Blue Ribbon Panel Interview with Ronen Hamatian
The FTC seems to have been more aggressively enforcing their rules over the last couple of years. How has that affected affiliate marketing?
Affiliate marketing and, more specifically, performance marketing, is the most cost-effective and trackable form of advertising for large, well-branded advertisers. Although it seems like a no-brainer, many household brands have sat on the sidelines, choosing not to participate in an otherwise legitimate marketing space due to its vulnerability to deceptive advertising tactics and the abuse of consumer privacy. The FTC’s intervention has significantly decreased the prevalence of black-hat methods, removing the wrong players and making room for companies that play by the rules of ethics and compliance.
Taking my own network Madrivo as an example, our track record shows that affiliate networks can produce quality traffic and engage with lifetime consumers while protecting the integrity of the brands we promote. White-hat affiliate networks have forced publishers to abide by compliant traffic restrictions in order to run winning offers. It’s not always easy to play by the rules, especially when competitors bend them to make a quick buck. However, networks that plan to be long-term leaders in the performance marketing space are proving that it pays to do the right thing.
Why is diversity of channels and traffic important to advertisers?
Large, reputable advertisers seek networks with diverse capabilities for a number of different reasons. They love the convenience of an agency that can both help them build and optimize direct response properties, effectively deploy a multi-channel approach and deliver traffic across a diverse selection of media channels.
When brands look into customer acquisition initiatives, they understand how important it is to advertise via email, display, social and search. More recently, programmatic, native, mobile and video advertising are necessary for a good marketing mix. Finding a credible one-stop-shop that can do it all effectively requires a lot of due diligence. That network needs to have the resources, experience, and technology to get the job done as well as the adaptability to keep up with rapidly-evolving internet marketing techniques, supplying unparalleled service in all categories.
Often the best way to achieve the kinds of scale needed includes partnering with leading super-affiliates on the publisher side (Madrivo was actually started by four super affiliates aggregating their traffic) as well as making joint ventures and acquisitions to increase cross-channel capabilities. As a Top 5 network, Madrivo is pretty representative, with the ability to offer a wide range of products to advertisers that are looking to deploy a campaign to acquire new customers. With diverse expertise in media channels like email, display, native, video, coupons, mobile, and more, a leading network like our own should be able to plan and implement a very successful and sustainable lead generation campaign for any large advertiser.
What matters more to affiliates, performance or sustainability?
Performance is key. At the end of the day, it’s the ROI for affiliates that should be the prevailing KPI. However, I always say, what’s good about a $3 EPC or a great CPM when you end up getting revenue scrubbed or even worse, don’t get paid? Yes, there are some bad affiliates who don’t get paid due to bad practices; that’s not who I’m referring to. I’m concerned for the affiliates who play by the book and end up not getting paid due to networks not holding their advertisers accountable, or agreeing to irresponsible terms of chargebacks and clawbacks. I’m concerned for the affiliates who do things right and get stiffed by a network that has poor financial and accounting practices. It’s actually quite amazing to go on some social network groups or affiliate forums and find out how widespread this phenomenon is.
How can you mitigate that risk? A lot of due diligence. Ask your network questions about their financial backing. How can they withstand paying your commission even if they suffer a large non-payment by an advertiser? How would they handle a seven-figure cash-flow mismatch? Do they allow chargebacks, post-scrubs, and clawbacks? Find out about their credit check process for new advertisers and their pre-pay policy. What do they do with the overage (leads that you produced but didn’t fire a pixel)? Remove emotions from your decision to choose a network. A good “friendship” with the network owner won’t do much when there’s a six-figure discrepancy. A nice-looking tradeshow booth doesn’t necessarily reflect a network’s credibility and adherence to best practices. When you’re going to put your trust in an entity that is one of your largest account-receivables, I’d suggest that you investigate their sustainability.
In our experience here at Madrivo, high-performing publishers aren’t interested in joining networks that can’t provide them with winning offers that have significant lifetime value, and can guarantee that they’ll be compensated for their traffic.
We evaluate performance and sustainability when bringing in new offers and securing new traffic sources so we expect the advertisers and affiliates we work with to align with these standards. We set up a very selective network to deter publishers with questionable motives and preserve the quality of traffic we provide. As a result, we have never had to remove a single lead from a good affiliate.
On the same note, we have set guidelines for the types of offers we’ll promote and a thorough sign up process for the companies that own them. We require new advertisers to either fund their accounts in advance or agree to a credit review process that ensures they have the financial backing to pay their bills. Compliance, reliability, and quality are minimum requirements for all of our new partners and, not surprisingly, the clients who value sustainable business relationships tend to experience and/or provide better performance as well.
As a CEO, what advice would you give to a fellow CEO just starting out in the affiliate marketing space?
Personally, I’ve reaped the most benefit from enrolling in advanced education courses, establishing a healthy work-life balance, hiring external coaching experts, and joining Vistage, an exclusive peer group comprised of local executives who manage multi-million dollar companies. We advise each other and relate on the obstacles, opportunities, and rewards that are universal to C-level executives overseeing some of the most competitive and highest-yielding companies on the market across every industry.
I’ve also set aside time to prioritize the individual growth and well-being of everyone on my team – you have to invest in your team as well as yourself. Madrivo was named one of the “2015 Best and Brightest Companies to Work For,” an honor that I didn’t take lightly. In the past few years, we’ve held monthly team building events to further the bond of an already close-knit team. More recently, we’ve hired 3rd-party consulting experts to coordinate seminars and workshops that highlighted the importance of effective communication, organization, time management, and emotional intelligence.
The health and integrity of our culture is essential so nurturing team bonds and promoting the ideals of accountability, achievement, and assertiveness have greatly contributed to the growth and progression of our employee base. Every team member has responded positively to the outings and trainings, which is evident in their improved work ethic and job performance. Prioritizing the individual and group needs of our team has cultivated an open environment where employees push themselves and their teammates to strive for constant improvement while making time to celebrate their accomplishments on the way. Taking a step back every now and then to evaluate and re-prioritize my personal and professional goals has made all the difference, and I think my team would agree.
Ronen Hamatian is a master online marketer with a proven track record and 14 years of experience in the affiliate marketing space. As CEO of Madrivo, Ronen continues to expand his high-performance team through top-level hires and strategic mergers & acquisitions. Ronen promotes credibility, accountability and excellence by holding himself and all around him to the highest standards of ethics, compliance and performance.