Growing in an Unhealthy Climate

Economists, politicians and media types are no longer arguing whether or not the economy is in a recession. Instead most are debating how long it will last.

If recent trends continue, the prognosis is relatively dismal for real estate values, gas prices and the unemployment rate. And as corporations and consumers grow frugal, cutbacks in advertising threaten the vitality of everything from cable operators to newspapers. Internet analysts, wondering about the ripple effect on the industry, offer a variety of opinions. While some think a recession would not have any affect on online advertising and marketing, others feel that it could have a significant impact – negative or positive – on the sector.

Slashed traditional advertising budgets are already apparent. TNS Media Intelligence found that ad spending in the fourth quarter of 2007 declined .1 percent from the fourth quarter of 2006.

But a Direct Marketing Association’s Quarterly Business Review survey in the fourth quarter of 2007 uncovered good news for online marketers: 50 percent said they would increase email marketing, 44 percent would increase database segmentation and 35 percent would increase spending on search engine optimization in 2008. And PQ Media found that spending on alternative media such as social networks, lead generation advertising and consumer-generated media is expected to grow by 20.2 percent in 2008 to $88.24 billion.

These findings reflect a long held belief that there will be a shift of marketing dollars from traditional media to the Web. Some believe this move would protect online companies from feeling the effects of a recession. Standard & Poor’s Internet analyst Andy Liu noted at the company’s 2008 Media Summit that he expects online ad revenues to grow by 20 percent this year – recession or not.

However, not all indicators (or analysts) are so bullish. In March, market researcher eMarketer lowered its estimates for U.S. online advertising market by nearly $2 billion, predicting that it will grow $25.8 billion, as opposed to $27.5 billion, in 2008.

Ability to Measure

Advertisers are shifting online to not only reach their audience, but because Internet advertising costs less and is trackable. Founder of Seer Interactive, Wil Reynolds, predicts a trend where any medium that offers less tracking will lose dollars to areas that offer more accountable results. Effectiveness can be measured by clicks, impressions, registrations and purchases, which are very attractive to bean-counting advertisers.

Brad Waller, vice president of business and affiliate development for AdJungle.com, points out that General Motors, the country’s third largest advertiser, announced it is shifting half of its $3 billion budget into digital and one-to-one marketing within the next three years. He claims this is the beginning of things to come, noting that the market online is growing faster than any other spend.

Founder of FatWallet.com, Tim Storm, says online advertising can be measured but offline initiatives, like direct mail, can’t be tracked. Online campaigns offer ROI down to the penny – so advertisers don’t wonder where their budgets were spent.

Paying for Performance

Even more appealing during belt-tightening days is performance marketing, where advertisers only have to pay when there is an action that is commissionable or measurable. Storm says he thinks there will be a shift of spending toward performance marketing, as opposed to advertising on a CPM basis. He doesn’t think Internet advertising will be affected by the recession as long as advertisers don’t look at the spending as a budgeted line item – which tips the scales in favor of performance marketing.

Online marketing consultant Sam Harrelson agrees that CPM big budget ad buys will suffer in 2008 and performance marketing will continue to increase its reach, effectiveness and popularity.

In fact, the Interactive Advertising Bureau statistics for the first half of 2007 indicate that "CPM deals" were replaced by "performance deals" as the leading pricing model for Internet advertising. In 2006, CPM deals comprised 48 percent of the overall total while performance deals (such as CPA) were at 46 percent. However, in 2007, performance deals made up 50 percent of deals while CPM fell to 45 percent.

There is evidence that performance marketing initiatives such as paid search are becoming more popular. OneUpWeb.com found that 48 percent of all U.S. online advertising spending in 2007 went toward paid search, and predictions are even higher for 2008.

Paid Search

Although paid search is considered more resistant to cuts than other advertising because it’s performance based, some think it is not immune to decreased spending. Advertisers could reason that people are less likely to surf the Internet for potential purchases during an economic downturn.

In March, comScore, the Internet ratings firm, reported that Google’s paid clicks fell .3 percent between January 2007 and January 2008, even as the number of searches rose 40 percent in the same period. As recently as April, Google’s ad clicks were rising at a 60 percent clip.

The industry panicked that Google, considered a bellwether for the overall sector, was being affected by the cyclical economic forces of the overall market.

It’s possible that Google is tightening the reins on clicks to combat click fraud and generate better clicks in general. And Hitwise found that the percentage of traffic going from Google to retail shopping sites is actually increasing. Since the bulk of paid search advertising is shopping related, the Hitwise data draws a different conclusion than the comScore data.

But cost per click has its challenges – there continues to be big inflation numbers. As more folks jump in, the costs get higher.

It’s possible that there won’t be less activity in paid search but there might be less money spent on bids. Seer Interactive’s Reynolds offers an example: the same number of marketers could bid on a term like "mortgage" but spend less money doing it. So if in the past a marketer paid $1,000 for 10 leads that convert, today that $1,000 dollars would only buy five leads.

Reynolds doesn’t believe this will cause marketers to abandon paid search, but thinks it could cause them to lower their bid to spend $750 for those five bids – reasoning that "smart marketers always will spend up until they max out their ROI." Interestingly enough, Reynolds says the saved $250 isn’t likely to go to buy radio or display ads. From what he has seen, people looking to rein in their paid search move into SEO as their next step.

Reynolds has seen shopping and e-commerce people moving from paid to SEO – and believes the affiliate space might have a good fallout as well because the closer a marketing channel is tied to results, the easier it will be for managers to get funding for it.

Survival of the Fittest

Google has boomed over the past few years because of search engine marketing – so it is possible that search engines will fare well during an economic downturn if paid search continues to be popular. Yahoo, Google, MSN and AOL have worked to become one-stop shops for advertisers by building up ad networks with targeting and tracking capabilities. David Hallerman, eMarketer senior analyst, notes that when "the portal is both destination and network, perhaps advertisers can get all they need without straying – at least that’s what the Big Four hope for."

Many niche sites have flourished while they get better at improving targeting to meet the needs of their clients. Reynolds says that vertical sites, if they can show ROI for marketers (even with less traffic) will start to get dollars if markets like Google become to expensive to play in.

Specific verticals that offer people a way out of a bad situation such as employment sites, job training sites, and mortgage refinance loans and debt consolidation sites like LowerMyBills, could become more in demand. Also well positioned are sites that offer people efficiencies in a weak economy such as comparison shopping engines and coupon sites.

FatWallet’s Storm believes that coupon sites could fare well this year – he points out that some of FatWallet’s best years were during the last downturn of 2001 and 2002. When the economy is in a slump, people gravitate towards being more cost conscious. For example, Storm has read reports that the craft industry does well because people make their own quilts – it is both entertainment and fulfills a need.

So far this year, Storm has not noticed any spending shifts – booms or drop offs – for FatWallet. Electronics and technology continue to be FatWallet’s strong categories as do other categories like Health & Beauty and eBay.

Insurance is another sector well positioned to weather an economic storm. Jon Kelly, president of SureHits, an ad network for insurance and loans, thinks it could increase because consumers are adopting the Internet as a primary means of buying insurance. Even technology laggards, who in the past surfed the Internet to find the best quote but picked up the phone to complete the transaction, are purchasing through e-commerce.

Another reason for Kelly’s bullish prognosis: "When the economy turns rough, people start looking for the best deals on insurance and they turn to the Web to do it." Kelly explains that auto and home insurance look particularly strong over the next few years because consumer demand for them does not drop in a recession – car insurance is mandated by law and home insurance is mandated by mortgage companies.

Kelly predicts that there will be increased Internet spending by insurance companies as the battleground for customers moves online. He thinks the areas where they will increase spending are paid search and affiliate and ad networks with a strong vertical focus like IndustryBrains, Quigo and SureHits Ad Network.

AdJungle’s Waller has seen record growth on its classifieds site, EPage – with 30 percent growth in revenue with January 2008 over January 2007 and an increase in the average revenue per user. He has seen growth in areas that want to get rid of excess inventory and says that in a tight market, people buy more items used than new. Listings for home-based businesses that offer ways to earn extra income are popular – like "how to make money from your laptop."

EPage makes money from advertisers paying for more exposure, as opposed to getting a cut of the purchase price. Advertisers pay to have their ad ranked higher on the page – when advertisers have success; they are willing to pay more.

Conventional wisdom would suggest that real estate would be hard hit in a recession. But Michael Stark, the founder and president of PostYourProperty.com, says that just because the housing market is tanking doesn’t mean there will be a negative effect on the online real estate vertical.

His real estate sites focus on the for-sale-by-owner (FSBO) market, which accounts for approximately 15 percent of U.S. real estate and says that traffic to his sites continues to grow despite the recession because of the focus on enabling the "do it yourself " FSBO movement. In fact, the crumbling prices, slow sales and a credit crunch in 2008 will make the FSBO option attractive to an increasing number of buyers and sellers.

Foreclosures are good for Stark’s sites because more postings mean more inventory, which means more advertising for his sites. Advertisers on Stark’s sites include people trying to sell their house, brokers, agents and lenders looking for new business.

Waller says that lead generation companies like Epic Advertising (formerly Azoogle), XY7, CPA Empire and Leadpiles could do well because people are buying and selling leads for real estate.

Performance marketers should feel confident that their industry is well positioned to weather a recession although things could get a bit tougher. Affiliates might get scrutinized more heavily – marketers don’t want to pay affiliate commissions if they find evidence that a paid search campaign created the sale. "Many marketers are estimating the ‘influence’ of their affiliates and zeroing out commission when other marketing campaigns are involved," Lee Gientke writes on ReveNews.com.

Some industry watchers say that marketing will move more in-house as knowledge of how to do search or affiliate marketing continues to spread out into wider communities instead of just specialized networks or agencies.

Poaching Prohibited

What’s in a name? According to Shakespeare’s Juliet, not much, but if the name is trademarked it has value worth protecting. Successful companies spend millions developing a brand name and promoting their Web domains online. Some publishers, however, treat others’ trademarks like their personal ATMs by generating commissions through misleading ads.

This practice has become alarmingly present during the past few years and is often referred to by a variety of names: trademark poaching, trademark bidding, domain name poaching and PPC domain name bidding. Kellie Stevens, president of Affiliate-FairPlay.com, says it’s a difficult issue to discuss because the terminology is still not clearly defined or even completely understood.

Some in the industry say it’s actually misleading to call it trademark poaching or trademark bidding. Instead they refer to it as PPC domain name poaching because it’s really a subset of a merchant’s trademark-type words, namely their domain name. Some industry watchers say that using the phrase “trademark poaching” or “trademark bidding” has connotations of it being a legal issue under existing trademark law, but it is really a violation of the terms of services contract between the merchant and the affiliate.

Regardless of the various terminology (which is often used interchangeably), in its most conservative definition, this practice involves a keyword search on a trademarked term or the merchant’s domain name that triggers a pay-per-click ad. The ads use a merchant’s trademark in the copy, and through clever coding, the display URL appears to consumers to be from the merchant.

The way it works is that consumers type an address in places other than the URL bar – such as the desktop Google bar or into their favorite search engine – and are taken to the merchant’s site or an affiliate site via an affiliate link, thus giving an affiliate a commission when none is deserved.

The basis that this commission is unwarranted is the idea that if a consumer types in a merchant’s URL or domain address, it is clear they were seeking that merchant and the affiliate provided no added value in getting the potential buyer to that destination. Therefore, the affiliate should not be compensated.

The origin of today’s trademark poaching problem dates back to 2004, when Google changed its AdWords policy to allow keyword bidding on trademarks and associated Web domains. Cunning individuals began joining affiliate programs and designing PPC ads to appear to come from a well-known merchant. When clicked on, the ad directs the consumer to the trademark owner’s site through a link that inserted the affiliate ID, therefore generating a commission for any resulting purchase. Voilà! No website is required – the ad creates a straight path to easy commissions.

WHY IT’S ATTRACTIVE

Trademark poaching is attractive because of the low barrier to entry. For just the price of a PPC ad, publishers can quickly generate handsome commissions without the usual affiliate administration overhead, and reducing the steps from click to purchase increases the likelihood of a purchase.

One PPC affiliate, who asked not to be named, says there is a “pack of about 30” PPC affiliates that closely monitor the list of new merchants at every network and “crank up campaigns on them all” in order to profit from this behavior.

The anonymous PPC affiliate says “it takes less than four minutes to create a new campaign for a new merchant,” and that this pack of rogue PPC affiliates “don’t read the terms of service” from the merchants and they “don’t care about size – they cover them all.” He says it’s like a competition among this “pack” and that they do this for hundreds of merchants.

“There’s a trickle of others trying it from time to time as well, but the way Google and most search engines work, historical performance and clickthrough rates determine who gets the spots. They’re all competing for the one spot that lands on the merchant’s domain,” the PPC affiliate explains.

He went on to note, “That’s a ton of commissions paid out for almost nothing. If a merchant can easily do this PPC themselves, why pay an affiliate a large percent commission for doing it? It’s the branded traffic the merchant has earned; giving it away to a lazy poaching affiliate is just ignorant.”

Scott Hazard, who runs the website Cooperative- Affiliates.com, says ads that mask their origin in this manner confuse the marketplace and take money away from the merchant and the affiliate channel.

“It’s more of a problem for big brands” with recognizable names, Hazard says, as the popularity of the name as a search term will generate the high volume of traffic needed to create sizable commissions.

However, another school of thought says that although big brand merchants are often targeted more – thus losing more money overall – it’s a problem for merchants of all sizes. In fact, many smaller merchants are less aware of the issue and how to police it, making them easy marks.

While determining exactly how widespread this practice has become is difficult since it’s hard to track throughout the entire industry, a PPC consultant, who asked to remain anonymous, says, that “in some smaller programs I have worked with, as a merchant consultant and/or as a PPC consultant, as much as 40 percent of their registered affiliate sales are coming from this poaching.”

The only penalties for being caught poaching is getting kicked out of an affiliate program and having your commission withheld. That’s a small price to pay compared with the upside of undetected revenue. (See the “Trademark Ads in Legal Limbo” sidebar on page 048″ for details on other potential penalties.) Trademark poaching challenges merchants because as quickly as affiliates are kicked off, others are ready to take their places, according to Hazard.

Hazard launched the website TrademarkPoachers.com in August of 2007 to provide advice and education about the practice. While his site has increased awareness of the problem, “It doesn’t seem to be happening any less,” he says. Some say that they have anecdotal evidence that nearly 50 percent of pay per click is based on trademark poaching.

Chuck Hamrick, an affiliate manager for AffiliateCrew.com, started noticing trademark poaching in mid-2006. He could see that it was impacting overall revenue for some merchants because after he removed the poachers, the affiliate channel earnings went down, while organic and paid search revenue increased by larger amounts. This showed that trademark poaching “was cannibalizing our other efforts,” he says.

In the last two years, Hamrick caught a number of well-known affiliates poaching. He gave them “two strikes and they were out” of the program. If they didn’t take down the offending ads, he would reverse their commissions. “If it happened again, it was not by accident,” he says.

TRACKING THE POACHERS

Still, merchants that do not protect their trademarks from poachers are like retailers that allow customers to walk out with the price tags still on the clothes – if you’re looking the other way, someone will inevitably take advantage of you. Although networks can help with detection, it is the affiliate manager’s responsibility to function as the security guard and prevent these losses.

Fortunately for merchants, tracking this nefarious activity is relatively simple. Reviewing commission reports is one effective method for identifying trademark poachers. High conversion rates or affiliates who rise too quickly in volume of referrals are signs of potential trademark poaching, according to Dave Osman, senior vice president of operations at Commission Junction. “[Trademark policing] is one of the biggest challenges that the affiliate channel has had,” Osman says.

Managers can bid on their trademarks through Google AdWords to see the affiliates that are also bidding as another method of identifying potential poachers. Checking data for the location and time of day where commissions are generated can also help to identify poachers. To head off potential poachers, merchants can specify with AdWords that bidding not be allowed on their trademark or the trademark as part of their domain name.

Google will take down ads from affiliates or competitors that include domain names or URLs if the trademark holder complains, according to the policy stated on the AdWords website. However, Google will not block keyword bidding on trademarks and will not otherwise mediate disagreements over trademark poaching.

THE CASE FOR AND AGAINST

However, there are some merchants that will ask their PPC affiliates to do trademark bidding. AffiliateFairPlay’s Stevens says that there are pros and cons to this tack and merchants that allow it employ the rationale that they would prefer to see their affiliates ranking higher in the search engines than their rivals.

However, these merchants often fall into two categories – those that understand the issue and allow it to happen; and those merchants that are not aware of the implications.

When a merchant understands it and still allows domain name bidding, it’s usually because the affiliate manager can make themselves look good to superiors by showing lots of sales; or the merchant wants to inflate their EPC and sales volume to make their program’s metrics look attractive; or the merchant has made a deal with someone – such as a legitimate consultant – who in exchange for the sweet, low-hanging domain name fruit, obligates themselves to do something else, like pump those margins into deeper product and general keyword PPC on the merchant’s behalf, according to a PPC expert.

For those who don’t completely understand the issue, the reasons to allow it are slightly different: The merchant believes these posted sales are the result of “power” affiliates’ magic and doesn’t understand they’re allowing their brand, via their site name, to be leveraged by someone who does only that; or they have no idea what’s happening and believe these are actually their best affiliates; or someone such as a PPC agency or an outsourced program manager has them hoodwinked into believing this is a good practice.

However, there are instances when this type of bidding can be helpful, according to some PPC experts.

If a merchant has chosen to have coupons, then a search for “merchantname coupons” will be filled with SEO coupon affiliates ready to meet that need in the engine’s natural organic listings. The same principle works for reviews of merchants’ product or services. Most often, consumers seeking reviews don’t want to visit a merchant’s site. Instead, they want a supposedly unbiased view. Therefore, allowing an affiliate to bid on MerchantNameReview.com might be desirable to the merchant.

The Big Decision

One search expert, who asked not to be named, says there are two questions a merchant must ask before making the decision on domain name bidding.

No. 1: Do I allow my affiliates to bid on “MerchantName.com” where they send people directly to MY MERCHANT website and where they earn a commission?

No. 2: Do I allow my affiliates to bid on “MerchantName.com” where they send people directly to THEIR AFFILIATE website and where they earn a commission if someone clicks through to my merchant site from their affiliate site?

Most observers say the answer to the first question, should be – “No way, this is the merchant’s traffic and they earned it. It’s fat with ROI (often a 19x return) and it’s theirs.”

On the second question, the answer is not as clear. Allowing affiliates to do this might keep competitors from squatting on the name with their PPC ads. Search engines could see the merchant’s ads as more relevant because the domain name is the same word as the keyword, meaning that the merchant should be able to still occupy the top search spots with ease.

The Role of the Networks

Networks including Commission Junction offer trademark policing as a value-added service, and specialist companies such as Trademark Tracker and Name Protect can search out poaching ads as part of their broader trademark protection services.

While the industry is in agreement that trademark poaching is unacceptable, there is little consensus on related trademark use by affiliates in their advertising efforts. From keyword bidding on trademarks to the use of trademarks in ad copy, merchants, ad networks and affiliate networks each have their own rules and perspectives on what is permissible, and often those vary depending on individual contractual relationships.

“Ultimately, trademark poaching is in the eye of the beholder,” says CJ’s Osman. “The burden is on [affiliates] to learn each of their [merchants’] rules and to receive permission before incorporating trademarks into their ads.”

Buying a trademark as a keyword in conjunction with other words, such as “iPod and covers” is often allowed or encouraged because search engines do not want to exclude “broad match” terms. With the permission of the trademark owner, trademarks are also permitted as part of the affiliate’s display URL (e.g., www.affiliatesite.com/coupons or /reviews).

Through statistical data and the ability to observe dozens or hundreds of merchants at the same time, the networks have the power to stop this practice, but some think they don’t go far enough in their efforts.

“Good networks will show the referral URLs to the merchant, making it easy to find these poachers if they look, and reverse their orders [don’t pay them] and remove them from their affiliate program for violating the rules,” one PPC expert says.

According to one PPC consultant, who asked not to be named, the networks don’t ban this bogus practice for a variety of reasons – all related to money:

  • Merchants who want to shine their metrics (and show their bosses how well their programs are running) would go to another network.
  • Unscrupulous OPMs (outsourced program managers) would suggest alternative networks for new clients.
  • Unscrupulous OPMs would migrate programs to other networks, and when the reported sales went up, they’d be proven “right” about suggesting the migration.
  • Some merchants would not be able to make deals with their PPC consultants or agencies, and a new network that allowed this practice would be the only alternative.
  • Many less-than-savvy merchants would accuse the network of firing their “best” affiliates.

Because merchants have a right to run their own program, networks don’t and shouldn’t take an all-encompassing stance against it, the PPC consultant says.

Commission Junction’s policy is not to allow the use of trademarks in third-party ads without the express permission of a merchant, according to Osman. The rules that each merchant sets depend on their individual objectives, with some opting to be more flexible in allowing trademark use, he says. “All [merchants] do not view their [affiliates’] use of their trademarks in the same light: They have different marketing needs and therefore make allowances when necessary. For this reason Osman says, “I don’t think consistency [across the industry] is possible.”

Affiliates bidding on a domain name and sending the traffic to their own sites is seen by some but not all in the industry as trademark abuse. “One type of trademark poaching – typo squatting – is the intentional use of a misspelling of the trademarked URL, and is considered trademark infringement by most marketers,” says Osman. In recent years, companies Dell and Lands’ End successfully sued affiliates for generating commissions through typo squatting and direct linking.

Merchants can best protect their trademarks by spelling out what is allowable in their contracts with affiliates and by educating their network partners. Network ShareASale provides a dedicated area for posting banned keywords and text explaining the merchants’ choices, easily available referral URLs marked on every sale so the merchant can see the details, a feedback system for merchants to tag terms-of-service-violating affiliates to others, and other mechanisms making implementation of a merchant’s choices easier and more effective.

“Each merchant has different ideas when it comes to this issue, so our goal is to try to make as much information as possible available to both the affiliates and merchants on our network so that they can run their programs as they wish to run them,” says ShareASale President and CEO Brian Littleton. He encourages merchants to upload their individual agreements as well as a list of prohibited keywords so that all parties are clear on what is allowed.

One observer says that merchants need to ask the networks different questions instead of just asking for advice on whether or not they should allow domain name bidding in their programs. Rather, the merchants should be posing questions to the networks such as: What will the networks do for me? What tools will they give me to support and facilitate my choices on these issues? How will they help me police a decision to disallow it and what repercussions/tools will they give me to stop people who do it and won’t stop?

Domain name poaching is not going away anytime soon, but search experts promoting best practices say that savvy merchants and affiliate managers that educate themselves on the complex issues will realize the practice is a shortsighted path to profits, and ultimately bad for the entire industry.

Hooking Search Talent

“As search marketers, we are the insiders. We are supposed to know and understand search in all of its dimensions. We are moving into uncharted territory. It is not territory that I am excited to explore, but I will go there nonetheless,” writes Amanda Watlington of SearchForProfit.com.

Despite her status as an expert on blogs, RSS and search marketing, Watlington is still trying to put a finger on what may be coming down the pike for search this year. Her pondering may sound a bit gloomy – because in many ways, things have never been better for search.

According to GroupM, search will make up about 65 to 70 percent of the measured online advertising in 2008. That’s up from 50 percent in 2005. Also consider that search budgets within brands have become bigger; search marketing professionals now easily have three to five years’ experience handling search initiatives; and most excursions on the Web start at a search engine.

Yet there are really no guidelines on what search-related skills a search team must have in order to propel a company forward – not written down in the company manual anyway. “Knowing” search and running a search team for your company are entirely two different things. Knowing how to budget for search and staying abreast of search innovations is something few teach.

A recent survey by the Search Engine Marketing Professional Organization (SEMPO) stated that in-house search managers are now handling budgets on average of $200,000. However, up to 40 percent of those managers are shepherding that money with three years or less of professional search experience. About 26 percent have five years of experience or more.

Keeping Up With Search

The uncharted territory is the constantly changing nature of the search game. Many search veterans will say that learning search is an ever-changing discipline, fraught with a learning curve that never straightens out. They say that to hire a search manager or search team means upper management must look beyond the experience they have on paper and judge a pro by their passion and innate intelligence.

It’s paying off for some. SEMPO says that about 49 percent of SEM professionals earn $50,000 or less. About 43 percent earn between $50,000 and $100,000 per year. Only about 4 percent of those with five to seven years of experience make more than $200,000 per year. “It’s a respectable career path. I know I wasn’t making 70 or 100 thousand dollars a year when I was three years out of college,” Rob Crigler, co-chair of SEMPO’s in-house committee told SearchEngineWatch.com.

“I equate it to sports – the people who don’t sleep and work really hard get ahead. As a numbers-based job, they attract the hard workers,” says Wil Reynolds of Philadelphia- based SEER Interactive, a search engine optimization company. He says that the tools – software and Web-based analytics and helpers in choosing keywords – are all pretty good now. The ones who rise to the top are the ones with a kind of “street smarts.”

There are some recent attempts to educate the search-interested. Google recently launched a program called Google Online Marketing Challenge, which partners with marketing college professors to teach Google’s popular Ad- Words. Students take a $200 budget and apply it to a PPC campaign for a client. Students then manage the AdWords campaigns including coming up with a pre-campaign plan, manage the ongoing campaign and evaluate post-campaign numbers. The students select keywords, write ads and keep tabs on their clicks. Google then judges the work on up to 30 different criteria and offers an actual prize – a week at Google’s headquarters.

SEMPO also offers distance learning courses in search marketing. Students are introduced to the “foundations” of search marketing; advanced how-tos on SEO; and PPC training. The courses are offered online and can include interaction with “SEM professionals” and grading by SEMPO volunteers. SEER also offers some SEO online video tutorials on its site covering keywords, competitive tools, link building and best practices.

SEM expert Todd Malicoat at stuntdubl.com helps organize an SEO class and an online marketing training class using online courses, podcasts and some PowerPoint. However, he points out that there is really no regulation within the industry and that anyone can build a website and say, “I do search,” and have it be technically true. He notes that the search community has an active base, and learning from these people would be different from the trial-and-error training someone may get when they do it alone.

Reynolds says this kind of education is out there for people to use, “so tenure isn’t important.” What people should really have, he says, is marketing acumen. “If you want to be second place, you go to search training,” he says. “The same materials are available anywhere. But the people who rise are the people that take the basic info and go to the top.”

Matt Spiegel, CEO and founder of Resolution Media, an SEO and PPC consulting firm, says that those with higher educations in marketing have received “little exposure to this new marketing world. The vast majority of recent graduates in advertising and marketing have had little course work specific to online advertising – much less search.” He says to not assume institutions of higher learning will adapt quickly. “Instead, we need to look within the industry for help.”

Rand Fishkin, CEO of Seattle-based SEOmoz, a search marketing consulting company, says that three years’ experience is “quite a bit and is good given the industry.” He says that if he were to interview a search pro for a job, he’d simply ask the candidate to explain how Google works. “How does Google do its rankings and what makes a difference; and how did you pick up these things?” The analogy he draws is with medicine: A doctor should be able to tell you how the nervous system works off the top of her head.

Spiegel says there is a talent shortage. He says to work for his company you do not need a shopping list of skills. “You have to invest in people in this business,” he says. If you are new to the industry, he adds, and learning from the ground up – you get about 18 months to learn nuts and bolts. “When we hire, if they come from another agency, I expect that within 90 days they will be up and running – that you will know enough about search to manage a client list but you may have to learn keyword placement, etc.” He says he has hired one-person shop owners. He looks for attitude as well as skills and a need to “thrive on uncertainty and realize they are at the beginning of an industry.”

Evolving Search Skills

Among the skills that SEER Interactive’s Reynolds looks for is the ability to problem-solve. “Do you like to solve puzzles; things that stimulate and test the mind?” he says. “I would follow that skill with a lack of fear. There are tools are out there to do short-term tests. But are you not afraid to fail? I continue to see more come into the space, but that doesn’t mean they are all going to be good. Anyone with a Net connection and phone can be a search firm tomorrow. That glut can lead to substandard talent.”

Since search seems to be one of those areas that is changing and improving all the time, a search pro needs to stay locked in step with the new. Mike Grehan, CEO of Searchvisible, experts at organic and paid search headquartered in the U.K., has said that it’s getting harder to keep good organic search results on the first page. “What used to work in the good old SEO days won’t cut it in the future.” He notes that while search engines themselves are innovating all the time, search engine optimization is not – meta tags, alt tags, some social media and header tags are still the rage but are seeing their results wear thin.

Constant adaptation is a valuable watchword held by Danielle Leitch, executive vice president of client strategy at MoreVisibility, a search, design and interactive marketing company. She has said that she sees “adaptation of the industry as a whole shifting from just acronyms – SEO, CPC, SEM – to ‘interactive marketing.’ As a result, I believe agencies will become more full service than they had been – which could lead to mergers or partnerships in that area too.”

As the changing landscape continues to shift, SEOmoz’s Fishkin actually sees a constant in search professionals’ qualifications. “To me, the most desirable are those people who started a site in 1998 and have learned from doing. I am always impressed with those guys. They are rare guys.” The other breed of search marketers are those who may have a background working at another agency doing search or with a portfolio of sites they have launched. They may have been a junior marketer on this or that team and they did a search campaign and now they say, “I’m lost.” Now, companies have to spend six to 12 months training this person. He adds that MBAs may spend too much time projecting and doing nothing. “In search, we have to do.” In the end, you can only lose revenue for a few weeks and still correct it and change, he says.

Spiegel says too many companies may hire one person to head up search and leave it at that. “If I were running a company and had to hire one person, I wouldn’t want to put all my eggs in one person. I would hire an agency,” he says.

Searching for Education

Fishkin has put together a primer for those looking for search pros. He states that recruiting might be the hardest part of the work. While portals on the Web offer loads of candidates, the passionate ones are usually found in the Web places where the “young, Web-savvy and tech-obsessed” hang out. In addition to their skill set, you and your company will want to ask how long you will need this pro for; what are the primary priorities for them; and do you want this person or team to grow with the company?

When building the team or fitting the search person into the structure of your company, you need to measure the scale of your search efforts – is your company large enough that you will need more than one person or team? Measure what kind of ROI you want for each segment if you choose to break up the search division into many platforms. And as you carve up search areas and responsibilities, you will still need a person to oversee the divisions.

For training, he recommends letting team members build their own BlogSpot or Yahoo360 sites and experiment with trying to rank them. He likes to give them two to four weeks to “read, learn and get involved.”

SEER’s Reynolds uses himself as an example of the kind of search pro he’d admire. “I loved the game,” he says, “so that’s why I know it well. In the beginning, I loved computers and marketing but also had the cajones to knock on doors.” He says when he got started in search it was a constantly changing and highly competitive field with no rules written. Still is. “Three-year tenure is about all you need – now I have eight.”

MoreVisibility’s Leitch has stated that in the coming year the focus should be on colleges and universities injecting “real world” classes into their business classes. “Those that we will hire in the future need to have solid fundamentals in interactive marketing and search ” regardless of your role in a company or field of interest.”

Eastern Promises

Japan’s had it hard. After nearly a decade of stock market doldrums and an economy on the brink of disaster – just as the rest of Asia struggled too – Japan bounced back. Growth happened. Its economy is still a tad slow, but there are many industries looking way up. Online marketing is one of them.

Of Japan’s 130 million people, about 88 million are online. That’s about 68 percent of the population, according to Internet World Stats (Asia), compared with 210 million of the U.S.’s 300 million and 137 million of China’s 1.4 billion residents. Japan’s may seem like small numbers, but the momentum of online marketing and the ever-growing popularity of affiliate marketing in Japan make it a region everyone’s talking about.

Blogging, for example, in Japan is a popular way of getting products in front of the masses. Technorati Japan says that more than 85 percent of Japan’s bloggers write about companies and their products – and that over half of these bloggers have been contacted by companies to extol their wares. Japan’s Ministry of Internal Affairs and Communications says that bloggers totaled about 8 million in that country, making for an in-blog ad market of about $60 million last year.

Expansion on the Way

In the 1990s, the Japanese did not use credit cards much for online purchases, as bank transfers and postal transfers made e-commerce slow and a waiting game. But by 1999, a tech-hungry culture emerged and online spending came with it. Pay-per-performance business models were not far behind.

A leader in this space is online retailer Rakuten and its affiliates – managed through LinkShare Japan, a U.S.-led affiliate company acquired by Rakuten in 2005. Rakuten is the leader in online shopping destinations in Japan, so their penetration made them a default major player. In fact, Rakuten plans to be in about 27 more markets by 2012, according to Atsushi Kunishige, a vice president at Rakuten. He says they will use LinkShare, for example, as a way to "expand our business into the international market. We want to open a full-fledged Internet mall [abroad]."

Rakuten’s 20,000-plus online stores and merchants did about $66 million in operating profit in the second quarter of 2007. With the company traded publicly on the Japanese stock market, that’s a market capitalization of more than $5 billion.

LinkShare Japan has about 68 percent of the top-selling merchants in Japan and is the leader in customer satisfaction, according to a survey by Japan’s Affiliate Marketing Association. Atsuko Umemura, director, corporate planning, of LinkShare Japan, says that their focus on per-sales kinds of merchants has helped make them a leader. "Affiliate marketing has proven to have the best ROI for us," she says.

Late Bloomers

While the U.S. affiliate industry can trace its beginnings to the mid-1990s, the first affiliate providers in Japan didn’t start up until 1999. The U.S. market has had a few years to evolve and grow, whereas the Japanese affiliate space is still considered a "juvenile." There are more than 80 affiliate networks in Japan that cover both Web and mobile platforms. Some of the more high-profile affiliate networks include Adways, Access Trade, LinkShare Japan, Fan Communications (A8), TrafficGate, ValueCommerce and Zanox Japan.

Anthony Torres, president of affiliate marketing program management company MetaFlo Marketing, which is based in Japan, points out that the key difference between the U.S. market and the Japanese market is that the "Japanese affiliate networks can service only Japanese sites. U.S. networks such as Commission Junction operate worldwide due to English being the most popular language for Web content. So, no matter how large the Japanese affiliate industry gets, it will never be as big as the English-speaking networks," Torres says.

He also notes that Japan is still behind the curve in tracking technology and commission sophistication. For example, U.S. advertisers have more choices in how they reward affiliates. Generally, U.S. affiliate networks allow merchants to pay affiliates based on subscription status of digital content and, of course, future sales even if buyer clicks go directly to a merchant store. The U.S. networks also have more payout choices. A small CPA, plus a larger percentage of future sales generated by the lead is a method that hasn’t made it to Japanese network platforms.

Torres notes that the cost of acquisition of a typical online customer is high in Japan. "When you add in customer service and all of the accumulated costs in the sale cycle, you are left with a lower margin per sale," he says. Merchants in Japan are just not used to paying high commissions or lifetime commissions on a customer, he adds. "As the industry matures here and the ability to attract online buyers becomes more challenging, we may see online merchants less reluctant to try more aggressive commission terms." Unique to the Japanese market seems to be the cross-investment of media sites and affiliate networks. In order to increase media coverage, many networks invest in or make their own in-house media sites.

Considered the real pioneer in Japanese affiliate marketing is ValueCommerce (Yahoo Japan took a sizable stake in the company in 2005), started by a New Zealander named Tim Williams. ValueCommerce has more than 50,000 websites and blogs in its network, with about 2,000 advertisers. The company has about $43 million in annual revenue and trades on the Tokyo Stock Exchange. Goldman Sachs veteran Brian Nelson is now CEO, having come on in 2000 as COO. Nelson says that "we focused on our strengths, continued to hire great people, and launched new products and services that kept new customers, especially large brand name customers, coming in to work with us."

Consolidation is Coming

Nelson says that a large product database for shopping and their Web 2.0 applications have kept them in the No. 1 spot. It also doesn’t hurt that there is some consolidation going on in the Japan online marketing space now. "I have been telling people in the market for a long time that consolidation is coming " and it is in full swing now," Nelson says. LinkShare’s Umemura says, "It is a very saturated market right now. There is not enough room for everyone to survive."

Online marketing observers in Japan note that there are just too many networks trying to service the same advertisers. With about 1.3 million affiliates registered with the major networks and the majority of transactions driven by a group of search affiliates and "incentive media sites," there are not enough "quality" affiliates to take on all the offers out there. This means the networks are starting to look at new channels for ads.

One of those new channels is mobile, a platform that has performed very well for Japan. Because the Japanese adopted 3G standards fairly early, more than three-quarters of all cell phones in Japan have smooth Internet access. This means delivery of interactive content and ads to about 86 million cell phones (compared with 31 million in the U.S.). There are more than 48 mobile affiliate networks in Japan, with names such as Moba8, Pocket Affiliate and Smart-C. In 2005, the Japanese spent more than $3.8 billion on purchases over cell phones – 57 percent over the previous year. In addition, the CPA-based mobile affiliate provider model does much better in Japan than in the U.S., where CPC or CPM models prevail. It’s been said the culture in Japan plays a role in this since there are so many more commuters in Japan – leaving more travel time for the Japanese to experiment with their cell phones.

And with greater mobile traffic comes the opportunity to serve more Internet phone search advertising. Local search engines like Goo, Nifty and BigGlobe get a share of those eyeballs, but the leaders are Yahoo Japan (with about 63 percent of searches), Google Japan at 23 percent and about 14 percent left to split between MSN and the regional engines. Yahoo Japan is also the biggest local player in Internet auctions, Web email, mobile content and broadband.

Search Challenges

Japanese online marketing agency and search specialist Sozon sees challenges in the search marketing arena. One area in SEO that is unique to Japan culturally speaking, says Andy Radovic, VP of strategy and planning at Sozon, "is its variety in language used. Essentially, there are four methods of writing – kanji, the character system borrowed from China; hiragana, a more simplified form of kanji; katakana, the Japanese expression for foreign words; and romaji, which is the alphabet," he says. "Depending on what you intend to communicate, you may use just one or a combination of these. This greatly impacts the keyword planning stage of your SEO program. Another major difference is Japan’s reliance on Yahoo as the search engine of choice."

Radovic notes that Japanese-run companies are the leaders in services and customized solutions. "There are very few successful, market-leading international companies in the online space," he says. The international companies that operate in Japan tend to do so with a local partner. The exceptions, he says, are technology- dependent products, where some U.S. companies are in the lead, such as in search (Google) and bid management and Web analytics tools (like Omniture). "Some of the Japanese homegrown companies in the mobile, travel and insurance space are getting more sophisticated in their online marketing programs and are tracking to off-line sales," he says.

Scott Neville, COO of Sozon, says that, creatively speaking, ad messages need to really know their audience. "International ad concepts simply will not work most of the time," he says. "Text is definitely king here. More information is better and creative is often very busy with multiple propositions." He says you will need to provide as much detail as possible in your campaigns – that Japanese users will definitely read your privacy policy. He says that text email is the standard and somewhat limiting in terms of email marketing campaigns that may rely on HTML. Flash and graphic-centric sites tend not to work that well at either an advertising or a site-campaign level. He says that Flash campaigns "are not really supported by major portals for media buying and tend to be not that well received." Also, comparison campaigns are not generally used in Japan and "culturally not respectable to run."

While online ad agencies in the U.S. are slowly starting to synergize their off-line traditional ways and the brave new web of interactive display advertising, the Japanese banner ad companies are not doing too well. Two online ad agency leaders, Cyber Communications and D.A. Consortium, actually had negative growth in recent years.

The Network View

Aside from the few U.S. companies acquired or now run by Japanese companies, there are few pure U.S. players in this market and there are not likely to be more anytime soon. Observers note that U.S. networks just don’t have the Japanese-language support. While LinkShare and ValueCommerce have a bilingual platform interface, they are the only two out of dozens. One of the U.S. networks to gain a measurable foothold in Japan is DTI. They host affiliate programs for Japanese adult sites, but since most networks in Japan won’t handle porn ads, DTI has found its niche in this area. Some experts point out that one opportunity for U.S. companies would be to acquire small- to medium-sized networks and re-brand. LinkShare’s Umemura says that in Japan, U.S. companies could have come in at an earlier stage, but that "starting now from scratch would be pretty difficult whether you are a U.S. or European company. There are some smaller U.S. networks that do quite well here."

In terms of what hasn’t been popular in Japan’s affiliate programs are third-party management vendors. Currently, only a handful of the affiliate networks have management services, mainly because they are pushing their own media. However, experts say, tool and service vendors could eventually find a market in Japan. Keywords tools such as Wordtracker, recruiting tools such as Syntryx Executive Solutions and competitive keyword research tools such as the makers of KeyCompete could enter the market fairly easily.

Perhaps the best indicator that the online marketing landscape in Japan is maturing is the formation in May of 2006 of the Japan Affiliate Service Kyokai, an association that started to draw up guidelines, educate the public and monitor ethical behavior in online marketing. The six major networks in Japan founded the association when they felt that "shady affiliates" were starting to encroach on the growth of the business.

A learning curve, however, still applies. Sozon’s Radovic says that "everyone is struggling with how to market in a Web 2.0 environment. The Japanese blog and peer consumer trust are major drivers of consumer purchase. So this is an ongoing challenge." And solutions to the challenge will certainly add up to a better marketing landscape.

The Sticky Question of the Results Page

In the mid-to-late ’90s, none of the search engines wanted to be mere search engines, because searchers quickly left their sites. Instead, they largely ignored search to create portals – those sticky sites they hoped would show more advertising to each visitor by catering to all of their information needs.

Then Google came along. Google gained prominence as an unvarnished search engine that got searchers off the search page to where they really wanted to go, and did it faster than the rest. Over time, Google’s search emphasis has made it a far more profitable company than those sticky portals, and Microsoft, Yahoo and the other portals have been forced to refocus on search in recent years.

Well, everything old is new again. Led by Google, everyone is trying to be sticky again. As with the original portal mania, it’s all about advertising. It’s different this time, however, because instead of ignoring search, they are making search itself sticky. Let’s look at what’s happening and what search marketers can do about it.

The New Search Results Page

As you might expect, with multiple search engines out there, we can never talk about the new results page – these changes are being seen in various degrees with each search engine’s results pages. So what’s happening?

From time immemorial (around 1998), the main results page for each search engine has contained a list of 10 organic links to Web pages – period. Each showed paid search ads around those organic links, but those organic results pointed to pages on vanilla websites. If searchers wanted images, or videos, or news, they needed to use more specific searches devoted to those kinds of content.

A few years ago, Google began offering its OneBox capability (such as showing movie times and weather forecasts at the top of its results pages). But that was a small step compared with what the search engines are doing now. The new search results pages break the content type barrier.

Google now offers Universal Search, where all of these content types are blended together on the page. The top search result might be a video or an image, or even a news story, rather than a standard Web page. Yahoo and Microsoft have followed suit. Similarly, Ask.com has unveiled Ask3D, which stacks the search results so that different content types are shown in separate areas on the same results page. Try typing “darth vader” into each of the engines to see what you get.

These newfangled search results pages have been much ballyhooed, but so far, relatively few keywords get the Darth Vader treatment. Search marketers should expect that these blended and stacked results will affect more and more keywords over time, however, for two reasons:

The search results are better. Google and friends believe that their new approaches serve more searchers than their plain Web results predecessors. It does make sense that searchers are looking for more than just Web pages.

Search engines sell more advertising. Some search engines don’t like to talk about their monetary motives for new search results pages, but Yahoo’s Tim Mayer has been refreshingly open about their goal: to keep searchers on their results pages for as long as possible.

Similarly, these new search result pages often highlight Web properties owned by their parent company. Google shows its YouTube videos, Yahoo shows its Flickr photos, Ask.com shows its CitySearch results, each of which shows more of their advertising.

What Search Marketers Can Do

As a search marketer, you can’t control which results the search engines decide to display, but you can provide the kinds of content that the engines are looking for. As these new search results pages begin to be seen for more and more searches, search marketers should:

Use what you have. You might feel as though you don’t have any of these new content types. But you have press releases that could show up in news searches. You might have TV commercials and other videos that you can post on YouTube and on your own website. Don’t overlook the existing content assets you can start with.

Create new content. If Google wants new kinds of content, then feed the beast. Start a blog. Take photos of your products, your customers, your employees – whatever you think people want to see – and post them on Flickr and on your website. Put some interviews on video, or tape live product demonstrations. Provide opportunities for customers to create content for you, such as message boards, product reviews and wikis. All of this content is the new fodder for search engines.

Optimize your content. For the content that you create, continue using your target keywords in titles and elsewhere, just as you always have for old-fashioned Web pages. For non-text content – such as photos and videos – titles and descriptions are especially important. Submit your content to as many aggregators as you have time for, not just YouTube and Flickr, for example. Claim your blog in Technorati (and in other blog search engines and directories). And place social bookmarking buttons on your pages for Digg, del.icio.us and other sites, so your readers can bookmark your content for other social bookmarking users to see.

Although designing your content with interesting titles and descriptions is timeworn advice, it still works. Applying this technique to new content types, such as blog posts and videos, is a great way to start.

Make compelling content. Your Web pages have always needed to be interesting to attract the links critical for high search rankings. These new content types are no different. Moreover, some experts believe that search engines are looking beyond links to other indicators of intriguing content.

No one knows exactly what search engines consider in their ranking algorithms, but speculation abounds that relevance ranking for blogs is based partially on subscriber counts. Videos may get a boost based on how many times they’ve been viewed on YouTube, or on the number of viewer comments posted. Expect search engines to continue to use whatever data is available to determine the popularity of each new kind of content – it’s not just inbound links anymore.

What’s most striking is that marketers who’ve created the most interesting content are beginning to be rewarded for it by the search engines. For those search marketers that were optimizing only Web pages because that’s all the search engines rewarded, they’re getting left in the dust by those marketers that have provided the new content types their customers are looking for.

Search Wars

Even though Google would prefer not to be a verb, the search giant is just that and more. To Google is to search for products, maps, healthcare plans, cars for sale, images of Britney Spears, coupon sites, new mobile phones, the population of Moscow, blogs on gardening – the world really. And more so now.

As of last May, Google changed the way it serves results pages. It isn’t one of the ongoing tweakings to its famed algorithm to help you find what you are really looking for, but a much more significant change.

Search results pages are no longer sectioned off into categories for more targeted searches – its tabs for news, video, blogs and maps are still there but its main search results now pull all of those categories together into one results display. This is called Google Universal Search.

Google wants to provide more relevant search results by offering not more choices but better choices in the possible niches a user may be searching for. If you type “healthcare” into Google, you don’t just get providers of healthcare, but also blogs on healthcare and even local providers by ZIP code. Universal Search is supposed to make it easier to find what you want – a mandate that is the heart of Google’s mission.

“With universal search, we’re attempting to break down the walls that traditionally separated our various search properties and integrate the vast amounts of information available into one simple set of search results,” writes Marissa Mayer, vice president of search products and user experience of Google on the company’s blog.

Google co-founder Sergey Brin has said in the press that Universal Search is the first major revamp of the site and its underlying architecture in several years. He said the work began more than two years ago and that more than half of the company’s “search efforts” developed it. He said the changes will give people more exposure to “underutilized” Google services such as Book Search and Video Search, and that they will help raise Google’s market share. Brin finished off by saying that “our data says we not only are the best [search engine] but we’re widening the gap.”

In Google’s Shadow

The myriad of niche search engines on the Web, however, take issue with this new feature. Marketers and custom search engine companies believe this reform to the results pages will cut into their business. “There is a lot of money being thrown at the category, and so many players, they are not supportable in the long run,” says Chase Norlin, CEO of Pixsy, which hosts custom image search engines for other sites. Marketers are simply afraid that all their SEO efforts will have to change dramatically to retain their hard-won rankings, being pushed lower by popular blogs and YouTube.com videos of cats. Currently, Pixsy gets 60 percent of its traffic through Google.

“I don’t think it changes a thing for the top search marketers,” says Matt McGee, SEO manager for Marchex at SearchEngineWatch.com. “The best have already been using all these verticals to drive traffic – video optimization, local search, blogs, news and press releases, and so forth. Search marketers who’ve been sticking to the basics like on-page optimization and simple link building have some catching up to do. I’d say they already had some catching up to do even before the Universal Search announcement.”

John Tawadros, COO of iProspect, suggests marketers relax and focus on the opportunity Universal Search presents – a call to diversify your digital content to include more additional media types, adding that a truly good search strategy goes beyond just changing your ways to suit the engines. Kris Jones, CEO of PepperJam, supports that view. “I have watched advertisers double their sales volume via search by focusing on marketing initiatives outside of search. Conversely, I have seen advertisers in just about every vertical space leaving massive dollars on the table by refusing to see the big picture,” he says on his blog.

“The moral for search marketers is,” says David Berkowitz, director of emerging media at 360i, “they need to take a holistic view of search. For those who get it, this gives them an unprecedented chance to dominate entire search engine results pages and gain sizable competitive advantages. Marketers need to consider every digital asset of theirs as an opportunity to gain more visibility in Google, whether it’s an image, video, press release, store listing, blog post or anything else.”

Norlin points out that since Pixsy has a large business-to-business component, Universal Search does not largely have an impact on those current customers. In fact, there is a healthy amount of vertical search in the business-to-business space. Research firm Outsell recently stated that the business-to-business vertical search market would probably top $1 billion in revenue by 2009. Also, vertical search engines that use different “contextual crawling methods” or integrate specialized databases that are not routinely interpreted by a Web search crawler may be unaffected by Universal Search.

Finding a Niche

Wil Reynolds, associate at SEER Interactive, thinks niche search engines still have a place and are not going to be crushed by Google. “We don’t need to be the biggest SEO company out there, for example. We only need a piece of the pie. [Search companies] go out there fighting for a third of a percent and that can be profitable for them.” Mike Solomon, vice president of Search123, says that they do well because “we know who we are and what we do well. We see business that Google and Yahoo have left behind in the second-tier clients. ” We are not saying one size fits all. Google says ‘this is one size fits all and if not, too bad.'”

Image search engine sites such as Like.com, Picsearch.com and Pixsy will probably never catch Google, but they may not need to. “We don’t really compete with Google right now,” Norlin says. “Universal Search isn’t really a big deal.” He says that Google is too concerned with having a negative impact on their revenue to change results that dramatically. “They have too much to lose. That’s what happens when you are up.” He adds that an engine like Ask.com has nothing to lose and, therefore, is the most innovative in terms of universal search, Norlin believes.

Search sites such as Ask.com and Snap.com are trying to appeal to the Google masses by displaying search results in an interesting way. Ask.com has incorporated a preview in which thumbnails of the home page of a site pop up when the cursor slides across the result listing. Snap.com’s preview has a bigger pane that slides to reveal the home page without having to click through at all. Ask.com also combines search results à la Google Universal Search but presents the results in three ways – as Web links; as news items, pictures, video clips, weather reports and local results; and finally, a pane to help you refine your search. Snap CEO Tom McGovern says, “We’re not delirious in thinking that we are going to displace Google. We want to be the secondary search engine of choice.”

Since Universal Search’s launch, there has been a change in traffic patterns on the Web. According to Hitwise, Google Maps saw visits rise by 20.34 percent from May 12 to June 2. Google’s video results meant YouTube got 8.26 percent more visits in the same period and Google Video was up 1.41 percent. The Google Image Search and Google News areas actually lost traffic by 7.22 percent and 7.84 percent respectively. As of June 2007, Google still gets 52.7 percent of all searches, according to Nielsen//NetRatings.

SEER’s Reynolds believes that Universal Search is just an outgrowth of a really innovative company. “At Google,” he notes, “they really allow you to invent there. They encourage their employees to try new things. The result is Google has built an engine of ideas.” He says that Google Maps was a side project of certain Google teams and “now look at it.”

The Size vs. Substance Issue

Some experts think the one-size-fits-all model can actually help vertical search firms. Products that never ranked high can now see better traffic and buyers from placement in a Universal Search result. It means the broadening of SEO efforts instead of the daily micromanaging some businesses still do to their sites. It will force marketers to unify their different channels so that everything ranks equally. Some pundits think this was a long time in coming. Finally, the most obvious benefit to Universal Search is that with more personalized results comes better traffic for everyone. Norlin says that there are “only so many kinds of destination sites. These are the early days of Universal Search. Personalization of search and automation of that is the next trend.”

The innovative ways Ask.com and Snap.com have used Web 2.0 technology to craft interesting user experiences, experts agree, is a trend, and could chip away at Google’s business. FlickrStorm, for example, allows you to search Flickr image tags and displays thumbnails of all the pictures with that tag. You can then choose to view the full-size image at Flickr or add to your personal slideshow. FundooWeb.com presents search results from Yahoo, Yahoo News, Yahoo Answers, Yahoo Maps, Amazon and Flickr. If you search from all sources, the results are paned as collapsible headlines and a Flickr photo strip.

Other vertical search engines using Web 2.0 include Whonu, which pulls from more than 300 search sources and an interface that contextualizes what you enter. For example, type in a ZIP code and you get a set of links to maps, weather maps and even public events in Google Calendar. KwMap calls itself a “keyword map for the whole Internet.” Type in a keyword or phrase and an interface lists related key phrases with a graph that shows related terms. Clicking on a term reveals another layer of related terms. Like.com is a “visual shopping” engine that displays images of products or people. Click on an image and the engine shows related products by analyzing the image and not text tags. The interface lets you focus on areas of an image to find similar products by shape or color. Blinkx TV is a search engine that searches audio, video and podcasts using keywords and phrases but also content from inside the clip that you’re looking for – be it a phrase sung in a song or a product name mentioned in a podcast.>

While marketers will probably have to learn new methods to keep their results high in Universal Search, it seems clear that niche search engines can offer unique ways to appeal to everyday searchers, too. SEER Interactive’s Reynolds trusts the Web audience is a savvy one. “When you get to very specific niche engines, the consumer is very knowledgeable. They are more likely to convert. ” Google got people hooked for years before they started serving ads.”

The Affiliate Lifestyle

For many aspiring affiliates, the phrase Affiliate Lifestyle conjures up visions of big beautiful homes and shiny new sports cars. Graphic images on affiliate training sites encourage visitors to imagine themselves at their desk, dressed in pajamas and smiling the big happy smile as hundred-dollar bills miraculously fly from their computer monitor. Those images often include a picture of the loving spouse standing in admiration somewhere in the near background. Another popular image of the “rich affiliate” shows her relaxing in a lounge chair on a long stretch of almost-deserted white sand beach, a laptop perched atop her knees and some tasty tropical drink at hand.

Cynical home-based business opportunists and experienced affiliates alike may snort, snicker or even guffaw at the idyllic portrayal; however, with two exceptions, that is an accurate picture of this affiliate’s lifestyle. The “hundred dollar bills” are in fact four- and five-figure checks delivered by snail mail, and I would never bring my laptop to the beach where it might be exposed to the dangers of sand and water. Actually, I’m reluctant to tote my VAIO with me on vacation as I so rarely use it.

Case in point: I spent the month of March touring Vietnam and Malaysia. Although the resort in Sabah on the island of Borneo, and each hotel in Singapore, Kuala Lumpur and Ho Chi Minh City (Saigon) provided free or inexpensive access to high-speed Internet, I spent less than three hours at my computer during the entire trip.

I was not working during that time. I spent it uploading vacation pictures to Flickr for my personal travel blog at Roamsters.com and GoogleTalking with family and friends. The few emails and responses I sent to friends in the industry were primarily to feign sympathy for their ugly early-spring weather and to talk about enduring three-and-a-half-hour spa treatments and swims in the 86 degree Fahrenheit (30 C) waters of the South China Sea.

My month-long vacation wasn’t the “once in a lifetime” trip about which many people dream either. It was the trip I take every fall/winter. Moreover, the winter trips represent only a small percentage of my annual vacation time. In 2007, I will spend at least 4 months away from home for pleasure travel and family events – not to confuse the two. Furthermore, to make the best use of our short Canadian summer, I will work only a few hours per week during June, July and August.

Do I tell you this to gloat? Not at all! OK, maybe a little. But what’s really important here is for you to know that, a) the fabulous Affiliate Lifestyle is possible, and b) you need to define your version of the lifestyle and choose to live it before you hamstring yourself with some crazy 24/7 business that won’t allow you the time of day (or night) to enjoy what you achieve.

Take for example my friend Ray (not his real name). Ray earns seven figures a year as a search affiliate. He works with a paid assistant in rented office space where, for eight to 10 hours a day, they scramble to investigate new product offers in a vast array of markets, create static landing pages, write and place ads, and monitor their conversions to sales. His workload doubles during the ramp-up to major holidays. Simply talking to him about his frenzied business at Christmastime left me feeling frazzled and I was in the midst of a three-week break.

Despite all that money, Ray still can’t relax with his family at the cabin for the weekend without working evenings at his laptop. He told me that it was a major effort to ready his business for a week’s absence during a family emergency, and when Ray heard about my latest foray abroad, he replied by saying, “I really wish I had more time to travel.”

Ray would have more time to travel if he made more time to travel, something he could easily do if he adopted a few content publisher strategies. Although I too research new offers, write product endorsements, create landing pages and place PPC ads, I dig much deeper into far fewer markets, which means less email to read and fewer offers to research. Placing 10 to 30 offers that run dynamic ads on one theme site is considerably less time-consuming than placing thousands of individual product ads that must be constantly monitored and revised.

Rather than chasing offers, content affiliates concentrate on building relationships with potential customers through information and entertainment. Delivery is simple and cheap via blogs, email and RSS feeds. Moreover, blogging, podcasting and making videos are way more fun than ad writing. The biggest advantage, however, comes from the ability to plan our publishing schedules well in advance.

So if I suddenly required an uninterrupted month of time to respond to a family emergency or to take advantage of an extraordinary travel opportunity, I would log in to my blog, select four draft articles and queue them up for delivery – one per week. The same articles would be queued in the same order for delivery through my autoresponder. To keep my business humming along for four weeks would take about five minutes per site, or less time than it would take to pack my bags.

Making even a partial switch away from the search affiliate to the content publisher model should be easy for Ray. He could start with an existing niche in which he has had success, preferably one of an evergreen nature such as dating, skin care or weight loss. In as little as a day, he could rework and load seven of his best product reviews into an autoresponder series and put an email capture form on the applicable site. He should also take a minute to install a blog on that site, and spend $20 to $50 to have a designer work his existing template into the blog.

Next, Ray should reallocate just one day per week of his pay-per-click ad writing time and devote that instead to writing articles and product endorsements. By producing just four short articles per week, in three months Ray will have populated his blog and autoresponder with a year’s worth of messages to be published and delivered to his subscribers every week. As the size of his subscriber lists grow, not only will Ray’s income increase, but he will also be able to lower his pay-per-click advertising costs substantially.

And if Ray’s perpetual pay-per-click ad writing has left him short on prose, he could hire a ghostwriter to write those articles. Better yet, he could hire a team of ghostwriters to write articles in a half dozen of his best niche markets and get his affiliate business to the “set it, forget it and go on vacation” stage more quickly.

The last step in the process – taking a vacation – might be the most difficult for workaholic affiliate Ray, as he may be tempted to use his newfound “free” time to build an even bigger empire.

If you’re like Ray, listen up! Whether you are an aspiring affiliate or a seven-figure affiliate, making time to rest and rejuvenate body, mind and soul is the best thing you will ever do for you and your family. When you are refreshed and focused, you become even more efficient and productive in your work. So leave the laptop at home and go have fun. With practice, you’ll soon discover that living the Lifestyle and taking vacations is as easy as FTP.

Oh, and one last thing. When making your travel reservations online, remember to book through your own affiliate link.

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.

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.

Legendary Outlook: Q & A with Todd Crawford

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

AW: How many merchants are in your network?

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

AW: How many affiliates are in your network?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Overcoming Your SEO Fears

Ask nearly everyone and they’ll say that search engine optimization is intimidating. Search engine optimization – SEO for short – should be a familiar term and practice for anyone or any commercial company with a website. SEO is what you do to your website to get a higher ranking on search engines,particularly Google,Yahoo and MSN.The higher you rank the more likely someone will click through to your site and buy your stuff. Lately, information and tips on just how to do that can fill a library.

“I don’t think you can be in business without realizing that search is a big part of the tool you need – you need to have a strategy to be found,” says John Battelle, search guru and author of the book The Search: How Google and Its Rivals Rewrote the Rules of Business and Transformed Our Culture.

And yet being found is still perceived as some sort of magic formula. “SEO is not sorcery or deception; just something that requires diligent research and staying on top of changes to the way search engines do things,” says Joe Balestrino, who runs the Mr. SEO website.

If someone enters the term pizza into Google, for example, the first results are most likely the product of SEO. Pizza Hut, Domino’s and Papa John’s have all made an effort to rank in the top three spots on Google. Whether they remain there is something search engine marketers will need to stay on top of. Search engine marketing – SEM – are the tactics employed in order to rank higher, be they through paid search or other nonpaid methods. It could be by transforming a website’s look and feel to gain higher ranking.

Many Search Marketers Fail to Measure Results Take the term iPod and plug it into Google. What you get is a sponsored (or paid) search result for Apple. The first nonpaid result is also Apple. Not a coincidence. The Apple brand is so strong that it ranks very high on unpaid results, and paying for a sponsored result is just bet hedging.

People who are new to selling on the Web can get very confused by the “science” behind SEO. Talk of relevant keywords, algorithms and cost per click can terrorize Web sales newcomers. It’s an issue that continues to frighten brand-name companies as well. Since the concept of SEO is only about eight or nine years old, most companies have typically hired a chief marketing officer with as little as two years’ experience in matters of SEO.

Companies are also realizing that search engine marketing is a full-time job and have created executive positions just to monitor and enact SEM strategies. Companies that will do your SEO for you are growing as well. Books and conferences continue to provide advice whether you are a newbie or have been practicing SEO for awhile.

While trying to demystify SEO for people who have gone to a few dozen websites and have not been able to understand it, we can’t ignore the advancements in SEO and how big the market has become. Search still finished first in online ad spend in 2006, to the tune of 40 percent of total online advertising revenue, according to the Internet Advertising Bureau and PricewaterhouseCoopers. This trend of 40 percent is predicted to continue through 2010, according to eMarketer.

Back when there wasn’t a name for SEO, the tried-and-true way to rank high on search engine results pages was using as many keywords as you could in your content. If you sold cigars, putting the word cigar in your articles and written materials as many times as humanly possible would probably get you a pretty high ranking. With the ascension of Google and its algorithmic rankings, that doesn’t work so much anymore. Not to look too far under the hood, but the Google algorithm that ranks pages basically looks at who is linking to whom on the Internet and the quality of those pages. The more high-quality pages linking to you, the higher you get.

Most marketers employ a combination of SEO and paid search, also called pay per click, which results in a sponsored ad when someone searches for certain keywords. For example, that’s why searching for iPod brings up Apple’s URL in the sponsored position and as the first search result – or the “natural” search result.

Getting there has been considered by some as rocket science. And there is a current debate in the industry over whether SEO is too hard for the average Joe to execute effectively. Some consultants who do SEO say, of course, it’s a very difficult science. Critics claim that search gurus want to keep SEO sounding complicated so that they will continue to get your business.

“SEO is a new-school-of-marketing thought – switching someone’s beliefs is nearly as difficult as converting someone’s religion,” says Todd Malicoat, who consults on SEO from his StuntDubl.com site.

“I think that there’s a complete misnomer that SEO equals top position on the search engines,” says Dave Taylor, tech blogger at AskDaveTaylor.com. “In fact, smart SEO is much more about being findable for the specific keywords and phrases that will drive customers to your site, rather than just a more simplistic popularity contest.”

Job Functions Performed by Search Engine Marketers in the U.S. - 2006 That said, there is no denying that SEM efforts continue to grow. Forty-two percent of advertisers say that their SEM budgets are new, says the Search Engine Marketing Professional Organization (SEMPO), in its recent annual survey of marketing executives. The survey also found that 83 percent of advertisers prefer organic (or natural, nonpaid) search, while 80 percent put paid search at second place. Respondents stated that sales was their primary goal for SEM – 59 percent said this. Fifty-three percent said brand awareness was the primary objective and 48 percent said lead generation was the goal. SEMPO’s 2005 survey stated that the North American search engine marketing industry grew to $5.75 billion. That’s a 44 percent jump over 2004.

“Search engine marketing is growing at a faster rate than television, than radio, than print media,” pepperjamSEARCH.com CEO Kristopher B. Jones said at a press conference in August 2006.

While brands are becoming more adept at SEO, a battle is still ongoing behind the scenes between traditional advertising and search marketing. “I think the big brands are starting to get it, but yes, at a snail’s pace,” says Mr. SEO’s Balestrino. He says that while a few of the “heavy hitters” have been looking for SEO people to get them started, most still rely on the word of their SEM. “As you might imagine, few SEMs are into SEO because it can greatly reduce the need for PPC over the long haul.”

Balestrino adds that some companies are starting to see PPC “for the losing battle it can become,” especially among highly competitive retailers and service providers. “The company who is willing to spend the most can rank the highest, but the ROI is dwindling because PPC costs are rising faster than inflation,” he says.

StuntDubl’s Malicoat says that “I no longer try to claim that ‘branding is dead,’ but that certainly won’t keep me from kicking it while it’s down. It’s amazing how often I see a big brand completely blow top search rankings that could have been achieved with a little understanding, some initial planning and very little additional budget.”

Keywords are Key

The camp that believes SEO is not an intricate science say the first thing any SEO beginner needs to do is figure out what your relevant keywords are. Since the major search engines are organizing results based on the word or words people type into the engine, knowing how to organize your keywords is step one. Plus, coming up with all the applicable keywords for your site helps you understand much more clearly what it is you sell.

You can find these keywords by writing down as many as you can think of, or you can survey your core audience. You can also buy software to help you come up with words. There are sites and software to help you find the value in the keywords you have come up with, such as Overture.com (now known as Yahoo Search Marketing) and WordTracker.com.

Statistics associated with your keywords will help you decide what words get more traffic than others. Companies such as Trellian offer SEO software tool kits that help manage keywords, check your rankings, edit your meta tags and create PPC bid comparisons, among other things. For your cigar site, for example, “Dominican cigars” may get far more traffic than “Mexican cigars.” In fact, the latter may do so poorly as to warrant omission when it comes to keyword bidding.

What you are shooting for is a site that can be easily indexed by a search engine. Search engines send out automatic programs that look for new content and create an index based on the words on each website page. That means that attention to Web design and quality writing will boost your site’s chances of getting high rankings. For example, try to keep each Web page small in size, have no broken links, use correct HTML, a server that is up all the time, no identical Web pages on your site and good, clear navigation. All these elements help the site get indexed by search engines.

Some believe that little things such as title tags can make a difference in your site’s rankings as well. Title tags are the one-sentence descriptions coded into the HTML that are displayed at the top of the browser when you visit a page. Organizing your site in URLs that make sense also may contribute to rankings (URLs that show the structure of the site in words as opposed to a series of numbers). Something as simple as a sitemap page helps when you are being indexed.

Especially in Google the more sites that link to your pages the higher your ranking will be. This is called backlinking and is very effective when “high quality” sites link to you – and is even more effective if the link text itself contains one of your keywords. This may mean you will need to put on a public relations hat and send information or press releases to other sites. Joining industry Web forums can help get the word out as well.

This is how SEO has operated over the last few years. There have been many nuances along the way and those degrees of execution are what make SEO seem very impenetrable. In recent years, companies and website owners have opted to buy SEO from firms that do it for you – pepperjamSEARCH.com, Prominent Placement, Fathom SEO, SEOInc.com, EngineReady.com, Adoofa.com and iProspect, just to name a few.

SEMPO’s annual survey indicates that more companies are interested in outsourcing their SEO, but the overall numbers are still small. Only 26 percent of advertisers plan to outsource half or more of their paid-placement budgets for 2007. About two-thirds said they plan to do all of their organic SEO in-house. Only 10 percent said they would outsource all of their SEO needs. The high tech sector is also not immune to the difficulties of search. Among top software firms surveyed by marketing research firm MarketingSherpa, 25 percent were not “sufficiently optimized for search engine visibility.”

Brand Awareness

Some search pundits and bloggers continue to believe that big companies are slowly awakening to the power search brings to their brands. “Big companies are doing too little, and many small companies are too focused on SEO at the price of good content production. The magic bullet is just to produce lots of good, fresh unique content; not to play SEO games and trick people into linking to you,” says Taylor.

Having everyone on the same side of the fence would solidify search as a must-have for all companies. Currently the jury is still out about what constitutes the best approach to search. Some critics have written that SEO is a “one-time fix” – that once a site is optimized, you won’t have to touch it again. Counterarguments are that sites have to change as search engine algorithms change. “I think there are more than a few [SEO firms] that give companies the indication that over-thinking an SEO strategy is necessary, when in reality, it isn’t,” says Mr. SEO’s Balestrino. He says that most companies budget SEO expenditures pretty low, but not necessarily too low to be effective. He says to be wary of the “overly grandiose implementation.”

Others predict that the future of SEO is specialization – broad-category specialists who see SEO as “just plain marketing” and people who will specialize in areas such as keyword research, link building and analytics.

Search engine marketers are still having a hard time because so many of them working for mid to large companies are not focusing exclusively on SEO. A JupiterResearch/iProspect survey found that 88 percent of SEMs are doing SEO; however, 58 percent of them are doing website design, 26 percent do public relations, 44 percent do market research and 22 percent do direct mail. There are only so many hours in the day and only so many hats for overworked SEMs.

This is where legitimate SEO firms hope to gain ground. While MarketingSherpa research stated that SEO firms were still mostly “mom-and-pops,” staffs are growing at these firms and client accounts have doubled. MarketingSherpa says there are a handful of SEO firms reporting more than $10 million in revenues from SEM work and there are at least a few companies reporting $20 million in SEM revenues. The research reveals that most of these businesses have only been in operation for about four years at the most.

Some say that the buy-in from companies who could use search isn’t complete. SEMPO’s 2005 marketing survey stated that only 37 percent of companies said that executives were “moderately interested in search engine marketing practices.” Even companies who would like to outsource their SEM appear to be intimidated by the choices. “The biggest mistake is not doing enough homework on who is reputable and what works,” says StuntDubl’s Malicoat. “Companies should search names, company names, past company names and really be diligent in learning what is going to work best for them.”

Battelle is straightforward when it comes to telling companies what they need to do. “It is hurting companies that don’t use search,” he says. “It is our user interface. It is like a listing in the Yellow Pages.”