Affiliates Yearn For Standard Bearers

Affiliate marketing is entering its adolescent phase, but the lack of standards for delivering data is inflicting some serious growing pains. If the industry is to grow up as well as out, merchants and affiliate networks need to provide affiliates with consistent methods of accessing the data that feeds their development.

While nearly anyone with a Web address can create a static storefront with a few dozen links or banner ads, affiliates looking to stand out from the competition are finding it necessary to incorporate near real-time feeds of product information. These feeds allow affiliates to differentiate themselves by displaying daily promotions, available inventory and updated pricing.

Unfortunately, sales sophistication comes at a cost. Because many merchants and their network intermediaries continue to deliver data using 20th century technology and proprietary data formats, affiliates must develop custom applications for each partner relationship. This time- and resource-consuming process detracts from the goal of promoting products.

The State Of Disunion

Today most affiliates receive creative materials for banner ads and product information as text files delivered via email, or by downloading them from a merchant file transfer protocol site or password-protected Web site.

Chris Henger, senior vice president of marketing and product development for affiliate network Performics, says that the current process is one whereby affiliates are mostly responsible for retrieving the information. In cases where the merchants deliver information to affiliates, it’s usually formatted as XML data or comma-separated value files. But there is no consistency of formats or order of product names, categories or descriptions, Henger says.

Performics converts the merchant data into customized files for each of its 75 affiliates, which requires considerable data massaging and some human intervention, he says. However, he notes that even as technology advances, affiliate networks will continue to deliver information in multiple formats because of the lack of technical sophistication of many affiliates.

“There will always be some (affiliates) who are happy with cut and paste,” Henger says. And for affiliates who sign up to offer products from dozens, or even hundreds, of merchants, that’s a lot of cutting and pasting, which inevitably leads to embarrassing errors.

The level of technical expertise among affiliates varies tremendously, according to Kellie Stevens, president of AffiliateFair-Play.com, an industry advocacy group. Stevens says some networks have developed application scripts to somewhat automate the retrieval of data, and frequently affiliates “install them on the servers without knowing what they do.” And while some affiliates have a background in programming, “For some it’s a stretch just creating a Web page,” she says.

But getting pricing information and daily promotional materials aren’t the only items that have affiliates clamoring for data feed standardization. Most also need to get near-real-time data about their specific commissions, click-through rates on banner ads and raw sales data. The largest networks, including LinkShare and Commission Junction, use the same technologies to track those important affiliate statistics, but affiliates may still have to do some of their own number crunching to figure out the top-selling products and those that are merely taking up screen real estate. Some networks with fewer affiliates provide performance feedback via instant messenger.

Because affiliate marketers are by nature independent-minded and have a variety of opinions on how to streamline the data-sharing process, there is not likely to be a single data standard anytime soon, Stevens says. And because there is also no strong industry association to recommend or impose standards, affiliates will likely have to grapple with proprietary data feeds for the foreseeable future.

Networks Eye RSS

However, a few forward-thinking networks are embracing a standard from the online publishing world that simplifies receiving real-time data feeds. The real simple syndication, or RSS, standard was developed to allow news publishers to seamlessly share headlines and article content with other Web sites and is currently used by many media leaders including Yahoo, the BBC and Wired News. RSS standardizes the XML tags used to identify components of an article and is popular with many Web logs, which also use RSS to publish their own content so that other Web sites can link to it. Online marketers realize that the RSS standard could be used to define tags for product and pricing information and reduce the amount of programming needed to extract information. RSS data can be distributed via email or FTP, or automatically streamed to remote Web servers. To view RSS feeds, you need to obtain an RSS reader application, such as FeedDemon or NetNewsWire, or point your browser to a feed-reading service such as Bloglines or MyFeedster.

One of the early adopters of RSS is diamond jewelry seller Mondera of Bangkok, Thailand. Chris Sanderson, Mondera’s marketing and affiliate partner manager, says the company is turning to RSS because email “has started to reach its limit as a useful tool.” Affiliates, like the rest of the wired world, receive a high volume of spam, so they use email filters that frequently block the data files, he says.

“We needed an easy way to reach out to our affiliates that wouldn’t clutter their mailbox, that they could opt into É and that provides easy access to more detailed information,” Sanderson says. Shawn Collins, who runs several affiliate sites and merchant programs, including ClubMom, is making the transition to RSS for his data feeds. Collins recommends that companies disseminating information via email should switch to RSS because it can be used to get around spam filters. Collins uses NewsGator, a news reader plug-in for Microsoft Outlook that enables RSS feeds to be sent directly to folders without screening by spam filters. RSS enables Collins to more quickly manage multiple programs and affiliates. A small number of affiliates are starting to use RSS but, Collins says, “Most affiliates don’t realize that they are missing out.”

Merchants who aren’t interested in developing technology themselves or negotiating with affiliates are turning to consultants and affiliate management companies for guidance. These groups often minimize the technical hurdles of sharing data with affiliates by taking data in whatever format the merchants prefer and finding a method of matching it with the affiliates’ preferred means of communication. Michael Stalbaum, CEO and affiliate manager of UnREAL Marketing, says affiliates get what they pay for in making a technology investment and that many affiliates are happy using email and FTP files to find out how their shops and ads are performing. However, he notes that the quality tracking of referrals through a timely data feed is key in a performance-based industry. “Since you only get paid when you generate leads, you need to understand what is working and what is not,” Stalbaum says.

Affiliate marketers are looking at the networks to organize the data distribution process using standards such as RSS, according to Gary Stein, senior analyst at JupiterResearch. He says that any standardization is likely to come from larger players like Commission Junction, LinkShare and Performics.

Standardization of product and performance data would give marketers more timely insight into their customers and allow them to more quickly make decisions about promotions. “Product feeds are getting more in demand. If you can set up an automatic feed using RSS, you can do all kinds of things,” he says. For example, if prices change, you can automatically rotate the least expensive item to the top of the list. Stein says that while many marketers grab the cheapest technology to get the job done, “20 percent of the affiliates are really sophisticated and passionate” and are willing to invest in technology.

Blogs: The Interactive Affiliates

Blogs, which are often personal opinion, news and rumor Web sites, have attracted huge followings during the past few years, and they are now monetizing their popularity by becoming affiliates. Entrepre-neurial bloggers are now using scripts to combine their RSS-formatted content with affiliate links. This ensures that when another Web site uses content that features text links to merchants, the original blogger is credited with referring the traffic.

Dick Costolo, CEO of data feed services company FeedBurner, says several networks have asked his company to help them create a commerce solution leveraging RSS feeds. Affiliates who receive RSS feeds no longer have to read through emails or check the Web sites of all their merchants to see if new content has been posted. RSS is a “more efficient way of tracking Web-based content,” he says.

There is a substantial business opportunity to combine blogs and commercial publishing traffic with affiliate marketing, according to Costolo. He claims there are currently about 4 million RSS feeds being distributed, 95 percent of which come from bloggers. Affiliate marketers can have their referral IDs inserted into RSS content streams, enabling them to contextually link within articles while maintaining tracking information.

Costolo recently began working with one of the biggest fish in the affiliate stream, Amazon.com. The online merchant is streamlining its affiliate program using RSS to make it easier to track purchases and associate relevant sale items with content. For example, an affiliate that has content about books can scan the RSS feed to find related content that is continually updated. “We are giving publishers more options by enhancing their feeds,” Costolo says.

Merchants At Your Service

Affiliates looking to partner with the largest online sellers may be required to make a more substantial investment in technology, but in the process they can gain experience with the leading e-commerce standards. Amazon and eBay have granted access to their massive inventories via Web services application programming interfaces, or APIs. Web services are platform-independent applications broken into component functions that are used to share information over the Internet.

Amazon and eBay have provided Web Services blueprints detailing how affiliates can query their databases to obtain real-time price and product information using tools common to many developers, including Java, the simple object access protocol (SOAP) and XML. Through Web services, affiliate developers can access product images, perform searches and find related products through standardized APIs. “The focus [of the Web services initiative] is to give programmers the guts of Amazon’s technology so that they can build a storefront on top of it,” says Jeff Barr, program manager for Amazon’s Web services.

Combining Web services with RSS data feeds is a “great example of creativity” that enables affiliates to mass-produce dynamic Web pages, and “this allows small companies to compete with the bigger guys,” Barr says.

But don’t look for Amazon to provide comprehensive tools that enable affiliates to cut and paste some code or download a utility and immediately hang out their virtual shingle. Barr says the Web services method requires some programming, and third-party companies are filling the void by developing applications that are more affiliate friendly. However, affiliates who aren’t afraid to learn a few simple scripts and shop around for third-party tools could put up a basic site within a few days, he says.

Choosing A Path

Affiliates looking to promote products from many merchants must manage the tradeoffs of committing to create custom feeds for each partner with the overhead of implementing cutting-edge technologies such as RSS and Web services. Or, they can take the path of least resistance and join up with a single affiliate network.

“Signing up with an affiliate network is the way to go,” for most affiliates today, according to JupiterResearch’s Stein. He says it is the affiliate networks’ responsibility to be the trusted source “guaranteeing that all the clicks are being counted.”

However, some affiliates are leery of committing to affiliate networks without being able to understand the networks’ proprietary data feeds that are used to calculate their commissions, according to AffiliateFairPlay’s Stevens. She says the networks were created to intervene between merchants and affiliates, but now some affiliates are learning how the data feeds operate so they can police the networks.

Understanding what goes into your feed is never a bad idea.

John Gartner is a freelance writer living in Philadelphia. He is a former editor at Wired News and CMP. His articles regularly appear on Wired.com and AlterNet.org.

Being Ben Edelman

You’d be hard-pressed to find someone more knowledgeable or dedicated than Ben Edelman when it comes to the evils of spyware. The 24-year-old assiduously tracks the proliferation of adware from his own computer lab. He’s a fierce critic of spyware practices and has testified in several high-profile adware-related lawsuits.

Talk about overachievers: Edelman is a Ph.D. candidate at the Department of Economics at Harvard University and a student at Harvard Law School. He currently is analyzing methods and effects of spyware, uncovering affiliate commission fraud and examining Internet filtering efforts by governments worldwide.

DIANE ANDERSON: Where do you do most of your work?

BEN EDELMAN: I work primarily from my apartment. All the equipment is in my office, the second bedroom in my two-bedroom apartment. I currently have six PCs in my lab, though I’ve had more from time to time. In general, I install one spyware app on each PC, then test its behavior under controlled experiments. For some projects, I install spyware in virtual machines on my fastest PC – which lets me return the system to pristine condition for multiple rounds of tests of install-uninstall or for testing of many different programs in sequence.

DA: How did you get started researching spyware and adware?

BE: It was something I had long been interested in. My recent work focuses on the intersection of law and the Internet – generally including writing software to study whatever software I’m looking at. Programs that show extra pop-up advertisements are a natural candidate for study in this way, because by careful testing I can learn which ads are shown when, how the programs get installed, what personal data they transmit and so forth. I was thinking about these kinds of questions as early as 2001. My earliest publication in this field came in mid-2002, when I served as a technical expert in the case brought by The Washington Post, New York Times, Wall Street Journal and others against Claria (then Gator) as to its pop-up ads covering their sites.

DA: There seems to be a lot of confusion about what the differences are between behavioral targeting, adware and spyware.

BE: I think the differences are often surprisingly small. There’s a large class of programs that use behavioral targeting – meaning watching what a user is doing – to figure out what ads to show (an “adware”-type function) while also sending back information to central servers about users’ online activities (which some might call a “spyware” feature). So I see great overlap between the three terms.

The various programs using these methods have a lot in common. For one, users don’t generally want these programs on their PCs. For another, users don’t generally seek out even the most benign of adware programs. Instead, users get the programs through some kind of bundle, or auto-install (“drive-by”) that occurs when users visit certain Web pages. A further similarity: The resulting advertisements cover Web sites with, in general, their competitors’ sites – a result that I found incredibly surprising when I first experienced it, and that in my experience users continue to find surprising. What an odd thought that the ad you see, when you type in LLBean.com (and are otherwise looking at L.L.Bean content), is in fact an ad for L.L.Bean’s direct competitor!

Of course, there are other kinds of contextual advertising. Google shows ads according to what searches users conduct. Sometimes these ads are controversial – sites’ advertising being triggered by direct competitors’ brand names. But Google certainly isn’t sneaking onto anyone’s PC. The Google ads, at least, are within Web pages that say google.com, so even the most inexperienced user can always understand that the Google ads are there because Google put them there.

DA: What should affiliates and affiliate managers know about search engine cloaking?

BE: First, let’s step back for a quick definition: Search engine cloaking is a set of methods whereby sites attempt to boost their search engine rankings, primarily by giving search engines content different from ordinary users.

Cloaking is a risky strategy. It has rewards, but it has a downside too. For those with savvy competitors or critics, who might notice the cloaking and report it to authorities, the risks are particularly pronounced. Google’s FAQ says it may remove sites from its index, permanently, as a penalty for cloaking.

That said, to date the penalties for cloaking have been pretty limited. Cloak for a year, and you might never be caught. Even if you are caught, you might get at most a slap on the wrist, especially if you’re powerful and can convince Google to be lenient. So the fact is, lots of sites are using cloaking.

DA: What are you working on now?

BE: This year I’m finishing my last year of law school, and planning my dissertation for my Ph.D. in economics. I also have some ongoing testing of more spyware and stealware, work I expect to publish on my Web site in the coming months.

DA: What stealware is the most pernicious these days?

BE: It’s hard to know. If I knew which software were most problematic, I’d surely make it my highest priority! Generally, I try to keep an eye on the programs with the largest installed base – figuring that they’re the programs affecting the most users, and that they’re the programs best positioned to show a large number of pop-ups or to falsely claim a large volume of affiliate commissions.

DA: You’ve studied these programs for some time. What do you think are the biggest dangers facing affiliates right now?

BE: I think the biggest danger is complacency. Affiliates would be wrong to assume that all is well in the affiliate marketing space – that they can simply link to merchants, then wait for the money to come rolling in. Fact is, powerful outside forces seek to profit from affiliate marketing and garner their profits by interfering with the referrals made by other affiliates.

DA: What actions would you suggest affiliates take to protect themselves?

BE: I wish there were more that affiliates could do. As it turns out, the major stealware problems are problems for merchants, primarily, and for affiliate networks to the extent that the integrity and value of their tracking systems are called into question. Ordinarily, rule-abiding affiliates lose out when stealware seizes their commissions. But there’s not much an ordinary affiliate can directly do to address the problem.

That said, it’s always good for affiliates to be informed, and to help spread the word. Revenue readers are surely better informed than most. I’m a big fan of ABestWeb, where there’s lots of savvy discussion about which programs are doing what. Those affiliates who have personal relationships with merchants can learn what’s going on and can help keep their merchants in the loop, especially as to programs found to target their merchants.

DA: You write about 180solutions, WhenU, Claria. Which companies are the most egregious violators?

BE: I was, and remain, particularly concerned about the behavior I have observed from 180solutions software. 180’s software was setting affiliate network cookies even on “organic-traffic” type-ins, where users reached merchants’ Web sites directly (not through any other affiliate). So merchants would be paying commissions to 180 for traffic that resulted from their own background marketing efforts. 180 was also overwriting cookies set mere seconds before by other affiliates – so merchants would be paying 180 when the commissions should have gone to other affiliates. These activities had been going on for at least six months when I began to write about the problem publicly. But somehow the existing processes – merchants’ fraud control efforts and affiliate networks’ efforts – had failed to detect what was happening, or to do anything about it.

Claria is notable for continuing to be installed on a huge number of PCs, some 40-plus million, according to recent reports. That’s a lot of users getting extra pop-up ads!

DA: What can be done about them?

BE: To the extent that these programs set affiliate cookies in violation of merchants’ and networks’ rules, I would ordinarily expect merchants and networks to detect the behavior and to issue sanctions, presumably including forfeiture of ill-gotten commissions. Litigation also seems like a possible way forward. After all, merchants might want refunds of commissions wrongly paid six months ago, not just of the most recent months of commissions not yet paid to stealware companies.

In thinking through enforcement options, it’s important to realize that affiliate networks face some odd incentives here. Remember that merchants pay networks a share of the amounts merchants pay affiliates. For example, if a Commission Junction merchant pays $10,000 of affiliate commissions, CJ’s 30 percent fee might be an additional $3,000. Usually, this is a good thing: Networks make more money when affiliates make more money, so networks have an incentive to stop merchants from cheating their affiliates. However, networks also make money when “stealware” affiliates claim commission they’re not entitled to. So networks face an incentive to look the other way and to allow or even to promote programs that claim affiliate commissions in violation of merchants’ and networks’ rules.

Set against this incentive are networks’ overall reputations for honesty and integrity: If the networks try to cheat the merchants too much, or if the networks let the merchants get cheated too much, then networks’ reputations are likely to go down the drain. But these forces are in tension, and my sense is that lots of merchants are coming to question whether they can count on networks to make sure affiliates, especially affiliates using software downloads, are in compliance with the necessary rules.

DA: What role does government play? What are your opinions about the various bills?

BE: I’d love to see legislation that truly addresses the problem of unwanted software getting on users’ computers. So far, though, I’ve failed to see much legislation that addresses the subtlety of the situation here.

The real problem, as I see it, is defining user “consent.” It turns out to be pretty easy to get a user to press an “I accept” button – especially if that button is in a box that looks official, or if it comes as one step in a many-step process of installing some software the user actually wants. But what should we infer from the user pressing “accept”? Can the user, with one quick click of a mouse button, allow a software distributor to claim commissions on the user’s every purchase? Allow the distributor to install whatever software it wants, from whatever third parties, at whatever point in the future? Can the user authorize the software provider to create on-screen advertisement displays that are, to many users, not just annoying but also misleading and confusing, and that many online publishers regard as damaging to their brands?

Then there’s the problem of licenses not actually shown to users. In many drive-by installs, the user gets a message like, “Do you want to, after reading our license (click here to view it), install [program name]?” How should we understand this prompt? If a user clicks on “yes” without reading the license, is the user still bound? What if the link were broken, such that clicking on the license link didn’t actually produce a license? If the unread license claimed “user will pay software provider $100,” I suspect we’d all consider the license unenforceable. What is so different when the license instead says, “We will cause your PC to show extra pop-up ads”?

I’ve been surprised at how many courts have been willing to accept the “consent” argument – giving so much weight to a user’s thoughtless and hurried press of the “accept” button. Most legislation also places great significance on “I accept” – sometimes requiring that users be given specific information before they accept, which I think is a good start, but ultimately letting users accept almost anything, no matter how one-sided. I’m not usually one to intervene in free markets – so I, too, have the instinct that if users actually want this stuff, we should let them have it. But my experience is that few users actually do want it. Instead, they’re just not paying attention when they “accept.” So I think there’s a role for government to be helpful here, in requiring consumers to really think before they leap, to read a few screens of disclosures and to press a few different “accept” buttons in a procedure reminiscent of signing a rental car agreement. The formalism of the multiple steps of acceptance might go a long way to helping users understand that pressing “I accept” is actually a big deal.

DA: What are your biggest current concerns?

BE: The current fight over unwanted software on users’ PCs actually seems to me a very big deal. As a society, how do we make sure that users have the freedom to install what they want on their own computers, yet that big companies can’t trick users into signing away (or should I say “clicking away”) their rights for nothing? In the real world, we’ve built up various kinds of unconscionability laws – a prohibition on various kinds of misleading real-world offers that make a user think he’s getting one thing, when the truth is far removed. Can we find the right online balance? Or will corporate interests run rampant and seize users’ computers for their own benefit?

More generally, I’m interested in the balance between public and private on the Internet. The fight over spyware ultimately comes down to how easily users can give up their own desktops – how much of a showing a software company must make to defend its right to be on a user’s PC, when the user quite likely didn’t actually want it there, but when the company claims the user pressed “accept” and granted permission. We shall see.

DIANE ANDERSON is an editor at Brandweek. She was the managing editor of Revenue Magazine for Issue 4 and she previously worked for the Industry Standard, HotWired and Wired News.

The Race to Embrace

Online marketers and merchants are quickly adopting new technologies such as blogging to help drive traffic and sell products.

Buzz Bruggeman, founder and CEO of ActiveWords, says his company has spent just $600 to advertise its ActiveWords software application. Yet thanks to his blog-centric marketing philosophy, ActiveWords was named the Third Best Software Product of the Year by Jupitermedia. The application has also been downloaded more than 100,000 times. Speaking in San Francisco at the Business Blog Summit in August, Bruggeman said more than 60 percent of those downloads come after people read the blog.

“It’s been a blessing,” Bruggeman says.

He’s not the only one getting good results. D.L. Byron, principal of Textura Design, says that his blog gets more than 1.5 million page views per month and the company has sold more than 50,000 of its Clip-n-Seal gadget as a result of the company’s blogging efforts. They have also expanded their markets to Ireland and the Caribbean, as well as into new industrial market spaces – such as getting orders from NASA – based on people finding them via the blog.

Blog On

New research is coming out rapidly, and figures are changing quickly. And while the exact numbers on the size of the market vary widely, most agree that the blogosphere is growing by leaps and bounds.

Perseus Development Corp. randomly surveyed 10,000 blogs on 20 blog-hosting services and found that as of June 2005 there were 31.6 million hosted blogs created on services like Blogger, LiveJournal, Xanga and MSN Spaces. Ten million were created in the first quarter of 2005. By the end of 2005, Perseus expects there will be 53.4 million blogs.

In August, some research reports put the number of blogs at more than 70 million worldwide.

According to a study conducted by Pew Internet & American Life Project in early 2005, 6 percent of the entire U.S. adult population has created a blog.

Technorati.com estimates there are approximately 900,000 blog posts every day, or 10.4 posts per second. The blogosphere continues to double about every five and a half months. A new blog is created about every second; there are over 80,000 created daily. About 55 percent of all blogs are active, and close to 13 percent of all blogs are updated at least weekly.

So there is no doubt that blogs are being created, but who is reading them?

According to two studies by Pew, 16 percent of U.S. adults, or 32 million, are blog readers.

A June report from market researcher comScore, sponsored by SixApart and Gawker Media, states that 50 million Americans, or 30 percent of all American Internet users, visited a blog in the first quarter of 2005. Traffic to blogs increased by 45 percent from the first quarter of 2004, according to the study.

The average blog reader viewed 77 percent more pages (16,000) than the average Internet user who doesn’t read blogs (9,000 pages) for the first quarter of 2005. The report also found that blog readers average 23 hours online per week, compared with the average Web user’s 13 hours.

The comScore study also found that blog readers are 11 percent more likely than the average Internet user to have incomes of or greater than $75,000 per year. Similarly blog readers are 11 percent more likely to visit the Web over broadband either at home or the office.

The good news for online marketers is that blog readers tend to make more online purchases. In the first quarter of 2005, less than 40 percent of the total Internet population made online purchases. By contrast 51 percent of blog readers shopped online. Blog readers also spent 6 percent more than the average Internet user, the comScore study reports.

Mind Your Business

So it’s no surprise that businesses are trying to leverage this phenomenon. For merchants and online marketers, using the Internet journal format of blogs allows businesses to talk directly to customers, generate product buzz and encourage consumer loyalty, while bypassing traditional media outlets such as newspapers and magazines.

At press time there were no exact figures on how many companies, executives and employees were blogging. Pete Blackshaw, chief marketing officer for Intelliseek, estimates that there are more than 150 official corporate blogs, with hundreds more in the works.

Big companies are getting into the act. General Motors Corp. Vice Chairman Bob Lutz has a blog (FastLane.GMBlogs.com) that gets between 150,000 and 200,000 unique visits a month. So does Sun Microsystems President Jonathan Schwartz’s (Blogs.sun.com/jonathan), who often uses his blog to take on Sun competitors and market analysts. His blog gets about 300,000 visits a month.

Both Lutz and Schwartz have written several blog entries that raised eyebrows, but corporate blogs don’t have to be controversial to attract attention. Stonyfield Farm, a New Hampshire company that sells organic yogurt and ice cream, has five blogs (www.Stonyfield.com/weblog). Aircraft manufacturer Boeing also uses a blog to promote its brand. Randy Baseler, vice president of marketing for Boeing Commercial Airplanes, made his first entry in Randy’s Journal (www.Boeing.com/ randy) the day before rival Airbus unveiled its A380 super jumbo jet.

Google has launched a blog explaining the ins and outs of its AdSense program (adsense.BlogSpot.com) to publishers. The effort to make AdSense’s workings more transparent offers optimization tips and features descriptions to prospective and existing publishers in the AdSense network and is updated three times a week by a variety of “engineers, product managers, product marketing managers, and operations staff” on the AdSense team. Google’s AdWords program has had its own blog since May.

For online marketers the idea is to be part of the conversation in your space and to get noticed, according to Dave Taylor, author of The Complete Idiot’s Guide to Growing Your Business with Google and well-known business blogger at www.Intuitive.com/blog.

Taylor suggests online marketers offer something of value to visitors. “Communicate with people to show them you are an expert in your area and give them a reason to buy from you,” he says. “So if you are an affiliate that sell laptops, write laptop reviews and blog about that. Include how-to’s or product guides. Blog about maintenance issues. You will give people a reason to trust you. It builds credibility.”

One often-cited story of a blog propelling someone to success is Thomas Mahon, a Savile Row tailor with a blog at www.EnglishCut.com, in which he discusses in great detail the specifics of creating expensive, custom suits – everything from buttons to selecting the right wool. Hugh Macleod, a top-10 blogger, wrote about his pal Mahon, who at the time was having trouble just paying his rent. That gave Mahon’s blog a huge traffic spike and suddenly his sales started to climb. He went from making two suits per month (at $4,000 each) to making 34 suits per month.

Mahon has also been able to expand his market beyond London. In fact, now when Mahon wants to travel to a specific location, such as New York, Los Angeles or Hong Kong, he simply lets his blog readers know and once he’s gotten orders for at least four custom suits he books his travel – a far cry from scraping by to pay his rent.

While these types of success stories are not uncommon, there is a limit to how many times lightning can strike.

“Blogs will help some affiliates become more important,” says Shel Israel, coauthor (with Robert Scoble) of the forthcoming book Naked Conversations: How Blogs are Changing the Way Businesses Talk with Customers. “A few will increase their sales by orders of magnitude. Then they will be imitated to death and, suddenly, no one will be unique anymore. It’s very important to be first with a unique story to tell. It becomes much harder to be second or third.”

Say No to Faux

Unique is good. But Taylor advises against getting too personal in a blog related to your business. “This is a business communications tool. You need to stay on topic. Talk about movies and personal things in your personal blog. Some bloggers think it should all be intermingled. I don’t.

“What if I have strong religious beliefs? That might conflict with the views and opinions of some of my readers and then I would lose business. That’s bad business. Use a blog to build credibility, not the cult of personality.”

Most agree that showing authority and knowledge about a topic as well as passion help make a good blogger.

“Personality is a word that makes me flinch,” says Israel. “You want to be professional and authoritative, but not boring. Boring is death in the blogosphere.”

Taylor says it’s the same principle that should be applied to traditional advertising – it’s about the product, not the personality. “That was the problem with the Dell ad campaign: ‘Dude, you’re getting a Dell.’ It was counterproductive because you want people to think Dell, not dude.” That issue proved to be particularly problematic for Dell when its spokesman for that campaign was arrested in New York and charged with possession of marijuana.

Some big companies are employing corporate bloggers. Microsoft hired Robert Scoble, whose blog Scobilizer is one of the most popular. Though for most affiliates and online marketers it might not be financially feasible to hire a blogger.

But there’s nothing that will destroy your credibility quicker than creating a fake blog. Most industry watchers and blog experts agree consumers can spot a fake blog immediately. They pick up on the insincerity instantly. Fake blogs simply stir up the ire of blog readers by disguising the fact that they are really ad campaigns. McDonald’s made this misstep when the company posted a new blog in advance of a Super Bowl campaign about a Lincoln-shaped french fry.

Steve Rubel, vice president of client services at CooperKatz & Co., a New York public relations firm, who also had a blog (www.MicroPersuasion.com) suggests avoiding fake blogs or just regurgitating press releases.

“It’s about finding the intersection of your passion and what people care about,” Rubel says. “Hopefully, they overlap.”

Spreading the Word

If they do, you’ll likely get other bloggers and consumers talking about you or blogging about you. That buzz can help. If other bloggers are linking to your business, it increases your ranking on Google. That helps people find you.

Clip-n-Seal’s Byron says, “Sales come from search, not ads.”

But Bruggeman adds, “Blogs are not about eyeballs. It’s about the conversation.”

“Word of mouth is very important,” Taylor says. “It’s important to know how people are getting to you, not just how people are searching for you.”

But word of mouth can be a double-edged sword. Many fear the consequences of letting consumers freely express their opinions. Those with the fear aren’t sure about allowing readers to post comment in their blogs.

However, some bloggers allow comment, even negative ones, as a way to add a level of credibility. It’s an individual choice. Israel says he uses what he calls the Living Room Policy.

On his blog (www.ItSeemsToMe.com) Israel writes, “If you come into my home and you are rude to me or my guests, I will ask you to be more polite. If you persist in being rude, I will throw you out of my home and will not allow you back into the house. If you begin with the clear intent of being offensive, you will be tossed out and banned without warning. I also take a dim view of anonymous comments. I am suspicious of people who take a position and will not demonstrate the courage to reveal who they are. I often just dump out those comments whenever I feel like it. This does not mean that I don’t welcome disagreement. But if you’re going to come onto this site with a spray paint can in your hand, you’re out of here.”

While you can control whether to allow others to comment on your blog, you have no control over what others say about you or your company on their blogs.

For example: Jeff Jarvis, the creator of Entertainment Weekly magazine and a high-profile blogger (www.BuzzMachine.com), took Dell Computer to task for the company’s alleged refusal to fix or replace Jarvis’ broken computer.

BuzzMachine frequently receives more than 5,000 visitors a day, and an open letter that Jarvis wrote to top Dell executives was the most linked-to post on the blogosphere for that day, according to Intelliseek’s BlogPulse. The post was also either linked to or discussed by at least .01 percent of all blog posts written that day, according to BlogPulse.

Back before the Net, Jarvis might have been just another dissatisfied customer. But today his widely circulated criticism triggered dozens of other bloggers and hundreds of others to publicly complain about service they’ve received from Dell’s technical support.

That problem is not unique to Dell. Many companies are not prepared to handle how their customers can share their experiences virally, says Intelliseek’s Blackshaw.

In the end, complaints that appear in blogs can do as much damage as a negative advertising campaign. Prompted by the incident with Jarvis, Dell’s public relations department began forwarding complaints with personally identifiable information to the customer service department so that representatives could contact dissatisfied consumers directly.

Mark Cuban, the owner of the Dallas Mavericks basketball team and an investor in IceRocket, wrote in his August blog (www.BlogMaverick.com) that blogs have changed customer complaints.

“It used to be an old customer service mantra that ‘one upset customer can tell 20 people about how poorly your company performed, and those 20 people could tell 20 more, and your business could really suffer.’ Keep all your customers happy, and you won’t have to worry,” Cuban says.

“Those numbers are miniscule compared to today. In today’s world, one upset customer can write in their blog about how upset they are about your product or service and it could be linked to by any number of other blogs, which in turn are linked to by any number of blogs, which is in turn picked up by a TV news show. In 24 hours or less, tens to hundreds of thousands, if not millions, of people have heard the complaint, and your business and brand are at risk.”

Searching for Blogs

But before you can handle a potentially problematic situation, you have to know what is being said about you or your company and where it’s being said. It’s a good idea to subscribe to blogs with RSS (really simple syndication) feeds as well as use RSS to send out your feeds. As of August, just 11 percent of blog readers, or about 2 percent of U.S. Web users, were using RSS tools to manage blog feeds, according to a report released by Nielsen NetRatings.

Nearly 5 percent of blog readers use feed aggregation software, and more than 6 percent use a feed aggregating Web site to monitor RSS feeds from blogs, according to a Nielsen NetRatings June survey of 1,000 online users who had visited blog sites.

The report also found that 66 percent of blog readers either did not understand RSS or didn’t know it existed, according to the report, which is titled, “Understanding the Blogosphere.”

Another way to monitor who is saying what about your business is to use niche search engines like Feedster, IceRocket (to be renamed www.BlogScour.com), PubSub and Technorati. These search engines are already monitoring and indexing millions of blogs so they can be searched. Technorati tracks more than 15 million blogs, and that number is growing every week. In July IceRocket claimed to track 18 million blogs, up from about 15 million four months before.

Many speculate that paid search and contextual advertising will progress into the context of customer-created dialogue. Search will be less about acquiring customers and more of a tool to insert brands into conversations between individual people, markets and groups of like-minded folks.

So monitoring, analyzing and archiving that conversation is becoming valuable. And like most other areas of the Net, where there is great opportunity there is also the potential for fraud.

Another obstacle in the efforts to organize and search blogs is that some companies appear to be using computer programs to create spam blogs or “splogs.” The sole purpose of these splogs is for posting links to their websites. The problem for blog search engines is that when users query certain terms the served results can end up being links to these splogs, instead of to the consumer-generated content the searchers were looking for.

Cuban says these blog search engines are being spammed in monstrous proportions in the blogosphere because it’s so easy to do. He writes, “Blogs are coming at us left and right. We are killing off thousands a day, but they keep on coming. Like Zombies.”

He puts some of the blame on Google, which owns Blogger.com. The service enables users to set up free blogs. However, some say the onus is on search engines to come up with better algorithms, not on the blogging software to stop splogs.

Making Money

There are lots of blogs, but are online marketers making money?

Weblogs Inc. is a network of 80 blogs. It is generating a steady stream of revenue from network ads and direct ads. The network ads are automatically served by Google and Tribal Fusion, and direct ads are the result of contracts with such advertisers as Equifax, Pacific Poker, Palm, Subaru and Volvo. According to founder Jason Calacanis, the majority of the company’s revenues come from direct ads, which currently command a CPM rate of between $4 and $12, whereas network ads generate CPM between $1 and $4.

Weblogs Inc. generates more than $1,000 per day from Google AdSense alone and has recently surged as high as $2,000. More than half of Weblogs’ advertisers end up buying space on more than one of the network’s blogs, says Calacanis, but to interest a direct advertiser, a blog’s traffic must exceed 1 million page views per month.

John Battelle, co-founding editor of Wired magazine and founder of The Industry Standard, has started Federated Media, which will serve as an ad and marketing network for high-quality blogs. FM will function much like a book imprint or record label, aggregating like-minded blogs, (about 10 to 20 per category to start). The categories include technology, media, pop culture, entertainment/gaming and sports segments.

BlogAds has a network of 750 blogs. Advertisers have run the gamut from carmaker Audi to political and other special interest groups. BlogAds expects to have 2,400 ads on blogs for the month of August, up from 700 a year ago. The average blogger makes $50 a month from displaying BlogAds, but some bring in more than $5,000 monthly, CEO Henry Copeland says.

Advertisers can find the separate groupings, along with traffic numbers and prices, and do a partial or full network buy. The theory behind the new networks is that bloggers can group themselves together much better than a top-down organization – because of the large volume of blogs – and advertisers get to select blogs by category, and on top of it reach millions who don’t read the top blogs but do read myriad others.

And while blogs will never replace other forms of content on the Web, they do have a distinct role to play, according to Jon Gibs, senior research manager at Nielsen NetRatings. “While these sites will likely never have the traffic of some of the larger ad networks, blogs do have a specific role to play in the online advertising mix,” Gibs said in the report.

“Advertisers should look to blogs as a way to organically grow trends by leveraging the role of bloggers as peer influencers. By associating their message with the blog’s image, advertisers can legitimize new trends they are hoping to promote to a niche audience.”

It’s a Commitment

Israel says that most bloggers like to take the position that every business should blog, “but that’s just not true.”

“There is a tremendous time commitment. It’s not just about doing your own blog, but about seeing what others are saying and being part of the bigger conversation. If you don’t have the time or the inclination, then you shouldn’t be a blogger,” he says.

Rubel say it’s a lot of effort but “you get what you put into it.”

Still, even if you don’t have the resources or commitment for blogging, you can’t just ignore it.

“You can no longer ignore the blogosphere,” Israel says. “It’s here and it’s where the fastest-growing news is taking place. Its influence is enormous, and it’s continuing to grow. And it’s not going away. It’s only going to get bigger.”