The Wealth in Health

A work-at-home marketer complained that he gained 30 pounds in the last few years when his home-run online marketing business became successful. In fact, his wife stopped working, he was doing so well. He published an e-book on how he made it and he moved his family to a bigger house. He loves riding bikes with his kids and happily juggles his work hours and a new 11-month-old baby. A great success story, except that he just can’t lose that 30 pounds.

He does have a small office out of the house for the crunch times but also relishes the weekends when he can be with his family full time. He employs little tricks to keep his mind on his work, even getting up and dressing for work just to go downstairs and fire up his computer.

The trouble with being an affiliate marketer or any telecommuter is that working from a home office can be a strain on your health, family life and pocketbook if you don’t know the strategies and tricks to keep everything in order.

Setting Priorities

The last U.S. Bureau of Labor Statistics report stated that more than 25 million people now work from home. That’s about 15 percent of nonagricultural workers. It further breaks down to as many as 30 percent of management and professional workers (work-from-home employees were defined as those working at least one day per week from their home). That number is sure to grow by the end of 2007 and is the norm for affiliate marketers.

Many affiliates will say that business comes first, but keeping yourself and your family sane and healthy seems to fall by the wayside unless you have a set plan. It’s not just about getting to the gym. Affiliates have said it’s more a way of life – when you have a successful business, it gets harder and harder to balance work and sanity. There seem to be no clear strategies.

“My office was set up by trial and error,” says Wendy Piersall of eMoms. com. “It took months and even years to get it right. I tell people up front: Get your own office space.” Piersall is on her third home business, has kids and a husband with a full-time job outside the home. “The only way to figure how to balance things,” she says, “is when you are out of balance.”

Jeremy Palmer of QuitYourDayJob.com rents a small office but tries to use it only if he needs to have phone meetings. The rest of the time – if he has lots of computer work – he will stay at the home office, which is centrally located in his house. “We considered an office detached from the house,” Palmer says. “I was in a basement before with one little window, but then an office with no window killed my productivity. Having a window is important.”

Productivity as a Priority

Issues of productivity are not to be discounted. A BurstMedia.com survey indicates that employees are doing more of their personal business on work time. The survey said that 25.5 percent of workers said work hours were the “best time to conduct their personal online activities” and that 23.2 percent said faster connections to the Internet than at home were why they use the office connection for personal tasks while at work.

Some affiliates set down hard and fast rules to get them to be productive. Linda Buquet of 5StarAffiliatePrograms.com keeps a list of “reminders” of things to do to remain successful. She bought a watch that would remind her to say “thanks” to someone every time she looked at it. She believes in the “pay it forward” form of karma, where she will help out fellow affiliates just to help – without fee or commission. She keeps a “to do” list on paper and actually checks it off when things are completed. And she tries to blog about only the things she thinks will be helpful for readers in the industry and not just because the blog needs an update.

Shawn Collins of Shawn Collins Consulting also has a list of “daily habits” that keep him on track. He’s big on structure and relies on his Microsoft Outlook to prompt him about things he needs to do. He works only from 8:00 a.m. to 6:00 p.m. and stops immediately at the assigned hour to be with his family. He answers the phone right away and answers email as soon as he gets one to avoid falling behind. He portions his day so that he does email and research in the morning, meetings in the afternoon and uses the last hour of his day for tying up loose communication ends. He tries to keep a clean desk and clean email inbox.

For QuitYourDayJob’s Palmer, part of working healthy means streamlining your work processes. He has all the same equipment in his home office and his small satellite office so that he can just get in the car and go if the home walls are closing in on him. He uses GoToMyPC.com for remote access to his primary computer from any Internet-connected PC. He uses primarily Web-based applications – such as Gmail and Google Docs and Spreadsheets – so that everything he needs is virtual.

A Healthy Outlook

Apart from making lists, staying healthy doesn’t begin at the gym but at your desk. Having the right equipment to work healthy means being aware of what is right ergonomically. eMoms’ Piersall admits her ergonomics are not perfect. She says she began to have “major back problems.” She says, “For some reason working from home makes it hard to get away from the computer.” She went to the local store and tried every chair in the place until she found one that suited her. She says she may have read an article about choosing the right ergonomic chair but relied on intuition instead. The result was an “instantaneous difference.”

In addition, she tries to exercise because she says, “The healthier I feel, the more productive I feel.”

Palmer says part of his health regime – when he can’t get to the gym – is to ride a bike when he can, take the stairs whenever possible and to park in the farthest end of the lot and walk to his destination. His gym is very close to his satellite office and he sets a goal to go there at least twice a week.

But the gym isn’t for everyone.

Scott Hazard, founder and president of Cooperative Affiliates, says, “I really would rather go to the dentist than to the gym. I’m just not a gym person.” So instead, Hazard finds lots of small ways to incorporate exercise into his day.

“I make excuses to get out and do stuff,” he says. “Like right now, it’s the middle of the day and it’s hot as blazes but I’m going out to mow the lawn. I’m forcing myself to do stuff that takes me away from the computer.”

Hazard was doing a lot of walking, but recently moved and started to do a lot more yard work to get him out of his chair and moving. “I’m looking at a pile of dirt, a wheelbarrow, a shovel and yard full of holes. I could hire someone to take care of this in one day, but instead I’m doing it myself,” he says. “You really get a workout moving, loading and smoothing out 15 or more large wheelbarrows full of dirt.”

A Family Affair

Mostly unspoken but equally important is the way working at home affects a marriage or relationship. Oftentimes work-at-home online marketers end up doing so well they bring in their significant others to help share the load and profits. That means being together 24/7 and that can inevitably lead to some tension.

QuitYourDayJob’s Palmer also employs his wife in his business but says they are not working side by side most of the time. “She’s more of a passive employee for the business,” he says, “and more of a quality assurance person for my sites.”

Experts say it’s important to have a clear division of duties and respect each other’s jobs.

Then there’s the issue of young children at home during the workday that often crops up with families. Palmer says that he and his wife huddle in the morning to work out their schedules so they know who will take care of the kids. The two older kids are easier to handle, but they also have an infant, which means someone has to be with the baby all the time. He says, at first, the newborn was hospitalized for a week – something that Palmer says had an impact on his productivity. But where family is concerned, that takes priority over work, especially in emergency situations. “It was worth the hit.”

eMoms’ Piersall says that even though she’s lately been clocking in 50-hour weeks, she keeps evening time for family and clears her weekends. “Marriage issues,” she says, “are also a trial-and-error endeavor. Like all marriages, there were rough spots” and at seven years of being an affiliate, her husband, she says, is really good about it. “We find a good balance.”

For Miami-based consultant Andy Rodriguez, his business is a family affair. Rodriguez runs his affiliate consulting business out of his converted two-car garage and employs his 21-year-old son, Andy Jr.; his cousin’s husband Emilio Yepez (operations manager); and Emilio’s brother is now doing an internship with the company.

“There are challenges to working with family, but it’s really about trust,” Rodriguez says. “They have access to the books and know everything about the business. But I trust them completely and that is the benefit of working with family. There is a level of trust already built in.”

Andy Jr. admits that having your boss also be your dad has its moments. However, he says that since they both “know how to negotiate with each other” that’s not a big problem. And usually, any issues between father and son revolve around “differences of opinion,” which are typically quickly resolved.

“The Web doesn’t sleep, so this job permeates into our personal lives, but there are times when we just stop talking shop,” Rodriguez says. “We had a family gathering over the weekend and we didn’t talk about work. Emilio said, ‘I just don’t want to talk business,’ so we didn’t that day.”

Cooperative Affiliates’ Hazard finds that having a work routine helps keep things on track in balancing work and personal life. He wakes, takes the dogs out for a walk, has some coffee, hangs out and talks with his significant other, then goes off to his home office.

“She understands that when I’m in my office I’m working. I don’t even have to close the door. I have a work session in the morning and another in the afternoon and that’s my work time,” says Hazard. “Of course, she knows that if she needs me or needs to ask me an important question that I’m available to her.”

That said, Hazard loves that being an affiliate means being able to break your routine and live a very flexible lifestyle. “If I don’t have any calls to make or anything pressing to do, then we may go out shopping or for a drive. I have my routine when I’m working but it can be broken fairly easily when there isn’t a whole lot to be done.”

Harrison Gevirtz: The Yearling

This sounds like any hard worker in the performance marketing space, you think. The only difference is that Gevirtz is a freshman. No, he is not a freshman in college, not the next Shawn Fanning (of Napster fame) working out of a dorm room. Gevirtz is a freshman in high school – a 15- year-old wunderkind.

Gevirtz first got exposed to the world of online commerce by selling diamonds and stamps through eBay auctions and Overstock Auctions when he was 12 years old. Mostly he sold items in the hundred-dollar range but once he sold a $4,000 diamond. The experiences were exhilarating but he was not so thrilled with the shipping process – packing material filled his bedroom and the every-other-day trips to the post office were a drag.

Next, Gevirtz built a MySpace help site through a turnkey solution that cost him $12 on the Digital Points forum. He promoted the site through “basic marketing initiatives like directory submissions” and uploaded ads and also created ads that were his own but looked like AdSense ones.

He says it was his “first gallop into affiliate marketing” and he began to bring in some bucks. But because Gevirtz was on a “crummy ad network” he was getting 1/10 of a click and giving them thousands of clicks for $50-60 a day. “It was terrible but I did not know any better.”

His interest now piqued, Gevirtz started another resource site that provides code generators like profile tracker and layout generators for users to put graphics on their MySpace pages. He moved to Yahoo Publisher Networks and the ValueClick Networks and started to make a lot more money.

By July and August of 2006, Gevirtz was looking into ways that he could make money off of CPA instead of CPC because he prefers the feeling of fulfilling an acquisition – he doesn’t like taking money for a click. Gevirtz says that he once was accused of clicking on his own ads and notes that “you can’t be held liable for click fraud if you are doing CPA stuff.”

Although he does not want to reveal the specifics, Gevirtz says that nowadays he runs a few interactive websites, including graphic sites, which have thousands of pages of content, and says he specializes in things that target a younger audience. Because he is a teen, he knows what teens find appealing, such as ringtones and clothes.

He makes most of his income from CPA nowadays and he focuses on landing pages, noting that in a few years, “landing pages might be on phones.” He says he makes money with paid search and would like to leverage mailing lists to promote offers but acknowledges, “There are so many people like that already.”

Last summer, Gevirtz hired developers to work on his next big project, the details of which he is keeping under wraps. He says the site is based on the idea that “content is king” and it will be focused on getting users to create the content. He hopes to have the main version of the site done by this summer. He has a company with 38 employees in India working on it – a company he found “after hours and hours of Googling.”

Gevirtz’s experience with outsourcing work to a company in India has been very positive – he describes these Indian workers as the most trustworthy people that he has ever worked with – he continually is impressed by their eagerness and how hard they labor to get a job done correctly. He feels good about working with them – not just because they are “respectful and honorable” – but because he literally is “helping them eat.” No doubt there have been “minor problems with the language barrier” but they work through it – by communicating both on the phone and through instant messenger.

Gevirtz blogs at his site, CPAShare.com, which he started this past January, but acknowledges that he struggles to come up with topics. He says that one of his goals is to get a user base going and to get a site where other people are blogging so that he can have mixed opinions – “it would be a portal for e-marketers.” He would like to drive more traffic to his site and in fact, entitles one of his blog entries “Nobody Reads This F—ing Thing.”

A Day in the Life

Not surprisingly, Gevirtz lives at home with his family, in Santa Barbara. He has an older sister, Eloise, who is 22; a little brother, Harland, who’s 10; and a 3-year-old sister name Madeline. His California-born father is in finance and his French-born mother is a part-time yoga teacher and full-time mom.

A typical day starts with Gevirtz “waking up 20 minutes later than he should” – he has to get to school by 8:00 a.m. and his mom takes him on the 20-minute drive. His first class is science, followed by a class entitled “careers,” then a graphic design class, followed by English. He breaks for lunch, and then it’s on to math and the last class of the day, which is “stagecraft.” School ends at 2:49 p.m. – “not that [he is] watching the clock,” he jokes.

He says he does “pretty well” in school, noting that he doesn’t skip class. He says he can’t help but feel like he is rotting away and wasting time during the school day because he would rather be uploading his sites, emailing with affiliate managers or working on some aspect of his business. He says he has a pretty good relationship with most of his teachers, although his math teacher does not like the fact that he text-messages in class.

At school, Gevirtz tries to keep his business endeavors on the down-low – he believes his teachers would get irritated and suspicious if they found out about his online dealings. He recalls a time when teachers were annoyed that a student was selling shirts online and attributes their irritation to two reasons: 1) teachers think there could be a shady aspect to it, like drugs, and 2) the kid was making approximately $50,000 a year and Gevirtz thinks that’s possibly more than the teachers were making and that could rub them the wrong way.

Gevirtz jokes that his favorite class “aside from lunch,” is graphic design, which allows him to get a little bit of work done because he can check email. Recently his parents “flipped a lid” when he told them he was getting a ‘B’ in his graphic design class. They thought he should get an ‘A’ because that’s what he does for a living. He says the class doesn’t really help him because they teach Dreamweaver and he doesn’t use an application to build his sites – he writes code by hand.

He likes math, because he does well in it, and likes the writing and the vocabulary part (it’s easy to memorize) of English class, but he does not like all of the required reading. Even the class’ current read, Lord of the Flies, doesn’t appeal to him. He “hates” science, dismisses stagecraft as “a joke” and does not have a very high opinion of his career class, which is designed to expose students to a variety of future occupations. This type of class is probably the last thing Gevirtz needs; he seems to have a clear understanding of what he will do next.

When he gets home from school around 3:30, Gevirtz sometimes works until midnight or later and says he gets most of his schoolwork done during classes. Gevirtz doesn’t sound that interested in spending a lot of time at the beach (the Pacific Ocean is cold, he explains) or engaging in sports, although he does like to watch college football and root for his father’s alma mater, the USC Trojans. But he says he is not missing out on his teen years – he goes out with his friends and does all the normal things that high school students do – especially now that he has a Treo that makes him mobile.

Kidding Around

His mother tells him that when he was 3 or 4 years old, he was playing around on his family’s Macintosh and broke it. The repairman told his mother that her son had somehow tried to access the hard drive and did some serious damage to the $2,000 machine. “After that, I was banned from the family computer for awhile,” he laments.

Gevirtz says he always liked computers – he knew how to save something on the hard drive by the time he was in first grade. He says they teach kids how to type in third grade and he was recognized by his eighth grade class to be the fastest typist – approximately 100 words per minute.

Gevirtz seems to be a natural born entrepreneur and exhibited the opportunistic traits at an early age. When he was in sixth grade, he had a teacher whose friend had a supply of plastic wristbands. Gevirtz agreed to buy them from him for 50 cents each and then sold them to “drunken college kids” for $2. He says he made enough of a profit for souvenir money for his trip to France that summer.

Learning the Business

Gevirtz says that he learns the business by communicating with his affiliate managers, emailing and instant messaging with industry folks whom he meets online and keeps in touch with by talking on the phone. He keeps up with the industry from reading other people’s blogs, like Shawn Collins’ and Jeremy Schoemaker’s ShoeMoney and laments that he does not have the time to read “the thousands of blogs on Technorati.” He also learns from listening to the Affiliate Thing and other WebmasterRadio Shows and “pestering people at Ad:Tech.” He plans to go to more shows in the future because he “likes to be connected” and says that he has a mountain of business cards that he goes through when he needs “to meet new advertisers and stuff like that.”

One observation that Gevirtz has about the industry is that there are a lot of click fraud companies out there “which is kind of sad that the world has come to that.” He says that there is an overabundance of affiliate networks and says some of the networks just piggyback off of other ones – which is bad because it makes it difficult to find a direct offer.

Gevirtz says that his parents are OK with his online endeavors despite not really understanding what he was doing until fairly recently. In April, Gevirtz and his father attended Ad:Tech in San Francisco and one of the affiliate managers from NeverblueAds took the time to explain to him how the system worked and how they worked together.

He says that for the most part, being 15 has not been a disadvantage in the industry. He thinks that people have helped him a bit because of his age and that he should use that wisely because he “only has three years left.” He has had a problem with one affiliate network for not being 18 but he would rather not use them than get his parents involved, saying that he wants to keep things separate from his parents because “there are liabilities even if you are not doing anything wrong.”

Setting Goals

Gevirtz has lots of aspirations – one of which is to continue to make money. He enjoys the fruits of his labor; he owns lots of gadgets – including a $3,000 laptop and several servers – is putting his money into a savings account, buys airline tickets (which he says are expensive from Santa Barbara) and treats himself to sushi.

His short-term goal is to buy a BMW m6 10- cylinder vehicle and his longer-term one is to be the next powerhouse. “Google’s becoming a beast; I want to be the beast,” he jokes. He doesn’t feel the need to go to college and would like to continue what he is doing but increase the volume – saying he’d like to “add a couple of zeros” to what he brings in on a monthly basis.

He is ambivalent about wanting to go to college and says he has to be careful about what he says about this issue because his parents are going to read the article and says he likes to tease his parents that he is going to drop out of high school.

Despite his success and business acumen, it’s clear that Gevirtz is not an adult trapped in a teen body – or any of the other Doogie Howser cliches that are used when talking about mature teenagers. Gevirtz is definitely a teenager who complains about having to take the trash out and walking his dog – a task he sometimes outsources to his brother by paying him $10. Given his drive and ingenuity, it will be interesting to see what Gevirtz does next – that is, when he is a high school sophomore.

Learning Outside the Box

Many of today’s online marketers have unrelated backgrounds and have learned their profession through on-the-job training and supplemental offerings.

The situation is similar to the first iteration of marketing on the Web in the 1990s. But unlike 10 years ago, there are more ways to learn and get information such as webinars and online courses; enrichment classes such as weekend training, conferences and boot camps; countless websites; and dozens of books and videos.

Because online marketing has become a bona fide career path, it seems reasonable to expect that university business schools would be offering undergraduate and graduate students a specific online marketing course or devoting a lot of time to its importance. But that’s not necessarily the case.

Over the last several years Choots Humphries, co-president of LinkConnector, an affiliate marketing network, has been a guest speaker at an M.B.A. program at a university on the East Coast where he addresses the incoming first-year grad students regarding online marketing. He has been “dumbfounded” at the lack of understanding of basic concepts. “They don’t know what AdWords is or what a merchant is,” Humphries says.

And he’s surprised that these new business school students know so little about such an important part of the economy. After all, according to Forrester Research, online retail commerce represents about 10 percent of total U.S. retail sales, and it is expected to grow to 13 percent by 2010. That begs the question: Are universities teaching the basics about such a vital aspect of commerce, or is online marketing still the domain of specialized education?

1. College 101

At the University of San Francisco’s Masagung Graduate School of Management, courses in finance, management and accounting all include readings and case studies that describe the impact of technology and online marketing in that discipline, according to Associate Dean Eugene Muscat. He believes the concepts of online marketing have achieved the same academic critical mass as the study of globalization and ethics and says that these three subjects should be included in each course of study as essential business literacy skills.

Muscat says USF does not teach a separate online marketing course because “to have a separate course in online marketing would run the risk of implying that the topic is only relevant to students majoring in marketing.”

Heidi Perry, vice president of marketing at gaming publisher PlayFirst, who graduated with an M.B.A. from Oxford University in 2004, says she took a marketing elective that had a section on online marketing. Perry thinks that certain graduate schools will eventually offer an online marketing course as an elective, but most schools will try to combine online marketing with other topics to give a candidate a more holistic view.

Although the University of Texas’ McCombs School of Business does not offer a specific online marketing course, Andrew Whinston, director of UT’s Center for Research in Electronics, says it makes more sense to teach entrepreneurship because the Web moves extremely fast.

“Think about how much the social networks have impacted online marketing just in the past year ” and if you look at some case studies of Internet companies from three years ago, it is like teaching history,” Whinston says.

However, there are many non-degree programs for learning about online marketing that are geared for people who want to enter the profession. Recruiters, such as The Creative Group, are encouraging traditional marketers who are trying to get into online marketing to take such courses to round out their skills and increase their marketability, according to Smith McClure, division director of the Minneapolis branch of the company.

NYU’s School of Continuing and Professional Studies (SCPS) offers dozens of non-degree marketing courses that can be applied toward a certificate in digital marketing. In the fall of 2006, consultant Shawn Collins was brought in to guest lecture at SCPS’s eight-week Strategic Search Engine Marketing class and gave a top-level overview of how affiliate managers should run programs. Ben Kirshner, founder of New York-based Elite SEM, taught the course and says that the students were extremely enthusiastic because they could apply the tactics they learned in an evening’s class to their jobs the next day.

Because Google sponsored the class, students were given a $50 credit to set up an AdWords account to learn how it worked, and were given the opportunity to take the Google AdWords professional exam for free, which is normally $50. Some of the students were able to put on their resumes that they passed the exam, a leg up for those who are applying for jobs at Google or Yahoo or an interactive agency. Kirshner says the class encompassed a mix of people – some were employees of companies who sent them there so they could better understand how to manage their online campaigns.

2. On the Company’s Dime

Many companies offer their employees online marketing training – through classes and in-house sessions – because of the shortage of qualified online marketers and because the industry changes so fast. Michael Taylor, founder of OnlineMarketingJobs.com, says companies hire people with existing account management skills and then train them for the online marketing techniques pertinent to their company.

So how do companies teach online marketing skills to their employees? PlayFirst’s Perry says that her company balances formal with informal training, and it does a lot of its training through group collaboration and brainstorming. The company also tries to send each marketing employee to the conference of their choice every year.

Dean DeBiase, CEO of Fathom Online, a search marketing and Web analytics company, says they are obsessed with training and view it as a strategic weapon to keep up with the constant changes made by Google, MSN, Yahoo, Ask.com and MIVA. Fathom Online offers two types of training – a 60-day, in-person training program for new recruits and ongoing training through modules to train employees on the latest topics such as analytics, in-game advertising and mobile search. This training is deployed through voice conferencing, video conferencing and WebEx.

Bob Chatham, senior vice president of education at WebSideStory, a provider of on-demand digital marketing applications, says that its employee and customer training program, Digital Marketing University, is a three-day course that teaches WebSideStory’s HBX analytics and Visual Site applications, which help marketers to optimize their search campaign by seeing how their paid and organic search terms are converting.

Chatham says he has seen courses relevant to digital marketing offered through e-commerce programs at schools including Babson College and Northeastern University – both in the Boston area – but has not seen any semester-long Web analytics courses. He notes that there are strong professional training programs on the subject such as one at the University of British Columbia.

3. Learn From the Masters

Chatham stresses that a lot of the good practical expertise lives with the consultants, such as Jeff Eisenberg and Bryan Eisenberg from Future Now; Gary Angel from SEMphonic; and Jim Sterne, who created the Emetrics Summit. Chatham notes that these same experts who speak at the University of British Columbia’s programs also speak at WebSideStory’s Digital Marketing University and other industry conferences. “I think the best way to get up-to-date information and the best training is through industry expert workshops,” Chatham says.

Attempting to fill a knowledge gap, Aaron Kahlow, managing partner of Business OnLine, created the Online Marketing Summit, which was held in San Diego in February. “I have spoken at many conferences including Ad:Tech and the DMA Conference and I am always surprised at how little industry folks know.”

He says that other industry conferences do not offer training or improve attendees’ understanding. He says they are all “either too technical or all about the future and predictions. This is great for investors but how does that help a tactical day-to-day marketer?”

Kahlow says that the industry needs to focus on education. “We are just getting to a point where best practices are established and the amount of change is slowing,” he says, adding that the most popular sessions at his show include workshops on search engine marketing and performance metrics.

However, if you want to be an affiliate marketer, formalized educational avenues are very limited. Stephanie Schwab, vice president of marketing at Converseon, thinks professors are in their ivory towers and are not aware of affiliate marketing. Consultant Andy Rodriguez says that he is surprised to not find any colleges teaching affiliate marketing in southern Florida. Consultant Colin McDougall has had similar findings in his area of British Columbia. But Rosalind Gardner says she is aware of a professor who was using her book, The Super Affiliate Handbook, to teach affiliate marketing in his university class.

The most convenient and least expensive way for newcomers to get their feet wet is to read the many websites, blogs and forums (message boards) related to affiliate marketing. “The best place that I have learned about affiliate marketing is from the community at ABestWeb.com,” says Kristin Collier, founder of MadHatter Consulting.

Consultant and author James Martell cautions that those looking for information must rely on credible sources such as the websites of Commission Junction and LinkShare, along with forums including http://affiliate- blogs.5staraffiliateprograms.com/ and AffiliatePrograms.com. Martell warns that forums can be good and bad because “they can take you down the wrong path” and says it is important to follow a person who is an affiliate and not just a writer.

McDougall says that there is a ton of “how-to” books on the market for teaching affiliates how to earn a living but warns that many of the “silver bullet” books sold teach how to manipulate holes in the Google algorithm, which can quickly become out of date. For this reason, Gardner says that her book is updated almost monthly and “every so often I offer previous purchasers a totally updated version of the book at a steep discount.”

4. Mentoring

McDougall recommends that affiliates find a mentor; a practice that he believes will become more popular in the near future. He says there a re some Internet and phone-based seminars today, but very few provide individual attention, and explains that assisting an affiliate in devising an individual plan of attack is very helpful – “some people struggle with time management while others struggle with technical issues.” McDougall says that he provides some complimentary mentoring but mainly it’s a paid relationship. Gardner says she has never participated in a mentoring program although she has done telephone consultations, which she calls short-term coaching.

5. Podcasts, Training & DVDs, Oh My!

Podcasts are a good way for people who haven’t quit their day job yet to learn about affiliate marketing. And there are plenty to select from. On WebmasterRadio, there is Good Karma by Greg Niland; Affiliate Marketing Today by Jeremy Palmer and Robin Walsh; and Net Income by Jeremy Shoemaker. Affiliate Thing features Revenue’s Lisa Picarille and consultant Collins on WebMasterRadio.com.

For those who want more interaction, Martell recommends videos. He has an eight-video program that corresponds with the eight steps outlined in his book, Affiliate Marketers Handbook. Anik Singal’s The Affiliate Classroom is a Web-based step-by-step training program to help people launch and grow their own affiliate Internet business. It reaches over 35,000 active affiliate marketers through its magazine and newsletter and is in the business incubator program at the University of Maryland. Another popular training program, Stomper Net, is offered by Brad Fallon and Andy Jenkins, and comprises DVD training and an online forum.

Nearly all industry experts recommend attending as many conferences as possible such as the twice-yearly Affiliate Summit, WebMasterWorld and e-Tail; along with the invite-only network events such as CJU and the LinkShare Summit.

“Affiliate marketing is an extremely social industry and we learn from each other. It is good to sit down and have face-to-face conversations with affiliates, managers and merchants. The sessions can be valuable as well,” MadHatter Consulting’s Collier says.

6. Experience vs. Classroom

Affiliate manager jobs are in high demand – so how can they obtain the training they need to do the multifaceted duties required – everything from HTML to creative to sales? Most think it is a learn-by-doing job. For one reason, managers need to have established relationships. “It is not about an M.B.A., but a person who can pick up the phone and leverage their contacts,” says Shawn Collins. Also affiliate managers need to understand “in the trenches” challenges like how they stack up again their competitors in terms of metrics like conversion rates, average order sizes and earnings per click. And most employers want to hire managers with specialized skills – and techniques learned in formal training can be too broad. Moreover, Converseon’s Schwab says that many classes only teach strategy and not tactics and “we need to hire people who can do the job.”

However, a background in marketing is helpful and there are aspects that can be taught in a course such as how the networks operate and the fundamentals of how to recruit, how to activate and how to retain affiliates. Still, PartnerCentric’s Linda Woods says that there is no way she would hire an inexperienced affiliate manager: “I wouldn’t hire anyone just because they took a couple of courses on Internet marketing.” She believes managers need on-the-job training and the training that is offered through seminars.

7. Affiliate Management Seminars

Industry experts like Rosalind Gardner recommend attending conferences such as Andy Rodriguez’s Affiliate Manager Certification Seminar and Anik Singal’s Affiliate Manager Boot Camp to learn affiliate management skills.

Rodriguez’s program is a three-day course and attendees are certified upon completion. Rodriguez and guest speakers teach attendees about formulas that work and promotional ideas as well as warn them about potential pitfalls such as identifying spyware that could affect program performance.

In 2006, Singal had a four-hour, in-person boot camp the day after the Affiliate Summit and he plans more for the future. Like Rodriguez’s program, it was created in response to demand by merchants who needed managers for their programs. Singal says that the attendees include new merchants who are trying to get in the game, merchants who are trying to fix their programs, affiliates who want to be managers and managers who want to improve their abilities.

8. Looking Ahead

Currently there are many options to learn about online marketing that fit into everyone’s schedule: You could attend a weekend boot camp, listen to a podcast on the way home from work, pop in a video on Saturday morning, watch a webinar during your lunch break or find a mentor to walk you through a challenging process.

Most university programs only touch on online marketing as part of entrepreneurship but do not teach it as a separate course for several reasons. One is that the industry’s fast pace has challenged the development of an up-to-date curriculum, which is needed to add a course to a degree program.

Another is that the real industry knowledge lies with the experts, who are busy leading companies and are limited to speaking and teaching at conferences and workshops. Some think that college professors would have trouble keeping abreast of this constantly evolving industry; although if the changes slow down and best practices are established, this may change.

Perhaps most importantly, it is all about up-to-date training: Employers desire employees with tactical online marketing skills from real-world experience, and they would rather hire someone who was trained through last month’s professional training program than someone who studied affiliate management as part of an undergraduate degree in marketing three years ago.

It’s all about training and educating the future generation of online marketers so the space can continue to grow and flourish.

How Do Companies Train Affiliate Managers?

Converseon starts by having new employees review hundreds and sometimes thousands of affiliate sites for approvals because Converseon does not do auto-approvals. The new employees examine sites to determine if they are good – how they are designed, to whom they link and how they are promoting their competitors. Vice President Stephanie Schwab says they encourage their employees to read industry blogs as much as possible, like Scott Jangro’s, Shawn Collins’ and ABestWeb. She likes to send employees to conferences like the Affiliate Summit, so affiliate managers can understand the business from a macroview, and to webinars like eComXpo because of its convenience.

PartnerCentric’s Linda Woods says that they train their employees for PartnerCentric processes, reporting and practices through weekly telephone conference calls among the account managers and staff of approximately 25 people. “Once a month, we have a training call where they are learning something like a new way of reporting to a client, a new activation campaign idea or a new technical tool that we will be using.”

Kristin Collier, former director of marketing at Batteries.com, credits consultant Andy Rodriguez with helping her become a successful affiliate manager. She is now the owner of MadHatter Consulting.

Q: How did you meet your mentor, Andy Rodriguez?

A: I actually met Andy virtually at first on ABestWeb.com. Batteries.com had recently opened a program on ShareASale due to LMI (link management initiative) and I noticed a thread on ABW about newsletters on ShareASale. Andy was hinting at a hidden secret about how to make these newsletters powerful so I sent him an email and he passed me a little information.

This was shortly before the Orlando Affiliate Summit in 2006, which is where I met him in person for the first time. I spent some time with him and many others, and asked as many questions as I could and then he offered to mentor me. I learned a lot from him in a very short amount of time and we still trade emails.

Do you think mentoring is important to this industry and do you think it is common?

A: I think mentoring is somewhat common. I know a few affiliates that mentor other affiliates if they see the passion, drive and thirst for knowledge in them. Andy is not my only mentor – other affiliates mentor me so I can learn more about PPC or about being a manager. I also help other affiliates and merchants learn the skills of good affiliate marketing and online marketing.

Do you think mentoring is mostly unpaid or paid?

A: When I think of mentoring, paid is not something that comes to mind. I do teach my clients about affiliate marketing but I am not mentoring them, I am consulting with them. Mentoring to me is taking the time out of your day to help someone else who truly wants to learn something that you know well, just to help them succeed.

Judi Moore: The Leaper

About Judi MooreJudi Moore is not a super-affiliate. She’s not even sure what that is. She doesn’t see this as a detriment. Being an affiliate is also not her first career. In fact, at 52 years old, she’s had a lifetime of work in the corporate world – in about three industries, she says – only to land back in her home state of Illinois, with six grown kids, husband No. 2, a Schnauzer and a burgeoning affiliate business.

She is the first one to say that she hasn’t really got a plan. She’s a leaper, not a looker, even though her diminutive frame doesn’t scream out that she’s a fighter. Always ready with a quip, her independence and voracious mind more than make up for her stature. Her personal motto is, “Leap and the net will appear.” And that is pretty much what she’s been doing her whole life.

What makes her stand out and helped inform her independent spirit goes all the way back to high school. Before she was even out of her senior year, she received a full scholarship to Brigham Young University in Utah back in the early ’70s. It was a long way from where she grew up in Illinois, but she grabbed her sweetheart, married him and lit out for Utah in nearly the same week. He was a farmer and followed her out there to see what he could do.

By Christmas of that year she and her husband were back in Illinois. Her attempt at higher education was over. As a good Mormon, she knew some of the expectations – get married, have kids, be faithful to the faith. But what she didn’t count on was living in a society that basically devalued her studies – journalism and the fine arts.

What she also didn’t count on was having a husband that abused her and was unfaithful. In 1981, after having three children and moving to Montana for her husband’s job, it was clear that her marriage was also over.

“I’m an independent sort,” she says, “and I swept up the kids and went to town. And felt betrayed. Then he filed for divorce. While there was domestic abuse – I was excommunicated from the church. I was the bad one in their eyes.”

She thought it was more than odd that when she arrived to start school, the reception was chilly. “I never expected to be looked at funny for being the one going to school and my husband working.” While she looks back at that time and calls it a “failure in my life,” the experience taught her a lot about liberty, self-determination, the troubles with blind faith and introduced the notion that “everything that happens to you puts you to the path you are on.”

These are all helpful pieces of life’s mosaic she took into the corporate world – with three kids and no college degree. She started selling radio ads in Montana. It was just a job that began as the “little girl order taker,” but she found she was good at it and moved to other kinds of marketing. Eventually she was going to stop work to be with family – but ended up in a small mortgage firm. Mortgage lender Countrywide Financial recruited her and made her an assistant manager and then regional manager. By then she was commuting two hours each way and decided to get back to Rockford, Ill. – where she and her second husband have been for 20 years, with her three kids and his three kids.

Judi Moore Along the way, they bought and sold a small radio station in New Mexico. Her second husband, Dave Moore, was known as the guy who would come into radio stations and turn them around if they were in trouble. Meeting him turned her around as well. She says that he just made the cut – before her radical feminism ruled out anything to do with marriage. “I’m not radical anymore,” she says. “It’s young blood that runs hot.” And it was her husband and his “geekiness” that first led her to the Internet. Also, she was at Countrywide Financial as a middle manager when the company went online, and while she didn’t know about things like eBay.com, she figured if she could sell books about mortgages online she could put some money away for retirement.

Moore will be the first one to tell you that she lacks an affinity for technology. Not that she can’t do it – she says she can pretty much teach herself anything – but she thought an easy way would be to have her husband and stepson code Web pages for her.

So in 2004 she opened LunchBreakShopping.com, her mall, selling everything from crafts to fashion to movies to bridal and baby stuff. Having come from corporate America, she knew first hand that many people shop online while at the office. She says she built the mall with one hand while holding the HTML book in the other and saw a little profit in the first year she filed a tax return.

She’s still not making big bucks and she knows that a bit more care in her campaigns may get her more notice. She’s not rich and she’s actually not looking to get rich – just a little extra for her husband’s retirement would be great. He retires soon and therefore she would love to find strategies to keep her commissions coming.

One turning point was joining ShareASale.com in the summer of 2005. Up until then her sales were fairly flat. “I learned from ABestWeb forums that I should give ShareASale a shot,” she said, “and kind of didn’t make a dime until that. I started seeing little successes with them.”

She also believes that her writing background gives her a leg up. She feels she can write good, tight copy. She’s kind of a newspaper nut and she will often see something in the paper that gives her an idea for an article. Something on mortgage advice to first-time home buyers, for example. She’s seen all the horror stories about home mortgages in the flesh and can usually come up with a small article that can be peppered with common sense. “Wise old grandma kind of stuff,” she says. She’ll write it up – about 700 words – and post it. She thinks that the quality of the writing gives her rankings a boost without any paid placement. The writing comes pretty naturally and it helps to have set templates or blog-style templates for her to pour the content into.

Today she owns about 50 domain names but she says that more than half are underdeveloped. In addition to her website LunchBreakShopping.com she has sites on home mortgages, Stanley Home Products, an all-things-Santa-Claus site and something she calls Middle Aged Spread, for people like herself, she says. Middle Aged Spread runs under the JudiMoore.com domain and is where she will sell a niche item for awhile – gifts, stuffed animals, diet-related items – and then just wipe the site clean and post a whole different niche product.

That’s not what she did in the beginning. The mall was an attempt to sell all things. It didn’t work too well. But once she picked a specific area – pajamas was the breakout one – things took off from there. “I’m interested in everything,” she says.

Midwestern Moxie

And while her interests are varied, her core is very Midwestern. She wakes up about 6 a.m. to see her husband off to work. She’ll fix his lunch and take something out to thaw for dinner. First thing in the morning, her husband usually goes to his newspaper while she runs to her computer to check stats on her sites. On some mornings – if she was up late the night before – she may go back to bed after he goes to work. If there is a lot of cut-and-paste work, she will save it to do it at night.

And while she’s “tried the PPC thing,” the results have been less than impressive. “I’ve tried it and come out with two or three specific things and my conversions are okay and so I let them run.” She just recently added Google analytics but still figures 80 percent of her traffic is from organic search. “With gifts and pajamas I must have a unique voice,” she says. Her husband and sons run some sites under her banner – about Linux and Linux books, which she says are quite popular. According to Moore, her husband has the traffic but hasn’t monetized it yet.

Judi Moore While she can code and is quick to learn, she says her husband is the real geek of the family. She says they have about eight computers in the house. And while she does have a laptop, it’s not her primary machine so she has to load it with the correct files every time she takes it out to the lake. She sent her first text message when she was in Las Vegas for Affiliate Summit in January. She says she knows just enough PHP coding to be dangerous. Of the eight computers she only uses two; the others are Linux test machines. She does have a Bluetooth phone and is wireless in the house, but still leads a life that is unencumbered by technology, including going sailing whenever possible and reading up to six books at a time (her most recent, the offbeat That’s Funny, You Don’t Look Buddhist: On Being a Faithful Jew and a Passionate Buddhist, by Sylvia Boorstein).

She says her creativity and the technical side don’t go well together. Her desk is a storm of sticky notes. Whether she is going to write or code depends on which side of her brain gets up in the morning, she says. She could be writing or she could be cutting and pasting. If she’s in the zone, she’ll stay up until 4:00 in the morning getting it just right. She’ll make a list the night before and even if she says she may ignore the list the next day, at least she organized her thoughts.

And while it takes planning to help your business grow, she’s taking it easy on dwelling too much on what it all will mean for her future. Maybe she’ll go back to school and chase that college degree that was so rudely put in suspended animation. But maybe she won’t. She says she’s toyed with the idea that she would make a good affiliate manager, but that would mean walking back into the corporate world. “I’m still just learning it all as fast as I can,” she says. And that is also part of the attraction. She likens the way mortgage rules change so often to the changes in the average affiliate business. “I love that about it.”

Meanwhile, she and her husband dream of the days ahead. She says they love to just “dink around together,” whether it’s traveling or going to the supermarket. They want to get to a warmer climate. He wants to sail but she’s not sure they should be that far from medical attention in case they need it. And since affiliate marketing is taking off for her this year, she thinks the dream could still happen. “But,” she adds, “if I have to pass out carts at Wal-Mart, so be it.”

She would love to move around as much as possible, now that the kids are out on their own – one’s in Iowa; one’s a midwife in Montana; another is a hospice care worker; two live in the same state as her and one was in New Jersey. Originally the attraction of affiliate marketing was that it was a business you can pack into a suitcase. Plus, she says, when you’re in radio you move around a lot, too. And while her husband switched to television and is now at the phone company, his retirement is imminent. When that happens they will be free to roam wherever they please. And that might end up being on a sailboat. Going across the country in a motor home also sounds appealing. But, she adds, whether on a boat or in a home, “I think I’ll be doing affiliate marketing until the day I die.”

Sex Education

You may or may not approve of what they are marketing, but nearly everyone can learn something from the strategies that the adult industry uses to capture consumers online. The thriving adult industry has a history of pioneering many online marketing techniques and continues to provide useful lessons in how to attract and convert an audience.

From the creation of the affiliate model to monetizing user-generated content, where sex sites go, mainstream marketers often follow. The selling of sex products and content has grown to become a more than $2.5 billion annual business, according to publisher AVN Online, as each year 72 million people visit the more than 4.2 million adult content websites.

Spoil Your Partners

While search marketing and display advertising provides most of the traffic in many industries, affiliates drive most of the visitors to sex sites. Adult affiliates are treated more like partners, and publishers are unafraid to show their gratitude. Keeping affiliates happy is paramount in the hyper-competitive adult world, says Clark Chambers, general manager of adult affiliate network NicheBucks.

Like many consumers, affiliates don’t have much brand loyalty and will work the partners that offer the better returns if they aren’t satisfied. Chambers, who got into the business because a friend needed someone to oversee his exploding affiliate program, rewards his best affiliates with gifts on top of their generous commissions. He has given jewelry, video games and digital music players to his best affiliates, including one teenager in Russia who makes more than $7,000 a month.

Affiliates do the primary search engine marketing and optimization, which reduces the risk for publishers and eliminates competing with them for the same keywords. Chambers makes sure that his affiliates have access to current conversion statistics and a variety of marketing tools, including a steady stream of images through RSS feeds to attract new customers. Adult sites will even host the affiliate websites for free, according to Chambers, who has been managing adult affiliates for eight years.

Adult sites will pay more than the first month’s subscription fees in commissions to keep the traffic coming, according to an adult industry consultant who asked that his name be withheld (he says his family doesn’t know where he works). The payouts are very generous to prompt affiliate webmasters to work harder for the program, and because they can easily find other content sites to promote, the consultant says. Publishers also emphasize the personal touch by being readily available to their affiliates and quickly responding to their phone calls, and by meeting in person at industry events.

Promoting Competitors

The adult industry has not only nearly perfected the art of affiliate relations, but also grows stronger through publishers earning extra revenue by also acting as affiliates themselves. “Co-opetition” is the practice of promoting competitors’ websites when visitors try to exit a website without buying something, according to Jim Lillig, president of marketing consultancy Synergy Intermedia. “It’s a last resort after exhausting all the other ways to monetize” visitors, he says.

While many publishers may not be willing to promote competitors by acting as an affiliate, Lillig says publishers may be able to earn more revenue from those who don’t buy from them than those who do. Lillig, who helped to build Mr. Skin, a subscription website focusing on celebrity nude scenes, into a successful franchise says, “98 percent of customers leave most websites without buying something.” Admitting that you may not have a product that suits every taste is a difficult but significant realization for publishers looking to maximize their revenue.

Ed Kunkel, the chief operating officer of SexSearch.com, agrees that pitching competitors’ products helps to grow sales across the industry. “[Competitors] have the audience you need and vice versa,” Kunkel says. “It’s a huge world you have access to; there is plenty (of demand) for everyone to make enough money. … Since there is no way of completely dominating a market, you might as well share the wealth amongst each other.”

Analyst Greg Sterling of Sterling Market Intelligence says that publishers who link to their competitor’s sites can benefit. “Intercepting a person before they leave a site in an unobtrusive way would be successful in capturing some number of sales,” according to Sterling. He says applications developers such as customer relations management software company LivePerson are experimenting with displaying competing products as a last resort.

By acting as an affiliate for niche adult publishers (such as sites focusing on older women or those of a specific ethnicity), publishers can also track the conversion rates of different types of content and then develop their own competing sites, according to Lillig. He recommends creating multiple niche sites to highlight areas of content as well as to learn more about consumer habits. Also, publishers who present information about competing products gain credibility with their audience, he says.

Analyst Sterling says companies can increase their reach by parsing their content and creating niche websites, such as search technology vendor Marchex’s development of local search sites from a single database. “The creation of niche sites is a good idea if it can be done skillfully and it’s not just spam,” Sterling says.

The adult industry is a tight-knit group who know each another and “form a big circle,” referring traffic to each other in the belief that it’s better if consumers buy from a competitor than if they don’t buy at all. Adult publishers who trade links with competitors can increase their traffic without having to purchase advertising, Lillig says.

However, that circle often traps customers by generating pop-up windows when customers try to exit, an annoying practice that continues to get some adult publishers in legal trouble. Lillig says that while the pop-ups may be frustrating, adult sites studied the practice and identified the exact number of pop-up windows to maximize revenue. Though pop-ups are still in use, many adult companies now ban affiliates who create pop-ups that trap users with unending windows.

Leading the Technical Charge

Lillig says Mr. Skin was one of the first companies to watermark an image and allow it to be spread around the Internet as viral marketing to enhance branding. Mr. Skin reached millions of potential customers by putting its logo on images and by embedding pre-roll ads into celebrity videos that were circulated via email and through peer-to-peer networks. “They became moving ads,” he says.

The adult industry also popularized giving free sample content in exchange for customers providing valid email addresses and co-registration, which gives customers the option of simultaneously signing up for newsletters from competing adult sites, according to Lillig. He says adult marketers took an early lead in tracking email performance, including who opened emails and where they clicked.

Adult sites have also been adept at identifying seemingly unrelated trends in entertainment and integrating them into their product. For example, one of the fastest-growing segments is “reality porn,” an imitation of reality TV programs that has prompted adult publishers to launch dozens of niche sites.

Another cultural phenomenon being integrated into adult sites is gambling (see article on page 66). Playboy.com will open its first Internet casino by the end of 2006, and 121 Gaming Inc. this summer launched GrandNevada.com, which features naked card dealers.

Publishers need to study the latest trends and find complementary ways to expand their reach, says 121Gaming president and CEO Howard Mann. “We saw an opportunity to go in a different direction with something that added entertainment value,” says Mann, of his combining gaming with nudity.

Adult content publishers are frequently the earliest adopters of technologies such as streaming video and webcams that later are adopted by other industries. “The VCR became popular because people wanted porn, and VHS won out because that was the format that porn adopted,” Mann says. Media companies who are currently evaluating which of the new high-capacity DVD formats (Blu-ray or HD-DVD) to sell should watch to see which technology the porn industry favors.

In addition to technology and cultural trends, adult marketers are also quick to turn the latest publishing trends into tools for deriving additional income. Affiliates are authoring blogs about the adult industry to increase their natural search result rankings, and publishers are creating MySpace profiles for their rising acting stars to differentiate their brands, according to NicheBucks’ Chambers.

The Upper Hand

Of course adult sites have a distinct advantage over their general audience counterparts – sex sells, and the demand for content is almost limitless. “If there is one thing that is universal, it’s that men love to look at naked women,” says 121Gaming’s Mann. Even without any marketing, millions of people will search for adult content. “I know adult networks that get similar traffic to Yahoo,” he says.

Conversion raters are higher on adult versus PG personals searches, according to Mark Brooks, the editor of Online Personals Watch. The “conversions are best when people are looking for sexual connections,” he says. Brooks, who previously worked for AdultFriendFinder, says adult publishers can make back the commissions paid to affiliates to acquire a customer within one month, while it may take three months or more for mainstream personals.

However, because of the generous payouts on adult personals sites, publishers have to spend additional time managing their affiliate relationships. “You have to look after [the affiliates], allow them to call you on the phone and take their requests seriously,” Brooks says. Publishers also have to be steadfast in making sure their affiliates do not damage their brand by being overly aggressive. While he was at the company, AdultFriendFinder stopped allowing affiliates to do email marketing because there was too much abuse.

Lessons Not Learned

The adult industry has mastered how to tempt consumers with just enough content to prompt them to purchase without compromising sales, something that most retail sites have been reticent to experiment with thus far. Adult publishers successfully convert traffic by providing affiliates with free samples of their content, a strategy that publishers should adopt, says Shawn Collins, co-founder of the Affiliate Summit conference.

In the adult world, the profits are in the video content, and affiliates lure and hook customers by showing image galleries (often thumbnails) of naked people, and then directing them to the publishers who sell unlimited access accounts. Collins says video, audio or print media companies could greatly expand their conversions by using affiliates to distribute free samples of their content.

For example, the television networks or movie sellers could distribute clips from their sitcoms or films to affiliates to pique consumer interest, which enables customers to realize the value of the content, according to Collins. Media companies have yet to exploit the power of distributing content through affiliates, Collins says, and were slow to team up with video search engines such as YouTube.com to increase their exposure.

This strategy of partnering with large search engines and requiring users to register is the opposite of the niche marketing that has been critical to the adult industry’s success. Video search engine sites have too much content to successfully promote niches (such as British comedy or period-piece dramas) that would convert well as independent affiliate sites.

“Showing teaser videos and allowing them to be distributed virally” could boost the sales of online video, Collins says. Online music stores should allow affiliates to host and play select songs for free, and Amazon should share its technology for previewing a few pages of a book with affiliates. Reuter’s news is one of the video services that allow affiliates to display its content, but the company keeps all of the revenue from its pre-roll ads, which takes away the incentive from affiliates.

As the adult industry has shown, whetting consumers’ appetites by letting them peek at the goods goes a long way in prompting conversions. Adult publishers prove that by working closely with affiliates, innovating by embracing technology and treating competitors as assets, publishers can create new products and increase their revenue.


JOHN GARTNER is a freelance writer in Portland, Ore. He is a former editor at Wired News and CMP. His articles regularly appear on Wired.com, AlterNet.org and in MIT’s TechnologyReview.com.

Gambling Stakes Rise

You can’t drive on the highway, watch TV or go to the supermarket without being reminded of America’s obsession with betting. Casinos are popping up faster than you can say “double down,” the World Series of Poker has become a prime time television spectacle and Powerball payoffs are reaching the size of state budgets.

Cashing in on a booming industry that offers some of the highest payouts around might seem like a good bet for affiliates, but not when that business is illegal. Gambling law experts say federal law makes it fairly clear that operating Internet sports books is a crime. But the law is not quite as clear regarding the issue of other Internet games, such as poker and blackjack.

Revenue from, and public support of, gambling (or “gaming” as the industry prefers) in all its forms has never been higher, but pressure from the federal government increases the odds that online gambling marketers may be putting their money and freedom on the line.

The policies of the federal government and some states are, broadly speaking, at odds with the rules governing online betting parlors in many countries, like Costa Rica and Antigua, where most casinos have their operations. The current regulations also put law enforcement in conflict with millions of Americans who place bets online, using their home computers to wager on sporting events and games like blackjack and poker.

Poker is hot right now and poker revenue at brick-and-mortar casinos in Nevada and New Jersey may have jumped 37 percent in 2005, according to the American Gaming association, but Internet gambling is the fastest-growing segment of the gambling market, according to a Pew Research report from March of 2006. Ignorance – whether real or feigned – leads to blissful betting, as nearly 20 percent of Americans surveyed by Pew denied knowing that online gambling is illegal.

More than 80 percent of Americans either support or don’t object to gambling, and last year between $10 billion and $12 billion were bet online globally, according to William Eadington, director of the Institute for the Study of Gambling and Commercial Gaming and professor of economics at the University of Nevada, Reno. Even though online gambling is illegal in the United States (with the curious exceptions of state-approved horse racing and lotteries), approximately half of the total online wagering comes from inside the United States.

Despite its popularity, even those who support gambling are reticent to admit it and many recognize its addictive powers. Less than five percent of Americans admit to gambling online, while 70 percent of Americans say that legalized gambling encourages people to spend money they don’t have, according to Pew Research.

Since no online bettors have been prosecuted, individuals log on without fear for all-night poker games, and some confident folks have even quit their day jobs to earn their living betting.

While online gambling may become a $25 billion annual industry by the end of the decade, legislative changes and more vigorous enforcement could prompt many U.S. gambling marketers to fold. However, some legal experts claim that online gambling will not end unless U.S. authorities prosecute every one of the 50 million Americans who bet online every year.

Sports Booked

In July, the “handcuff-click heard ’round the world” took place at a Dallas airport, where BetOnSports CEO David Carruthers was arrested following an indictment for racketeering, conspiracy, fraud and violation of the federal Wire Act. Carruthers, whose company was headquartered in Costa Rica, was charged along with BetOnSports founder Gary David Kaplan and four alleged co-conspirators who worked for U.S.-based DME Global Marketing and Fulfillment. BetOnSports later closed its Costa Rican office.

The arrest forced many companies who participate in online gaming to shuffle their strategy as they awaited trial, and to see if indictments against other organizations would follow. Proprietors of online gaming sites stopped traveling to the U.S., and a much-anticipated gaming conference in Las Vegas was scaled back.

Seven weeks later, law enforcement agents in New York arrested Peter Dicks, chairman of Sportingbet, which offers online sports betting and is traded on the London Stock Exchange. Sportingbet is one of the largest online gambling operators in the world with revenue of $193 million, for the year ended in July, with two-thirds of that coming from the United States, according to the company. Agents of the Port Authority of New York and New Jersey arrested Dicks upon his arrival at Kennedy Airport, acting on a warrant issued by the state police in Louisiana. The arrest was the first time that officials at the state level had adopted similar tactics and pursued charges against a director of a publicly held Internet gambling company.

“The best advice is to stay away from [online gambling],” says attorney Linda Goodman, founder of the Goodman Law Firm, a practice focusing on Internet compliance. Goodman, who primarily represents affiliates and advertising agencies, says this first-time indictment of a marketing company that promotes online gambling opens the door for other affiliate and ad networks to be prosecuted. “If you pick up one of those [gambling] clients on your network, they can charge you with conspiracy.”

Marketers minimally need to include language on their websites stating that advertisements are not intended for American audiences, according to Goodman. Gambling websites should not accept payments if the customer who attempts to set up an account lives in the U.S., she says.

Goodman believes the federal government is more actively pursuing online gambling agencies because the potential pot for taxation is getting sweeter. “Billions of tax dollars are going out the door,” she says.

Online bettors who live outside of the state of Washington probably need not fear as law enforcement’s limited resources prevent targeting individuals, according to Goodman. The Washington legislature passed a law in June of 2006 that upgraded the penalty for running a gambling site from a gross misdemeanor to a felony, and provides gross misdemeanor and felony penalties for betting online in the state.

Patrick Smyth, the president of Gaming Transactions, Inc. and CEO of Keno.com, says that marketers and online gambling companies can operate without fear if they follow one rule. “As long as you don’t take phone bets, you are fine,” says Smyth, whose wife Kate Kozak worked as brand director at BetOnSports (Kozak has not been charged).

Smyth says the Department of Justice only pursued BetOnSports because founder Gary Kaplan was alleged to have run a sports book in New York before heading to Costa Rica.

Because gambling is illegal in the U.S., many of the proprietors who accept wagers from the United States are headquartered in Costa Rica or Antigua and may have offices in Canada, as is the case with Smyth’s company. “I pay taxes in Britain, but I should be paying taxes in the United States, which is where my customers are,” says Smyth.

The BetOnSports indictment accelerated a change in the marketing of online gaming sites, according to Smyth. To help its partners avoid prosecution for promoting illegal gambling, online wager sites have created fun-only gambling sites with “.net” web addresses to supplement their existing .com gambling sites. The .net sites don’t outwardly promote online gambling, but once registered, participants will be asked if they would like to open an account on their pay-for-play sites, Smyth says.

Hedging Bets

The creation of .net sites provides a defense that has yet to be tested in court. Online casinos and poker sites are transitioning to promoting either just their .net sites, or promoting only the brand name, such as is the case with Bodog and PartyPoker, which operate both .net and .com sites.

Despite the potential revenue, the large networks have historically shunned online gaming, prompting the formation of gambling-specific networks. “We do not have any gambling sites within our affiliate network, nor do we allow any affiliates to link to gambling sites,” says Kristin Hall, product marketing director at Performics.

Gambling networks such as CyberSuccess Group, CasinoBlasters and MainStreet Affiliates have been happy to pick up the slack and offer generous commission programs. For example, PartyPartners.com offers signing bonuses of $75 for each new account opened, or a revenue share of 25 percent or more of gambling losses.

Christopher Shawn, vice president of business development at CyberSuccessGroup, says very few affiliates have closed because of the indictments. “Affiliates, however, have expressed concerns about sending traffic to sports books that accept telephone wagers, as this could be a violation of the United States Wire Act, which is directly related to the BetOnSPORTS Indictments.”

In addition to the potential legal penalties, affiliates could also earn nothing if the gamblers they refer win. Dave Johnson, CEO of WagerWeb.com, says his company pays commissions once a week, and any losses by the gambling sites are carried over until customers lose.

Johnson, who has been operating WagerWeb from Costa Rica for seven years, launched an affiliate network that now boasts 1,500 members. Some of his affiliates who reside in the United States told him they were nervous about continuing operations during the new climate of prosecution, but he argues that the risk of prosecution has not really changed. “The potential [of being indicted] isn’t greater now than seven years ago, there is just more exposure,” he says.

Each state has its own rules about online gambling that marketers should be aware of, Johnson says. If an affiliate were torn about the risks, he “would recommend that they go another way.”

Marketing companies are also distancing themselves from online gambling activities. Mike Shopmaker, CEO of Virtumundo, Inc., says his Overland Park, Kansas, company draws the line at gambling sites that require customers to provide credit card numbers to play. Companies such as Virtumundo client GoldenArchCasino.net, a Cyprus-based gaming site, that offer both pay-for and free gaming, are acceptable, but Virtumundo only “occasionally” markets for gaming companies.

Crapshoot

A new law that makes it illegal for financial institutions to process transactions for customers of Internet gambling sites may reduce the amount of virtual wagering. Congress surprisingly passed the Unlawful Internet Gambling Enforcement Act as part of unrelated legislation during an early hour session, and President Bush signed it into law a few days later.

While most U.S.-based banks and payment processing companies such as PayPal have not been accepting payments to gambling sites from domestic customers, the new law all but guarantees they will stay away.

In the wake of the new law, Sportingbet sold its U.S. operations for $1, and electronic transaction processing company FirePay, which along with Neteller transferred U.S. payments to many online gambling companies, said it would no longer send funds from U.S. customers.

However, Goodman says lobbyists for the online gaming industry could ensure that more restrictive laws are not enacted and may eventually use their influence to erode the current laws. The gaming industry could ask for legislation with more exemptions or challenge the existing laws in court. Also, a desire to tap in to the billions of dollars of potential tax revenue from online gambling could prompt the federal government to change its policies.

Gambling expert Eadington says U.S. lawmakers’ stance on Internet gambling will be increasingly hard to maintain. The exceptions in the law that have been “carved out” for betting on horses and pay-to-play fantasy sports leagues, as well as interest from state lotteries in accepting bets online, have opened the door for more exceptions that would ultimately doom online gambling prohibition, he says. Consumers who support gambling and don’t have a voice in the political process could also become more vocal in opposing new laws, according to Eadington.

Online gambling is growing internationally as nations including the United Kingdom, Sweden and Italy are regulating and taxing the leisure activity, Eadington says, making the current U.S. laws politically untenable. “Can the United States continue its prohibition strategy when the rest of the world is moving in another direction?”

A complaint started by a tiny nation in the World Trade Organization (WTO) could ultimately result in the United States reconsidering its position on Internet gambling. American Jay Cohen was operating an online gambling site on Antigua and Barbuda, a Caribbean nation of two islands, when he was convicted in 2001 of violating U.S. gambling laws.

Antigua complained to the WTO that the United States was violating a trade principle known as “national treatment” that requires foreign companies are treated the same as domestic organizations. Since it was legal for U.S. companies to accept online wagers for horse racing, Antigua argued that gambling websites there should also be allowed to take bets. Antigua has been victorious in nearly all aspects of their complaint through several levels of appeal.

However, the WTO lacks the authority to force governments to comply with its ruling, according to attorney Goodman, so the United States could continue to prosecute foreign gambling organizations. But Antigua is likely to ask the WTO for permission to ignore U.S. copyright laws as a penalty for its noncompliance. If the WTO grants the action, Antigua could begin selling movie DVDs and music CDs internationally, that are produced in the United States, which Goodman says could result in the entertainment industry using its extensive influence to persuade Congress to legalize online gambling.

Wagering On Mobile

The next innovation in gambling will be play-by-play gambling from mobile devices, according to Gaming Transactions’ Smyth. Companies such as LiveHive Systems are creating services that enable bets on each play, such as whether a golfer will successfully sink a putt, from mobile phones or handheld computers.

Also, if China legalizes online gambling, the demand for online gambling will skyrocket, says Smyth. “There is still so much room for growth.”

Whether or not online gambling is made legal in the United States, the industry will continue to expand, according to Smyth. If American affiliates and marketers no longer support the industry for fear of prosecution, international organizations will happily take their place.

Disclosure: Revenue magazine accepts a very limited number of advertisements from online casinos in each bimonthly issue and only if those advertisers are promoting an affiliate program and not actual gaming enterprises.

JOHN GARTNER is a freelance writer in Portland, Ore. He is a former editor at Wired News and CMP. His articles regularly appear on Wired.com, AlterNet.org and in MIT’s TechnologyReview.com.

Taking A Stand: Q & A with Brian Littleton

ShareASale is an affiliate network that has taken a hard stance on spyware, adware and parasite-ware by not allowing any downloadable applications into its network. That business model has won legions of affiliate supporters. ShareASale is growing, and is still considered the smaller, nimbler, more fun network – throwing memorable parties and playing host for standout social events. The company’s founder, president and CEO, Brian Littleton, is committed to affiliate marketing and creating a successful business by building strong relationships and sticking to his beliefs. He recently won AffiliateFairPlay.com’s first-ever Fair Practice Award (see Revenue September/October, page 18). Meanwhile, he, and everyone around him, is having lots of fun making it happen.

Lisa Picarille:What made you decide not to allow downloads or applications within your network?

Brian Littleton: Several years ago when the issue first came up to us, we took a look at how some of the software download applications worked – and it was obvious to me that they didn’t belong in any affiliate channel that I had any control over. As an affiliate network, our main job is to track a consumer from the point of a “click” to the point of a “sale” and commission the referring affiliate. Based on our testing, it’s impossible to accurately track this and commission the proper affiliate if there is a download or application in effect. Further, we witnessed some extremely disturbing distribution methods and behavior from some of the players in that market. Thus, to ensure that ShareASale is not party to any practices that contradict our values, we do not allow any downloads or applications within the network.

It is my opinion that these downloadable applications, most of which involve customer loyalty of some kind, should be a completely separate channel from the affiliate channel, one that is tracked and commissioned differently. They perform an entirely different service than that of an affiliate – and actually remind me more of the type of action such as using my “Reward Miles” credit card for a purchase as opposed to a “sales generating” affiliate. I love consumers, but it has never been my understanding that a consumer has the right to dictate where a commission on a sale should go. That doesn’t make sense to me. A lot of times, loyalty applications and affiliates could actually help each other out if they were properly channeled, but that may take time for affiliates to welcome back into the clickstream a party which has, in the past, taken money out of their pocket.

LP: What are the pluses and minuses to that business stance?

BL: The only minus is the occasional client who wishes to work with an affiliate who we do not work with. In those cases, we try to convince the client why partnering with a download or application is disadvantageous to their affiliate strategy. If that doesn’t work, we guide the merchant to another network. We don’t really see a financial downside to that, because our ultimate goal is to be a sustainable and long-term “sales focused” network. Also, it’s our view that the loyalty channel, which is essentially what most of the download applications are, does not belong in the affiliate channel. The affiliate channel should be focused on bringing in new customers, new businesses. Affiliates are able to extend beyond the brand and seek out different demographics. The purpose of a loyalty marketer is to drive consumer loyalty; it’s a different goal.

LP: Is there any other type of business/entity that ShareASale doesn’t work with; religious groups, sex sites, etc.?

BL: We review each and every application into the ShareASale Network – and have done so for as long as we’ve been in business. While I don’t want it to be our job to prejudge anyone’s ability to become a successful affiliate, it is important to me that we keep a certain level of quality in the affiliate applications. To that end, we screen for things such as adult content, hate groups, etc. More important to us than the actual site content is being able to verify an affiliate’s contact information as well as their ownership of the site that they have applied with. Because of the effort we put into this process, I feel we offer a great value to merchants in taking as much time as we do to verify affiliate information. Beyond that, we believe in every affiliate’s right to “start small,” and tend to err on the side of the affiliate in deciding if their site should be accepted for content reasons.

LP: You seem pretty tight with the ABW crowd. How has that relationship impacted your business?

BL: The ABestWeb community is a great friend to ShareASale, and I hope to continue to participate there as long as they will have me. I don’t have any explanation as to why our network has become popular there except to tell you that I think it is because we make a dedicated effort to take every request seriously without regard for whether an affiliate generates $5,000 per month or $5. Every business has “big” clients that are important, and obviously we have some relationships that garner more of our attention at times; however, one of our greatest assets is the collaborative expertise of all affiliates and merchants in this industry who are willing to give us advice on each issue we come across – and I’m always grateful for the advice that they have given me over the years.

LP: People cite ShareASale as the fourth-largest affiliate network. Do you aspire to be among the “big three”?

BL: I aspire to put together the best product that I can for the market that we serve. If you take a close look at the individual networks that are out there, I think you will find that each has strengths within its individual market that makes it as successful as it is. For us, we started out with the hopes that we could provide a solid technology platform and a network of quality affiliates to a market that was being mostly ignored by most networks. We wanted to provide an alternative, mostly for small to mid-size companies, who didn’t feel like their needs were being addressed, and to that end we’ve been fairly successful. Our goal isn’t necessarily to become one of the “big three” but just simply to continue improving both our technology tools and network of affiliates. There are distinct markets within which we compete very well, and within those markets we want to be not only the best solution available but also a solution that our customers are happy with.

LP: Do you any feel pressure to expand?

BL: I founded ShareASale in the year 2000, and have been able to launch and run the company without the assistance of outside capital. A close friend of mine in this business, and I, often discuss the pluses and minuses of being “independent” and I can tell you that I don’t feel any pressure to expand outside of what I feel we do best. We’ve added people nearly every year, but we do so within the realm of what we need. Expanding a business isn’t an important goal of mine. Doing what we do, and doing it well, is important to me.

LP: How many merchants are in your network?

BL: At the time I am writing this there are 2,071 merchant offers in the network. That does include some merchants who may have multiple offers so the true number of merchants is a little lower than that. Of the 2,071, there are 1,866 who are participating as “pay per sale” merchants – which is our focus. Pay per sale could indicate a revenue share, such as a percentage of a sale, as well as a flat dollar amount.

LP: How many affiliates?

BL: While we do discuss some numbers with merchants who call to ask, I try to avoid discussing the size of the network mostly because I think concentrating on the numbers isn’t a very good way to describe to a new merchant how affiliate marketing works. It is my personal feeling that merchants are mostly responsible for their own success whether they participate in ShareASale or any other network. Using a number like “100,000 affiliates in the network,” for example, is misleading to a prospective merchant because there is really zero likelihood that all 100,000 would ever become sales-generating affiliates in their program. For some merchants, one or two affiliates can make a successful program, and for others, it is 1,000 or 2,000. … ShareASale has been a successful platform for both of those types of merchants.

LP: Would you consider a merger or acquisition to grow the company?

BL: As a businessman, the potential for mergers/acquisitions is always a discussion that I would be open to. It isn’t, however, our main focus. We want to finish our own goals in putting together the best technology that we can, coupled with a quality network that merchants can grow with. I feel like there are large opportunities for growth even without considering the possibilities of M&As.

LP: Performics and Zanox are both based in Chicago, like ShareASale, and Zanox would give you a presence abroad. Would you consider teaming up with another company to expand your business?

BL: I’ve been lucky enough to meet with the folks both at Performics and Zanox, as well as LinkShare, who also have offices in the Chicago area. We’ve got quite a good group of affiliate marketers in Chicago including several merchants and affiliates. It should probably be renamed “Affiliate Row” as there are about five companies specifically concentrating on affiliate marketing within a five-block radius or so in this part of Chicago.

LP: Are there any plans to expand into other geographic areas?

BL: Geographically, I can’t say that we do – but in terms of markets we are hoping to have a full Spanish-language site available soon so that we are able to move into markets that otherwise would not be open to us.

LP: So, it’s a Hispanic version of ShareASale? When is that happening and what prompted that move?

BL: In my opinion, just taking the United States as an example, Spanish-language populations are and will continue to be important avenues for economic growth. It is one of my personal goals to learn Spanish myself – as well as a goal of this business to be able to provide a product for that market.

LP: What are the biggest challenges facing ShareASale over the next year?

BL: Growth puts a huge strain on resources both technological and human. Over the next year we expect to continue on a fairly high growth curve and thus will be faced with continual challenges to remain ahead of the curve. Things such as database design, fault management and even something as simple as timely payments can be affected purely by the scale of their scope – so we’ll be quite busy just tackling those challenges. Affiliate marketing itself is also becoming more challenging for merchants, and ShareASale will be providing tools to merchants to counter those challenges. Take, for example, the collision between the “affiliate channel” and the “loyalty channel”; we will need to provide better tools to merchants so that they can separate, track and commission these two channels differently without conflict, so that the two channels can be complementary and help each other grow. There are countless examples just like that one, where a technology provider has opportunity for innovation and we will be working on each one.

LP: What are the goals for the company over the next year or two?

BL: As has always been our goal, we want to put together the best product we can. Our affiliates tell us that they want more and more brand name merchants, so we are working on that. Our merchants tell us they want better reporting tools and methods for multi-commissioning a sale, and we are working on that. In our particular industry, I haven’t found it to be too effective in laying out goals too far in advance, due to the ever-changing landscape. Being a relatively small company, we have used to our advantage our ability to be flexible – and customize our solutions for merchants and affiliates as they need them. That is probably one of our biggest advantages; actually, as we get a lot of feedback from clients who tell us we were the “only one who would do what we needed,” etc.

LP:Why did you put together Think Tank? What are you looking to accomplish at this event?

BL: The ShareASale Think Tank is an event that we are putting together for November 4, 2006, at the Wynn Las Vegas – despite various unofficial events, parties and get-togethers. … This will be our first organized event including both sessions and social activities. Our goal is pretty simple: We want to bring a select group of ShareASale merchants to the Think Tank and allow them the opportunity of “pitching” their program in front of some of the best and brightest affiliates in the industry. Affiliates in attendance will be able to critique individual offerings, brainstorm new ideas on conversion/creatives/etc., all leading to an improved program for the merchant as well as a new personal relationship with those affiliates in attendance.

Of course, true to ShareASale, there will be social events to keep everyone from feeling like they are at a conference. If things all go well we are hoping to put on a Think Tank event every six months or so with different focuses to encompass all of the diversity that is an affiliate network.

LP: Tell me what you consider to be ShareASale’s greatest differentiator in this marketplace.

BL: To me, it is simply the willingness to work with our two greatest assets: merchants and affiliates. Affiliate marketing technology isn’t something that you can create and put into a box to sell off the shelf. Each new merchant who comes on board has the opportunity to work with us directly to make sure that they are getting exactly what they need in terms of specific reporting, creatives or even payment setup. Affiliates are treated the same way if they have specific needs that we are able to accommodate. Our ability to be flexible has allowed us to not only win client contracts in areas of competition, but also strengthen existing relationships. Especially with merchants, it has been really helpful for some of them to be able to deal directly with me on certain issues such as customized technology and contracts. We also have been able to continue to provide a level of support to our clients that has remained high despite the increased growth in number of merchants and affiliates – and this is something that is important to us going forward as well. Everyone at ShareASale pitches in and helps us where we need help on a given day; it isn’t unusual.

Anne Fognano: The Mother Lode

The old adage that necessity is the mother of invention is certainly true when it comes to this mother.

More than a decade ago Anne Fognano, then a new mom, needed a way to earn additional income while being able to work from home.

She had just completed her master’s degree in clinical psychology when her son Austen was a year old. And while it was her dream to be a therapist working with children, she also loved being a mom and wanted to be home with her kids.

However, she was also used to engaging her mind and needed to keep busy. She was a Prodigy user, and paying for dial-up service she surfed the Web looking for parenting sites and family-oriented Web pages, but found little that was interesting or useful to her. Being an extremely curious person, Fognano began opening up the source code to some of those sites and then taught herself some HTML.

In 1997 she started a website for Beanie Baby collectors after being appalled by the scalping that surrounded the hot collectibles. Although not a massive collector, she just thought Beanie Babies were cute, and was irate about people taking advantage of kids by doing unsavory things like tracking the shipments to Hallmark stores or tracking UPS shipments and stealing them.

She also admits that she had a lot of time on her hands and no specific focus or mission. Her site FunkyMommys.com was designed as a trading board for moms and kids to swap Beanies without fear of being ripped off. At the height of the Beanie Babies craze, the site had more than 2,000 members but Ty, the maker of Beanie Babies, began to enforce its trademark in cyberspace and sent cease and desist letters to those using the word “beanie” and even “beans.”

Although Fognano at the time thought that she could have fought Ty (her message board was called Bouncing Beanie Board), she didn’t have the time or money for a protracted legal battle with a big company. She also could have just changed the name of her board; instead, she pulled down the site and contemplated her next move.

THE COUPON CRAZE

By now it was 1997 and Fognano still had a mortgage to pay and two young children to care for at home. So, she decided to put up an online resale shop for moms. She settled on a doll-house theme (see image) and then spent $2,000 to have an artist and programmer create the site. Fognano was very pleased with the way it turned out and thought the site was beautiful. Moms could post ads and pay her 25 cents for each one. Things were going pretty well. The site was getting some decent traffic and Fognano was adding even more content including coupons from an early dot-com drugstore (PlanetRX.com). The popularity of the coupon portion of the site led her to add a coupon box in the lower right corner of the page. Soon she noticed that 98 percent of her traffic was clicking directly on the coupon box.

But instead of being delighted, Fognano was devastated that she had worked so hard and spent so much money to create this site she loved but people were only interested in the coupons. After she emerged from her funk, she signed up with two of the first merchants to have affiliate programs – Amazon and Barnes & Noble – and she decided that she needed to dump her beloved doll-house theme and concentrate on the coupons.

Currently, Fognano has three very successful coupons sites – CleverMoms.com, CleverDads.com (manly things), CleverBabies (baby and toddler items through 5 years old). She is a super affiliate and works with Commission Junction, Linkshare and Performics. She has one employee. Previously, she had two – one full time and one part time. But earlier this fall, she discovered that she could handle some of the load herself as both of her kids went off to school for the first time.

Fognano had been home-schooling her children because each of them had unique learning issues. Her daughter had a language impairment and Fognano battled the school for years. It now has a program and Haille, who is now 9 years old, can attend classes full time. For the last year a teacher had been coming to the Fognano’s home to help. Her son Austen, now 11, is a very gifted student and there was no advanced placement class for his grade. So, Fognano home-schooled him until the third grade.

THE MOTHERING INSTINCT

“I’m one of those mothers that want things to be perfect for my kids,” she says. “I took care of them when the school wasn’t.”

She likes to take care of people. Fognano’s two employees were both stay-at- home moms that she has never met in person or even talked to on the phone, despite that the one in Portage, Wisconsin, has worked for Fognano for four years and the one in Syracuse, New York, had worked for her for one year.

While she admits it was slightly odd to be paying people to work for her that she’d never met, she says it was a great arrangement. Both of the moms were previously loyal visitors to her site and began sending Fognano deals – sales and coupons – and she decided that she should start paying them for their efforts.

Although Fognano has been an affiliate for almost a decade, 2006 has been a year of changes for her and her business. Sending her kids off to school meant more time to attend conferences, shows and events – something she never had time for previously.

Earlier this year she attended a conference in Dallas for women in business (EWomen Network in June). She referred to the event as “one big Oprah show,” but she heard some great speakers and took home some sage advice. Top of the list was learning to delegate.

While she still admits to having this kind of “do everything yourself” attitude, she realizes that is a vicious cycle since there is always something to be done, which means she would never stop working. She said it was amazing this summer when she felt comfortable enough to delegate responsibilities to her employees and take some time off for the Affiliate Summit in Orlando.

In the past she says she would have been in her hotel room updating her site or running from Disney World back to the hotel to check on things. This time it was a relief to know that someone else could handle all the duties. That freedom meant that she was able to have quality face-to-face contact with her peers – many of whom she’s developed longstanding email or instant message relationships with over the years.

And she’s working less as well, dropping down from about 10 hours per day, which was previously just early in the morning and then again late at night – to about four hours a day. But in that shorter workday she’s focusing on more strategic issues such as branding her site and trying to get media coverage to educate users on how to use online coupons and where to get those savings and promotional codes.

“Many customers really have no idea about online coupons. It’s astounding to me. There is a lot of work to be done to get discounts,” she says, adding that she never shops online unless there is a coupon. “It’s an annoying thing if you know someone is getting a discount and you aren’t. If I see a promotional coupon box and then can’t find a coupon, then I won’t shop there.”

The new schedule is also allowing for many things that have been neglected for years, according to Fognano, such as her daily exercise routine, things she enjoys like sewing and scrapbooking, and nine years of photos in shoe-boxes that need to be organized into albums.

In addition, she’d also like to do some writing about online shopping – maybe for business and consumer magazines. And while her experiences and success story would be good fodder for a how-to book on affiliate marketing, she says that route doesn’t immediately appeal to her.

MEASURING SUCCESS

“There are too many different factors associated with being successful in affiliate marketing. It’s all about being in the right place at the right time,” she says, recalling that when she began there were only a handful of coupon competitors. “You could count them on one hand.”

She claims that most of her visitors are type-in traffic and that she doesn’t get a lot of eyeballs from the search engines. But once people get to your site, you’ve got to give them a reason to come back. Her writing helps in that department.

She already has an email newsletter that she sends out every Thursday to her large base of subscribers. She often writes stories about her husband and kids and things that are going on in her life. These personal stories are not intended to be a marketing trick but a reason for visitors to come back to her site. She thinks getting personal has helped others identify with her on a deeper level and created loyalty.

“It’s just me being me,” she says. “About 70 percent of the time, I try to be funny and mostly I succeed. People are always writing to me to let me know they could really relate to what I was writing about.”

But there are times that she gets some negative comments and feedback on her personal tales, but those are far outweighed by the positive responses she typically receives.

She recalls a story she wrote where she mentioned waking up late one morning and rushing around trying to get the kids ready for school, while her county policeman husband was moving at a snail’s pace. Many people wrote to her saying that she should have never called out her husband in a public forum and “shame on her.” She was shocked at the response.

Regardless, she enjoys the interaction with her customers. “This business is not always about making a buck,” she says. “If I can have something that people look forward to every Thursday, that makes me happy.”

Maybe that’s because she has also far exceeded the goals she originally set for herself when she started out with her doll-house resale site: to make $1,000 a month. Many of her work friends from back then shunned her because she chose the mommy track rather than opting to climb the corporate ladder. Now she makes more money than most of them, although she declined to provide specifics on how much she earns as an affiliate.

“I don’t have to make a specific amount per year. I don’t focus on that. As long as we have our bills paid, then I’m happy with the income the site generates.”

She’s also thrilled to be able to work at home. It’s one of the best things about her job. She says that she’s not exactly the affiliate in her pajamas at the computer, or the affiliate marketer sitting out by the pool, but she’s got a lot of freedom. She can have coffee with a friend whenever she chooses. She can attend a sewing conference. She can have lunch with her husband. She can volunteer at her kids’ schools.

But working at home requires self-discipline. Much of that discipline comes from Fognano’s educational background. She paid her own way through college and graduate school, which took her 12 years since she could only take classes as she could afford them. She used to fly to Vermont for 12 days every six months and the rest of her curriculum was done as independent study. While getting her master’s degree she would drive two hours each way to attend classes. She got straight A’s all through her education because she “couldn’t bear to get a B.”

That discipline, coupled with Fognano’s desire to help people and her love of being a mom, is the driving factor in her success. She also has a strong sense of what’s right for her.

“I could not stick an offer up for a quick buck – like something for a gambling site,” she says. “What if someone got hooked on gaming? I just wouldn’t be able to sleep at night. I make sure to deal with ethical people that are not spammers. I want things to be ethical, honest and up front.”

The bottom line: “I’m just a mom doing this. I thought I’d never be in sales and never in marketing. I’m just a mom who opened a resale shop online hoping to make money and the coupon site is a fluke or should I say, a blessing. I love doing it.”

The title on her business card says it all – Mama in Charge.

Performance Marketing Prognostication

It’s that time of year again when we ask industry movers and shakers to look back at the past 12 months and forward to the next year in performance marketing. Here’s what those in the know have to say.

Looking back, what do you think were among the most significant themes to emerge in 2006 in the performance marketing space?

“There has been a huge shift in traffic sources – with two main groups – the first being PPC, which has been a major source of affiliate traffic in 2006 and has brought with it significant issues such as “Brand Bidding.” The second being blogs, which I believe will be a major driving force in the coming years.”
– Brian Littleton, founder and CEO, ShareASale

“When the situation calls for it, affiliates and affiliate managers can band together and stand their ground on an issue.”
– Scott Hazard, president, Brightside Media

“No truly new themes emerged. We saw click fraud penetrate the consciousness of the mainstream media at the same time there is a growing sense of animosity (possibly jealousy?) towards Google inside and outside our industry. Some merchants are reviewing their trademark bidding terms and looking to accommodate affiliates. Finally, you did see a lot of affiliates publicly say they were moving away from black hat and toward white hat activities.”
– Brook Schaaf, principal, Schaaf Consulting

“The desire to achieve better scale (less overhead, more revenue) drove every major corporate merger as well as CJ’s failed LMI project. It’s what makes Adwords attractive and successful.”
– Jeff Molander, CEO, Molander & Associates

“Just how vibrant and powerful the performance marketing community is. This can be seen in the response to LMI, the upward trend in budgets for performance marketing by advertisers and the growth in publications, events and forums serving the community.”
– John Grosshandler, event director, eComXpo

“The re-emergence of brand as an important part of the marketing equation after years of focus on ROI and search.”
– John Battelle, founder and chairman, Federated Media Publishing

“Google actively trying to squash private-label PPC arbitrage affiliates in the name of ‘better user search experience.'”
– Tim Ash, president, SiteTuners.com

“Cooperation. 2006 displayed greater willingness by merchants, publishers and networks alike to adopt ‘cooperative selling’ strategies.”
– Kurt Lohse, founder and CEO, KeyCode.com

“New trends such as the use of video and advertainment continued to grow in 2006 but pose challenges for strict ROI/CPA advertisers.”
– Joshua Sloan, director of online marketing, 1and1.com

“Search is a bigger part of affiliate marketing than many people thought.”
– David Lewis, president, 77 Blue

“Clearly 2006 will be marked by what some are calling ‘The Affiliate Massacre of 2006’ where Google updated their quality score rankings in Adwords and started placing penalties on affiliate landing pages. In many cases this caused minimum cost-per-click fees to go from 10 cents to $5 or $10 on many keywords. This effectively shut down PPC advertising for many affiliate landing pages. This change is causing many merchant advertisers to rethink their policies for PPC marketing since publishers who were running large-scale campaigns and linking directly to the merchant’s site using the merchant display URL and an affiliate link were largely unaffected by the recent change.”
– Adam Viener, president, imwave.com

“A few years ago, you could quickly tell whether or not an online marketer ‘got’ affiliate marketing by discussing affiliates. Those that ‘got it’ conveyed respect for the affiliates. Those that didn’t, well, they tended to use adjectives like ‘little’ or ‘questionable’ when describing their role in the model. In 2006 the performance marketing community witnessed affiliates asserting their right to be treated respectfully. It is no longer acceptable to be a participant in this space and not get it.”
– Lisa Riolo, online marketing professional

“Affiliates/publishers are in the driver’s seat now, not merchants/advertisers. Affiliates have money, power and traffic and their requirements; business practices and needs dominate the relationship. Merchants need them more than they need merchants who are unable to comply or cooperate with terms. They can deliver the goods; can merchants respond adequately to their demands? If not, NEXT!”
– Linda Woods, president, PartnerCentric

“Behavior targeting seemed to be a popular buzzword but I never heard too many real success stories. Online marketers are actually getting comfortable with the basics and are now casting an eye toward testing and optimization to squeeze out better results.”
– Greg Schraff, director of strategy and business development, Brooks Bell Interactive

What will be the ‘big thing’ that we can expect to happen in 2007 in online marketing?

“A return to the importance of new-traffic- generating affiliate marketers.”
– Brian Littleton, founder and CEO, ShareASale

“Yahoo and Microsoft will debut new products to compete with Google.”
– John Battelle, founder and chairman, Federated Media Publishing

“I expect to see many more super-affiliates stepping up to the plate and saying, look, we need to take responsibility for engaging in upright business practices. You’ll see them become open to educating newcomers in the industry. It won’t be about cutting out your competition, but developing a bigger and more powerful affiliate workforce. And I expect to see managers becoming excited about the possibilities of capturing the loyalty of those affiliates by becoming truly affiliate-friendly.”
– Anik Singal, CEO, Affiliate Classroom

“Performance models such as CPO and CPA are the main driver. Advertisers as well as networks/providers realize that success-based commission models are king and key for success. Globalization is the most important issue. Globalize or die.”
– Holger Kamin, executive account director, Zanox

“There is no doubt in my mind that user-generated content will really start to take fire – especially around video. Still, merchants will have to be innovative to get beyond the sheer volume of media – music, podcasts, pictures and now video in circulation.”
– Wayne Porter, senior director special research, Facetime Security Labs

“User-generated content such as short online videos will proliferate at an even larger scale and pace and show that it can convert as advertisements.”
– Jim Kukral, publisher, ReveNews

“Video ads will continue to grow in popularity as traditional marketing agencies attempt to maintain their grip on ‘their’ industry as they gripe all the way to Congress.”
– Todd Taylor, manager business development, TaxBrain.com

“2007 will bring far more practical offline marketing applications online. It will also signify the beginning of the ‘big shift’ to correct the disproportional ad spend on the traditional mediums.”
– Kurt Lohse, founder and CEO, KeyCode.com

“Social e-commerce will emerge with innovations focusing on peer group favorites and recommendations. The ‘wisdom of crowds’ will begin to drive serious transaction volume in niche markets.”
– Jeff Molander, CEO, Molander & Associates

“Social media marketing strategies that spawn, leverage and influence consumer- generated media are the hot thing at the moment. Companies and affiliates that create environments where their target audiences can gather, share useful information – and don’t overtly interfere with the experience – are those that will be the most successful.”
– Rob Key, founder and CEO, Converseon

“More off-line ad channels (print/radio/ TV) will wake up to the growing importance and measurability of online advertising while more online advertisers will wake up to the branding potential of online marketing despite confusion and difficulties with performance tracking.”
– Joshua Sloan, director of online marketing, 1and1.com

“I think the launch of Microsoft Vista may change the landscape of search marketing and make Microsoft AdCenter more important than it is today. I also think that Yahoo’s Panama project will be a big shift for search marketers. There will be a lot of adjustments as platforms change and traffic starts flowing more towards Microsoft.”
– Adam Viener, president, imwave.com

“The emergence of mobile phone marketing in the U.S. It’s just a matter of time before affiliates worldwide are able to promote affiliate links via digital and print signage. Consumers will then utilize their video-capable mobile phones to transact with merchants.”
– Shawn Collins, president, Shawn Collins Consulting

“I expect Google will continue to morph into other non-search areas. Under this scenario, Google will begin to offer tools that very much resemble an affiliate marketing or CPA network. This will put many traditional affiliate marketers directly in competition with Google for customers. Those non-branded entities relying solely on search will be hurt the most. Such a move is likely to trigger a rash of online mergers and acquisitions as big names and even traditional brands circumvent the search engines and buy their way into bigger pieces of the pie.”
– Mike Allen, president and chief executive shopper, Shopping-Bargains.com

“Technological innovation will become even more important in 2007. Between the growth in online video, broadband adoption and new tools for contextual advertising, behavioral marketing and detecting fraud, the gulf between those who leverage the newest trends and tools and those who rely on yesterday’s approaches will widen.”
– John Grosshandler, event director, eComXpo

“Video, video and more video.”
– Matt Ranta, affiliate manager, Vanns.com

“Continued decline in the effectiveness of current search engine optimization methods. Traffic building through social networking media will continue in effectiveness and popularity throughout 2007.”
– Rosalind Gardner, super-affiliate and author

What are the major challenges in the performance marketing space moving forward?

“Still getting online marketers beyond just keeping their heads above water, for example, just running the actual marketing< campaigns so that they have the bandwidth to concentrate on performance factors and tactics they can employ to improve performance.”
– Greg Schraff, director of strategy and business development,
Brooks Bell Interactive

“Volume. How to sift through the masses to identify the diamonds in the rough, whether they are advertisers, affiliates or partners. Emails and newsletters no longer get through, and when they do, are seldom read.”
– John Grosshandler, event director, eComXpo

“Effectively and ethically integrating the use of video ads into affiliate marketing.”
– Matt Ranta, affiliate manager, Vanns.com

“Keeping up with the speed of innovation on the Internet!”
– Linda Woods, president, PartnerCentric

“Globalization and multichannel approach to reach each and every possible market on this globe.”
– Holger Kamin, executive account director, Zanox

“It boils down to an emphasis on quality and restraint and the need to mature beyond the ‘growth at all costs’ mentality as well as adjusting merchants’ expectations and teaching them to think long term so that system pollution doesn’t kill the environment in which we all do commerce, operate and converse.”
– Wayne Porter, senior director special research, Facetime Security Labs

“Consolidation and intense competition due to a changing marketplace where search engines no longer do only search. With shareholder pressures on the ‘big 3’ engines to continually grow revenues at nontraditional paces, there will be new efforts to go after non-search money wherever it can be found.”
– Mike Allen, president and chief executive shopper, Shopping-Bargains.com

“The need for improved accountability. It’s all well and good for affiliates to have considerable discretion to find novel and creative ways to promote merchants’ offers. Indeed, that independence is the essence of affiliate marketing. But how can a merchant make sure its offer is presented appropriately, ethically, lawfully and in a way that offers fair value to the merchant as well as to users? At present many affiliates keep their methods secret, and affiliate networks don’t do as much as they could to tell merchants what their affiliates are doing. Increased transparency would improve affiliate accountability, helping merchants feel confident that affiliates’ behavior is appropriate and lawful.”
– Ben Edelman, anti-spyware consultant

“The affiliate industry can no longer rely on arbitraged search traffic. It’s a diminishing resource. Instead, it’s absolutely incumbent upon smart affiliates to morph rapidly into the new frontier of online marketing – word of mouth, viral, social media, blogging and other consumer-generated approaches that companies are only now beginning to grapple with. There are myriad opportunities for those that embrace the Web 2.0 world.”
– Rob Key, founder and CEO, Converseon

“Self-regulation is key in 2007. It’s not in our best interest to have the federal government legislate issues for us. Instead, we must band together and squash the bad actors.”
– Shawn Collins, president, Shawn Collins Consulting

“I see all the Web 2.0 trends making a huge impact on not just performance marketing, but all online marketing.”
– Anik Singal, CEO, Affiliate Classroom

“The two sides – affiliates and merchants – have different goals. It is a constant challenge for both parties to try to find a common goal which isn’t always as simple as just “sell more stuff.”
– Brian Littleton, founder and CEO, ShareASale

“Keeping links from being whacked by ad blockers and trying to set our sites apart from those in the space which
give the space a bad name.”
– Scott Hazard, president, Brightside Media

“The biggest challenge moving forward is Sarbanes Oxley and the network aggregators. There has to be absolute tracking integrity within all the affiliate networks – or the model will ultimately become extinct and be replaced with direct (and auditable) relationships.”
– Mary Beth Padian, senior director, Upromise

“Brands will attempt ‘ubiquitous messaging’ regardless of whether the focus is to increase awareness or generate sales. I think a big part of this stems from the promise of behavioral targeting. Look at the popularity of MyYahoo or Netvibes – and how, with respect to content, the users’ ability to bring preferred publishers’ material to them changes their online navigation. Users can browse in the comfort of their own home page. What does this mean for advertisers? I think you’ll see increased effort by the advertisers to create a presence within user-generated content. Subtle or otherwise, ethical or not, the marketers will not settle for a possible ad to appear over on the right margin in the Google AdSense block. No, they’ll be pushing for coverage in blog posts or a logo in a video.”
– Lisa Riolo, online marketing professional

What’s the one word you would use to describe the current state of online marketing?

“Irrelevant”
– David Lewis, president, 77 Blue

“Burgeoning”
– Greg Schraff, director of strategy and business development, Brooks Bell Interactive

“Transitory”
– Lisa Riolo, online marketing professional

“Disconnected”
– Matt Ranta, affiliate manager, Vanns.com

“Fabulous!”
– Rosalind Gardner, super-affiliate and author

“Turbulent – as always.”
– Tim Ash, president, SiteTuners.com

“Exciting”
– Joshua Sloan, director of online marketing, 1and1.com

“Evolving”
– Shawn Collins, president, Shawn Collins Consulting

“Important”
– Adam Viener, president, imwave.com

“Heretical”
– Rob Key, founder and CEO, Converseon

“Immature”
– Jeff Molander, CEO, Molander & Associates

“Vibrant”
– Todd Taylor, manager business development, TaxBrain.com

“Crowded”
– Mike Allen, president and chief executive shopper, Shopping-Bargains.com

“Momentous”
– Kurt Lohse, founder & CEO, Keycode.com

“Nascent”
– Wayne Porter, senior director special research, Facetime Security Labs

“Rocketing”
– Anik Singal, CEO, Affiliate Classroom

“Flux”
– John Battelle, founder and chairman, Federated Media Publishing

“Growing”
– Brook Schaaf, principal, Schaaf Consulting

“Fast”
– Brian Littleton, founder and CEO, ShareASale

“Dynamic”
– Scott Hazard, president, Brightside Media

We asked a wide range of industry gurus, experts, affiliates, consultants, program managers and industry watchers four seemingly simple questions about the state of online marketing.

  1. Looking back, what do you think were among the most significant themes to emerge in 2006 in the performance marketing space?
  2. What will be the big thing that we can expect to happen in 2007 in online marketing?
  3. What are the major challenges in the performance marketing space moving forward?
  4. What’s the one word you would use to describe the current state of online marketing?

Here’s a look at what each one of them had to say, in no particular order:

 

Joshua Sloan, director of online marketing, 1and1.com

  1. New trends such as the use of video and advertainment continued to grow in 2006 but pose challenges for strict ROI/CPA advertisers.
  2. More offline ad channels (print/radio/TV) will wake up to the growing importance and measurability of online advertising while more online advertisers will wake up to the branding potential of online marketing despite confusion and difficulties with performance tracking.
  3. Fighting over trademark PPC bidding continued and continues to keep advertisers and affiliates on their toes. What’s legal in one country isn’t necessarily so in others. Ethical and legal dilemmas for companies and affiliates still exist. Click fraud and other forms of online fraud do not seem to be getting better.
  4. Exciting.
 

Shawn Collins, president, Shawn Collins Consulting

  1. Affiliate 2.0, the next generation of affiliate marketing tactics and technologies, was a predominate theme in 2006.
  2. The emergence of mobile phone marketing in the U.S. It’s just a matter of time before affiliates worldwide are able to promote affiliate links via digital and print signage. Consumers will then utilize their video-capable mobile phones to transact with merchants.
  3. Self-regulation is key in 2007. It’s not in our best interest to have the federal government legislate issues for us. Instead, we must band together and squash the bad actors.
  4. Evolving.
 

Adam Viener, president, imwave.com

  1. Clearly 2006 will be marked by what some are calling “The Affiliate Massacre of 2006” where Google updated their quality score rankings in Adwords and started placing penalties on affiliate landing pages. In many cases this caused minimum cost-per-click fees to go from 10 cents to $5 or $10 on many keywords. This effectively shut down PPC advertising for many affiliate landing pages. This change is causing many merchant advertisers to rethink their policies for PPC marketing since publishers who were running large-scale campaigns and linking directly to the merchant’s site using the merchant display URL and an affiliate link were largely unaffected by the recent change.
  2. I think the launch of Microsoft Vista may change the landscape of search marketing and make Microsoft AdCenter more important than it is today. I also think that Yahoo’s Panama project will be a big shift for search marketers. There will be a lot of adjustments as platforms change and traffic starts flowing more toward Microsoft.
  3. From the affiliate’s perspective, performance marketing companies are maturing, and dealing with the growth of the business while keeping up with the constant changes in the marketplace will continue to provide major challenges for performance marketing entrepreneurs.

    Setting the right policies for their programs that will enable them to continue to attract the talented performers who can make a difference in their campaigns. To do this a good affiliate manager needs to understand the numbers, the cost per acquisition of a new customer or sale from ALL of their channels, and craft policies that will enable the company to maximize sales at the best possible cost. In today’s market the old decisions to not allow affiliates to use the company’s display URL in search engine ads needs to be reanalyzed.

  4. Important.
 

Rob Key, founder and CEO, Converseon

  1. Performance marketing is growing up and morphing, although perhaps a bit too slowly. LinkShare’s vision, ValueClick’s growth and Google’s new forays demonstrate that performance marketing is going mainstream and can no longer be seen as a stepchild of the overall media efforts. Performance marketing has always meant accountability. We’re seeing our approaches becoming increasingly adopted by more mainstream media entities. The issue for the traditional affiliate marketing world is how to play with the more mainstream media, and how to get a seat at the table so that it’s taken as seriously as possible to ensure integrated efforts and minimize channel cannibalization. Affiliates has to become fully integrated with search strategies, word-of-mouth initiatives and CPM media buys. With a few exceptions, the big media entities are still slow to embrace affiliate marketing as part of their mix. Part of this is simply terminology and lexicon. It’s time that affiliate and media started speaking more of the same language.
  2. Social media marketing strategies that spawn, leverage and influence consumer-generated media are the hot thing at the moment. They’re also the strategies that many companies are grappling with most. Consumers want to hear from consumers, not traditional marketers. Businesses want to hear from other businesses. Companies and affiliates that create environments where their target audiences can gather, share useful information – and don’t overtly interfere with the experience – are those that will be the most successful. But this world is moving fast. Discrete content communities, social networks, blogs and other CGM venues are emerging daily. These venues are becoming micro-media properties, and like much media, those that get the audience first and provide ongoing compelling content, will be difficult to dislodge. I expect a land grab for these long tail communities by companies and affiliates alike. Both have equal opportunity to spawn these communities. The question is, who will be the quickest and most effective?

    Essential to success here is the ability to listen and map to this consumer-generated media conversation. New technologies, like Converseon’s Conversation Miner that scour and analyze this CGM conversation, are becoming essential elements to any online marketing campaign. After all, if you can’t understand the landscape and listen, as well as talk, you’re going to be talking past audiences, and perhaps overlook the most important constituents. Companies will indeed have to “join the conversation.”

  3. Affiliate marketing has historically been successful because it provided services and capabilities that companies themselves were either unable, unwilling or ill-prepared to tackle. But as merchants becoming increasingly sophisticated, especially with natural and paid search strategies (including long tail search, the affiliate industry can no longer rely on arbitraged search traffic. It’s a diminishing resource. Instead, it’s absolutely incumbent that smart affiliates morph rapidly into the new frontier of online marketing – word of mouth, viral, social media, blogging and other consumer-generated approaches that companies are only now beginning to grapple with. These online strategies are where search marketing was two to three years ago. My advice to affiliates who want to flourish in this environment: Evolve rapidly, now. Darwinism won’t be kind to those who rely on the same old tactics for success. On the other hand, those affiliates who do dive successfully into this new world will provide that value-added marketing dimension that companies are hungry to embrace. There are myriad opportunities for those that embrace the Web 2.0 world.
  4. Heretical. Nothing is sacred. We’re in a state of incredibly accelerated evolution. What can be demolished probably will be. And like in all evolution, there will likely be several mutated states before new stabilized species emerge.
 

Jeff Molander, CEO, Molander & Associates

  1. Scale: The desire to achieve better scale (less overhead, more revenue) drove every major corporate merger as well as ValueClick/CJ’s failed LMI project. It’s what makes Adwords so attractive and wildly successful. Reduction of inventory: Ad inventory is becoming even more scarce and prices are rising, especially in search.
  2. CPA will trump CPC pricing models. Innovative product search players like Jellyfish.com and Snap.com will cash in. Google and Yahoo Search will manage to enter the game although success will be limited and hindered by class action lawsuits focused on click fraud and “bad clicks sold” arising from failure to disclose (and reprice clicks from) low-quality distribution partners.

    Driven by the popularity of MySpace, Facebook and social media, affiliate managers will rush to tap into the long tail of affiliate-related transactions. Social e-commerce will emerge with innovations focusing on peer group favorites and recommendations. The “wisdom of crowds” will begin to drive serious transaction volume in niche markets.

  3. Scale: Retailers experienced in performance marketing are aching to figure out how affiliate marketing can be scaled upward (more leads, more transactions) while concurrently generating a better return on customer retention spending (repeat sales via affiliates) at a fair cost.
  4. Immature.
 

Todd Taylor, manager business development, TaxBrain.com

  1. Even more large companies have entered or are considering performance marketing and Revenue magazine went bimonthly and most importantly there was actually enough slush money in the industry to have a golf tourney at AS06 East – therefore, it must be real!
  2. Video ads will continue to grow in popularity as traditional marketing agencies attempt to maintain their grip on “their” industry as they gripe all the way to Congress.
  3. Second-tier advertiser merchants who enter the industry may have trouble creating affiliate brand awareness for their program, as they must compete for mind-share and visibility against the larger or more established programs.
  4. Vibrant.
 

Mike Allen, president and chief executive shopper, Shopping-Bargains.com

  1. Affiliate marketing went mainstream in 2006 in that major brands and media companies are now willing to invest in and support the pay-for-performance model. After demonstrating strong Q4 successes in 2005, many traditional retailers now see affiliate marketing as what it is – pay for performance – and a way to maximize their advertising dollars with predictable expenditures and results. No traditional media buy can deliver a guaranteed minimum ROI. In 2006, the skeptics of performance marketing began to have a change of heart.
  2. I expect Google will continue to morph into other non-search areas. Under this scenario, Google will begin to offer tools that very much resemble an affiliate marketing or CPA network. This will put many traditional affiliate marketers directly in competition with Google for customers. Those non-branded entities relying solely on search will be hurt the most. Such a move is likely to trigger a rash of online mergers and acquisitions as big names and even traditional brands circumvent the search engines and buy their way into bigger pieces of the pie.
  3. Consolidation and intense competition due to a changing marketplace where search engines no longer do only search. With shareholder pressures on the “big 3” engines to continually grow revenues at nontraditional paces, there will be new efforts to go after non-search money wherever it can be found. Google Checkout is only the beginning. I predict search engines will find new ways to become intimately involved in the performance marketing space themselves.
  4. Crowded.
 

Kurt Lohse, founder and CEO, KeyCode.com

  1. Cooperation. 2006 displayed greater willingness by merchants, publishers and networks alike to adopt cooperative selling strategies.
  2. 2007 will bring far more practical off-line marketing applications online. It will also signify the beginning of the big shift to correct the disproportional ad spend on the traditional mediums.
  3. The major short-term challenges are search engine bias against online marketers and net neutrality laws.
  4. Momentous.
 

Tim Ash, president, SiteTuners.com

  1. Google is actively trying to squash private-label PPC arbitrage affiliates in the name of better user search experience.
  2. International affiliate programs. There is now Internet critical mass in many other countries.
  3. Improving the conversion rates of offer landing pages. If you don’t, you’re dead.
  4. Turbulent – as always.
 

Ben Edelman, anti-spyware consultant

  1. What I hear most from affiliate merchants – not to mention attorneys and even regulators – is the need for improved accountability. It’s all well and good for affiliates to have considerable discretion to find novel and creative ways to promote merchants’ offers. Indeed, that independence is the essence of affiliate marketing. But how can a merchant make sure its offer is presented appropriately, ethically, lawfully and in a way that offers fair value to the merchant as well as to users? At present many affiliates keep their methods secret, and affiliate networks don’t do as much as they could, to tell merchants what their affiliates are doing. Increased transparency would improve affiliate accountability, helping merchants feel confident that affiliates’ behavior is appropriate and lawful.
 

Jim Kukral, publisher, ReveNews

  1. User-generated content such as short online videos will proliferate at an even larger scale and pace and show that it can convert as advertisements.
  2. Supercalafragalisticexpialadocious.
 

Wayne Porter, senior director special research, Facetime Security Labs

  1. Oddly enough a few years ago the answer to that question is whether or not enough people would even bother to shop online. Clearly they have no problems doing so.

    Merchants are beginning to pick up on how sophisticated the fraud issues really are. The key for the winner will be the ability to balance scalability and click/lead quality. Players like Google have relied heavily on being able to machine scale, but have had increasing trouble with quality control and rogue elements that grow more sophisticated all the time; nor are they alone. It is a bit ironic that PPCSEs are not held to as high a standard as traditional affiliate networks.

    I look for Yahoo and MSN to attack this front heavily next year as click fraud control becomes a differentiator. We should also reflect on revenue and technology risk. ValueClick via CJ had to rush the LMI issue to provide an alternative to the patent wars, and clearly from Google’s filings there is an extreme concentration risk via JavaScript, which usually is benign. However, there has been increasing hostile attacks on legitimate networks and through an array of vectors – even IM.

    If you coupled that with the frailty of cookies either through malware scanners removing them, users actively deleting them or natural cache attrition as surfers are more active – the performance marketing industry faces some severe risks on multiple fronts moving forward.

  2. There is no doubt in my mind that user-generated content (UGC) will really start to take fire – especially around video. We already see this happening with the popularity of YouTube, Google Video, click-based Revver and innovations like community-powered video such as Magnify.net which can offer large brands the messaging in a format they are accustomed to. Still, merchants will have to be innovative to get beyond the sheer volume of media – music, podcasts, pictures and now video in circulation.

    The indie film thought shapers have been waiting for this inflection point for a long time and they are poised and ready with rifles raised. The traditional gatekeepers still remain in place, but there are now powerful forces to be reckoned with in terms of UGC disrupting the traditional top-down communication stream – much like blogs have done. In addition the emphasis will be on interactive, immersive ad campaigns that cross between the real world and the virtual one. From Second Life grids to the Web to a dead drop on a country road. Users want to be entertained and they want it to be sophisticated.

    This does provide an opportunity for enterprising affiliates who often have better creative DNA than merchants if they can move away from the myopia of simplistic deal structures. Smaller affiliates will continue to feel the squeeze of the powerhouses, but should do OK by dominating niches and working with mid-tier or emerging brands.

  3. The problems are myriad and affect different groups. The erosion of the once-fertile CPA space will happen as the market has become super-saturated with dozens of networks and they must start to shrink unless they too specialize. Co-registration, another once-lucrative market, will suffer. Most “thin” arbitrage players will also get knocked out of the game and affiliates will rise up and realize it really is about being unique and having content. Controlling partner sprawl and the problems inherent with this phenomenon will continue to plague large affiliate networks and PPCSEs. Advertising powerhouses will be forced to provide more visibility into their networks as premium merchants demand to know where and how their brand is being presented. Some are starting to care.

    Once again the rise of a tough and well-funded rogue element is looming – the mass tide of botnets, experienced fraud rings, rampant content theft, aggressive Web agents and the lot are rapidly gaining contextual marketing skills and sociological and technical sophistication. If the e-commerce industry in general ­ – both PPCSE, merchants and network aggregators – do not rise up and clean things up, security companies or perhaps legislation and litigation will do it for them. I am not bullish on this cooperation based on past experience, but it is possible. If security firms, e-commerce firms and law enforcement worked in tandem, the tide could be turned.

    It boils down to an emphasis on quality and restraint and the need to mature beyond the “growth at all costs” mentality as well as adjusting merchants’ expectations and teaching them to think long term so that system pollution doesn’t kill the environment in which we all do commerce, operate and converse.

  4. Nascent.
 

Holger Kamin, executive account director, Zanox

  1. MSN Search Launched; MySpace working with Google; eBay and Yahoo; Web communities and blogs are on the rise. Big mergers are changing the landscape of this industry.
  2. Performance models such as CPO and CPA are the main driver. Advertisers as well as networks/providers realize that success-based commission models are king and key for success. Globalization is the most important issue – globalize or die.
  3. Globalization and multichannel approach to reach each and every possible market on this globe.
  4. Paradigm Shift.
 

Anik Singal, CEO, Affiliate Classroom

  1. Two themes jump out at me, and they are intimately related to each other: transparency and professionalism. The entire industry seems to be waking up to the fact that both sides of the affiliate marketing equation – merchants and affiliates – need to open up to each other about their business practices.

    Every day I talk to forward-looking merchants and managers who are eager to hold themselves to the same standards of transparency that mainstream bricks-and-mortar businesses do. They’re also actively seeking affiliates who are willing to play by the rules of fair business practices. They want affiliates who are well-versed in best practices, diversified marketing methods, compliance and good old-fashioned ethics.

    Which ties into the theme of professionalizing affiliate marketing. The history of business has proven that you can’t have transparency without professionalism. I see merchants and affiliates literally thirsting for professionalism in every aspect of affiliate marketing. They want to raise the bar and see those professional standards become part of their online careers.

    More and more affiliates and managers tell me they actually view the affiliate marketing industry as a lifetime career . To me, that says professionalism will become one of the most talked-about ideas in our industry in 2007.

  2. As an entrepreneur in the field of affiliate education and training, I believe 2007 will be the year in which merchants and affiliates both realize affiliate marketing has been a very lucky industry. We’ve seen massive growth in spite of the fact that all the players have been learning the game – even developing the rules – on the playing field. It’s been very rough and tumble and a wild ride, yet we’ve evolved our own business models, practices, culture and conventions while learning on the job.

    But with that growth – and all that money at stake – all of us, including the biggest players, now need to hold ourselves to higher standards. We must do that if we want our revenue to grow without interference from the outside. That’s why transparency and professionalism will literally force themselves upon us in 2007. The stakes keep getting higher.

    So I expect to see many more super-affiliates stepping up to the plate and saying look, we need to take responsibility for engaging in upright business practices. You’ll see them become open to educating newcomers in the industry. It won’t be about cutting out your competition, but developing a bigger and more powerful affiliate workforce.

    And I expect to see managers becoming excited about the possibilities of capturing the loyalty of those affiliates by becoming truly affiliate-friendly. They’ll be doing that through innovative and humane management practices, such as offering comprehensive and innovative training and development programs.

  3. Many people will disagree with me, but as I work with affiliates in the trenches I see all the Web 2.0 trends making a huge impact on not just performance marketing, but all online marketing. Interactive communities and “spaces,” social bookmarking and social search – those are grassroots trends being developed by audiences that spend lots of time and money online.

    Web 2.0 is not just about teens and college kids any more. Research by organizations like Pew has shown that a significant percentage of grown-up people with grown-up incomes could live without search engines. Who can blame them when the results are relevant one day but off-kilter the next? Spam is also making email a less-reliable form of communication.

    But people have realized that Web 2.0 can satisfy your need for self-expression plus help you build and communicate with a whole network of like-minded friends. That’s why all kinds of people today are blogging, sharing their favorite links and shout-boxing their ideas about everything, including products. While I might be too young to have experienced it, I’m told this is a trend back to the early days of the Web.

    That’s when a list of links on a Web page wasn’t scraped with automated software, but handpicked with care. People want to be able to have that kind of trust in websites. And they are realizing that the only way to reclaim that trust is by finding which sites their online neighbors turn to.

    For the smartest people in performance marketing today, those Web 2.0 micromarkets represent a massive opportunity. Yes, reaching them is not just a challenge, but probably impossible through traditional marketing channels. But it’s the perfect fit for affiliates, especially affiliates who are well-versed in those spaces.

  4. Can I make up a word? Rocketing.
 

Brian Littleton, founder and CEO, ShareASale

  1. There has been a huge shift in traffic sources – with two main groups. The first is PPC, which has been a major source of affiliate traffic in 2006 and has brought with it significant issues such as “brand bidding.” The second is blogs – which I believe will be a major driving force in the coming years as well.
  2. A return to the importance of new-traffic-generating affiliate marketers.
  3. The two sides, affiliates and merchants, have different goals. It is a constant challenge for both parties to try to find a common goal, which isn’t always as simple as just “sell more stuff.”
  4. Fast.
 

Brook Schaaf, principal, Schaaf Consulting

  1. No truly new themes emerged. We saw click fraud penetrate the consciousness of the mainstream media at the same time there is a growing sense of animosity (possibly jealousy?) toward Google inside and outside our industry. Some merchants are reviewing their trademark bidding terms and looking to accommodate affiliates. Finally, you did see a lot of affiliates publicly say they were moving away from black-hat and toward white-hat activities.
  2. I don’t see as much of a buzz around an idea like RSS or rich media as the continued entry into the marketplace of more content and paid search publishers. For their part, merchants will continue to experiment with new channels and partners.
  3. This is a competitive marketplace. Publishers must continue to adapt in order to perform and marketers must manage more and more relationships.
  4. Growing.
 

John Battelle, founder and chairman, Federated Media Publishing

  1. The re-emergence of brand as an important part of the marketing equation after years of focus on ROI/DR/search.
  2. Yahoo and Microsoft will debut new products to compete with Google.
  3. Understanding how to integrate with conversational marketing online, and learning the new “hybrid” model of both performance and creative/branding-driven marketing.
  4. Flux.
 

Scott Hazard, president, Brightside Media

  1. When the situation calls for it, affiliates and affiliate managers can band together and stand their ground on an issue.
  2. Not sure, but I’m afraid it will center around Google.
  3. Keeping links from being whacked by ad blockers and trying to set our sites apart from those in the space, which give the space a bad name.
  4. Dynamic.
 

Mary Beth Padian, senior director, Upromise

  1. Confirmation yet again of the value of relationships.
  2. RSS feeds for special offers and coupons becoming more commonplace on affiliate sites – even loyalty sites!
  3. The biggest challenge moving forward is Sarbanes-Oxley and the network aggregators. There has to be absolute tracking integrity within all the affiliate networks – or the model will ultimately become extinct and be replaced with direct (and auditable) relationships.
  4. Nascent.
 

Linda Woods, president, PartnerCentric

  1. Affiliates/publishers are in the driver’s seat now, not merchants/advertisers. Affiliates have money, power and traffic, and their requirements ­ – business practices and needs – dominate the relationship. Merchants need them more than they need merchants, who are unable to comply or cooperate with terms. They can deliver the goods; can merchants respond adequately to their demands? If not, NEXT!
  2. Tools, tools and more tools for affiliates. With the announcement of CJ’s Web services and many other players creating technology tools to either improve reporting, functionality or efficiency, the next “big thing” is, who can provide what to better service affiliates’ growing hunger for technology tools?
  3. Keeping up with the speed of innovation on the Internet!
  4. Exciting!
 

David Lewis, president, 77 Blue

  1. Search is a bigger part of affiliate marketing than many people thought.
  2. A shift to the extremes. Merchants will begin to completely embrace or flat out reject publishers utilizing search. Past decisions will not be factored in. New decisions will be made and there will be no way to predict where anyone will stand on the issue on December 31, 2007.
  3. Trust. People do not pick their partners wisely and misjudge “the other side.”
  4. Irrelevant.
 

Rosalind Gardner, super-affiliate and author

  1. White hats came into style in a big way, and were even more prevalent after Labor Day.
  2. Content authority and visitor-optimized sites are now all the rage … and everything old is new again as the meaning of “value-added” gains ground amongst the gray-hat set.
  3. Continued decline in the effectiveness of current search engine optimization methods.
  4. Traffic building through social networking media will continue in effectiveness and popularity throughout 2007.
  5. No change here. Getting heard and getting seen. Affiliate managers and merchants will have to work increasingly harder and smarter to put their products in front of affiliates who will actually promote them. Rewards and incentives for top affiliates will increase while commission rates for less-productive affiliates will decrease.
  6. Fabulous!
 

Matt Ranta, affiliate manager, Vanns.com

  1. Video, video and more video.
  2. Effectively and ethically integrating the use of video ads into affiliate marketing.
  3. Disconnected.
 

John Grosshandler, event director, eComXpo

  1. Just how vibrant and powerful the performance marketing community is. This can be seen in the response to LMI, the upward trend in budgets for performance marketing by advertisers and the growth in publications, events and forums serving the community.
  2. Technological innovation will become even more important in 2007. Between the growth in online video, broadband adoption and new tools for contextual advertising, behavioral marketing and detecting fraud, the gulf between those who leverage the newest trends and tools and those who rely on yesterday’s approaches will widen.
  3. Volume. How to sift through the masses to identify the diamonds in the rough, whether they are advertisers, affiliates or partners. Emails and newsletters no longer get through, and when they do, are seldom read.
  4. As President Bush likes to say, “Strategery.”
 

Lisa Riolo, online marketing professional

  1. A few years ago, you could quickly tell whether or not an online marketer “got” affiliate marketing by discussing affiliates. Those that got it conveyed respect for the affiliates. Those that didn’t, well, they tended to use adjectives like “little” or “questionable” when describing their role in the model. In 2006 the performance marketing community witnessed affiliates asserting their right to be treated respectfully. It is no longer acceptable to be a participant in this space and not get it.
  2. Brands will attempt “ubiquitous messaging” regardless of whether the focus is to increase awareness or generate sales. I think a big part of this stems from the promise of behavioral targeting.

    Look at the popularity of MyYahoo or Netvibes – and how, with respect to content, the users’ ability to bring preferred publishers’ material to them changes their online navigation. Users can browse in the comfort of their own home page. What does this mean for advertisers? I think you’ll see increased effort by the advertisers to create a presence within user-generated content. Subtle or otherwise, ethical or not, the marketers will not settle for a possible ad to appear over on the right margin in the Google AdSense block. No, they’ll be pushing for coverage in blog posts or a logo in a video.

  3. Revenue Science, Tacoda and BlueLithium represent a possible disruption for performance marketers. The assumption of many is that the budgets will shift away from other display ads. I think behavioral targeting may also disrupt search and affiliate because it is equally data-driven and ROI-focused. The advantage of behavioral targeting is that it focuses on all aspects of the consumer’s buying behaviors, not just the research and purchase decision phases typically pursued by the performance marketers.
  4. Transitory.
 

Greg Schraff, director of strategy and business development, Brooks Bell Interactive

  1. BT seemed to be a popular buzzword but I never really heard too many real success stories. My observation is that online marketers are actually getting comfortable with the basics and are now casting an eye toward testing and optimization in order to squeeze out better results.
  2. Following my comments above, more structured and strategic testing and optimization efforts. A/B, multivariate and companies that provide these services.
  3. Still getting online marketers beyond just keeping their heads above water, i.e., just running the actual marketing campaigns so that they have the bandwidth to concentrate on performance factors and tactics they can employ to improve performance.
  4. Burgeoning.

Google Hates Affiliates

Back in January 2005 Google changed its Adwords policy to read, “We’ll only display one ad for affiliates and parent companies sharing the same Display URL per search query.” Consequently, affiliate arbitragers who used pay-per-click advertising to send traffic directly to their merchants’ sites saw their ads disappear overnight. Those who hadn’t diversified their incomes by building their own affiliate sites and/or subscriber lists suffered serious hardship when their affiliate commission checks also disappeared – a very bad result, indeed.

The other result (and the reason for the policy change) was more positive, however. Well-informed shoppers who make use of Google’s Sponsored Listings could run a search for “computer” and choose from a variety of merchants’ ads, which was a huge improvement over seeing hundreds of Dell advertisements, as per a comment from a U.K. poster at WebmasterWorld.com.

A spin-off benefit went to affiliates with content sites. As the arbitragers’ ads went by the wayside, content affiliates’ Google Adwords’ listings rose in the ranks and their advertising costs decreased.

Despite the benefits to users and content affiliates, “Google hates us” became a popular refrain on forums throughout the affiliate community, as affiliates who were struggling to cope with the new policy voiced their outrage. Much discussion revolved around ways to exploit loopholes in the policy.

For example, some smart affiliate noticed that the algorithm seemed to be casesensitive, and had failed to remove duplicate ads that shared the same display URL but were capitalized differently, i.e., xyzmerchant.com vs. XYZMerchant.com or xYzMeRcHaNt.COM. Affiliates frantically revised their Adwords campaigns, but the tactic lasted only a short time before the “Google Cashers” were sent back to the drawing board to figure out new loopholes.

Around the same time, affiliate sites were dropping like flies from the Google index. An explanation for the “problem” emerged in June, when Henk van Ess, a Dutch journalist, reported that a Google employee who had broken a nondisclosure agreement with Google confirmed that Google employed human raters to ferret out low-quality sites. The report also stated that raters worked according to specifications laid out in Google’s “Spam Recognition Guide for Raters.” Based on the raters’ findings and recommendations, Google was continually tweaking its algorithms to expedite removal of “thin affiliate” sites from its index. Here is a snippet from the guide:

“Thin affiliate doorways are sites that usher people to a number of Affiliate programs, earning a commission for doing so, while providing little or no value-added content or service to the user. “we’re attempting to identify sites that do nothing but act as a commission-earning middleman.”

Affiliates’ response to the news that Google employed humans to assess affiliate-site quality was phenomenal, with related forum threads spanning dozens of pages. A few suggested that affiliates should work in accordance with Google’s editorial guidelines to improve their sites. The predominant theme again however was that Google hates affiliates.

Affiliates who did not throw in the towel to look for 9 to 5 jobs after their sites were de-ranked and/or de-listed, sought solutions. Software developers responded with improved content-generating software that would create “unique” content pages, complete with RSS feeds and AdSense ads, and all at the simple push of a button. All anyone had to do was give the software an article and a list of keywords, then hit “Go” and like magic, you had thousands of unique article pages to feed and satisfy Google’s spider bots. That solution worked for all of two seconds before Google caught on and proved yet again that it hates affiliates.

But wait – it gets worse. In August 2005, Google Adwords launched quality-based minimum bids. If an Ad Groups’ maximum CPC (cost per click) did not meet the minimum bid, keywords were deactivated and ads would not appear in the Sponsored Listings. Then the big, bad and very mean Google made the process even more complicated in December when it threw a landing page Quality Score into the mix. Both changes resulted in higher minimum bids for Adwords advertisers with poor Adwords Quality Scores.

Fast forward to April 2006 when Google sent affiliate marketers into yet another tailspin with what affiliate Scott Jangro referred to as “some spring cleaning on the Adwords side of the business” in his April 5, 2006 blog entry at Revenews.com.

Google had jacked up the landing page Quality Score algorithm and some advertisers whose ads had previously cost 10 cents to 15 cents suddenly shot up to 50 cents, $1.00, or in some cases, $5.00 per click – and Google showed no mercy.

A July 7, 2006 post on Google’s Adwords blog (http://adwords.blogspot.com) stated, “We realize that some minimum bids may be too high to be cost-effective – indeed, these high minimum bids are our way of motivating advertisers to either improve their landing pages or to simply stop using AdWords for those pages””

Although name squeeze pages (designed to collect an email address before the visitor can see what they were promised), single-page sales letters (merchant) sites and AdSense sites were also targeted, according to the buzz on affiliate forums, ads that linked to affiliate sites were hardest hit by the change.

Developers rushed in again to the hard-done-by affiliates’ rescue, this time with “white hat” push-button software solutions. A flood of new information products promised to reveal the “real secret” to creating Googlicious landing pages.

Affiliates whose Adwords campaigns had improved with higher ad placements and lower advertising costs shared their strategies for success with Adwords. They pointed to both Google’s AdWords Editorial Guidelines and the basic Webmaster Guidelines as the best sources of information for creating quality landing pages.

Yet public expressions of angst and outrage continued into late August. There are even discussions about possible class action lawsuits, and the chorus of “Google Hates Affiliates” grows louder and more shrill.

If you’ve been listening in and think that “Google Hates Affiliates” is a catchy tune, let me warn you – don’t get caught up in the lyrics. Apart from a few good sites that always seem to be caught in the crossfire, most of the sad refrain comes from those who are mad that their free ride on the Google gravy train has come to an abrupt halt.

Google does not hate affiliates. Google couldn’t care less about affiliates, other than to get rid of those who continually spam the index and Adwords with useless stuff that detracts from its users’ experience.

Google is a business. Its first loyalty is to its users, a point that is repeatedly emphasized throughout its various guidelines. Not even advertisers who spend $10,000, $20,000 or $50,000 a month surpass the value Google places on its users – because without users, there are no advertisers.

Affiliates who are now determined to get off the push-button bandwagon and succeed as professional affiliate marketers should take their first clue from Google.

Do business the way Google does business. Put your visitors’ interests before your own. Here’s a really simple formula: First create a page of useful and unique content, and then suggest a choice of relevant products to solve your visitors’ problems. Send traffic from Adwords to the first page and Google will both love and respect you.

Revenue magazine offers more clues. You won’t find the successful affiliate marketers and managers who write for this magazine advocating push-button software, crazy keyword density formulas or other quick fixes. That’s because those aren’t solutions and there are no quick fixes.

Authority content sites have always been, and still are, the best way to earn your visitors’ respect; and quality landing pages make for a smooth ride with Google.

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.