Posts Tagged ‘advertiser’

Your Business is Under Attack

Tuesday, November 20th, 2012
Wow, affiliates, you can’t catch a break!

Hurricane Sandy isn’t the only storm to roll through these past few weeks and impact our industry.  You and your business are under attack from the forces of nature within the insurance industry.  This isn’t the first time it’s happened, and it won’t be the last.  Are you prepared to weather this most recent storm and come out stronger on the other side?

The Storm
In recent weeks a number of large buyers in our industry have been in the headlines, making changes that could severely impact your business if you aren’t ready for their next moves.  Keep reading to find out how and what you can do about it.

  • After months of downward trending results, high agent attrition, and carrier complaints BankRate announced they are launching quality initiatives – cutting more than 500,000 leads/month and promising change to their shareholders.
  • When presenting their most recent quarterly results, Quinstreet, parent company of SureHits and Insurance.com, announced that similar trends within the insurance space contributed to them falling short on their earnings expectations. They are expecting flat revenue and margin performance in auto insurance for Q2 2013 with limited visibility to when they will return to growth.
This ‘move for margin’ might be what Wall Street wants to hear - but what does it mean for you now, and what the hell should you do next?

What History Tells Us
Bankrate and Quinstreet have to deliver on 2 points:

  • Increase the quality of their traffic to retain thier agents and buyers
  • Deliver growth to their shareholders and revive stock price
History shows us that all too often companies resort to trying to control supply in order to accomplish these two initiatives.  The theory being they will have the ability to more closely monitor quality while simultaneously increasing their margin by eliminating the middleman.  Also, down stream they will ultimately be able to force better pricing from their buyers.

So, how does one gain control of supply?  By eliminating competition, reducing subsidization of the marketplace, and increasing direct to site traffic – it’s a strategy that is fundamental to business.  The history books tell us that buyers, especially when they are in a position of strength and market domination, look to this strategy. Often times at the expense of their partners.  Don’t believe me?

  • In 2009 Insurance.com made the decision to all but abandon their B2B and affiliate channel, instead focusing on building their brand and increasing their direct to site traffic.  Their first move was to increase payouts and sign exclusive deals with their top partners to clear competition.   The pay increase was short lived, soon after they cut partner payouts to increase their own margin and limit affiliate growth.  They thought affiliates were so dependent on them that you’d accept it, they were wrong.
  • In 2010, Quinstreet tried to increase its consumer presence by acquiring a number of premier websites including Insurance.com and Carinsurance.com. They have struggled significantly since adopting this strategy; their auto insurance vertical has posted year over year declines in revenue of 15% or more each year since.
  • Now, during the November 1, 2012 shareholder meeting, Bankrate stated, “As previously mentioned, the year over year margin increase is primarily a result of trimming the ratio of affiliate leads compared to traffic to our destination sites in insurance through direct, organic and marketing activity.” They go on to say “we are concentrated on driving consumer adoption directly to our sites.” If we’ve learned anything from history we know there will be fallout from this strategy and you need to protect yourself.
These are attempts to eliminate you, the affiliate!

Your Next Move
Be prepared!  What to expect in the market over the next few months:

  • Large buyers in the space will likely increase your payouts in the short term as they look to build your loyalty and dependence. Make      no mistake, the increased payouts are not sustainable.  It’s a short-term play to grab traffic, and they will soon cut payouts as they need to take more margin to re-coup earnings lost from cutting volume.
  • They may dangle the carrot of greater riches in return for exclusive rights to your traffic. This may seem like a good thing, and it could be.  Just make sure you negotiate a quick out if the relationship or pricing goes sideways, and the ability to send up to 25% of your traffic elsewhere for testing.  Don’t let your business become dependent on someone else, you need diversity.
  • If neither of the above work, there will be threats of losing their partnership altogether if you don’t give them what they want.
Don’t be fooled by these tactics, hold your ground – you have more power than you think. If they could, they would have already eliminated you altogether.  They rely on you.  Evaluate your business, determine your risks and look at new ways to diversify.  You may find that a solid, diversified foundation with maximized conversion and a lower return rate coupled with more feedback and guidance could put you in a better position to grow. Partner with people who are transparent and have your best interest in mind.  Play for the long term, don’t fold under pressure or agree to things that will limit your success.

Explore Your Solutions
Remember, you aren’t alone and you do have options.  Tell us what you need, we will help you diversify and solidify your business.

  • Do you need help fulfilling extra legs of a lead?
  • Are there buyer relationships you need help obtaining?
  • Is there a technology solution you need access to?
We believe in you and it has always been our philosophy to do whatever we can to help your business succeed.  Let us help you navigate this storm, call us today and tell us how we can help you. Don’t let anybody control your future but you!

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Are Your Offers Meeting Your Goals?

Wednesday, October 26th, 2011

In the insurance vertical there are many different types of offers, each with its own set of pros and cons. The type of offer that is best for you depends on several factors including your marketing efforts, the degree of control and autonomy you desire, and of course your goals. The goal of this article is to highlight the 4 different ‘types’ of offers most prevalent in the industry and help you to understand which is best suited to fulfill your needs. Maybe you’ll discover you’re right on target with your current campaigns, or maybe you’ll find there is an alternate solution out there that is worth testing against what you are currently doing.

Hosting vs. Redirect

Hosting an offer simply means you are hosting the entire interview form on your site, rather than redirecting the consumer from your landing page to the advertiser’s page to complete the form and submit a lead. There are two different ways in which you can host an offer, either by placing javascript from the advertiser on your site or by integrating to the advertiser’s actual schema. First let’s talk about the pros and cons of hosting vs. redirecting, and then compare the two hosting options.

Redirect

Pros:

  • Easy set up – start boxes, banner ads and other creative normally provided by the advertiser
  • Low maintenance, once set up it’s easy to step back and let it run

Cons:

  • Search Engines are penalizing affiliate sites that utilize a bridge page and redirect the consumer to 3rd party site
  • Lack of control over the offer
  • Limited ability to differentiate from others in the space
  • Harder to hold your buyer/advertiser accountable

Best Suited For:

  • Affiliates driving traffic via: Email, Banner/Contextual Display and PPV

Hosting

Pros:

  • Offers SEO benefits including increased time on site, no bridge page, etc
  • Ability to differentiate form from others in the space
  • Additional control over consumer experience
  • Opportunity to own consumer data
  • Increased opportunity for monetization

Cons:

  • More resource intensive for set up and maintenance

JavaScript

Pros:

  • Set up is easy, normally just pasting the code to your site
  • Offers some SEO benefits

Cons:

  • SEO benefits are limited as you are unable to differentiate your form from others hosting the same form
  • Security concerns around placing 3rd party code on your site
  • No control over form length or ability to optimize to conversion

Best Suited For:

  • Lower volume SEM/SEO affiliates with limited resources,

Integrating to Advertiser’s Schema

Pros:

  • Ability to fully customize the form, allowing for maximum SEO benefits from differentiation, unique content, increased time on site, no bridge page, etc.
  • You own the consumer data and can remarket at no additional acquisition cost
  • Owning the consumer data also allows for a deeper analysis of the data and the ability to understand and better market to your demographic
  • Full autonomy and control over consumer experience and conversion optimization

Cons:

  • Takes a deeper investment in time and resources to fully reap the benefits

Best Suited For:

  • Higher volume SEM affiliates with programming resources and the desire to fully optimize an offer

Click vs Lead

Traditionally, payout on a lead is higher than payout on a click because the paypoint is farther down the funnel so the advertiser is assuming less risk. However, with the increase in social and incentivized traffic in the market we’ve seen lead pricing steadily fall. Given this recent trend it’s more important than ever to take the time to do the math and understand which model works better for you. Conversion is the key factor in determining which payout type is most profitable for your business.

Below is an example of how a $8.00 per lead offer could net you the same as a $4 per click offer based on 100 visits to your site.

Per Lead Offer
Payout: $8.00/lead
Conversion: 35%
100 visits X 35% = 35 leads
35 leads X $8.00 = $280
$280 / 100 visits = EPV of $2.80

Per Click Offer
Payout: $4.00/click
Conversion: 70%
100 visits X 70% = 70 clicks
70 clicks X $4.00 = $280
$280 / 100 = EPV of $2.80

Tie everything back to visitors to ensure you are making an apple to apples comparison.

Flat Fee vs. Revenue Share

Another payout model to evaluate is being paid a flat dollar amount per lead vs the variable payout of a revenue share. While a flat fee provides you with security, ultimately it may provide far less upside for you vs. a revenue share model. As you work to optimize and drive increasingly higher quality traffic that demands a higher sold price, you will reap the benefits with a revenue share.

All In vs. Sum of Parts

Many advertisers paying on a flat fee per lead combine the sale price of the lead with the back end revenue they are also able to generate from that lead on a thank you page marketplace or cross-sell. We consider that ‘all in’ pricing as opposed to being paid separately for all revenue generated from the lead. Pros and Cons of each:

All In

Pros

  • Provides a guaranteed payout on leads accepted
  • Less optimization required
  • No need to invest resources in finding and testing multiple marketplace or cross sell offers

Cons

  • Limited upside as you may be able to earn more by controlling the backend offers yourself
  • Held to your advertiser’s appetite for leads accepted
  • Quality is not reflected in increased pricing

Sum of Parts

Pros

  • You have more control over consumer experience
  • Opportunity to earn more by managing and optimizing the back end offers yourself
  • Increased quality is reflected by increased pricing

Cons

  • Optimization is more time intensive
  • Returns and earning take patience and investment

Take some time over the next few weeks to evaluate whether your current offers are best suited for your business, and if they are setting you up for success in 2012. For example, if you are currently using a redirect offer, but one of your goals is to increase your SEO ranking in the New Year, you may consider testing an offer that allows you to host the form. It’s important to start testing now, so that you are fully optimized for the increased January traffic. Our November newsletter will give you a rundown of all Moss offers, you may see something new! Or ask your Account Manager what we have available today.

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Social Media & Incentivized Traffic – What it Means to You

Thursday, July 7th, 2011

The comments, questions, and inquiries keep coming so I will keep writing…

First, I hope you had a fantastic holiday weekend and that you have time in your summer schedule to get away from your computer to spend with family and friends.

My summer has been pretty exciting.  I have been on a whirlwind tour, working with industry leaders to move the insurance vertical in the right direction.  Right now our industry parallels a rip current.  On the surface everything looks normal as waves are crashing on the beach.  Similarly, lead pricing continues to crash.  But, beneath the surface the rip current is moving the other direction, just like behind the scenes our efforts to improve quality and pricing are beginning to take hold. Paradigm shifts take time, and this one is gaining momentum.

So, let’s discuss social media and incentivized traffic.  Initially, social media didn’t have a great impact on our industry.  It didn’t convert well, and it was better suited for branding rather than the conversion our industry requires.  But it was a cheap way to subsidize more expensive traffic like search and email.  Some affiliates would do a blend, like 80% search and 20% social media.  This was an affordable way to increase volume levels while keeping their overall quality and conversion higher.

Over time, as lead pricing started to drop, search and other more expensive traffic sources became prohibitive to affiliates.  Concurrently, lead buyers began compensating affiliates based on agent coverage and lead demographics rather than consumer intent. The combination of these two events gave the affiliate very little incentive to pay top dollar for quality sources.

What happened next is really what hurt our industry.  There were affiliates, who were not held accountable, that began sending disproportionate blends of traffic.  The 80/20 started slipping to 50/50.  And then FarmVille and MafiaWars came along, and the rest you could say is history.

Consumers were being incented in droves to fill out insurance lead forms for “points”.  I’ve even heard that some advertisements told the consumer “if they informed the agent they were calling for points, they wouldn’t receive their points.”   Many companies explicitly forbid this type of marketing behavior, but others turned a blind eye.  Some weren’t able to source traffic and couldn’t police it even if they wanted to.  So, social and incentivized traffic became a much more prevalent source than anyone wanted.  I know this because unfortunately we are all feeling the repercussions now, whether or not you were an active participant.

The extreme rate at which this traffic infiltrated the industry caused high agent turn over, diminishing returns, lower conversion, and increased supply to decreased demand. Adam Smith would be slapping his forehead.  In this frenzy, folks lost sight of the fact that policy sales are what ultimately fund this industry.  Social and incent traffic is just a distracting noise that allows those with very little value to steal from the legitimate affiliates.

If it’s not obvious by now, I don’t believe social media or incentivized traffic to be sustainable sources.  At MAM we are in the game for the long haul rather than short term gains, and are working to extricate this traffic from reaching lead buyers. In the final Summer Series newsletter next week I will talk about how to manage your business against the trends of increasing social traffic. I will include what we are doing to ensure your quality traffic isn’t getting lumped in with other’s social traffic, allowing you to ultimately get paid what you deserve.

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How to Navigate the Waters of an Exclusive Deal

Thursday, June 23rd, 2011

Welcome back!  I was overwhelmed by the emails I received in response to last week’s post.  It definitely tells me that many of you are ready to do your part to help get our industry back on track towards appropriate lead pricing and generating more value for not only the customer but the lead buyers as well.  Keep those questions coming!

The topic of this post is one that several of you have asked me about in the past several weeks:  Exclusive Partnerships.  If you believe in the power of a free market, then exclusive is not the way to go.  However, when you are trying to make sure your kids can go to college, the stability of an exclusive deal can be very appealing.  Let’s walk through the landscape and at least get you ready for these conversations.

From an industry perspective, the click marketplace companies have certainly started to put the pressure on affiliates to sign exclusive deals.  And, from what I gather, the carrots being dangled are pretty big and juicy.  So, what do you do with it?

Before you start negotiating an exclusive deal, I want to warn you that I have never believed in exclusives.  It is counter-intuitive to driving better products to market, forcing more accountability from providers, and continually getting you the best pricing.  Also, given the extreme amount of flux in the current lead marketplace, I’d advise against any type of exclusive deal on a lead basis.

That said, the market has been riddled with fraud and quality issues.  Locking in exclusives helps the click providers to guarantee good quality revenue while flushing out the poorer quality.  That model could help rebound pricing by re-establishing carrier confidence, allowing them to start paying actual value for your click rather than current market value.  So the current situation is a bit of an anomaly.

The good news is the click providers need your quality clicks, so that puts you in the driver’s seat for negotiations.  Historically we had one true click fulfillment company.  Recently, several companies have put legitimate products into the marketplace and much of the quality has been diversified.
The click marketplace has done a good job of putting checks and balances on quality algorithms, so if they are approaching you, you are doing something right.  Here’s how you negotiate good pricing without betting the farm:

1. Make sure the exclusive you are signing is the best performer for your traffic.  Before entering into the deal, be sure to test your different options to make sure you are maximizing EPC for your traffic.  While the terms of the deal may be sweet, if the performance isn’t there on the back end, the terms won’t matter.  You need to know if conversion makes a 90% rev share on a $5 CPC a better deal for you than 80% on an $8 CPC.

2. Don’t get caught with your pants down.  There’s a lot of fluctuation in the market and if your exclusive provider has issues, you don’t want to scramble to find a new solution.  That will leave you dealing with unknown economics, and very little leverage in a short-notice negotiation.  Instead, negotiate the ability to diversify 5-25% of your traffic.  This will provide your partner with the volume guarantees they need, but the protection and diversification you need.  The best way to do this is to ask your click provider for their weaker states and send your traffic elsewhere in those states.

3. Make sure your partner is accountable to an ever-changing marketplace.  Keep your termination agreement/notification as short as possible, 90 days with written notification is typically a good duration.  It allows you and the provider ample time to prepare for changes, as well as extra time to negotiate a new deal that works with the dynamics of the market and your reality.

4. Be careful of what you are locking yourself into.  Sometimes these deals look like a bill in front of Congress, meaning the package is a little bit more extensive than what you have verbally agreed to.  Make sure that once the exclusive period is over, you have the right to work with any advertiser you want.  Definitely have your attorney review the agreement to make sure you aren’t getting more than you bargained for.  It can bite you later.

5. Make sure the contract allows for future negotiations and price matches.  For example, if another partner comes to you with a better deal you need to have the ability to:

  • Test the new offer to make sure it is accurate and sustainable
  • Give your exclusive partner the opportunity to match pricing or let you out of the agreement.

6. You don’t know what the future holds, things change every day.  Make sure you aren’t held to volume minimums, future monetization models, etc.  There’s a lot on the horizon that could revolutionize our industry, make sure you are allowed to get on that bus when the time comes.

7. Last, but not least, make sure the contract delivers what they have verbally promised.  I know it seems like common sense, but sometimes when reading contracts people only focus on major red flags and forget to read the basic language.

Remember, when you ask for these things, you are asking for the provider to give a little.  So you need to be ready to give a little back too.  Negotiations are give and take. The provisions above should allow the provider to achieve their goals, while giving you some safety and consistency without keeping all your eggs in one basket.

If you choose the exclusive path, good luck negotiating!  As always, let me know if you have any questions and I will do my best to answer them.  While I don’t believe that exclusives are a good solution, if that is the route you need to take at least you are armed with information to help protect your business.

P.S. – If you are looking for a click marketplace and aren’t interested in signing an exclusive, ask  us about testing our click product – Moss Marketplace.

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Don’t Let Your Provider Take Advantage of You

Wednesday, June 15th, 2011

Affiliates, it’s time to take action and get what is rightfully yours.

Ever since Insurance.com was demolished, the market hasn’t been near as accountable.  I am reminded of the movie ‘The Lion King’, when Mufasa dies and Scar takes over.  Scar doesn’t have the best intentions for the kingdom, and his selfishness virtually ruins all of the pride lands.  Because he has the power he hurts everyone, including himself, until a new king takes him out.

This is the state of our industry. The pride lands are ruined, we need a new regime to take over and bring back accountability.  But you need to do your part too.  Don’t cower to the destructive machine that is currently controlling the industry, by working with the current regimes you are only empowering them and hurting yourself in the long run.

This is Part I of our 4 part Summer Series discussing how we need to evolve and clean up the insurance lead industry.  If you do your part, your long term goals will be achieved.
Part 1: Don’t Let Your Provider Take Advantage of You
Part 2: Why an Exclusive Deal is NOT in Your Best Interest
Part 3: Social Media & Incentivized Traffic- What it Means to You
Part 4: Don’t Let Your Quality Traffic Get Mixed with the Junk

I get it- you want to get back to higher lead prices, so you go to the partner that you think will pay you the most. Let me know if any or all of these phases sound correct:


1. They bring you in and promise you the world, make you feel welcome and give you that warm and fuzzy feeling.

2. As the relationship goes on – customer service drops, payments are late on a regular basis with no explanation and you are totally in the dark,  they force you into solutions that work best for them (like the ‘race to the bottom’ ping post).  You question it and they say they are doing all they can to get you best pricing (which is a lie).  So, in order to keep getting what you think is best pricing, you oblige them.  You are doing your part to sustain the partnership, but they have asked for your help while giving you nothing in return.

3. They have treated you like shit and now they start dropping pricing, giving you ultimatums and asking you to sign an exclusive in order to preserve the payout you are receiving.  Their hope is to make you feel trapped and unless you flex your muscle, you are.

Unless you are with a select few partners in the industry, you are in one of the above situations.  The current companies leading our industry don’t believe in you the affiliate, or your ability to create and market ethically or sustainably.  In their strategy, they don’t have accountability to you, only to their investors or shareholders.  They believe that suppressing your abilities is what will get them their results.  They use you. Short term this may be best for your pricing, but long term it isn’t in your best interest. If you question that, you aren’t coming to terms with what two years of this type of behavior has done to the state of our industry.  We had an exceptionally healthy industry that is very, very sick right now.

There are a few companies out there who have the correct perspective when it comes to affiliates. Unfortunately, they are not the current market leaders.The right philosophy is to give you every resource and every dollar available to ensure your success in the marketplace. Our business is only successful if our affiliates are successful; we believe in a real reciprocal partnership.

Affiliates, your core competency is driving quality traffic to your website.  It is engaging the consumer to complete the process of shopping for insurance. It is the companies that you send your traffic to who have the core competency of monetization, relationships, and technology. Everyone has their function, but the industry leaders right now are bullying you with their position in the chain.

Most lead buyers out there believe the volume you come with is your full potential, and they will squeeze your prices because they don’t believe in your upside.  But they do more than just fail to recognize your potential, they acquire websites that are your direct competition and with their higher prices suppress your rankings.  And the crazy part is that you are funding these acquisitions that aim to kill your presence in the marketplace.

I would argue that given the current pricing and state of the market, you are not even close to your volume potentials. By ripple effect your quality isn’t near what it used to be either.  I believe if we get you more money and better feedback loops you will once again align yourself with higher volumes and quality as an immediate byproduct.

I challenge you next time you see a top executive in our industry, ask them how they feel about affiliates.  My guess is that even if their lip service gives you the answer you want to hear, their eyes will shift and they will be uncomfortable.  I know this because I have heard their philosophies first hand.  They rely on you to sustain and grow their business, but if they had their druthers they would squash you at first chance. You can also gauge how they feel about your relationship by how often your Account Manager picks up the phone to talk to you.

We are far from perfect, but I can promise you this; we will do everything in our power to encourage your growth and success, if there are roadblocks along the way we will always pick up the phone and work through them. We will continue the quest of increasing pricing by bringing on direct source buyers, strategically partnering with ethical leaders that have the proper philosophies, and weeding out the junk traffic to make your traffic more valuable. There are good guys out there, even if you don’t sign with us we will help you find the best solution for your business. Our mission is to turn this industry around and do right by the affiliates as well as the lead buyers.

Help us change the industry and take back the pride lands, by not letting your provider take advantage of you.  It’s like the song “We’re Not Gonna Take It” from Twisted Sister.

We’ve Got The Right To Choose And – there Ain’t No Way We’ll Lose It -
This Is Our Life, This Is Our Song – we’ll Fight The Powers That Be Just -
Don’t Pick Our Destiny ’cause – you Don’t Know Us, You Don’t Belong -
Oh We’re Not Going to Take it Anymore.

Affiliates, whether you like this song or not you need to sing the message from every rooftop and make sure your provider is hearing it.

Watch for ‘Part 2: Why an Exclusive Deal is NOT in Your Best Interest’’ next week.

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Exciting News – JON KELLY JOINS THE MOSS AFFILIATE MARKETING ADVISORY BOARD

Thursday, April 28th, 2011

Henderson, NV— April 28, 2011—Moss Affiliate Marketing, one of the nation’s leading insurance affiliate networks, announced that Jon Kelly has joined the company’s advisory board, effective today.
Jon Kelly is currently the CEO of This or That (thisorthat.com). This or That is a website that keeps users updated on the most controversial news topics and allows them to crowd-source decisions to their friends. Kelly has been an internet executive since the late 90’s.

“We are so honored and excited to have Jon join our advisory board. His forward thinking and strategic insights are going to push our rapidly growing company to the next level.” says Moss Affiliate Marketing CEO Paul Moss.

Previously, Kelly ran the Insurance division for internet media company QuinStreet, Inc (QNST) and was the President of SureHits, which was purchased by QuinStreet in April of 2008. Prior to SureHits, Kelly was a co-founder and Marketing VP for the venture-backed insurance startup eCoverage.

Kelly notes, “I am excited to be a part of this innovative team of top insurance experts. Moss has compiled an incredible team with deep industry experience. Look for this company to continue producing big wins with our partners.”

Kelly has also worked in strategic marketing at Oracle Corporation and as a strategy consultant at Mercer Management Consulting (now Oliver Wyman). He earned a Bachelor of Arts degree in Economics and Political Science from Stanford University.

About Moss Affiliate Marketing
Moss Affiliate Marketing (www.mossaffiliatemarketing.com) was founded by Paul Moss formerly of Insurance.com in 2008. Moss Affiliate Marketing is one of the leading affiliate networks in the insurance lead generation industry serving auto, home, health and life insurance verticals. Moss Affiliate Marketing is a company that believes in the power of the affiliate. Building on over 10 years of hands on experience driving many multi-million dollar affiliate programs, Paul Moss created Moss Affiliate Marketing with the concept of profitability and scalability. This occurs by focusing on setting the right expectation for the consumer, generating and delivering leads that convert to the lead buyers, and putting marketing dollars back into the hands of the affiliates.

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Going Exclusive with your Affiliate Advertiser

Tuesday, August 31st, 2010

Please, please, please tell me that you are not doing this. If the company you are working for is asking for an exclusive… they are scared you are going to leave because they don’t have best pricing. They want to limit your ability to shop… because they know you will find better.

It’s not like a relationship… in a relationship you ask for security because you want commitment to start a family… you want commitment so that you don’t catch an STD… or, maybe because you love them and they love you and that is a great way to show it!

Unless you are some perverse person- you are not going to start a family w/ your affiliate program, you certainly aren’t going to sleep with it (unless you find yourself with an attractive account manager at 4:00am at a conference in Vegas drunk as a skunk), and if you are in love with your affiliate program then you need a life.

Ever since I have been in this industry- even when I knew I had the best payouts by a long stretch I have always encouraged affiliates to continually test at least 5% of their traffic somewhere else. Why? If your affiliate program cares about you they would want you to have your eggs in a few baskets. What if their servers go down- who do you switch to on a dime? If someone acquires them and squeezes your margin you need an out… where do you turn? If they care about you they won’t lock you in to something that doesn’t make sense for you.

Look at it this way… let’s say Nike comes out with an awesome shoe. You freaking love it!! However, in order to get the shoe you have to promise to buy Nike’s for the rest of your life. Would you do it? Nike now has the power to get lazy, produce a terrible product- and you will be stuck with it. It creates inefficiencies in the marketplace- and the person getting the short end of the stick is you.

Just be careful- going exclusive gives the advertiser all the power, and allows laziness to creep in. You are at your best, and have the best opportunity if you can continually hold your program accountable. Have a great day!

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The Loyalty Question…

Friday, July 24th, 2009

The Loyalty Question…

I know, I know- tough topic… and one nobody likes to broach- but one we have to.

Do you stay loyal to your affiliate program even if it is no longer your best solution?
You know what I am talking about… and I have a number of feelings on this.

Instinct is to say ‘hell yes I will stay with them through thick and thin!!!’ But that isn’t necessarily the right answer. After all this is business… and you have an obligation to you, your family, your employees to do what you can to make it work to the best of your abilities.  It’s important to give your existing partner all due respect and consideration through your decision-making process.  Other than that, you need to do what you need to do.  Let’s broach this subject in more detail and run through a couple scenarios.

1st: Times/needs change. This is a fundamental process in business. Let’s take for example entrepreneurial CEOs (and, yes, this might hit home for a lot of you). The start-up CEO isn’t necessarily the one who will serve it best when the company goes public. It’s a reality- and a lot of successful businesses crumble because the CEO can’t let go when it is appropriate.

Let’s take another example… market dynamics changing. Back in the early 1900s when cars started to steal the scene- horse and buggy dealers held their ground and said cars were a fad (kinda like the modern day computer- right ). I bet you could only name one horse and buggy manufacturer. Cadillac… yep, that’s right, they were the only ones to start producing cars instead of standing their ground producing horse and buggies.

My point is not to drop your existing solution on a dime… my only point here is that times change- and it is up to you to decipher what is best for your company through the transition.

2nd: Just because it is expected doesn’t mean it should happen. The best example I can come up with here is relationships. Either you or a friend has had them… that relationship that is just comfortable and there is the fear of the unknown that comes with a break up and you don’t want to hurt their feelings. It’s not that you don’t care about the person- you just know they aren’t right for you long term. And, ultimately this means that you aren’t best for them either. But you stay- just because you feel like you should stay.

So let’s take Jason Mesnick from the Bachelor (and, yes, I do enjoy the bachelor and the bachelorette. Seriously- all these supposed studs, babes get in a room and fight for one person, living with each other like a twisted pre-polygamy nightmare taking sloppy seconds, thirds, and fourths… it is wicked good entertainment). At the end of Jason’s 25 semi-babe rainbow he chooses this girl Melissa. Then they date for a few months and there is this update show on national tv. Jason decides this is the time to break her heart and tell her that he has fallen for someone else. All this after they jumped into a beachfront pool, in their formal wear, with his son, at sunset… seriously, the nerve of this guy. But Jason’s mistake wasn’t changing his mind- or choosing the girl he actually ‘loved’- it was the forum and way in which he did it.

Let’s get out of this sappy talk- and tie it back to the topic at hand. It is ok to test other networks, programs, medias your affiliate program doesn’t cover… just do it the right way. Here are my rules for trying something new:

1. Give your current affiliate program a heads up- not nice to go behind their back. Be forthright and honest about your reasons for change
2. Let them try to assist you if you want them to- ultimately you could help them shore and existing weakness and they could be exceptionally grateful
3. If you are sending existing traffic- only test a small portion to start
4. Before you send all your traffic over make sure the new program is as sustainable as your existing program. More money for 2 months is not near as much as less money for 3 years
5. Once you do switch let your previous affiliate program know where they need to be in order to get your business back
6. Upon switching- keep the relationship warm… ask them if they have new offers or something else you could try.

Don’t break the news like Jason, don’t be that CEO that holds on too long. Make the best decision for your business. Sometimes it is change- and sometimes it is not.
Good luck!

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The Advertiser Who Doesn’t Get it and Thinks You’re the Competition

Thursday, July 23rd, 2009

Ok- you know this scenario… you sign up for an affiliate program- and you may or may not get attention from their management team. You have some successes and you start to get better and bigger and then you get your fee reduced, completely ignored, or even worse- cut altogether. Whether or not this has happened to you- it is a reality in our business- and while I may not have perfect solution- I thought it would be a good idea to write about because it is prevalent.

I think first you need to get in the mindset of the advertiser… so go back to 13… it might take some of you a while longer… but go ahead and do it… 13… zits, lockers (and that little 3×5 mirror in lockers), pee-chees, your first cigarette puff, first kiss, raiders starter jacket, lemonheads, lord of the flies, piano lessons, ALF, chores, pre-algebra… etc. Your 13 might look a little different but you get the point. Ok- so now that your brain is back to 13 think of how you thought of your parents, teachers, or virtually any authority. They were a necessary evil- right!?! For instance- your parents wouldn’t let you stay home alone while they went away on vacation (so you were mad at them)- but you needed them to drive you around (so you needed them). They wouldn’t let you skateboard (so you were mad at them)- but they were your financial support (so you needed them). Same thing for teachers… they would call your parents (so you were mad at them)- but they also held the key to your grade which led to privileges (so you needed them).

At 13 you thought authorities were the bad guys. Many advertisers who don’t get it view you from the same perspective a 13 year old views authority. And because there is this internal conflict for them- the message gets conveyed to you in several different ways. Typically instead of getting both the good and the bad- they only give you the bad: “no trademark bidding”, keyword restrictions, no emailing, lacksidasical reporting, no feedback on performance from their perspective, little communication, no marketing help, etc.

These advertisers look at you as a necessary evil. And, if possible would do away with the affiliate program at their first chance. They feel like you cannibalize their traffic, drive up marketing costs, misrepresent their brand, and ultimately blur their brand and products.  However, you drive them traffic they rely on to grow the business and subsidize overhead, et al.

Unfortunately I don’t really have a solution for this dilemma… I have consulted for nearly 100 companies at this point- and once the mindset is in place it is nearly impossible to shift the paradigm.

On the other hand- some companies really get it- they understand you are an extension of their company and offer more coverage in a marketplace that they couldn’t otherwise achieve. They give you tools, feedback, top creative, deep links, etc. If you have a chance- always try to align yourself with these companies- as you will likely have more success and less risk that the carpet will be randomly pulled out from under you.

So, just as a kid views authority as a necessary evil- some advertisers view you the same. For the most part, as time went on kids realized that authority figures were just trying to help the best way they know how. Unfortunately, as it stands now, affiliates have to carry the brunt of this burden.

Affiliates- prove these idiots wrong. Show them that you aren’t evil. Play by their rules when necessary. Show them that they are much better with you than without you. The reality is that distribution models are the backbone of American business in the brick and mortar world- and are becoming the backbone of business in the online world. Keep in mind we are in the early stages of this commerce- and just like brick and mortar distributors (Walmart, Macys, Giant Eagle) are viewed as true partners to “advertisers” (Nike, Johnson & Johnson, Hershey) the online world will come around and affiliate marketing will be as accepted as the rule, not the exception.

I think I might start filing in Pee-Chees just for old time sake… are they still around?

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