Revenue Performance Q&A with Pace Lattin by Chris Trayhorn, Publisher of mThink Blue Book, May 5, 2011 Performance marketing is an industry full of interesting characters with rich back-stories, lots of ideas and a commitment to making things happen. Pace Lattin fits that description perfectly. He founded a leading online media publication, ADOTAS; he was a major player in the display advertising space and he now runs Inside The OfferVault, a newsletter focused on the CPA industry. He’s never short of an opinion, that’s for sure, so we were happy to catch up with him recently to find out what makes him run. Sample quote: “Affiliates aren’t the problem, because real affiliates have real business plans and solutions – it’s the fraudsters, incentivized scammers, content unlocking fools who jump from network to network scamming people that are the issue.” Q: Let’s start with an introduction. What would you like people to know about Pace Lattin, the person? A: I can honestly say that I am more unsure of myself, than I have ever been in my entire life. Probably one of the greatest things I’ve learned in the last few years is that everything is completely in flux including ourselves. Accepting that chaos of the universe is probably one of the most freeing things in my life. Q: In Hollywood there’s an expression known as the “elevator pitch”. It refers to finding yourself in an elevator with a producer and having to pitch a movie in the time it would take to travel three floors. From a business perspective, what’s your elevator pitch? A: I’m one of the original grand-fathers of the interactive advertising space, having worked in the industry for almost 15 years. I was one of the founders of the first online ad-rep firms, founded one of the top publications in the industry, and have worked in all segments of the space from Brand to Direct Response. I’ve owned a major advertising network, a major affiliate network and have created products that everyone from Google to Yahoo use. I like to think of myself as the guy who bridges the performance marketing space and the brand space, currently advising companies in both. And I really hate flying. I always hated and avoided planes, but even more so now since they started to give proctology exams with the security check-ins. I’m not sure I’d really share that with someone in an elevator, but you never know. Q: You’ve been in this industry a long time. What are the things you like about how the industry has developed? A: The biggest change is that we’ve become as an industry smarter and smarter about the value of media. Not to say that there aren’t still people out there selling media at 10x its value, but as direct response, performance based marketing becomes more and more mainstream; people expect more and more that online media prove its value. Seriously, just because someone shows you stats that say an audience is ‘really interested” in the product, doesn’t mean that you need to pay a high cost. With audiences growing more and more, there is always a plethora of inventory available for performance marketers. Q: What about the future? Is performance marketing going to grow? A: Of course, we are only at the very tip of what this industry can do. Not only are more companies opening up to the possibilities of performance marketing, but the entire world is opening up to interactive marketing in general. I speak to friends all over the world, including Mexico, Sweden, Spain and other countries, and they are 10 years behind us when it comes to performance based marketing maturity. Q: In terms of threats to the industry, I know you have always been very involved in fighting fraud. How did you get into that and why do you feel it’s so important? A: My first publication, ADBUMb was a “call-out” publication that basically took on all the people who were ripping off others in the industry. For those who remember ADBUMb, it was almost 75,000 weekly readers in a tabloid format with all the content emailed. The industry was a wild-wild west then, and there was no controls whatsoever over fraud. Fraud is the one thing that can destroy a company and more importantly prevent the industry maturing. Q: At the moment it seems as though fraud is fought on a case-by-case, campaign-by-campaign basis, but still there are many people making a lot of money off of it. When there is so much incentive for some affiliates and/or networks to turn a blind eye, what’s the solution? A: Unfortunately there are a lot of “major” affiliate networks out there whose entire model is brokering other networks offers to other networks. This is still a huge part of the industry and many people are making money off it. Many of these networks have absolutely no fraud detection and take the attitude that if no one complains it’s ok. These networks also require net-zero payments from the other networks, so when the fraud is finally caught its too late to refuse payment. Affiliates aren’t the problem, because real affiliates have real business plans and solutions – it’s the fraudsters, incentivized scammers, content unlocking fools who jump from network to network scamming people that are the issue. Q: We have talked in the past about the so-called “gurus” of the industry that sell high-priced get-rich-quick training courses and software. What are your feelings about them? A: There is nothing wrong with courses, and there is nothing wrong with “quick” solutions – there are a lot of easy ways to make money. However, most of the stuff is easily learned on message boards out there. The problem is that most of these gurus are preying on people who have little or no connection to the affiliate industry, but want to “make money from home.” These aren’t affiliates, but often people who can’t really afford the $5k fees, but are so desperate to change their life that they’ll believe that a day course will teach them how to make millions a year. If you didn’t know, the secret of all these gurus success has nothing to do with affiliate marketing. Most of them are either one hit-wonder who made a few hundred thousand in the day, or worse never made a dollar outside of pitching crap. Q: Some people feel that the affiliate nexus tax bills – or Amazon taxes – that some States are introducing are an existential threat to the industry, yet others seem unconcerned. Where do you come down in that debate? A: I think that it’s a serious issue, but not specifically as it has been framed. We should be more worried about what steps legislators will take next? These laws show that legislators are more and more influenced by large businesses such as Walmart and Target, while ignoring the needs of the small businesses. There is no reason to think that they won’t go after lead generation companies next and charge them taxes for creating leads, or charge a tax for CPA networks that have affiliates in certain States. Every single economist in the World says that to stimulate the economy, start with small businesses. Affiliates should be getting the tax benefits, not Wally-World or some impersonal mega-conglomerate corporations. Q: If you could be anywhere in the world right now with anyone you wanted, where would it be? And who? A: Honestly, I’m quite happy where I am, what I am doing now. I spent most of my adult life trying to achieve more and more, not happy where I was and for the first time I’ve accepted that here and now is the only and the very best place. Q: What are you going to be doing in 10 year’s time? A: I haven’t the foggiest idea. I would have never thought 10 years ago that I’d be doing exactly what I am doing now where I am now, so I assume the next 10 years will be even more interesting. Technology is changing so fast as is the world, so who knows: perhaps I’ll be marketing space suits to an alien culture over the World Universal Web. Filed under: Revenue Tagged under: Click Fraud, Fraud, Interviews About the Author Chris Trayhorn, Publisher of mThink Blue Book Chris Trayhorn is the Chairman of the Performance Marketing Industry Blue Ribbon Panel and the CEO of mThink.com, a leading online and content marketing agency. He has founded four successful marketing companies in London and San Francisco in the last 15 years, and is currently the founder and publisher of Revenue+Performance magazine, the magazine of the performance marketing industry since 2002.