The Ingredients That Go Into Spam

“Never watch sausage being made,” folks say, lest you would find the process so unappetizing that you’d never eat it again. Regardless of how you feel about Spam®, the venerable luncheon meat, all search marketers must understand the ingredients that comprise search spam.

In our last column, we explored the dangers of spam, which include bad publicity and getting banned from the search engines. We also looked at a spam technique called cloaking, in which spammers feed a different page to the search spider than what they show to real people.

This time around, let’s look at stupid content tricks. The goal isn’t to teach you how to use spam techniques, but rather to help you spot them on your site (oh no!) or on your competitors’ (so you can report them). Content spammers generally employ two kinds of tricks: page stuffing and doorway pages. Let’s look at each one in turn.

Page Stuffing

Content spammers treat their Web pages like a Thanksgiving turkey. They stuff as much extra content into each page as possible, hoping they’ll include something that search engines like. Let’s look at the three major types of content spamming tricks:

Hidden text

Don’t use tricky techniques to show the search spider text that is not seen when a reader looks at your page. In the old days (two years ago), content spammers tried displaying text with the same font color as the background color. Today the trendy spammer uses style sheets to write keywords on the page that are then overlaid by graphics or other page elements. Whatever the technique, if the search spider sees your words but people never do, that’s spam. The only exception to that rule is HTML comments, which are ignored by both the spider and the browser.

Duplicate tags

In times past, the use of multiple title tags (and other meta tags) was rumored to boost rankings. Although few search engines fall for that trick nowadays, spammers have adjusted. The same style sheet approach that can hide text can also overlay text on top of itself, so it is shown once on the screen but listed multiple times in the HTML file, adding emphasis for the repeated keywords.

Keyword stuffing

Also known as keyword loading, this technique is really just an overuse of sound content optimization practices. Do emphasize your target keywords on your search landing pages, but don’t overuse them. Dumping out-of-context keywords into an <img> tag’s alternate text attribute, or into <noscript> or <noframes> tags, are variations of this same unethical technique.

Search engines have gotten much better at detecting page stuffing in recent years, but the cat-and-mouse game continues. Each year, spammers develop new content tricks and search engines try to catch them.

Some extremely clever and hardworking people really can fool the search engines with advanced versions of these tricks. Most of the time, however, spam techniques are like stock tips: Once you hear the tip, it is probably too late; the stock price has already gone up and the search engines are already implementing countermeasures.

What should you do instead of page stuffing? Write your pages for your readers. Yes, use the popular keywords on your pages, but don’t repeat them endlessly like mindless drivel. Write engaging and informative pages that use the right keywords and you’ll attract the search engines. Moreover, when a reader gets to the page, your copy will persuade them to take the next step and buy something.

Doorway Pages

A few years ago, doorway pages were all the rage. Every search marketing “expert” was explaining how to create pages whose sole purpose is to appeal to search engines. The idea was that searchers came from the search engine to your site through a “doorway.” Some called them entry pages, others gateway pages, but the idea was the same. If your page exists only to get search rankings, it’s probably a doorway page.

In a sense, doorway pages are doors that only open “in” because they are not part of the mainstream navigation of your website. Doorway pages link to other pages within your website, but none of your other pages link to them.

Spammers use various techniques to get high search rankings for doorway pages, such as cloaking (which we discussed in our last column), page stuffing, and link spam (which we’ll tackle in our next column). Search engines have tightened up their detection mechanisms to avoid high rankings for doorway pages, but a smart spammer can still slip them through.

What should you do instead of doorway pages? Create search landing pages that are optimized for both search engines and people. Like doorway pages, search landing pages are designed to be the first page a searcher sees on your site when coming from a search engine. Unlike doorway pages, search landing pages are legitimate pages intrinsic to your navigation that are linked both to and from many other pages on your site. In fact, they are designed for people first and for search engines second.

Some paid search landing pages can be legitimately designed to be closer to doorway pages. Because you may want to target many more keywords for paid search than you can optimize for organic search, you can create paid-placement landing pages that are not part of the mainline site navigation – with links leading into the site only. The difference between these pages and doorway pages is they are not being used for organic search at all. (In fact, you should use a robots tag or robots .txt file to block them from organic search.) Because you are not fooling the organic engines with these pages, they are not spam.

For any pages that you want to optimize for organic search, just make sure they are heavily linked into the main navigation path of your site. That will ensure that the search engines treat them as landing pages rather than doorway pages.

Comedian Buddy Hackett joked that his mother’s menu consisted of two choices: Take it or leave it. The search engines’ terms of service (their rules for you to follow) are similar. Search engines decide which techniques are spam and there’s no higher court for an appeal.

Those who engage in content spam run a grave risk of having their sites banned by the search engines. So don’t be reckless. Stick to writing for readers and you won’t go wrong.

That’s it for content spam. In the last part of the three-part series, you’ll bone up on link spam, so that you’ll recognize the tricky link techniques that might fool the search engines.

Mike Moran is an IBM Distinguished Engineer and product manager for IBM’s OmniFind search product. His books (Search Engine Marketing, Inc. and Do It Wrong Quickly) and his Biznology blog are found at MikeMoran.com.

Getting a Reputation

If you didn’t see it, you probably read about Snickers’ Super Bowl advertisement, “The Kiss,” which featured two men unintentionally kissing after they were both eating the same Snickers bar. Immediately after the Super Bowl, much of the feedback in the blogosphere was that the ad was funny. But the next day two gay civil rights organizations denounced the ad as homophobic. The blogosphere reacted again, much of it negative about Snickers. By that evening Snickers pulled the ad and took down its website. The day after that, Snickers issued a statement expressing that they did not intend to offend anyone. For the remainder of the week, much of the mainstream media coverage was negative for Snickers and there was much debate back and forth on the Internet.

For weeks, the conversation raged online, which affected search engine result pages (SERPs). Meanwhile the press, including The New York Times and USA Today, picked over Snickers’ bad judgment and missteps. More than two months after that commercial aired at the Super Bowl, four out of the top 10 listings for the search term “Snickers” in Google’s SERPs were about “The Kiss” and three of them were negative.

“The Kiss” is the latest high-profile illustration of the long-term repercussions online conversations have on a brand’s reputation. The content of what is written on the Web not only affects the people who read it, it affects the rankings on the search engines and what the media chooses to cover.

The advent of consumer-generated media (CGM) has transformed the concept of brand management. Nowadays it is possible for a consumer to never encounter information created or endorsed by a company, but instead to rely completely on CGM for recommendations and insights. The bottom line, explains Rob Key, CEO of Converseon, is that “you no longer own your brand – your customers do.”

CGM includes community scoring programs like eBay, feedback rating systems like Yelp, opinion sites like Epinions, social networks like MySpace sites, and blogs. Blogs range from the very influential and highly trafficked, like TechCrunch and Jeff Jarvis’ BuzzMachine, to millions of average blogs that in the aggregate can reach tens of millions of readers.

When a company does something considered egregious, such as produce an offensive commercial or provide bad customer service, bloggers often react harshly and create a far-reaching buzz called a blog swarm, which can cause damage to a company’s reputation. In 2006, there were blog swarms that had serious long-term consequences for companies including Dell (dubbed “Dell Hell”), which started when Jarvis complained about Dell’s customer service on his blog, and another surrounding AOL, which began when a subscriber posted his phone conversation with a rude AOL representative to his blog.

Key explains that because blogs are spidered well (due to their large amount of refreshed content and inbound links) they can rank higher than other sites, including corporate sites. In the past, a brand could control the placement of their site with tags and by the way it designed the site’s pages. But Jim Nail, chief marketing and strategy officer of market influence analytics company Cymfony, says that currently corporate sites are getting outranked by consumer-generated sites “and frequently those are the ones that are negative.”

However, it’s not just the first or second listing on SERPs that brands should be worried about. Holly Preuss, principal of Granular Solutions, an online customer acquisitions services company, says companies should be managing the top 10 and particularly the top five because “above the fold is crucial.” Key agrees. He says it’s similar to how companies must manage their brand on the shelf in the supermarket: Companies must manage their top listings – “their shelf space” – to maximize their brands’ positioning.

Brands have to make their top listings a priority. An April 2006 study conducted by iProspect found that when users perform a search, 62 percent of them click on a result within the first page of results, and a full 90 percent of users click on a result within the first three pages.

Andy Beal, creator of the site Marketing Pilgrim, says sometimes companies find a negative post and think, “it’s only one blogger; it won’t have a long-term impact.” But then a blog swarm begins and the negative buzz ranks high in the SERPs. Then the issue reaches a whole new audience as mainstream journalists increasingly use search engines to research new story ideas.

Because consumers rely heavily on the Web as an authoritative source of information, managing a brand’s online reputation has become a top priority for companies. Strategy consultant Amanda Watlington says the participatory environment of Web 2.0 requires companies to monitor and measure their public perception so they are able to take necessary actions to preserve brand equity and maintain a brand’s personality. This necessity has spurred the development of new strategies, tactics and tools.

Monitoring Tools

Agencies like Converseon and Nielsen BuzzMetrics have tools for monitoring social networks, blogs and communities. They measure the volume of buzz, track the source and gauge the emotions of a comment – whether positive, negative or sarcastic.

But monitoring systems don’t need to be expensive or complicated. Granular Solution’s Preuss recommends that companies “think like a customer” and Google themselves. Companies can create RSS feeds based on keyword searches and narrow down the results to a specific domain with tracking systems like Technorati and Feedster. Sites like BlogInfluence.net and SocialMeter. com provide a snapshot of the credibility of any blogger by showing the audience-reach and popularity for the entered blog URL.

New tools are popping up all the time. Pronet Advertising launched Serph, a tool to find what is being said on social media websites. Do The Right Thing is a community that rates companies positively or negatively. Its goal is to hold big businesses accountable.

Once You Monitor, Then What?

Converseon’s Key says that once companies mine the conversation for detractors, they can separate them into two groups. Some are “reasonable” – they have a bad impression or a company had a bad experience with a company, such as poor customer service. And some are “determined,” such as the site StarbucksSucks.com, which feels Starbucks is ruining independent companies.

Catherine Seda, Internet marketing expert and author of the book How to Win Sales & Influence Spiders, says there is nothing a company can do about determined detractors, so companies should focus on the reasonable ones. There are a variety of ways to do this.

Companies need to reach out to bloggers. The sooner they react, the better it is to prevent potential longterm damage, says Marketing Pilgrim’s Beal. Preuss adds that when there is a complaint about customer service, the company needs to fix the problem and then engage the customer immediately by responding to that post.

Noah Elkin, vice president of communications at interactive agency iCrossing, says his company offers “proactive customer engagement” for their clients by responding to posts with helpful information, such as a link to a technical support page. Elkin stresses that they always indicate they are representatives for a company – “the No. 1 rule is to be honest about who you are; then you can participate in the discussion.”

An option for promoting a company’s brand online is to pay bloggers to evangelize it through a service such as ReviewMe. PayPerPost.com offers this service, but is requiring writers to include a small graphical button that denotes that a post is being sponsored. One of the tenets of Word of Mouth Marketing Association’s (WOMMA) code of ethics is that bloggers must disclose for whom they are blogging. To help craft disclosures, affiliates can seek advice at DisclosurePolicy.org, which was created and funded by PayPerPost.

Some experts recommend monitoring the buzz instead of trying to manage it. Cymfony’s Nail explains that there is no controlling what people say and the best you can hope for is to have your side of the story told. He says that “The Kiss” exemplifies this. It created an ebb and flow on the Web of people that started out attacking the ad and then started defending Snickers. Due to that, Nail says Snickers did not need to issue a statement.

For matters that require a timely response, some experts recommend using paid search (pay-per-click links). Preuss says that on the plus side, PPC links can show up in a couple of hours and they let the public know the company is aware of the situation. The downside, says Seda, is that people who might not have been aware of the problem will likely find out about it.

Some experts say that paid search is underused. For example, searching on the term “Wal-Mart sucks” yields negative results for the first 10 listings. Cymfony’s Nail says it is “foolish” that Wal-Mart does not have any paid links to sites where it could tout Wal-Mart’s economic benefits.

“For a company to protect its brand, they should be buying those words,” Nail says. But Marketing Pilgrim’s Beal warns that paid search “is a Band-Aid” and does not replace reaching out to bloggers directly.

An affiliate could mine blog buzz through a monitoring tool such as Relevant Noise’s pingMe notification system – so when someone posts about a product that an affiliate sells, the affiliate could buy relevant keywords.

One tactic for dealing with negative buzz, such as a product recall, is to issue a press release that addresses the concerns. Press release distribution companies such as PRWeb send releases to journalists’ email boxes and optimize press releases, which helps to increase the rankings in news engines such as Google News as well as in the general search results. When a press release ranks high in a search engine, it is one more spot a company’s competition or a negative listing won’t get.

Knock Out the Negative

Issuing a press release is one way that company information can gain a top search engine ranking, and when this happens, negative sites move lower and get moved off the page. Converseon’s Key describes this as pushing detractors off the “visibility cliff.” There are other ways to try to do this.

Post to top-ranking sites: Postings to sites such as Wikipedia or Squidoo can help a brand or affiliate push negative results down and get more exposure. When an affiliate posts to advice sites like LifeTips.com, it allows them to be seen as an industry expert on the things they are attempting to market. Granular Solution’s Preuss says if an affiliate blogs about cars and posts affiliate links on their site in a CPL deal with automakers and has rev shares with accessory retailers, then they could post on LifeTips.com a top 10 tip list for shopping for a new SUV.

Create a blog: Another tool for creating a positive listing and monitoring a brand is to create a blog, which can humanize a company and present its side of the story. If the comments are enabled, companies can get in touch with their most passionate visitors.

Optimize your site and create multiple domains: Author and IBM search expert Mike Moran explains that search results never contain more than two listings from any one domain, so brands should make sure their pages are optimized for the legitimate two listings (#1 and #2 are ideal). If the company has multiple domains (i.e., for subsidiaries) a brand can ethically optimize those sites for the company’s target keywords. Many companies have mini-sites, for which each has its own URL; for example, Starbucks has one for music, one for locations and one for its online store.

Use affiliate programs: Affiliate programs are a way that brands can get additional positive listings on SERPs. But affiliates pose risks because they can threaten the control of a brand. Watlington says brands have to make sure that affiliates, who are custodians of their brand, are in step because “companies spend a lot of money creating a brand and if an affiliate does something like use outdated creative, the brand is then altered.”

If a merchant does decide to have an affiliate program, it’s imperative for a merchant to monitor affiliates and make sure they are compliant with a program’s terms and conditions. For this reason, Converseon’s Key recommends that merchants start with tightly managed and honed programs.

The Merchant Mind-set

Merchants will need to decide if they are going to allow their affiliates to bid on their trademark terms, which tend to convert very well. Benefits include having offers for different types of users on the SERPs, keeping competitors off the SERPs and keeping competitors’ affiliates off the SERPs. 77Blue’s David Lewis says that merchants need to evaluate what is right for their brand and find trusted partners who will work with them to protect their brands through trademark bidding.

Many merchants are so wary of affiliates bidding on their trademarks that they completely forbid it for all affiliates. Super-affiliate Colin McDougall recalls an instance when an affiliate manager admitted that McDougall’s bidding had made a huge difference for their sales but still would not make an exception to the company policy – it was the “if we let you do it, then we would have to let everybody do it” mind-set.

This mind-set might be changing, however. A 2007 Marketing Sherpa study reports that merchants have become more lenient with the use of their trademarks in keyword campaigns. In fact, 29 percent of merchants say they allow bidding on use of their trademarks and 36 percent say they place some limitations on trademark bids.

Companies no longer have an option about whether they should participate in online communications. These conversations are going to take place regardless if the company is involved or not. For this reason, reputation management has become one of the most talked-about topics among merchant and affiliates. Just this spring, Neo@Ogilvy, Ogilvy Group’s digital and direct media unit, acquired GSI Consulting Group, which specializes in brand reputation. TNS, a provider of strategic advertising intelligence, acquired Cymfony.

The good news is that there are tools to monitor buzz and ways to push negative conversations from the eyes of the masses. Creating a blog, optimizing a company’s website, buying PPC, issuing quality press releases, contributing to high-traffic forums and becoming a part of the conversation on user-generated content sites are all methods whereby an online reputation can be managed.

No Borders

In 1492, Christopher Columbus proved that the world was round. In 2006, Thomas Friedman reversed that thinking by writing in his book, The World Is Flat, that the Internet, technology and diminishing trade barriers have created a global marketplace. We can now work and trade with people all over the world with an ease that would have been unimaginable even one ago.

Performance marketers are taking advantage of this more open and leveled playing field to grow their business across borders and oceans by using the skills honed in their home countries. Publishers and networks no longer must confine their opportunities to the 50 states, but through partnerships can reach out to the world.

However, just as American networks and publishers envision growing profits by going abroad, marketers in other regions are now aiming to do battle in the United States. Everyone should prepare for heightened competition.

The United States may have had the early lead in Internet adoption and e-commerce, but the world is catching up quickly. The EU, which has a population two-thirds larger than the United States, now has approximately the same number of Internet users according to research firm eMarketer. China is expected to have the largest community of Internet users by the end of the decade, and Australia and Japan have a higher percentage of citizens with Internet access today than the U.S. As more people go online, global competitors sensing the opportunity are developing operations on par with the U.S.

Europe Grows Up

Just a few years ago Europe was between 18 to 24 months behind the U.S. in affiliate sophistication, but those days are over. During the past few years TradeDoubler, Zanox and Commission Junction have expanded their networks throughout much of Europe and rival the U.S. in their ability to establish relationships and attract an audience. Publishers are expected to help online commerce in Europe to grow from $94 billion in 2006 to more than $200 billion by 2009, according to Forrester Research.

From a network-services, marketing-savvy and technology standpoint, affiliate marketing in Europe is now equal to the United States, according to Carl White, vice president of ValueClick Europe. (ValueClick is the parent company of network Commission Junction.) For example, network software now automatically adjusts the content for nation-specific language, currency and taxes, says White, adding that ValueClick’s European and U.S. networks use the same software. With an understanding of local markets and a bit of training, publishers can get a passport to market internationally.

ValueClick Europe has offices in four countries and saw revenue grow by 30 percent in 2006, according to White. He says that while standardizing on the euro for currency has helped to unite the region, familiarity with the business practices and legal differences of each nation are critical for affiliates to succeed. For example, skill gaming is allowed in much of Europe, while in some regions software downloads as promotional vehicles are less tolerated, White says. “Each market has its own nuances.”

William Cooper, chief executive officer of TradeDoubler, says his company learned that hiring local personnel who live in the country and have an intrinsic understanding of the cultural values and language is critical to growing an affiliate program. TradeDoubler, which started in Sweden and now has offices in 15 of the 18 EU countries in which it operates, grew revenue last year by 61 percent to $256 million.

Rather than trying to conquer Europe simultaneously, the company added one or two countries per year, according to Cooper. “I wouldn’t say for a second that it has been easy,” he says. While most of Europe has adopted the euro (with the exception of the U.K., Poland and Sweden), the unique tax regulations and business laws require time-consuming research before a network can set up shop in a country.

Cooper says that European networks have a more handson style than their American counterparts. “It is more of a consultative approach as we work on a daily basis with our publishers,” Cooper says. Focusing on account management rather than technology enabled TradeDoubler to spread across Europe, he says.

TradeDoubler’s publishers have asked the company about expanding its network into the U.S. and Asia, but for now the focus remains on Europe, according to Cooper. Earlier this year AOL attempted to acquire TradeDoubler, but shareholders rejected the offer.

The European market may become even more crowded should Performics enter the fray. Chris Henger, vice president of affiliate marketing at Performics, says the company is still debating expanding outside of the United States. “We have other priorities than an international distribution effort.” However, Henger says 2007 will be a year for international “investment and investigation” for the company. “We can decide based on demand whether or not to go international,” He says. His rival Link- Share is already in France and the U.K.

Steve Denton, president of LinkShare, says the focus in the U.K. is not about the merchants, which often have two or three different affiliate programs, but with the publishers.

He notes that because interactive agencies have a much bigger influence on advertisers’ affiliate programs in the U.K., its harder to have exclusive merchant deals with networks. Instead, that means that networks must work hard to woo publishers who often have to decide between offers from the same merchant who may have programs on several networks at the same time.

“As a network you need to look at the needs of publishers,” says Denton. “It’s about how they choose and why.”

Consumers-Border Conscious

While most of the trade and technology barriers to market across borders in Europe are crumbling, publishers may find difficulty in converting visitors because of consumer resistance to shopping internationally. According to a 2006 European Commission survey, while 27 percent of citizens have purchased something online, only 6 percent had made an online cross-border purchase.

European consumers say the biggest concerns about buying internationally include the security of transactions, potential problems in resolving complaints, differences in national laws regulating consumer transactions and higher delivery costs, according to the survey. Partially because of these perceptions, just 29 percent of EU retailers offer their products outside of the country, which limits the number of merchants available to publishers.

ValueClick’s White says the software and practices used in affiliate marketing and e-commerce has evolved to the point where the physical location of the publisher or network no longer restricts entering a new market.

“A publisher’s life is border-free,” says White. With a little guidance and local connections, publishers who are successful in one country can achieve success elsewhere, he adds. “A good business in one country is a good business in another,” he notes. He says it is becoming commonplace for U.S. affiliates to come to the EU, and the company also has affiliates based in South Africa.

Zanox, the network based in Berlin and with a U.S. office in Chicago, sees Asia as a fertile ground for affiliates, and has been among the most aggressive European networks in the region. The company has relationships with approximately 250,000 publishers in Asia, according to Holger Kamin, Zanox’s U.S. regional manager. Kamin says China, “with only 9 percent [consumer] Internet [access] penetration … has by far the greatest potential.”

TradeDoubler’s Cooper says his company currently is not active in Asia, citing the challenges posed by cultural differences. “Europe has been the focus for us,” he says. Nicky Senyard, CEO of Ecom Access, attended the Ad:Tech conference in Sydney and says there is considerable interest in affiliate marketing in the East. “The take-up in China and Asia is amazing,” she says. She predicts that Asia will follow Europe as the next quickly maturing affiliate arena.

Because of its ties with parent company Rakuten, LinkShare has established a strong presence in Japan.

From Global to Local

Technology has made it much simpler for publishers to participate in international marketing, including targeting the audience on a local level. Geo-tracking and geo-targeting are becoming standard features of affiliate and advertising software. The software prevents ads from being seen outside of their intended geography and should increase conversion rates.

Zanox, which works with publishers from 30 countries and five continents, uses geotracking technology to customize how publishers display content to visitors from different countries. The technology identifies the visitor’s IP address, and when used in conjunction with a geo-targeted advertising system, displays geographically relevant content to maximize revenue, according to Kamin. Advertisers in industries such as finance and insurance that can only offer services to domestic consumers do not want to pay for external leads, so Zanox prevents their content from being shown.

U.S. publishers can monetize their international visitors by signing up with an international network and then displaying relevant content to visitors regardless of their country of residence.

American publishers who enter the United Kingdom can tap into an audience of English speakers that will include some traffic from their home country, according to Malcolm Cowley, director of strategic accounts at the Buy.At network. Up to 25 percent of visitors to some U.K. sites are from the U.S.

Cowley says Buy.At’s network currently has many U.S. publishers who market U.K. products to a U.K. audience. It also works in the other direction, as Cowley says U.S. affiliates can enhance revenue by signing up with a U.K. network and automatically deliver relevant content to those visitors from their home by tracking their IP addresses.

Ecom Access’ Senyard says geo-targeting is a “great function for affiliates” to enhance revenue by serving foreign visitors. The company developed the software in-house and uses it to deliver custom advertising to its European audience through its ShareResults network. The company, which has offices in Canada, the U.K. and Australia, also has affiliates in Italy, Sweden, Finland and Spain who use the software to identify people from other regions and customize content to suit them.

Sophisticated geo-targeting software can identify the city of the visitor (or at least the city of their Internet service provider), which can be used to customize content for people living in a nation with regional differences in culture or language. For example, Digital Envoy’s geo-targeting software, which is used by Performics, maps Web addresses at the city level and can also detect for connection speed. So sporting affiliates can display different merchandise to footballers (or as we say, soccer fans) in Birmingham and Sheffield, or similarly target different areas of the U.S.

Coming to America

But just as technology has made it seamless for U.S. publishers to participate internationally, it also creates a window for foreign networks and affiliates to participate in the domestic market. In March, Buy.At opened a U.S. network without a physical presence, although executive Cowley expects to do so at a later date.

Buy.At chose to expand into the U.S. before operating anywhere else in Europe because of the common language and because the network already had relationships with many American advertisers. “We were looking to make it a two-way street because of brands we have in the U.S.,” according to Cowley. He hired veteran affiliate manager Andy Rodriguez to develop the network because of his local expertise and ability to develop the affiliate relationships.

Zanox’s Kamin agrees that there is considerable interest from U.S. and European publishers to work with affiliates on the opposite side of the Atlantic. Despite the maturity of the U.S. market, Kamin sees opportunity in creating vertical networks that develop market-specialized material.

Affiliate marketer and blogger Fraser Edwards, who works with Commission Junction in the U.K., visited the U.S. recently to learn more about the networks here and to meet with potential partners. He was surprised at the number and variety of specialty cost-per-action networks.

Despite the intense competition, he sees opportunity for international networks to enter the U.S. Edwards, who is based in Edinburgh, Scotland, says that by focusing on the quality of service delivered to affiliates, they could take business away from U.S. networks.

Edwards says European publishers who apply for U.S. programs using current domains are often automatically rejected, but they get around that by signing up with an American Web-hosting company. Content would need to be modified to give a local perspective and the language used in campaigns would have to be checked to ensure that it is familiar to a U.S. audience, Edwards says.

During the next few years publishers are likely to have a much greater audience to market to as more consumers go online. By 2010 more than 360 million consumer households worldwide will have broadband access, with nearly 40 percent of all connections located in the Asia/Pacific area, according to research firm Gartner. This will result in new affiliates and networks with international aspirations.

As author Friedman says, “Globalization 3.0” enables individuals to collaborate and compete globally. With global networks and software that automatically adjust for local currency, language and taxes, international online marketing has indeed become flat.

John Gartner is a Portland, Ore.-based freelance writer who contributes to Wired News, Inc., MarketingShift and is the Editor of Matter-mag.com.

Presidential Performance

Obama’s got one. So does Hillary. As does McCain. John Edwards has a good one. Rudy Giuliani, Mitt Romney and Bill Richardson also each have one.

It will come as no surprise that all the major 2008 presidential candidates have websites this election cycle. While they are not all of the same quality and some have way more bells and whistles, the sites carry news, video clips and the all-important areas for donations. What is surprising is how well the candidates have harnessed the power of the Internet and what tracking data can do to help their victory. And while the candidates gear up for an astonishingly early election season, it also means marketers and affiliate marketers can take advantage of the interest in this political period to further their cause or add a few ducats to their sales. But challenges still lay ahead.

The Internet as a political platform is not new – just look at the various blogs that have sprouted up since the 2004 presidential election, not to mention the various other new conduits for candidate conversation such as podcasts, user-generated video and cell phone text messaging. Remember that Howard Dean was the first – then virtually unknown – candidate to blog in 2003. This season candidates have more ways to get their talking points out.

Performance marketing network Performics in fact, recently completed a survey that said 42 percent of Americans will seek more information on the 2008 elections from the Internet.

“Campaigns have embraced Internet strategies to stay competitive,” Alexis Rice, project director of CampaignsOnline.org, says. Not only campaigns, but also mass-audience destinations have launched political areas such as MySpace.com’s Impact Channel, where users can drag candidate ads onto their own MySpace pages.

A Burst Media survey found that more than 20 percent of likely voters have actually already gone to a presidential candidate’s website. Of those, one-quarter have clicked on a candidate or advocacy group’s online advertisement. The study also found that use of the Internet to understand the positions of candidates outpaces all other forms of media. A quarter of likely voters said that going online was the best method to learn about the issues, which beat out TV (21 percent), newspapers (17 percent), radio (7 percent), magazines (4.4 percent) and other paper material (3.3 percent).

Back in 2000, before the dot-com bust, pundits and publications made fun of most candidates’ websites, singling out their old information, lack of transaction abilities and their stupefy-ingly bland sense of Web design. Today, just like outdated ASCII art or “site of the day” home pages, political sites have seriously evolved. Now the candidates and the third-party companies that help their digital campaigns are more than savvy; they are refreshingly cutting-edge and Web 2.0 in their approach.

The amount of money being spent and raised online for the elections is also evolving – albeit a little more slowly. Although PQ Media predicts the online campaign ad spend will top $40 million this cycle – up from $29 million in 2004 – it is still dwarfed by the $2 billion to be spent on TV ads alone. And while 38 percent of registered voters received telephone calls from campaigns in 2006’s midterm election push, only 15 percent got email from the candidates, according to Pew Research Center. Advocacy website MoveOn.org raised upward of $28 million in 2006 – the majority of that through online donations. The Center for Responsive Politics measured more than $100 million in online fund-raising by election day. Still it seems a drop in the bucket compared with the $2.6 billion in total 2006 fund-raising.

It may not be huge, but the revenue stream from online is worth tapping into. Candidates for House and Senate seats in 2006 were pleasantly surprised by how much they raised via the Internet. Democrat Joe Sestak earned a House seat in part from the nearly $900,000 he received in Internet donations; $88,000 of that from a single email blast. Democratic advocacy group Act- Blue touts the fact – in big numbers on its home page – that it has received $19,918,240 (at press time) through online donations since 2004. Not to be undersold, the John Kerry campaign in 2004 claimed it owed $80 million of its campaign funds to donations made via the Internet.

While no candidate is likely to refuse money from Internet donations, the biggest realization the Republican and Democratic parties have made – the Democrats more so because they were so challenged by muddled messages in 2004 – is that data is king. Since around 2001, the Democrats, after being demoralized by their defeat, have become conscious of the fact that the GOP simply had better voter data.

One result is that the 2008 democratic candidates have sleeker websites. Another is the Democratic National Committee hired Plus Three, a “progressive” digital marketing firm to build out a database of voters.

The data that Plus Three is going after is basically the most detailed demographics it can get by law; most urgently, email addresses, phone numbers, income and birth dates. Plus Three and the Republican counterpart – Voter Vault – together hold information on more than 165 million folks in their respective hard drives. The most coveted are email addresses because, as Plus Three states, it can mount email campaigns for a fraction of the cost of phone campaigns or TV and print advertising.

Fast Fund-raising

With the data at the ready, campaigns can send email blasts as news happens. Following on the heels of John Edwards’ morning announcement that his wife’s cancer had returned, an email went out that afternoon with a personalized message to all who had registered at Edwards’ website. He was the first presidential candidate to join Twitter (the mini-blog social network) and the first to announce his candidacy online by way of YouTube. On his website, Edwards has all the tech bells and whistles – with profiles on social sites 43Things.com, Bebo.com, blip.tv, Capital Hill Broadcasting Network, Care2. com, Collective.com, Essembly, del.icio.us, Facebook, Flickr, gather.com, hi5, LiveJournal. com, Metacafe, MySpace.com, Ning. com, PartyBuilder.com, Revver, TagWorld, vSocial, Xanga.com, Yahoo360 and YouTube. Edwards also has a Store button on the home page where T-shirts, buttons, mugs and stickers get their showing. Additionally there is a download area for podcasts and RSS feeds.

The week after Edwards broke the news about his wife, ActBlue reported the Edwards campaign received $540,000 through online donations. However, fellow democrat Hillary Clinton raised more than $1 million in online donations the week after her husband, former President Clinton, asked for contributions at the end of February.

The intersection of this highly charged political election and widespread technological advancements is something that marketers can also take advantage of.

CEO of search engine Powerset, Barney Pell, points out three examples of opportunities for online marketers: “First, a bookseller could create a special section on their site that organizes books according to political topics, issues and personalities,” he says. “Second, a company specializing in clean and environmentally friendly products could create a website focused on these issues,” adding that they could then track what the candidates have said or how they voted and then link the issues back to the company’s products. “Third,” he says, “companies could take a stand on issues or back candidates from social media properties. This level of authenticity, while risky, can connect with target audiences in a whole new way.”

Not to be discounted, search marketers can grab ballot-fever by the handle and utilize the “mind-set” of the voter. “Search marketing is a fantastically underutilized area for political candidates to demonstrate their qualifications beyond the status quo,” says Todd D. Malicoat, a search consultant who runs the site Stuntdubl.com. “When someone does a search for a candidate’s name they are volunteering their attention versus the normal approach of a candidate interrupting a voter for their attention.” He says that the information found through search can “actually sway a voter’s opinion” because they are infinitely more receptive to the information. He adds “the difficult opportunity for search marketers is mostly in finding a way to market themselves to the candidates by demonstrating how valuable these services could be to a candidate’s campaign.”

Whatever a marketer’s commitment to showcase political topics or products, Gary Marcoccia, Marketing Director of affiliate network AvantLink, suggests choosing something you’re passionate about. “This makes it easy to maintain and add content on a regular basis,” he says. “Publishers should shoot for 20 to 30 posts a month and think hard about including keywords in the headline and a couple of times in the post itself.” He says, for example, on an eco-friendly blog, a publisher could write a post on how to save energy in the home, categorize it appropriately and then send the traffic on to a merchant that sells low-energy light bulbs.

The other changing face of campaigning in the digital age is commerce versus community building. Hillary Clinton’s site has a good number of videos with her message on her site, as does Barack Obama’s site. But McCain, Mitt Romney, Clinton and Richardson have no online stores.

What the major candidates lack in storefronts, they gain in grassroots efforts online. Democratic-leaning Party- Builder.com lays claim to 10,000 virtual volunteers since September of last year and its Republican counterpart MyGOP says it has “thousands” of online volunteers as well. The Edwards campaign has its OneCorps, a virtual volunteer network that plans and executes grassroots Edwards house parties and serves as a platform for launching other campaign actions. Gone are the days when simply having a website was enough. “The organizational aspect is transformative,” says David Plouffe, a political consultant. When Maryland candidate for comptroller Peter Franchot emphasized his presence on MySpace and Facebook, his campaign got 80 percent of its volunteers from there.

When Maryland candidate for comptroller Peter Franchot emphasized his presence on MySpace and Facebook, his campaign got 80 percent of its volunteers from there.

In a month his volunteers – most of them obtained through online efforts – made 15,000 calls and distributed 50,000 campaign flyers. Franchot did win. Online experts have called this effect the “new virtual playing field.”

Online Voter Army

The site has pulled in 10,000 volunteers since September 2006. The Republican National Committee’s counterpart, MyGOP.com, also claims “thousands of people” and shows Web pages chartering each individual volunteer’s fund-raising progress. When Democrat Ned Lamont ran for Connecticut Senate he set up a space on his website where supporters could type in personal endorsements or “virtual postcards” and send them from the site. He got 25,000 visitors to do this. He beat incumbent Sen. Joe Lieberman.

Another lesson that campaigns still need to learn is the power of performance marketing. As noted, online stores on candidate sites – at least at this stage of the election cycle – carry inconsistent content. More importantly, the stores are mostly populated by products sold by third-party companies, which are either mom-and-pops or come from the direct marketing world.

John Edwards’ store, for example, is run by The Progressive Store, which is owned by Keith Shirey in the Los Angeles area. Shirey, a former janitor who touts the fact that his political buttons were banned on eBay, also sells stickers for Obama, Gore, Kucinich and Clinton. However, he doesn’t offer links to his store like Tigereye Design does. Tigereye sells Obama, Clinton, Richardson, Kucinich and Edwards campaign products and offers cut-and-paste link code for anyone to put a store link on their site.

Data Determination

As mentioned, the Republicans had made great and precise use of data before the 2000 election. Their Voter Vault database is drawn from voter registration and from other public and private records. What shakes out is a potential for the database to have hundreds of pieces of demographic information on every single voter, such as what cars they drive, what churches they go to, what magazines they subscribe to, what political organizations they give money to and even whether they hunt or fish. The data is run through a computer model and a prediction is made about how they are likely to vote. These folks can then be targeted with very specific messages, be that via letter, phone call, email, TV or other collateral. This form of “microtargeting” essentially won the GOP the White House in 2000, pundits say.

Democratic online efforts are motivated by trying to match what the GOP has built. Democratic online volunteer campaigns are aimed at amassing a virtual army of advocate foot soldiers. Voters with personal websites and affiliates can take advantage of the political season by linking to the candidates’ stores; however, there is no commission. If education and awareness are important to the affiliate, a candidate store section would not be out of place on a site selling retail goods or a site or blog that is opinion-based. If an affiliate runs a travel site or coupons, the links might be out of place. Certainly MySpace and other user-generated social sites are an ideal place for store links. One could even link to the candidates’ donation pages where visitors can pledge funds from the bare minimum to the maximum allowed by federal law. Throwing in a few well-chosen keywords at the new areas of a website could increase traffic overall and may generate a sale or two.

“Studies in the retail sector, where users who are served ads get a cookie placed on their machine ” provide a glimpse into how effective online ads can be in planting ideas in peoples’ heads that shape future behavior,” said political blogger and executive director of the Internet Advocacy Center in Washington, D.C., Alan Rosenblatt. Colin Delany of political blog e.politics.com notes, however, that “what the Internet excels at is relationship-seeking and relationship-building,” meaning those who seek out a candidate or sign up for a candidate’s RSS feed are probably already followers of that campaign. But once a potential supporter is in the door, so to speak, the campaign can leverage email and viral messages to help solidify support and donations. The next big step is to track them and target them as well as the online marketing sector has with analytics and what the Republicans did so well with microtargeting.

The multimedia aspects of a candidate’s site have proven popular and engaging. Burst Media reports that 50.7 percent of likely voters stated they would watch a video clip on a candidate website that features him or her talking about the issues. That number held for all age groups, including 55 and older. A quarter of voters said that they would hear a podcast by a candidate outlining his or her platform. Podcast listeners in the 18- to 34-year-old category scored far higher on that question than other age groups.

Right now, the bigger blogs such as RedState or Daily Kos may pull in a wider audience demographically on the Web but are still small numbers compared with the reach of a single campaign email blast. And with a solitary email, Rosenblatt notes a campaign can reach a whole array of donors who give small amounts – $25 to $50 – who wouldn’t otherwise give off-line. As one campaign finance expert noted, “It’s the only way you get a million people to each give you $10 on the same day.”

Legendary Outlook: Q & A with Todd Crawford

More than a year ago, Todd Crawford created quite a stir in the affiliate community when he departed Commission Junction, a company he helped found in 1998. He emerged at Digital River’s oneNetworkDirect as its vice president of sales and business development, where he oversees affiliate recruitment and development, has profit and loss responsibility, and develops the technology road map and overall strategic direction for the company.

Although Digital River is headquartered in Minnesota, Crawford lives and works just south of Santa Barbara in Ventura, California, where he can ride his motorcycles and drink the local wine in Southern California’s year-round sunshine.

During his tenure at CJ, he was the vice president of sales. His main responsibility was new advertiser acquisition, but he also handled other business initiatives including industry relations and CJ’s international expansion in Europe and Asia.

Revenue’s Senior Writer Alexandra Wharton asked Crawford about a variety of topics including why an affiliate program for the software industry makes sense, the constantly evolving affiliate industry and the making of industry legends.

Alexandra Wharton: oneNetworkDirect is part of Digital River. How do the two entities fit together?

Todd Crawford: oneNetworkDirect is Digital River’s online affiliate network – a network that specializes in providing Digital River software publishing clients with affiliate marketing services and technologies as well as access to a channel of more than 70,000 affiliates.

AW: What is the reason to start an affiliate network for only software products?

TC: Since 1994, Digital River has focused on e-commerce and the digital delivery of software products, so it was a logical progression to launch an affiliate network focusing on these types of products to help our clients drive more sales.

AW: Has this been a long-standing opportunity or is it the result of changes in the marketplace?

TC: With broadband penetration where it is today, more and more consumers are opting to download their software purchases, and I believe this trend is only going to continue to increase. Affiliates can benefit several ways from offering digital downloads: 1) When sold online, downloads have a lower cost of goods than physical products, which means there are more margins to pay affiliates higher commissions; 2) software is a natural fit for affiliates to promote since the computers consumers are using to shop online run on software; and 3) consumers can begin using the software as soon as the download is complete, so affiliates do not have to wait for physical products to ship before receiving their commissions.

AW: During the eight years that you’ve been in the industry, what are some of the most significant changes that happened in affiliate marketing?

TC: The first thing that comes to mind is how much the entire industry has matured. In 1998, affiliate marketing was a great idea but did not generate significant revenue because most companies did not take it seriously. From 1998 to 2002, it seemed like affiliate marketing was trying to earn its wings as a legitimate marketing channel. Fortunately, the dot-com bomb accelerated this shift as it forced companies to make smarter decisions on how to spend their marketing budgets and eventually moved affiliate marketing to the front of the line.

The next big change was the emergence of search arbitrage. I remember the day we were doing some networkwide analysis on recent unexplained growth trends and saw a lot of referring URLs coming from Google and Overture. We looked into it deeper and figured out what was going on. It seemed like such a simple idea that obviously was working very well. Today of course, search arbitrage is a huge part of affiliate marketing. I believe that the success and popularity of paid search today is due to the early innovators in affiliate marketing.

AW: Over the next year, what are some of the biggest challenges facing oneNetworkDirect?

TC: The greatest challenge is taking advantage of all the opportunities in front of us. We have been growing at a tremendous rate since we launched in November 2005. During the past six months, we have made great progress on the affiliate interface, reporting and tool set. Prior to Affiliate Summit in Las Vegas, we re-branded and launched a new home page at www.oneNetworkDirect. com. We have a road map of new features and functionality and have been doing regular releases. During the past year, we have created more affiliate mindshare, which is also attracting more attention and interest in oneNetworkDirect. Some of our affiliates have found great success as part of our network and we are hoping that their success stories will drive even more interest in the industry.

AW: How many merchants are in your network?

TC: Currently there are more than 50 programs in oneNetworkDirect, including programs from leading publishers of digital products and software applications. We typically add several new programs each month.

AW: How many affiliates are in your network?

TC: More than 70,000 affiliates have signed up to participate in oneNetworkDirect.

AW: Can you talk about how you will focus on recruiting and developing affiliate relationships?

TC: Affiliate recruitment and development is our primary focus at oneNetworkDirect. We have a dedicated affiliate development team. Half of the team is responsible for recruiting new affiliates, and the other half of the team is responsible for managing top-performing af- filiate relationships. I recognized years ago that world-class affiliate service is the key to growing a network. We are very active at trade shows where we attract new affiliates and further develop our relationships with existing affiliates. This year we will be exhibiting at the Af- filiate Summit conferences in Las Vegas, Miami and London; Ad:Tech in Paris, London, San Francisco, Chicago and New York; eComXpo; SES; and at Digital River-hosted client events around the world.

AW: Can you explain what oneNetworkDirect’s product, trialTracker, does?

TC: trialTracker is a new conversion-monitoring technology that allows affiliates to promote “try before you buy” versions of software titles by integrating the affiliate ID dynamically into the download. Because the affiliate ID is actually in the software trial, any subsequent upgrades to paid versions will be credited to the affiliate that initiated the trial download. It is a great product offering because many software titles offer free virus or security scans that require the consumer to pay for the product to resolve any identified issues. Affiliates can offer something valuable and free for their users to try out and benefit from the eventual paid upgrades. trialTracker is exclusive to oneNetworkDirect.

AW: What are some of the incentives oneNetworkDirect has in place to attract top affiliates?

TC: oneNetworkDirect has several incentives that are designed to both attract and retain affiliates. Like most affiliate networks, we encourage all of our merchants to offer coupons and promotions to affiliates, including exclusive coupons for select affiliates. These coupon links can be accessed when searching for creative by type through the af- filiate interface. We also list promotions and other program-specific opportunities on our blog, which can be accessed at our website. Affiliates also can find a list of current coupons from top programs on the oneNetworkDirect site. In addition, we offer networkwide promotions on a regular basis. Currently we are offering the oneNetworkDirect Rewards Program that pays up to an additional 2.5 percent when affiliates achieve certain goals or thresholds. For more details, affiliates should visit our site.

AW: Can you tell me about oneNetworkDirect’s Achievers’ program?

TC: The oneNetworkDirect Achievers Program is targeted to our topperforming and high-potential affiliates. Through the Achievers program, affiliates are offered dedicated account management resources to help them gain access to special creative, offers, promotions and custom landing pages as well as receive help obtaining approvals for certain promotional opportunities, such as email or paid search. The Achievers Program also provides affiliates with special perks and opportunities tailored for this exclusive group, including VIP passes to conferences, free software and dedicated marketing dollars for individual bonuses and promotions. Affiliates can learn more about how to become a member and benefit from all the perks of the oneNetworkDirect Achievers Program on our website.

AW: What are some of the long-term goals for the company?

TC: To further increase the value we provide our clients, two important areas of focus for Digital River will be the continued expansion of our global footprint and strategic marketing services. In the end, we are committed to driving pay-for-performance results for our clients.

AW: In three years, what will the performance marketing space look like?

TC: What makes affiliate marketing interesting is the constant innovation and change. Just like with paid search, affiliates are eager to explore and take advantage of new opportunities. Right now, Web 2.0 is the big trend. Three years from now it will be something else.

AW: At CJ you were sort of the face and voice of the company in the affiliate space. Do you feel you have the same level of influence over the community in your role at oneNetwork Direct?

TC: I continue to play a very active role in the industry. I have a network of people that I interact with on a regular basis and we all influence each other. At oneNetworkDirect, we have an active trade show schedule, we frequently participate on panels and speak at industry events, contribute to blogs like ReveNews and ABestWeb and regularly meet face-to-face with affiliates, technology providers and marketers in the affiliate community.

AW: At January’s Affiliate Summit, you won the 3rd Annual Wayne Porter Affiliate Marketing Legend award. Rumor has it that you won because you are always willing to share your knowledge. Why do you think that’s important in this industry?

TC: If you want a young industry to grow, you can’t keep a lot of secrets. I like to talk to people about things I feel passionate about – and affiliate marketing is something I feel very passionate about. I’ve found that some of the best ideas come from open dialogue and conversations with other people. It’s by working together that we can build and develop the best ideas and solutions.

AW: In your opinion who else is a legend in the affiliate space?

TC: That is a tough question because there are so many people who have contributed to this industry to get it where it is today. I know developers, program managers, affiliates and other network executives who have worked very hard while keeping their heads down and consequently have not been in the industry spotlight to get the recognition they deserve.

Virtual Worlds, Real Opportunities

They hang out for hours on end, actively seeking out new people and things to experience. These “residents” of online worlds – who also aren’t afraid to buy online – match the definition of a desirable audience. With millions of registered users and thousands of dollars changing hands every minute these virtual worlds provide ample opportunity to enhance e-commerce and bolster your brand.

However, marketing to virtual-world participants is very different than in the real world. It requires carefully assimilating into the community of pixelated people and tactics that are more about nuance than numbers. Those who buy not-so-real estate before understanding the culture could cause damage to their brands that carries over into the real world.

Virtual worlds enable people to escape the doldrums of school, work and home life by using altered egos (avatars) to navigate terrain where almost anything goes. Virtual worlds such as Second Life, World of Warcraft, There.com and Kaneva are among the fastest-growing (and most-hyped) destinations for online entertainment, and marketers have been quick to stake their claim.

Second Life has grown from 100,000 to more than 4.4 million registered users within a year, and often has more than 40,000 people online simultaneously. World of Warcraft, a massive multiplayer game, has more than 8 million subscribers.

Console makers are getting into the act as well, creating virtual- world extensions of their gaming platforms to retain their customers when they take a break from killing or competing with each other. The Sony Playstation Home world will launch later this year, while Nintendo has developed a virtual world for owners of the Wii console.

Buying In

Today most of the money to be made from virtual worlds comes from subscriptions and selling virtual real estate. According to analyst firm Screen Digest, online virtual worlds surpassed $1billion in revenue in 2006, but most of it (87 percent) stems from subscriptions paid to the worlds’ creators.

Marketers are spending on in-world events to increase their reach, and most importantly, to get access to a desirable demographic. If you imagine that these worlds are primarily a respite for socially awkward teens, think again. Because the sites require a faster-than-average computer and broadband Internet access, users tend to be somewhat computer-savvy and more educated, according to marketing consultant Sam Harrelson.

“They are not your typical audience,” says Harrelson, who counsels clients on marketing strategies for Second Life. Participants tend to also use many social networking sites such as Flickr and del.icio.us, and because they buy virtual goods such as clothing for their avatars, they are comfortable with spending online. Screen Digest projects that commerce (both business to consumer and consumer to consumer) transacted through these sites will top $1.5 billion annually by 2011.

There.com, a virtual world created by Makena Technologies, has more than 600,000 registered avatars, with participation equally split between males and females, according to Betsy Book, director of product management. The median age is 22, and 70 percent of members are between 13 and 26, she says. Shopping for items for avatars is one of the most popular activities, according to Book.

Learning the audience

Before deciding whether to establish a corporate presence, companies should create avatars and join the virtual world as individuals to learn how people communicate and what their tolerance is for marketing. Virtual-world residents have developed their own culture that must be understood before marketers establish a presence, according to Harrelson. Residents would prefer to learn about companies from their peers rather than be approached by advertisers or overwhelmed with graphic ads. “If you buy a building without a marketing plan you can be wasting a lot of money,” Harrelson says.

Opening a storefront and expecting avatars to cruise by and start shopping is an unreal expectation. Sporting goods and apparel company Reebok did just that and had their store defaced by Second Life activists who are rebelling against the commercialization of their escapist distraction, according to Harrelson. (Buildings can be reset in Second Life, so the damage was only temporary.) The company erred in not doing any community outreach before setting up shop, he says.

Companies must be sensitive to what are considered acceptable levels and aggressiveness of advertising in virtual worlds. “If brands go in and assume that you can have ‘in your face’ advertising, it could potentially be very damaging,” says Greg Verdino, who blogs about online marketing. Companies must “join the community and add value” or risk anti-brand backlash, he say. “A bad brand impression in Second Life can follow you into real life.”

A virtual presence must be interactive and offer some entertainment or incentive to be accepted by the community and to garner traffic, Harrelson says. Just as in the real world, free music, sporting events and item giveaways are the best methods for attracting a crowd.

“If you are not authentic and do not offer anything to the community, you are likely to be ignored, at best,” according to Catherine Smith, director of marketing for Linden Lab, which operates Second Life. “However, those firms who commit to a long-term, creative presence in Second Life have an opportunity to interact with their community in new and innovative ways.”

American Apparel, a Los Angeles-based casual clothing company, was the first retailer to establish a Second Life store, in June of 2006. The younger audience of people who “are into leading-edge stuff” was a good match for American Apparel’s customer base, according to Web director Raz Schionning.

American Apparel held several events to generate attention on Second Life, including a launch party that surpassed expectations. Avatars were lined up outside their store in a four-hour queue, according to Schionning.

He says the company thought a Second Life storefront would be a better investment than advertising in an online game. “I’m not sure that a billboard in a racing game would get us much notice” because of the speed of video games, he says. The virtual storefront is modeled after a Tokyo store and costs a few hundred dollars per month to maintain, Schionning says.

Revenue Slow to Grow

Virtual worlds sell real estate in the form of buildings and islands, which can cost tens of thousands of dollars to set up and maintain. IBM purchased 24 islands on Second Life and has committed to spending $10 million on virtual-world marketing.

MTV set up a virtual Laguna Beach island on There.com to promote its TV show of the same name. Reuters, Cisco, Dell, Wired Magazine and General Motors established virtual-world stores or offices, and Calvin Klein launched CK IN2U, a virtual perfume.

Land speculation is becoming big business in virtual worlds. Companies that don’t want to buy an island or take the time and resources to develop an attractive property themselves can buy or rent a building or office space from a virtual landowner. Second Life real estate developer Ailin Graef of Germany claims to have made $1 million developing and selling virtual properties.

So far the majority of the commerce transacted within virtual worlds is consumer to consumer. People are happy to spend a few dollars to buy a skateboard or outfit designed by a fellow resident. More than $1.6 million changed hands in a single day on Second Life in March, according to the company. Companies such as American Apparel are testing the waters of selling virtual goods to generate revenue, but more importantly, to get more exposure for their brands.

American Apparel sells items (virtual jeans or T-shirts) to avatars to wear while cruising Second Life. The clothes are all modeled on real items, and American Apparel offers coupons for 15 percent off real world items when someone purchases the virtual equivalent, Schionning says. The virtual coupons link to its online store, but the transition between the websites could be smoother. “The technology is a bit too clunky,” he says.

While the 12,000 purchases of American Apparel garb in Second Life currency (Linden dollars, which are purchased with real money) aren’t enough to boost the company’s bottom line, the attention from the media and access to Second Lifers has made it a worthwhile investment. “The value is in the exposure,” notes Schionning.

People tap into their inner consumer through their avatars without the restrictions of the real world. While you might not be able to own a tricked-out sports car or diamond necklace for financial or practical reasons, your avatar can, and marketers can use the boundless possibilities to broaden their branding opportunities.

Residents of There.com can buy or rent apartments and adorn their online homes with furniture or art designed by residents or sold by retailers that represents the life they would like to have, according to Makena Technologies’ Book. Shopping is the most popular activity on There.com, she says. “Your online self represents what you are, and where you live says who you aspire to be,” Book says.

The growth of virtual money-changing got the attention of a congressional committee, which is studying the possibility of taxing virtual purchases. Profits made from selling virtual goods are required to be reported as taxable income when converted into currency, and Congress could tax individual virtual transactions in the future.

Brand aid

While companies should not expect a virtual store to convert its visitors into millions of dollars in online commerce, participating in virtual worlds generates buzz and creates brand awareness that can justify the investment.

“Real-life businesses are generally not looking at Second Life as a revenue opportunity, but rather as a way of extending their brands,” Linden Lab’s Smith says.

Brands that create a positive impression in the virtual realm can transfer that interest to their real-world products, according to Book. For example, Nike sold virtual sneakers that enable avatars to run faster, she says, which reinforces the company’s message of its products’ enhancing performance.

Determining an accurate way to measure the value derived from a virtual store or event is a work in progress, according to Book. “We’re still trying to figure out what works in metrics,” she says. The company is developing methods for tracking avatars’ presence in commercial areas of the virtual world to provide demographic data to marketers.

While a company might be happy that the avatar of a young woman is flirting with others at their virtual party, they can’t be sure that it is not an older married man behind the avatar, making it difficult to be certain who is being exposed to your brand. “There is no way to be sure if the registration [information] is actually who they are,” says Book.

Virtual Cottage Industry

While anyone can join and do business in an online world, creating an experience and brand identity that is worthy of residents’ attention requires an insider’s insight. Hot on the heels of the virtual worlds craze are marketing consultants, ad agencies and graphic designers specializing in building and monetizing in the faux environments.

Companies such as Electric Sheep, Millions of Us and The SL Agency provide consulting services that enable companies to create a virtual presence that is consistent with the rules and culture of virtual worlds. Hiring a graphic artist who has experience building offices or islands in a virtual world will expedite the process for companies looking to build a virtual presence.

Joe Mastrocovi and his partners at Long Island- based Moderne Promotions thought their 25 years of event marketing experience would translate well to the virtual realm. After spending time learning the ins and outs of Second Life as residents, the company launched The SL Agency, a marketing company focused on developing events such as volleyball tournaments, concerts and parties in Second Life.

The same tricks of the trade to entice young audiences that work in malls and clubs (free music, free clothes) also work on Second Life, according to Mastrocovi. The SL Agency purchased an island named Activ8, which provides avatars with a place to ski, wager, dance or cruise the boardwalk.

The company sells virtual outdoor advertising such as billboards on Activ8, as well as sponsorships of events. Mastrocovi says virtual and real-world events can be held simultaneously to maximize the press potential and viral buzz.

Similarly, There.com holds events that match what is going on in the sports world, such as skiing events during the winter, and a virtual grand prix in March, according to Makena Technologies’ Book. Companies can purchase sponsorships to expose their brand to virtual world participants without having to commit the resources needed to establish a permanent presence, she says.

But companies expecting to host a DJ-ed virtual party for a song are mistaken. “The costs aren’t much cheaper than a real-world event if you want to hire talent,” Mastrocovi says. By combining in-world and real-world events, companies can create millions of impressions to websites as well as drive customers to brick-and-mortar stores, according to Mastrocovi.

Just as event companies hire beautiful 20- somethings to hand out merchandise in the real world, Mastrocovi recommends that marketers pay well-known avatars to walk around Second Life and promote a company’s brand. These “brand ambassadors” are people trusted in the virtual environment, and an endorsement for them holds weight with other residents, he says.

Participating in online worlds today provides access to an influential younger audience, but it is a challenge to quantify the return on the investment. In the future the companies that administer these sites will develop better ways of tracking the time that residents are exposed to a brand as well as offer more in-depth demographic data. Makena Technologies’ Book says the company would likely develop methods for sharing details about the people behind the avatars that are attending events and making purchases.

The popularity of virtual worlds is encouraging more companies to create alternatives, including kid-themed universes and even a world based on Shakespearean characters. However, blogger Verdino says consumers will have a limited appetite for virtual participation. “No one is going to join 57 different virtual worlds.”

The technology to make virtual worlds interesting and interactive places to while away the hours has arrived. By getting in early, companies can help to set the course for marketing in these burgeoning worlds.

John Gartner is a Portland, Ore.-based freelance writer who contributes to Wired News, Inc., MarketingShift, and is the Editor of Matter-mag.com.

B. Knoblach: The Fast Talker

If you asked 100 people on ABestWeb what kind of experiences they have had interacting with B. Knoblach, they probably wouldn’t have a clue as to who you are talking about. But if you say the name Billy Kay, you’re likely to get a huge reaction.

Billy Kay is not just a screen name on ABestWeb; it’s the business identity of a man who has a huge personality and huge heart.

And yes, his first name is really just the letter “B” and no, it’s not short for something else. He claims that his dad was named Walter and didn’t want a junior so he named him B. Although it seems like there might have been other choices for his father, in the tale Knoblach tells that’s how it goes. Period.

One thing about Knoblach is that it’s hard to know just when he’s kidding or saying things for effect. Most of his talk seems designed to provoke and titillate. The way he says things is a huge part of who he is. He’s a fast-talking native New Yorker, who still has a noticeable accent despite having left his home state more than 30 years ago.

Back in the ’70s he made his way out west to California. He served in the Air Force straight out of high school and then used his GI benefits to attend college at CW Post. Armed with a degree in music and $10,000 worth of musical equipment (including keyboards, drums and guitars) to his name, he headed to Los Angeles with a big dream to make it as a professional musician.

But he claims that a shipping problem changed the course of his life. The instruments he shipped to LA arrived and were signed for, just not by him or at the correct address. Back then the tracking and authentication methods of package shippers weren’t as sophisticated as they are now. So after months of arguing with UPS about not receiving his instruments and also trying to file a police report (which was declined because the police said the goods weren’t stolen since someone signed for them) he called it a wash and started hunting for a job to pay the bills.

An ad in the paper looking for ex-New Yorkers who were musicians caught his attention. It was for a telemarketing job. He jokes that New Yorkers are ideally suited for telemarketing because they have the natural gift of gab. He has that in spades and thrived in the business. In fact, he did so well that he stayed there for eight years. He was a standout and not surprisingly was noticed by the owner of the company. His boss was apparently infamous for questionable money-making tactics. Billy Kay won’t reveal much more about those early days except to say that his tax forms listed his occupation as “publishing.”

But it was clear to him that something was missing. He had good money coming in and a serious girlfriend but he really wanted to be a parent. He thought about being a big brother but that wasn’t permanent enough. He jokes that he already had season passes to the zoo and lived near Magic Mountain, he just needed the kid. Someone suggested to him that he might want to think about being a foster parent.

So nearly 13 years ago Billy Kay took the steps to become a foster parent to a six-month-old boy named Jesse. He says it was the best thing he ever did. But being a parent meant undergoing some serious life changes.

In his personal life, Knoblach’s longtime girlfriend wasn’t willing to change her pampered lifestyle to accommodate a child, so they eventually split. “It changed our whole lives. Jesse wasn’t a puppy that could take care of himself. He needed someone who wanted to be there for him and share a life with him. She cared about getting her nails done and rubbing shoulders with stars.”

On the work side of things, Knoblach needed more “respectable” employment. He claims that he “knew what I was doing was wrong,” and started to look for other things to do. It all started with a Web ring for personalized gifts. He began his online marketing career as a drop shipper, and then one day in 1999 a merchant asked to place a banner ad on Knoblach’s page. He was stunned, given that the business wanted to pay him $5,000 and could have just put the ad up on the ring for free. Knoblach took the deal and the next thing he knew that merchant’s direct competition called and wanted to place an ad. Suddenly there was a bidding war and Knoblach was the beneficiary.

Then “affiliate marketing was invented” Knoblach says, and the merchant asked if instead of incurring the shipping charges and the hassles associated with drop shipping if Knoblach wanted to be an affiliate.

Meanwhile, four years had passed and within the California foster care system, you had to relinquish care of a foster child or adopt them. There was no question in Knoblach’s mind that he could never give up Jesse.

So he began the complex process to legally adopt, but there were some huge hurdles. The first and foremost issue was that Jesse is African-American and Knoblach is Caucasian and California had very strict state laws governing interracial adoption. After years of legal battle, racial sensitivity training classes and a yearlong court-imposed order whereby the two had to move to New York for a year to be close to Knoblach’s Long Island family, the adoption was legally sanctioned.

When the year in New York was up, Jesse was five and they immediately planned to move back to LA but “stopped in Las Vegas on the way home and never left.”

Viva Las Vegas!

Living in Sin City isn’t for everyone, but Knoblach isn’t like everyone. For him that straight-laced life conjured up images of parents that spent little time with their kids. “I didn’t want to see Jesse just 10 minutes a day. I wanted to have work that would let me spend my life with him.”

The pair has been living in Las Vegas for nine years and Jesse, who is now 13 and in the seventh grade, spends lots of quality time with his dad. Bill Kay can thank his job as an affiliate marketer for that freedom.

“I thought, all I have to do is put up a link and not deal with customers; why not?” he says. “I lucked out when I found this.”

Suddenly he started expanding, going from his mail order collectible site (MailOrderShoppe.com), which is still his main moneymaker, to niche sites (ceramic baby shoes, business cards, golf gifts, etc.) and coupon sites.

Currently he runs about 20 sites and typically wakes up each day at 4:00 a.m. to begin his three hours of work to update all the sites. By the time he’s through with that process, it’s time for him to get Jesse off to school. Once Jesse is gone, Knoblach gets into what he calls the experimental stuff and then he claims he’s burnt out by 10:00 a.m. When Jesse gets out of school at 2:30, he and Knoblach often go to one of a handful of casinos.

Knoblach takes his laptop and often works from a casino, whether it is the lobby of the Mirage or in a poolside cabana at the Palms. In fact, taped to the bottom of his laptop is his business license so that his place of business is wherever he happens to be working on his laptop at the time.

It sounds like something out of the movie “Casino.” One day he’ll be working at the MGM; the next he’s at the Excalibur. He’s treated well because he’s got host contacts at all of these casinos. That means he can call up his host at whatever establishment and say, “Jesse and I would like to see a show, or, we’d like to come swimming on Friday,” and whatever the request (within reason), it will be arranged immediately.

He boasts that he once had the presidential cabana at the Palms and that they kicked out Vince Neil of Motley Crue in order to make room for him and Jesse.

To celebrate Thanksgiving last year, the Luxor flew the pair up to Reno in a private jet. And then put them up at a swanky hotel. Jesse is also probably one of the few teenagers that receive a personalized Christmas card from the Maloofs, the billionaire owners of the Palms. Often one of these hotels will send a car to Jesse’s school to pick him up, where the 13-year-old will be greeted by a limo driver holding a sign with his name on it.

The high-roller treatment occurs because Knoblach is a regular and loyal gambler. Video poker is his game of choice. He says you don’t have to be super rich to get perks. All it really takes is loyalty and showing up at the same casinos. His coin-in rate (which is the amount of money you put in and how much that added up to before you cashed out) at the Palms last year was $1.8 million. He allows himself to gamble for one hour each day. He doesn’t set a money-spending limit but instead just sticks to his set time limit. During that hour he gives Jesse $20 to go to the casino’s arcade and lets the boy play video games.

After that the two get together for regular stuff – like dinner and homework. They enjoy spectator events such as movies, shows, sporting events. Although lately Jesse has been trying to get his dad into more participatory things like playing baseball rather than just watching it.

Creating a Family

Knoblach is anything but a spectator on the message forum ABestWeb.com. He’s an active and vocal poster at ABW, which he likens to a family. That’s very important to him because he says he’s not particularly close to his own family.

He also gives back and treats his ABW “family” well – especially when he gets to play host in his “hometown.” At the Affiliate Summit conference, which was held in Vegas last January, four hotels gave Knoblach comp rooms. He ended up passing on that good fortune to several out-of-town affiliates attending the show to help them defer costs. He also generously offered a few of his colleagues some friendly gambling tips. And in one case his advice helped net a friend a $500 payout.

He credits others with helping him along the way – especially Haiko de Poel Jr., ABW’s founder [and Shawn Collins]. “If it weren’t for Haiko, Billy Kay wouldn’t exist,” he says. “They are both really good at what they do and I got so much from both of them.”

The rest he’s learned through much trial and error and lots of research. “You’ve got to do your research. It’s 90 percent of your job as an affiliate.”

He also says that he works backwards. When he was planning to create a site for license plate frames, he did a search to check on what search terms people are using for them. Then he made 48 pages using the 48 exact terms people searched for. No more; no less.

Research is important but so are common sense and good instincts. Because of his previous work, Knoblach claims that he can think much like the bad actors out there trying to steal commissions. This helps him put in place ways to thwart parasites and other bad folks. It also helps him when analyzing his numbers. He’s good at spotting inconsistencies and looking for the angles.

So, the obvious question is, why hasn’t someone who has an aptitude for fast talking and making money, perverted his online business (which is always ripe for scammers) into that kind of operation – especially since so many of these scammers do it because it’s very lucrative?

“I have a conscience. It would only take a second for me to do something bad, but I won’t. I spend half of my day trying to defeat the bad apples. It’s a pain. I truly believe that some congressman’s wife will get a bug about this and then there will be regulation regarding this behavior.”

Instead, he’s fallen in with a crowd that abhors that type of behavior and is not shy about making it public.

Meanwhile, Knoblach spends a lot of his work life looking into new things. “Copying and pasting links is drudge work. Thinking about new ideas is the fun part.” He’s getting into a partnership with some peers from the affiliate space, but he coyly declined to provide any details except to say that “it will be bigger than eBates.”

But Knoblach’s life as an affiliate is really just about having a job that allows him to focus on raising Jesse. His work gives them both freedom and a good life filled with fun and enjoyment. We’re not a regular family but “life is great. Who could ask for more?”

Network Supporters

Many merchants and affiliates develop very close relationships with their account representative at the networks. These network reps often take on many roles including problem solvers, helpers, mentors, sounding boards, cheerleaders, and sometimes they end up being cherished friends.

Many of these representatives are juggling multiple client relationships as well as their daily interaction with colleagues and peers. The account reps are usually big supporters of their clients and while the relationship between the network and its merchants is a partnership in many ways, it’s best not to forget that the account reps ultimately work for the network. And the goal of the networks is to make money.

And that’s where potential conflicts begin to arise. As a network you want to have efficiencies and leverage strengths. If one representative has experience dealing with the specific challenges and issues of a particular vertical segment (whether it’s those selling online mortgages, insurance, shoes or flowers) then having a single person deal with all those clients might be the most effective way to maximize your resources.

However, from a merchant’s point of view this might create a conflict of interest. If you are a merchant selling flowers online, you don’t want the same person handling your account having access to all your proprietary information and also managing the accounts of your competitors.

“I think it could be a benefit and liability for the merchant,” says Shawn Collins, co-founder of Affiliate Summit. “If all goes well and you have a rep with good insight, that’s great. But if you have someone that you suspect has a reason to help someone else over you, that’s not a good feeling.”

Collins says those uneasy feelings could easily be amplified since each of the networks offer different levels of service.

“I would probably have some concerns if the same rep was working on the same verticals – especially if the network was managing the account,” he says. “If you’ve got one company paying $1,000 a month to the network and another paying $10,000 and they are in the same vertical, I’d be worried that the one paying more was getting much better attention. I’d also be worried about shared intelligence even if it was innocent or inadvertent.”

ShareASale.com President and CEO Brian Littleton says his network is very aware of the situation and asks “each client who their competitors are, in their minds, so that we get a comprehensive list as well.” He says in “any area where a ShareASale representative is in front of sensitive data, we take as many steps as we can to make sure that it is not shared directly or indirectly with a competing merchant,” Littleton says.

LinkShare President Steve Denton says that his company helps quiet merchants’ fears by giving them direct access to their affiliates. That’s not the case with some other networks – most notably Commission Junction.

“It’s your channel; you should have that information,” Denton says, who admits that tact could be a liability if a merchant decides to leave. However, he says he thinks the upside of building a partnership outweighs that.

Denton says that for LinkShare it’s all about the service level the merchant has bought into. LinkShare offers two levels of service: one where the merchant purchases tools to help them run their own program; another whereby LinkShare runs your program for you.

“If you bought tools from us and I’m not running your program, then you can be put in a vertical category,” Denton says. “I don’t see a conflict there because it’s just a tool set and the playing field is level. But if I’m running your program – recruiting affiliates, extending private offers, etc. – then you can’t have the same reps working on accounts in the same vertical. I would not have direct competitors in the same portfolio. They may roll up to the same VP. We have Dell and Apple, Wal-Mart and Target, Macy’s and Bloomingdale’s. But the same reps don’t work on those accounts.”

Gary Marcoccia, marketing director at affiliate network AvantLink, says that in the company’s top two categories – Outdoor Gear/Recreation and Special Occasions – AvantLink has seen “that the more merchants from those respective categories that come in, the better all programs seem to do. This is because each program brings quality affiliates, adding even more specialized affiliates per category to draw from and attract.”

But what if a merchant is working with a CPA or ad network? Generally the merchants that do business with ad networks are looking to get leads and conversions. They are not paying them to deal with branding guidelines.

“In essence you bought shelf space in a store, you can’t expect much more. You didn’t buy an exclusive network. The attention goes to the guy that pays the most and has the best-selling product. Welcome to the world of distributed commerce,” Denton says.

Merchant Vann’s works with two different networks and according to Matt Ranta, affiliate manager at Vann’s, “Fiscally, it can be in a network’s short-term best interests to promote one competitor over another based on the analysis of commission and conversation rates,” he says. “But, ideally, if competing merchants both were working with a single network, they should be offered equal services and opportunities from separate representatives so as to assuage as much as possible a potential conflict of interest. Unfortunately, is seems that this is not always the case with some networks.”

A Taxing Experience

Some companies worry about conflicts when competitors simply join the same network. For TaxBrain, the problems started last November when Intuit and H&R Block also joined Commission Junction after leaving LinkShare. For four years leading up to the point, TaxBrain had enjoyed being the only tax preparation program with a big affiliate presence at CJ. Even though its rivals had much larger overall brand recognition with consumers, TaxBrain had more success using affiliates.

TaxBrain got wind of a competitor joining CJ when TaxBrain’s No. 1 affiliate called the company to say H&R Block’s account team at CJ was recruiting him. TaxBrain’s affiliate manager and vice president of business development, Todd Taylor, says he approached CJ about actively recruiting his top affiliates for the H&R Block program and was told these folks signed up as publishers looking to work with specific types of merchants, and the H&R Block profile was the same as TaxBrain’s.

Affiliate Colin McDougall says this kind of poaching is the norm. “This happens all the time. I will usually accept the rival offer; however, I will promote both companies on my site by offering reviews and pointing out the differences between the two companies for my visitors to make the best decision possible,” he says. “In most cases, each merchant has their own unique selling proposition and promoting rival companies benefits the merchant, consumer and the affiliate. The merchants get more traffic. The consumer gets to see a third-party perspective. The affiliate makes more money by having more brands to promote.”

That might be true, but Taylor says it’s still a hard pill to swallow when you’ve been at the network much longer. Taylor, who had suspected something was afoot when H&R Block showed up at CJU in September, was also miffed that the newcomer Intuit got high-profile treatment at the network. CJ recently put Intuit as a featured advertiser on its home page. TaxBrain has never been featured in that position.

“I felt like that was a slap in the face,” Taylor says, adding that TaxBrain has gone through four entire account teams in the last year at CJ, due to personnel changes and reshuffling at the Santa Barbara-based network.

This has all caused Taylor to be very cautious about communicating his affiliate strategy to CJ. He’s also worked hard to find out the names and other contact information for his top affiliates (CJ doesn’t actually share that information with its advertisers). He claims that now he only calls his top affiliates on the phone and deals with them personally. The rest of the affiliate program related to messaging and such is outsourced to a team at Partner Centric.

The impact has been felt on TaxBrain’s program. Taylor claims it has seen the conversion rate come down compared with last year, while the commissions paid out have gone up. He attributes some of that falling conversion rate to a variety of factors, including the state of the economy and that there is evidence that many people are holding off on filing their taxes. He directly cited the increased affiliate program competition for the rise in commission rates, saying that his company has had to pay out more to be competitive. He also claims that H&R Block recently began mimicking TaxBrain’s successful hybrid affiliate program that pays for both leads and sales.

After getting over the initial shock of H&R Block coming to CJ just in time for tax season, Tax Brain felt like it was dealt another blow when Intuit, which joined CJ in early January after running an independent program, had its lawyers begin sending a handful of cease and desist letters to TaxBrain. Most centered on advertising that TaxBrain was doing (some here in Revenue magazine) to recruit affiliates and promote its affiliate program.

“They are lawyering us to death to keep us from gaining market share,” Taylor says. “It’s cheaper for us to comply then spend the money on legal fees.”

Boon for Affiliates

While all of this competition can be a headache for merchants, it’s great news for affiliates. The more people affiliates have bidding for their attention the more they are in the driver’s seat in terms of getting better offers and higher commission rates.

Affiliates that want to create comparison sites in a particular category can also maximize their chances of getting commissions for sales or leads. “This is great one-stop shopping having all the players in one spot – search engines love that stuff,” Taylor acknowledges.

But some affiliates claim there is some loyalty involved. “I have been approached by rival merchants seeking to compete with a strong performer on our site. However, in these cases, loyalty plays a strong role,” says Mike Allen, president and chief executive shopper of Shopping-Bargains.com.

“It’s wise to ‘dance with the one who brung ya’ and I’m not willing to dismantle a strong relationship for a quick dance with a newcomer. Over the long term, though, since we have a diverse base of shoppers, I’m willing to build a complementary relationship with additional and even competitive merchants. Expand, yes. Replace, not likely.”

Allen adds there is also a lot of research that goes into joining a new program. “Once we have evaluated a program and determined we are interested in running it, we then look at the finer details of their program to determine how much we will promote it. This is especially important when there is a lot of competition in a particular vertical. Some of the finer details that impact placement and promotion on our site include the merchant’s conversion rate, their coupon policy, the availability of their affiliate manager, their policy regarding parasites and opportunities for additional earnings through bonuses, higher tiers, private offers or sometimes even slotting fees.”

McDougall says, “As an affiliate, having multiple merchants to choose from helps grow my business. More merchants to promote provides me with more brands to review for my site visitors, offering greater value to them. Plus more merchants in a vertical creates more competition amongst the advertisers to get prominence on my site, which of course leads to higher commissions. If there are too few merchants in a vertical, an affiliate doesn’t have much leverage for higher commissions.”

The Web, Take Two

Like new confections spilling out of Willy Wonka’s chocolate factory, the brain trusts at Web companies big and small over the last three years or so have spun out a brand new Web. Like candy, this version of the Web is flashier, full of speed, comes in a cool wrapper, has good stuff inside and is highly addictive.

But unlike the dot-com crash of six years ago, it seems these new companies (and some old ones thinking in new ways) have figured out how to make the Web user king, keep the eyeballs and make money.

Think about what has happened since 2001: Google has put search front and center; online affiliate marketing was born; smaller computer programs on websites have made shopping and collaborating easier; and user-generated content has redefined entertainment and online marketing. With redefinitions come labels, and since 2004 these innovations in the Web experience have been called Web 2.0 – to mean a second generation of Web-based services and technologies.

Angel Djambazov, marketing and business development manager of affiliate management tool Popshops, says, “Web 2.0 lends itself to more interactivity between the user base and the site.”

Web 2.0 also has been called the “participatory Web” that involves consumer action, not just reaction to your website or message. Web 2.0 has been called the explosion of video – homemade and commercial video slathered freely and easily across the Web. Web 2.0 has also been called the rapid rise of blogs (highly personal websites), widgets, RSS feeds and the podcast.

Web 2.0 is really all these things. Tim O’Reilly – founder of O’Reilly Media, publisher of technology books – coined the term and in essence meant it as a perceived shift in the Internet as platform.

He has defined it this way: “Web 2.0 is the business revolution in the computer industry caused by the move to the Internet as platform, and an attempt to understand the rules for success on that new platform.”

Where 1.0 was HTML Web pages you read like a book, 2.0 is Ajax-coded pages where mini-programs are swirling away on your desktop telling you the weather, what to eat, showing you videos or – most important to marketers – reporting your traffic. YouTube, MySpace, Facebook, Flickr, craigslist, Wikipedia, Digg, Photobucket and del.icio.us would all be considered Web 2.0 sites.

Adapting for the 2.0 World

For online marketers, now is the best time to be in a Web 2.0 world. There are hundreds if not thousands of companies who claim their technology or service is Web 2.0-enabled. Pundits say it’s not just another bubble. Venture capitalists are expressing their confidence with their checkbooks, sending $844.4 million into Web 2.0 companies last year, according to Ernst & Young and Dow Jones VentureOne. Advertisers are also coming on board and they are predicted to spend $1.5 billion on online video alone by 2009, according to eMarketer.

Mike Moran, author of Search Engine Marketing, Inc., says there are three main changes for marketers and advertisers in a Web 2.0 world: You can now target even the smallest group; you can measure every single message’s effectiveness; and you must change your message in response to what customers say and do. Fortunately, he says, Web 2.0 helps you do all of these.

The most recent Web 2.0 lightning rod is the widget or Web widget. It is a kind of mini-program that can be embedded into a Web page and operates separately from your website. Widgets can contain anything from updated weather to interactive ads, videos and photo slide shows, to calendars, feeds to games and polls. Widgets are often Adobe Flash or JavaScript, which make them lightweight and easy to embed.

Because widgets are transportable – meaning a thousand folks can place the same widget with the same information on a thousand different websites – marketers are nervous of the threat to their business. “Widgets allow for individuals to take or use parts of the content from a marketer’s site and apply that content to their own Web page,” says Sam Harrelson of CostPerNews.com. “Of course, that can be threatening to a large segment of online marketers.

“For those marketers attempting to monetize their sites or programs with page view metrics, it should be threatening.” He says that YouTube did not become a major Web property and bring a billion-dollar price tag because it just had funny clips of people doing funny things.

“It provides a perfect example of how a company can grow quickly, in terms of numbers of users and advertising dollars, through the use of these democratized or decentralized ways of serving unique content.” Harrelson adds that marketers should be on the cutting edge anyway, looking for ways to measure what is going to happen on the Web, with or without widgets.

Currently there are thousands of widgets available – most of them free – on the Web and some that are embeddable media players come branded with advertising. Recently MySpace.com banned the use of most kinds of widgets that come with ads in them from being placed on MySpace profiles. Critics said the move was made so that MySpace could control the ad messages to its 90 million monthly visitors.

Making Technology Work (Well)

Another Web 2.0 technology in search of scale is the RSS feed. An RSS feed is a format that allows certain content to be pushed to your computer. Newsletters, favorite blogs or columnists and news sites use it when they have frequent publishing schedules. Users can subscribe to a feed and receive only that information they sign up for. Usually, Web users must install a feed reader to subscribe to the content. While use of feeds is popular, Feed aggregator FeedBurner also sees great potential for the ad market in feeds. “There are a lot of blog authors creating great content on a variety of topics, but advertisers are challenged to find flexible and scalable deployment of a blog ad campaign,” says Brent Hill, vice president of business development at Feed- Burner. While FeedBurner continues to extend its ad network for RSS feeds to include ads on blogs, Hill says that advertisers need to realize that quality sites, reach and effective placements of feeds will help drive advertisers to the well.

As companies are adapting their messages for the cell phone, so is Web 2.0. Mini-blog site Twitter, for example, is making it easier to use connected mobile devices to add to Twitter threads. Twitter basically only allows 140 characters to be posted at a time. This limitation seems well-suited to the legions of text-messagers already sending short notes to each other. In addition, Twitter now has a short code or abbreviated message system where the word “weather” and your ZIP code will get you back the information you seek.

This is just one example of the user-centric mobile Web experience that’s exploding. Companies such as Mobio, SoonR and Loopt all allow cell phone users to receive specific kinds of information directly to their mobile device, usually event or dining listings, physical locations of friends in your network or data pushed to your phone.

All these technologies are part of the greater social Web or social media; usually video, audio or other content that users can interact with. Web 2.0-styled social media applications can be found at sites such as Wikipedia, Second Life, Digg, MySpace. com and Flickr. The media can usually be shared, rated and oft times edited by visitors. This is also called user-generated content and is defined as content on the Web influenced but not necessarily created by visitors to those websites.

Consumers = Participants

The impact of user-generated content on marketers has been great. As Moran points out, Web 1.0 users were considered consumers by marketers; now with Web 2.0, they are participants. He says that now readers “comment on your blogs, change your wikis, create blogs of their own, create hate sites if they don’t like your products and produce ‘mashups’ of your content and functions.”

This sea change has given rise to the term “social media optimization”; what Rohit Bhargava, vice president for interactive marketing with Ogilvy Public Relations Worldwide, calls “changes to optimize a site so that it is more easily linked to, more highly visible in social media searches on custom search engines and more frequently included in relevant posts on blogs, podcasts and .” He says that while that sounds a lot like search engine optimization, the difference is that Web 2.0 will make it easier to get your message out through tagging and bookmarking sites, widening your linkability, helping your content fit onto more niche websites and blogs and encouraging users to blend your message with other messages, or what is called the mashup.

On a participatory level, wikis are the exemplar of social networks that don’t require fancy technology. Wikipedia, for example, has taken the concept of building an online encyclopedia that every visitor can contribute to and made it very successful. Now there are wikis devoted to paleontology, linguistics, Swedish and Russian textbooks, law-student life, Star Trek, maps and collaborative novels, just to name a few.

While blogs and podcasts (downloadable audio shows) are also considered Web 2.0 innovations, the blog or Weblog technically has been around since just before the dot-com crash. Blogs and podcasts are beginning to be embraced by marketers also. Blog tracker Technorati reports that as many as 75,000 new blogs are created every day. While sites such as PayPerPost.com have made it easier for marketers to simply pay a third party to create a blog about their product, the effectiveness metrics are absent in that arrangement. Recent research has begun to balk at the reach of podcasts. Pew Research released a study that said only 12 percent of Internet users have downloaded a podcast and Forrester Research says that as few as 1 percent of all North Americans have downloaded a podcast.

A Web 2.0 spin on broadcasting information on the Internet is a company such as Userplane that enables webchats, webcasting and instant messaging. They sell themselves as a very Web 2.0 sort of company. Michael Jones, CEO, says that “Web 2.0 companies I come across all started as Web services companies. We saw an interesting need to have an online communication tool, and we started to say maybe there is an interesting way to turn on the lights in these rooms.” The company is beginning to host live webchat town halls with political candidates, which they hope will grow as the political season heats up.

Ad network MIVA also identifies itself as a very Web 2.0 company and has even outlined trends for 2007. Seb Bishop, president and CMO, has stated that mobile video sharing will offer an even greater level of immediacy than the Web, that mobile search will become localized – meaning mobile search will be less about browsing and more about fulfilling a need in real time and that advertising will become “democratized.”

Some critics have said that Web 2.0 is nothing but a marketing slogan itself. Russell Shaw, a columnist for ZDNet.com, has simply said that Web 2.0 “does not exist.” He says that things labeled Web 2.0 “are forward lurches of various standards and technologies; some compatible, some not, some revolutionary, some evolutionary, some impractical. Some are collaborative; others are highly competitive with each other.” He agrees with skeptics who say that the term is essentially meaningless and irrelevant.

CostPerNews’ Harrelson, however, perceives loads of relevancy in the new Web, especially as it relates to marketers. “Once marketers realize that the inventory available on publisher and affiliate sites is growing at near exponential rates, they will realize that metrics based on limited inventory such as CPA or CPC are increasingly inefficient,” he says. “That, more than anything, will lead to a re-examination of traditional marketing methods online and move the equation of metrics toward something more 2.0-ish.” He adds that “attention data is the new black. ” My practical advice to companies is to start developing attention metrics. That’s where the next black gold lies.”

The Art of Wooing Affiliates

“You spammed me,” I said with a smile to the affiliate network manager standing next to me as we posed for a picture together at the last Affiliate Summit. Her smile suddenly disappeared.

Kind, compassionate and understanding person that I am, I fervently hoped to hear an honest, if not apologetic reply that would give me the slightest reason to consider ever doing business with her network’s merchants.

Despite tripping over herself with admissions of having been “horrified” when she realized that she’d spammed me, she left me in the dark as to why she would try to solicit my attention through the email address that I use only for domain registrations.

Here’s a tip for affiliates: Creating a unique email address for individual functions such as domain registrations is an effective way to ferret out spammers. Filter email sent to that address into a separate folder and check it occasionally to see who is operating on the dark side. Delete the address to which the spam was sent and make a note never to do business with that company.

OK, it should be fairly obvious that I have almost no compassion for spammers. I was simply curious to see what excuse she could come up with on the fly. However, there was no excuse because there simply is no excuse.

First of all, spamming is illegal, which makes it a lousy way to try and recruit super-affiliates for anyone who cares about their reputation as a trustworthy business partner.

Secondly, I am hardly an under-the-radar affiliate. My contact information is almost too easy to find. Google my name with or without quotes and my affiliate marketing “how-to” site floats to the top of the natural search results. In the upper right-hand corner of every page on that site there is a link to my Support Desk, at which my virtual assistant, Joel, is eagerly standing by to field questions from affiliates, managers and merchants alike. Our Support Desk is open to anyone and everyone. No proof of purchase is necessary and the only skill required is the ability to correctly enter an email address.

If a not-so-savvy surfer somehow misses the listing for that site in the search results, the vast majority of the other 999 results which Google serves on a query for my name are affiliates who link to another of my sites, which also includes a clearly labeled link to my Support Desk.

Regardless of how one chooses to get to the Support Desk, the manner in which a solicitation is worded determines the response (or lack thereof) that it receives.

Authors of generic blasts that do not include my name or are addressed to some variation of “Dear Affiliate” or “Future JV Partner” are sent a canned but friendly TYBNTY (Thank-You-But-NO-Thank-You) note. And they should consider themselves lucky that we take the time to do them the courtesy of a reply.

Those who address their request appropriately but then hype the offer receive the same note, as do merchants and managers who provide insufficient or incomplete details.

The number of correspondents that fail to show basic courtesy by including their real name and full contact details is staggering. I used to try making the point by addressing replies to “Dear ___” or “Dear Your Affiliate Team,” but I am not in the business of teaching basic email etiquette, so they too now get a canned TYBNTY.

I’m also not in business to research offers that are not only unsolicited, but which are also apparently a secret. I don’t really care if you have a “ground-breaking opportunity which will make affiliates a lot of money.” So does every other merchant, and Sherlock Holmes I am not.

Tell me what the product is, and include a link to the specific offer’s sales page. Also, if the offer is restricted to a U.S. audience, please provide a link that does not redirect my Canadian IP address to Classmates.com. Please apply the same technology within your network interface so that non-U.S. affiliates can view all merchant landing pages. I asked for that feature at MaxBounty and they were only too happy to oblige, so we know it’s doable.

Then there are those pitches for products that are completely irrelevant to my audience. If I find those before Joel has a chance to send a TYBNTY reply, they are summarily deleted. Seriously, why waste your time trying to get me to promote George Foreman grills on my dating service review site?

Do your homework and check out my sites before you contact me with your offer. Find the page on my site where your offer should be placed for the greatest impact and don’t bother to suggest that it should be placed on my home page.

Answer the question, “What’s in it for Ros?” If the offer is available on several other networks or directly through the merchant’s own affiliate program, the commission rate you offer has to beat them all, or any chance of further discussion will stop right there. Furthermore, be specific about how much more you can offer than each of the other guys.

Better yet, if the product is an online service or piece of software, kindly provide me with a username and password so that I can assess the product for review purposes. Doing so costs next to nothing, and if I really like the product and continue to use it, your product will receive a stellar review and subsequently many more sales. On the other hand, you could provide me with time-limited access, but then there is no guarantee that I will make time to review the product by your deadline.

Best of all, if you have a real product and are inclined to send samples, hit me up for my mailing address. It’s unlikely that such a request will be denied. You can be sure that affiliate Colin Mc- Dougall promoted the heck out of the inflatable boat that he was paddling around Vaseux Lake last summer.

We super-affiliates also work harder for merchants and managers who go the extra mile to get to know their affiliates. For example, while attending a conference in Los Angeles, two of my Australian- based merchants went 1,568 miles out of their way just to take me out for dinner. By result, I have been promoting their product for almost nine years and don’t intend to stop anytime soon.

If you’re not inclined to visit Beautiful British Columbia, then chat me up at a conference. Make it your job to learn that the super-affiliate you wish to recruit prefers beer over wine and dark beer over light. Super-affiliates eat too; so an invitation to lunch is always a good segue to doing business.

Having shared a belly laugh or two over lunch, you by now have my business card and telephone number. Do a follow-up call. Propose your best offer and have the name or number handy of the offer that you want me to look at.

Next, follow the call up with an email (yes, by now you also have my private email address) and include a link to the offer along with a list of keyword suggestions. Consider sending unique copy targeted to my audience and which I am allowed to edit. Barring long copy, a bullet list of product benefits and features is also very much appreciated. At this point, your job is done. Now just sit back, relax and watch for the sales spike.

There are many ways to get my attention and me working for you as a super-affiliate. Plaguing me with spam, however, is not one of them – especially when I’m already affiliated with your network!

Rosalind Gardner is a super-affiliate who’s been in the business since 1998. She’s also the author of The Super Affiliate Handbook: How I Made $436,797 in One Year Selling Other People’s Stuff Online. Her best-selling book is available on Amazon and www.SuperAffiliateHandbook.com.