates (at) gmail.com to participate.

Please note, we will have more on district visits and ed board visits in the next few days and I’ll post those on ReveNews too.

The greatest strength of affiliate marketing has always been our amazing entrepreneurial spirit.  We need to put that spirit to work to fight against this bill. If we work together we can win.

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Imagine how hard it would be to stick to a budget in a store with no prices. Well, that’s pretty much how we buy electricity today. Your utility company sends you a bill at the end of the month with very few details. Most people don’t know how much electricity their appliances use, where in the house they are wasting electricity, or how much the bill might go up during different seasons. But in a world where everyone had a detailed understanding of their home energy use, we could find all sorts of ways to save energy and lower electricity bills. In fact, studies show that access to home energy information results in savings between 5-15% on monthly electricity bills. It may not sound like much, but if half of America’s households cut their energy demand by 10 percent, it would be the equivalent of taking eight million cars off the road.

Google’s mission is to “organize the world’s information and make it universally accessible and useful,” and we believe consumers have a right to detailed information about their home electricity use. We’re tackling the challenge on several fronts, from policy advocacy to developing consumer tools, and even investing in smart grid companies. We’ve been participating in the dialogue in Washington, DC and with public agencies in the U.S. and other parts of the world to advocate for investment in the building of a “smart grid,” to bring our 1950s-era electricity grid into the digital age. Specifically, to provide both consumers and utilities with real-time energy information, homes must be equipped with advanced energy meters called “smart meters.” There are currently about 40 million smart meters in use worldwide, with plans to add another 100 million in the next few years.

But deploying smart meters alone isn’t enough. This needs to be coupled with a strategy to provide customers with easy access to energy information. That’s why we believe that open protocols and standards should serve as the cornerstone of smart grid projects, to spur innovation, drive competition, and bring more information to consumers as the smart grid evolves. We believe that detailed data on your personal energy use belongs to you, and should be available in an open standard, non-proprietary format. You should control who gets to see your data, and you should be free to choose from a wide range of services to help you understand it and benefit from it. For more details on our policy suggestions, check out the comments we filed yesterday with the California Public Utility Commission.

In addition to policy advocacy, we’re building consumer tools, too. Over the last several months, our engineers have developed a software tool called Google PowerMeter, which will show consumers their home energy information almost in real time, right on their computer. Google PowerMeter is not yet available to the public since we’re testing it out with Googlers first. But we’re building partnerships with utilities and independent device manufacturers to gradually roll this out in pilot programs. Once we’ve had a chance to kick the tires, we’ll make the tool more widely available.

There is no one-size-fits-all solution to providing consumers with detailed energy information. And it will take the combined efforts of federal and state governments, utilities, device manufacturers, and software engineers to empower consumers to use electricity more wisely by giving them access to energy information.

Posted by Ed Lu, Engineering team

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Power to the people

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