Denied

On a cold Minnesota afternoon, affiliate marketer Connie Berg checks her email fearing the worst: a message from a dream merchant saying her affiliate application for either iShopDaily.com or FlamingoWorld.com has been denied.

You see, Berg’s sites post coupon information – a once-hot commodity now shadowed by merchant belt-tightening and recent incidences of customers getting expired or invalid affiliate-posted codes.

“No matter how much we try to convince them that 99 percent of the coupon sites are simply shopping sites that also post coupons, they don’t seem to want to give us a chance,” Berg says.

It’s certainly a frustration for Berg, still an ideal candidate with 90 percent of her traffic from direct bookmarks or type-ins and a “deal alert” newsletter going to thousands. But she’s been caught in a war between ideologies that surrounds many once-highly desired affiliate sites. Merchants are looking twice at any site that could potentially cut its profits, give the wrong idea about its brand or send an unapproved marketing message.

That’s why affiliate application turndowns extend even beyond coupon sites. Under fire are affiliate sites offering coupons, incentives, discounts, email marketing, heavy search buys, forums, downloads and even mass-market and cross-cultural appeal rather than the merchant’s defined niche.

“Five or six years ago, it was about who had the biggest affiliate program,” says Chris Kramer, media director of NETexponent. Kramer, who approves affiliate applications for The New York Times, Financial Times and others, says, “Now it’s more about ‘who is this affiliate, what are they doing and do I have to worry about what they are doing?'”

Performics, for instance, denies 20 to 40 percent of the applications it receives for programs including Bose, Eddie Bauer, Harry & David, HPshopping.com and Motorola. While AffStat 2005 found onequarter of its merchants still auto-approving applications, the buzz is that the remaining three-quarters of merchants are creating additional safeguards to determine who gets in, and who stays in.

“When we talk about this issue of merchants denying affiliates, it’s mostly due to brand sensitivity,” says Kraig Smith, co-founder of Chicago-based Media- Impressions.com. His clients include Apartments.com, Healthcare Media, HEE Corporation, LifeGem Memorials and Performics. “Many big-brand offline marketers are concerned about protecting their brand in affiliate marketing.”

After all, these days merchants can be more selective – mainly because there are plenty of affiliates to choose from.

“There’s a lot of filibustering going around about how many affiliates there are,” says Chris Henger, Performics’ vice president of marketing and product development. “There are legitimately probably 50,000 to 100,000 types of affiliates active at any point in time. While it used to be easy to stand out as an affiliate with a professional site, now you’re just one in the crowd.”

“The whole [affiliate] industry has gotten more sophisticated,” says Elizabeth Cholawsky, vice president of marketing for ValueClick, Commission Junction’s parent company. “These are real businesses with real employees working day to day to grow their revenues and customer base.”

Even Vinny Lingham, a Commission Junction super-affiliate and founder of Clicks2Customers.com, the affiliate search marketing technology provider that won CJ’s 2004 Horizon Award for Innovation, gets denied for about 10 percent of the programs he applies for.

“We’ve mainly been denied because of the fact that we’re search marketers,” he says. “From a search marketing perspective, 90 percent of the merchants realize they can’t market through search engines as well as the affiliates can.” The result, he says, is that some merchants pin search-oriented affiliates as the culprit if their own search campaigns don’t produce.

Perhaps, but Kerri Pollard, Commission Junction’s director of publisher development, says it’s more about being concerned with how an affiliate will fit into the merchant’s overall integrated marketing strategy.

“Paid search has become such a big component of all the affiliate programs,” Pollard says. “They want to make sure that whatever the publishers are doing doesn’t conflict with their own search campaign.”

Still, Lingham’s site takes top affiliate status in many programs, even globally, and Clicks2Customer’s parent company, incuBeta, is one of Business Day’s “Technology Top 100 Companies.” “In reality, if we or any other super-affiliates are not working for your company, we’re building your competitor’s business and market share instead.”

Why Deny?

Oklahoma affiliate Joel Comm has begun running DealofDay.com, a community of 125,000 bargain hunters, since he sold off ClassicGames.com to Yahoo in 1997. Three to 5 percent of his applications are denied, and the bulk of those come from financial-related merchants.

“Some merchants, like financial services, just don’t want to be part of coupon sites,” he says.

His response if denied? “I’ll just put someone else there instead,” Comm says. “There are some affiliate managers that just don’t get it, and others where the affiliate relationships are managed by the legal team – dotting their I’s and crossing their T’s. That ties their hands.”

That’s particularly apparent in the financial services arena.

“I don’t know if it’s as much price point as it is brand concern, but there is a correlation between higher price point products and brand concern; that’s not accidental,” says Peter Figueredo, CEO of NETexponent, the agency that manages the Financial Times’ affiliate programs.

NETexponent’s Kramer says one of the reasons is that financial service companies, ranging from American Express to mortgage companies, are governed by strict rules, codes and laws.

“They can’t have affiliates out there advertising ‘no-fee balance transfers’ when there really is a fee, because they can get fined,” Kramer says. “But when it comes to companies such as Financial Times, it’s more based on brand integrity. They’ve invested a lot of money in protecting and developing their brand,” and wouldn’t want “just anybody” representing that brand. Financial Times also “fits a tight demographic of highly educated, higher-income customers,” he says. “It doesn’t serve their needs to have their ads on sites where their ideal customers are not going to be.”

However, as a trend, “declines by merchants are on a case-by-case basis,” ValueClick’s Cholawsky says. “Some merchants are tiptoeing into affiliate marketing and are very restrictive. Others accept every application. We try to encourage merchants to be more inclusive, since we’ve seen that as one of the best practices. Otherwise, there is relatively little change” across the board.

Either way, the networks say tough requirements work both to the advantage of merchants and affiliates.

“Affiliates don’t want to be associated with a network that has a lot of fraud running rampant on that network,” says Danay Escanaverino, head of Global Resource Systems’ quickly growing affiliate network, Filinet.com. “If we allow fraudulent affiliates, generating bogus leads or clicks, that makes the program difficult to run for our other affiliates, and advertisers start losing faith in the program. It’s in everybody’s best interest for us to be a little bit more vigilant about who we allow in.”

Pay-per-click or pay-per-lead merchants, however, have higher rates of declines, attempting to weed out applications likely to send bogus clicks for quick cash. It’s an issue faced every day by Jonathan Miller, who approves applications for 27 affiliate programs managed by ForgeBusiness.com.

“We get inundated with affiliates trying to get into our programs,” says Miller, who since 2001 has received tens of thousands of applications, if not more. “We used to take just about anybody that signed up, but over the past year I’ve realized that things have become a lot more fraudulent and, in some programs we manage, as many as 90 percent of the applications in some periods are fraudulent.”

It’s usually only a temporary spike, made up by syndicates doing mass submissions from outside the United States, but Miller still usually denies 30 to 40 percent of the applications he receives, many of which are fraudulent.

Though common for pay-per-click or pay-per-lead sites, other merchants generally see fraud in no more than 5 percent of their applications, says a KowaBunga insider. (KowaBunga runs MyAffiliateProgram .com.) The rate of fraudulent applications often depends upon the type of merchant, the type of product, whether the merchant pays per lead or per click, and the dollar amount of commissions for average sales. “If you have lucrative offers,” Miller says, “it will be tested by forgers.”

So Miller, like other affiliate managers, is adding extra safeguards. He now has all the network fraud protections and verifies Social Security numbers and compares application info against the Whois.com registration information for the domain. Even after an application is approved, he watches for any telltale activities, such as lots of immediate clicks or changes in banking information at the end of the first month. Then, before paying out checks that are often in the thousands of dollars, ForgeBusiness.com requests not only a W-99 form but also additional proof of the affiliate’s identity, such as a faxed copy of a driver’s license, Social Security card or business license.

“We are willing to share our identity with our affiliates,” Miller says, “and we’re now requesting that our affiliates share their identity with us.”

Still, Miller says, “There is always a worry that we will be denying legitimate affiliate applications, which is why we call every affiliate that applies that makes it through the fraud software on our networks. If the affiliates can’t be contacted, then we either wait and hope to hear from them or their application is rejected.”

So while merchants of pay-per-click and pay-per-lead programs must still watch out for fake applications, ValueClick’s Elizabeth Cholawsky says – though the company hasn’t made an official statement – that she’s not seeing any more or less overall affiliate fraud than there was years ago. If the website is legitimate, the email address gets a response, and if the tax ID number checks out, then “the initial barrier [into CJ’s program] is fairly easy for a new affiliate.”

Though acceptance is easy, Commission Junction doesn’t cut a check until it’s reviewed by a “network quality team.” In June 2005, it redoubled its efforts, bringing in Cyveillance’s phishing, identity theft and corporate-brand-abuse protection software, which includes affiliate channel compliance and control features.

With more eyes on applications, Commission Junction can now relax some of its other requirements, such as denials of applications from affiliates in certain geographical areas: “We used to exclude all of Asia, all of Russia, but now we just exclude a couple of pockets,” Cholawsky says.

Meanwhile, officials at both Commission Junction and Performics say the number of applications isn’t going up, and the number of active affiliates are about the same even with new entrants (as new ones enter, old ones drop off). At the same time, the number of merchants with affiliate programs is growing year after year.

“As affiliate programs become standard, we’re starting to see it as part of every online merchant’s sales efforts,” Cholawsky says. This seems to say that the issue of perceived growth in affiliate denials isn’t a result of increasing competition for a limited number of spots.

So what is the answer? Though requirements and the number of applications remain stable, what used to slide is now inexcusable. “Three years ago you would see the ‘under construction’ symbols, and maybe that’s what kicked you out; today I’d be shocked to even see ‘under construction’ signs,” Performics’ Henger says. “We probably have a more discerning eye today as to what is a quality site that we want to let into the network.”

Other affiliate sites are being turned down because they’re missing something that could be easily fixed (see sidebar page 51).

Once you’re in the network, remember to reread your affiliate agreement on a regular basis.

“We put a lot of work into post-screening as well, checking month to month on the top sites to make sure they’re consistent with the rules we set,” Kramer says. As such, he says, affiliates are increasingly concerned about guidelines, especially regarding search or email marketing, once they get into the program. “Years ago, nobody cared about search and it was definitely a free-for-all, where you could do whatever you want,” he says. Now it’s a much different model.

These days, affiliates like Berg have to push for acceptance into the programs they want. But they are doing it.

“I’ve had some merchants that I was able to get into by really pushing it with the networks,” Berg says. “American Eagle was really hard to get into; I had to basically promise away my life that I wouldn’t do this or that. They gave me a data feed so I can post real-time products, but they were really particular about what they would allow on the site – and I follow it to a tee.” That means no coupons for American Eagle’s site and no inclusion of the words “discount,” “sale” or “coupon.”

And affiliates like Berg are learning to cut their losses.

“Sometimes I’ve actually dropped some merchants because they didn’t even want their name mentioned in the title meta tags, even when they are the only store on that page.” She’ll either find other merchants who carry the same products or chalk it up as a lesson learned. “Sometimes,” Berg says, “you get into their program, but the restrictions are so tight that you just have to walk away.”

JENNIFER D. MEACHAM is a freelance writer who has worked for The Seattle Times, The Columbian, Vancouver Business Journal and Emerging Business magazine. She lives in Portland, Ore.

It’s Just Direct Marketing

As I go around the country teaching workshops on pay per click (PPC) I get asked many varied questions on search engine marketing (SEM), depending on which city I happen to be in. Larger marketers seem to have more sophisticated questions; smaller marketers tend to focus on subsistence tactics. However, one theme seems to reoccur frequently: the myth that SEM is some kind of rocket science.

Smaller businesses and many members of marketing departments at large and even Fortune 1000 companies have bought into the idea that SEM is something that can only be properly utilized by those who know the correct “voodoo” to make it work.

But really, SEM is just another form of direct response marketing and many of the same principles apply. Why else do you think those nasty 24-page sales letters work so well at driving conversions from search engine traffic? Personally, I hate those letters, but I am not their targeted audience.

The marketers who write long sales letters typically have years of experience in direct response marketing and have figured out how to use search to reach the same customers that they would target with any other marketing vehicle. They are successful because their message resonates with their intended customers (mostly Internet newbies) and they apply the same controls to their search marketing campaign as they do to any other campaign.

So how can you apply the same tactics? Don’t get me wrong; I’m not advocating the use of long-winded sales letters with 15 calls to action set in strategically placed buttons. They may or may not work for your product – depending on your offer – whether your consumer is educated in your marketplace and your price point. What I am saying is that you too can adapt their techniques to reach your intended goal.

Here are some direct response marketing principles that should also apply to your SEM campaigns:

  • It takes work. In order to truly be successful at search engine marketing you have to constantly test your response rates. Those who throw up a campaign and expect to just sit and watch the dollars roll in without any labor investment are just wasting their time. Successful marketers test copy, keywords, placement, pricing, messages, landing pages, etc.
  • You have to test. In direct response marketing, testing rules is never-ending. Just like testing in direct mail, the cost of the campaign can be justified if the lift in the conversion rate is enough to offset the expense. To measure the effect, you have to A/B split-test your traffic, testing new landing pages against the old. For retail sites with thousands of products, you can minimize the expense by testing just the product pages driving the most sales. If the lift in conversion offsets the cost of optimizing the pages, keep testing and roll out new ones.
  • You have to track results. Just as savvy offline marketers can tell which piece of mail and from which specific message a customer converted, you have to be able to tell which keyword, message and referrer drove your sale. Tracking is easy to do on PPC, harder on search engine optimization, but critical on both.
  • Creative is key. Google rewards those with high click-through rates (CTR) on PPC by better placement, and the way to get high CTRs is to write great copy that resonates with your audience. A good copywriter can make the difference between a successful PPC campaign and one that bleeds cash. Similar to an offline campaign, online creative (i.e., your search listings) should be tested frequently because even a small lift in conversion can affect profitability.
  • It’s all about the benefit. Successful marketers remember that the customers’ needs are paramount at all times. They sell on benefits, not features, and look for the messages that play on their customers’ emotional responses to their product or service. Include in your creative the things that work best such as your unique sales proposition, calls to action, list of benefits, money-back guarantees, etc. Never test more than one element at a time, or you won’t know which one contributed to the lift or falloff. Over time, you will discover offers that work only online, but like offline marketing, it comes through the same test-and-learn discipline.
  • The “Lead to Sale” conversion rate is important. Just as in the offline world the key to conversions from search is providing the right hook in your listing at the right phase of the buying cycle, and then converting that lead into a paying customer with the right offer on your landing page.
  • Analysis is your friend. Like any good offline campaign, you learn a great deal from analyzing your testing and conversions. Sometimes, new search engine marketers make the mistake of analyzing all their online test campaigns as one big program. This can really skew your testing as the set of results from one search engine campaign can vary dramatically from another. Likewise one set of keywords can perform significantly better than the rest; but because even changing a keyword from singular to plural can have dramatically different results, you have to test and analyze each variable separately.
  • It’s all about CPA or CPL. All search engine marketing campaigns need to be analyzed in just the way you would analyze your efforts in the offline world. Cost per acquisition (CPA) or cost per lead (CPL) is your common denominator and the only number that really counts in the long term.
  • Create customer loyalty.Search engines are looking more and more at how many websites link to yours. But a bunch of links from high-traffic sites are worthless unless those links drive sales. Link campaigns are too time-consuming to do them just for the sake of getting higher search engine ranking. You need customer evangelists driving more sales, and links can provide that.

Not all traffic is created equal. Just as in the offline direct response world, the 80/20 rule applies. In that world we know that 80 percent of your profits come from 20 percent of your sales. The same thing applies in SEM: 20 percent of your keywords will drive 80 percent of your sales. Obviously those are the keywords you will focus 80 percent of your attention on but you can’t discover those drivers unless you test constantly. Some keywords will bring you more traffic, but fewer conversions on the back end. Other keywords may bring you no sales, but be effective in driving branding or eliminating a stumbling block in the buying cycle.

Direct response marketing skills and experience are some of the key drivers in SEM campaigns. There are some nuances of SEM that you can only learn by experience, but if you go into it with the mindset that these rules apply you will demystify the whole experience. Regardless of the source or channel this mindset is what makes the difference between success and failure.

MARY O’BRIEN is a partner at Telic Media. She was formerly senior director of sales at Yahoo Search Marketing and is currently presenting their advertiser workshops around the country.

Defend Yourself Against Click Fraud

The sky is falling! The sky is falling!” That’s what the Chicken Littles of the world would have you believe when they discuss how click fraud will doom the world of pay-per-click (PPC) advertising. Of course, some Chicken Littles have a vested interest in raising awareness of this supposedly rampant problem, considering many of them are the purveyors of products that help protect you from this threat.

I don’t mean to make light of click fraud. It certainly exists and if it is left unchecked it has the potential to cause serious harm to advertisers. But does anyone really expect the search engines to sit idly by waiting for hackers to kill their very substantial profit margins? The search engines take click fraud very seriously and have teams of folks whose job it is to try to protect advertisers from spending millions in a tide of click spam.

The search engines are not waiting for the problem to go away, and neither should you as an advertiser. You need to protect yourself from an issue that has the potential to kill the golden goose of PPC marketing and severely impact your return on investment.

First of all, if you are spending a decent amount of money on PPC (in excess of $1,000 per month), assume that you will become the victim of click fraud at some point. If you are marketing in a competitive channel, with a large number of keywords, top positions, high click value (over $1 per click) and a large marketing budget, you may have already seen traffic to your site rise in a suspect fashion on certain keywords.

As with any impending threat on the Web, protection comes down to vigilance. If you are a frequent Web user, you know you shouldn’t surf the Web unprotected. You need a firewall and an Internet security program to protect you from the shenanigans of those who propagate trojans and worms and phishing schemes. Seriously, if you have an unprotected computer, you better drop this magazine right now and go purchase the necessary software. You’ve got bigger problems than PPC fraud.

A good vigilance campaign deploys the following methods: take advantage of the tools the engines provide to you; purchase tools that allow you to see immediately if there are spikes in traffic and their source; and monitor your campaigns frequently.

Tools From the Search Engines

All of the major search engines monitor clicks across many different points of data. The majority of click fraud gets caught by the engines and never shows up in your reports, because they strip out those clicks before they bill you. Unfortunately, a small percentage can slip through mainly because the algorithms that perpetrate fraud are constantly adjusting. Just as it’s hard for the antivirus programs to keep up with the worms, etc., it’s also hard for the search engines to catch every piece of fraud when they are constantly under attack.

This is where you come in. Constantly review the reports that the engines provide to you, and if you see a spike in traffic start looking for reasons. Maybe it’s simply because one of your products was listed in a press release, but it could also be because one of your keywords is under attack.

The engines also provide billing reports. Pay attention to emails you get advising you of charges to your credit card. If you see an increased frequency of charges, it’s time to start investigating.

Tools You Can Purchase

Any of the basic tracking solutions allows you to see at a glance where spikes in your traffic are coming from. By viewing click data at the IP level, you can see if a large amount of traffic is coming from a specific IP address. That can be a good indicator that the traffic source may not be a good one.

Going to the search engines with these types of reports in hand will guarantee you an investigation and will likely result in a refund if the traffic is found to be bogus. Unfortunately, the types of reports you get from just viewing most Web logs are not detailed enough for search engines to conduct a thorough traffic investigation. You need the more detailed analysis that a tracking solution provides.

If you just want tracking on your pay-per-click campaigns, two good tools are Who’sClickingWho and Click Auditor from Keyword Max. These tools allow you to see at a glance what might be amiss with your PPC campaign.

Of course a more extensive tracking solution allows you to see traffic from every marketing campaign you are running and enables you to determine where you should be spending your money. Before buying one of these tools decide whether you just want to analyze PPC or if you would prefer to calculate ROI and conversion rates across all your campaigns. There are many great tracking solutions out there – both inexpensive and expensive – that let you do so. Many will give you a free trial version of the software.

Monitor Your Campaigns

Checking your campaigns frequently enables you to see patterns in your traffic and determine if something is wrong. If you are in the retail space you will definitely see seasonal and monthly changes in traffic, but service and B-to-B sites can also see varied traffic patterns.

If you have deployed a good tracking solution and are also using a bid management tool, you may only need to monitor your campaigns on a monthly basis. However, if you haven’t implemented those tools, at the very least you should take advantage of the free conversion analysis tools the engines provide, and watch your campaigns on a weekly basis.

Resign yourself to the fact that click fraud, just like phishing scams, isn’t going away. While the Net creates a global competitive marketplace for business and products, it also creates the same opportunity for thieves and scoundrels. But just as Chicken Little protected herself with the umbrella, you too can protect yourself and your business. Stay vigilant and monitor frequently, and you will be fine. Remember, PPC works and we all have a vested interest in ensuring it continues to do so.

MARY O’BRIEN is a partner at Telic Media. She was formerly senior director of sales at Yahoo! Search Marketing and is currently presenting their Advertiser Workshops around the country.

Don’t Give in to Click Fraud Fears

Click fraud is a potentially serious problem faced by any affiliate marketer who uses pay-per-click (PPC) search engine advertising to market their sites.

One study estimated that between 10 and 20 percent of a PPC advertiser’s budget is lost to fraud. That estimate increased to 50 percent for high-priced, highly competitive keywords.

Unfortunately, there is no guaranteed way to prevent unscrupulous competitors from going click-happy and rapidly depleting an advertiser’s PPC budget.

Solving the problem is tedious and time-consuming. Getting your account reimbursed requires proof of the fraudulent activity. However, detecting click fraud demands effort and resources that most marketers would rather devote to increasing their income – not ferreting out thieves.

No wonder the fear of click fraud has some affiliate marketers running scared. Understandably, dealing with the whole ugly scenario might leave an advertiser feeling frustrated and thoroughly disenchanted with pay-per-click advertising.

Indeed many new and aspiring affiliate marketers are using potential click fraud as an excuse not to try pay-per-click advertising, or to abandon their Internet marketing business plans altogether.

Giving up due to problems that may never arise? What sort of response is that? Any activity, business or otherwise, has its potential problems.

Take something as commonplace as fueling a vehicle, for example. Under certain conditions you may risk starting a spark-induced fire at the pump. Does such a horrible prospect persuade you to sell the car, ride the bus to work and add two more miserable hours to your daily commute? I should hope not. Rational people learn and apply safe fueling techniques to keep from being fried.

Likewise, dropping pay-per-click as an advertising option from your marketing arsenal because you’re afraid of click fraud, or want to avoid the cost of advertising, isn’t the smartest approach to Internet business.

Rather than use PPC, some affiliate marketers rely exclusively on using search engine optimization techniques, an option fraught with its own perils.

First of all, you may wait several months to get your site ranked high enough in the engines to attract visitors, only to discover that your copywriting or the product itself doesn’t convert to sales. So the process begins anew with copywriting, site submissions and another long wait to see the results.

Second, income derived from search engine traffic tends to be inconsistent from month to month, varying with a site’s rank. Imagine having your earnings plummet from $30,000 per month to a paltry $2,000 per month, simply because Google changed its algorithm or de-listed your sites.

I often consult with affiliates who’ve taken the SEO-only route but then need a way to rebuild their shattered businesses. So yes, such catastrophes do occur.

So what’s the answer? It’s simple: use pay-per-click advertising to market your sites. By the way, that’s the same solution many “you don’t have to pay for traffic” marketing gurus use to promote their own products and affiliate programs. Why? Because no other traffic- generation method is as easy to implement or immediately effective as PPC advertising.

I LOVE pay-per-click advertising, and yes, it loves me back. When Yahoo Search Marketing’s (Overture) predecessor, GoTo.com, launched its pay-for-performance search engine in June 1998, I recognized the service as a complete godsend to online marketers and have been using it to successfully market my affiliate sites ever since.

You simply write an ad, input your keywords, set your budget and within minutes a Google AdWords campaign can be sending highly targeted traffic to your site. Yes, minutes, not months!

Clickthrough and conversion rates can be rapidly assessed, most often within hours of starting a campaign. Is the impression- to-clickthrough ratio poor? Simply tweak the ad and test again. If conversion to sales is underwhelming, rework the product review and then resume the flow of traffic to your site with just a click of your mouse.

Don’t know whether you should promote Product A, Product B or both on your site? Pay-per-click advertising quickly helps you find the right answer. Simply create two listings to send traffic to their respective product review pages. Five hundred sets of eyeballs to each page will give you a good reading on which is the most lucrative choice.

You can test conversion rates for various products without having to write an endorsement. Scores of affiliate marketers who don’t have their own websites are making scads of money promoting products as affiliates using PPC. Instead of bringing visitors to a product endorsement page, they send traffic directly to the merchant from Google through their affiliate links.

Perhaps you shun PPC because of horror stories about campaigns run amok and credit cards drawn to the limit? Forget them. There’s absolutely no reason that should ever happen. Most pay-per-click search engines permit advertisers to set maximum daily or monthly budgets. Or you can deposit a set amount into your PPC account, and the campaign will automatically suspend itself when the funds have been depleted. Once you are confident that your campaign is producing satisfactory returns on a consistent basis, automatic funding options are available. Eventually you’ll get to a stage where you can set it, forget it and collect your commission checks – month after month and year after year. Some PPC users complain that increased competition in certain markets is driving them out of business as bid prices skyrocket.

Here’s a simple solution. Don’t raise your bids to compete on the most popular keywords in your niche. Instead, lower your bids or drop those keywords completely. Concentrate on building bigger lists of highly targeted keyword phrases on which your competitors are not bidding. This strategy lowers your average cost per click and increases your returns by driving laser-targeted traffic to your sites.

Targeted traffic is the lifeblood of your affiliate marketing business. Don’t let fear of click fraud or any other potential problem keep you from trying pay-per-click advertising, the easiest and fastest way to get traffic to your sites. Spend a buck and make two, three, four or more. Those benefits greatly exceed any associated risks.

ROSALIND GARDNER is author of the best-selling guide to affiliate marketing, The Super Affiliate Handbook: How I Made $436,797 in One Year Selling Other People’s Stuff Online. Her book is available on Amazon and www.SuperAffiliateHandbook.com.

Off the Mark

Affiliates and Web publishers who sell goods from the most popular brand name merchants are losing traffic and revenue to Web sites that lure consumers by deceiving them with unauthorized use of trademarked products.

This happens when a Web publisher embeds the most popular brand names into their site in order to attract consumers who are using a search engine to find specific products. These visitors are often directed to Web sites that sell similar products, but not the specific ones they were looking for. Instead, consumers see rival products.

For example, a consumer types “Nike” into a search engine and is directed to a Web site that sells sneakers made by rival Reebok, but not those made by Nike. In this scenario, the consumer may get frustrated and move on to another site that does sell Nikes. Or they might buy one of the competitive offerings. This means the offending Web site profits and has less incentive to stop these deceptive practices.

This very common tactic has upset consumers, the makers of popular brand name products, as well as affiliates authorized to sell these products. In an attempt to stop such behavior, there have been several high-profile lawsuits in which brand names such as Gucci, Louis Vuitton, Nike and Geico Insurance have sued specific Web publishers and search engines to control their own brands on the Internet.

These lawsuits raise a key question: Can one corporation prevent another from linking to its trademarked, for-profit Web site?

The answer is not easy to determine. Many companies are testing the limits of trademark law by suing alleged Internet trademark abusers for infringement. So far the results have been mixed.

Terence Ross, a partner at Gibson, Dunn & Crutcher, a Washington, D.C., law firm, has represented plaintiffs in cases against adware makers Claria and WhenU. “Unfortunately, there is no more certainty as to what the law is than a year ago,” he says. “There have been a number of court decisions on either side of the issue.”

An August 2004 decision by the US District Court for the Eastern District of Virginia delivered a blow to search engine giants Google and Overture Services in their efforts to defend ad sales of trademarks as “fair use.”

But that changed in December when a federal judge ruled that Google’s advertising policy doesn’t violate federal trademark laws. Google will now be allowed to sell ads to rival insurance companies whenever Geico’s name is typed into the Google search box.

Geico sued Google and Overture in May 2004, saying that use of its trademarks when selling advertising in search engines constituted trademark infringement and raised various state law causes of action. Google filed a motion to dismiss the case on the grounds that it had no legal merit and that the state claims were insufficiently pleaded.

The August ruling, which allowed insurance giant Geico to sue Google and Overture for allegedly selling advertisements linked to its trademark, could have threatened the livelihood of the search engines. Overture, which is owned by Yahoo, and Google make money by selling ads linked to keyword-triggered search results, and many commercially driven searches are tied to trademarked brands such as Geico or Nike.

Google attorneys cited the U-Haul International v. WhenU case, in which the moving-truck company alleged trademark infringement against WhenU for displaying rivals’ pop-up ads over its Web page. The court found in favor of WhenU, because it only used U-Haul’s marks for “pure machine-linking function,” Google argued.

For its part, Geico cited the Playboy v. Netscape and Excite case, in which the Ninth Circuit US Court of Appeals in San Francisco found that the two online portals created consumer confusion when using Playboy trademarks to sell banner ads. That suit took five years to settle.

More Legal Battles

Many of the cases are settled before they ever reach the court, with smaller sites often removing the trademarked terms to avoid a costly legal battle. There are some high-profile cases that are still pending. Many are closely watching the trademark suit filed by American Blind and Wallpaper Factory against Google along with its partners Netscape and Ask Jeeves.

The suit, filed in January 2004 in a New York federal court, claims Google’s practice of selling text ads related to keyword search terms takes advantage of American Blind’s trademarks, because rivals’ ads can appear on results pages turned up by searches for “American wallpaper” and “American blind.”

American Blind had threatened to file the lawsuit last year. That, in turn, prompted Google, in a filing with the US District Court for the Northern District of California, to argue that “American” and “blind” and other words American Blind was claiming as trademarks are descriptive terms and shouldn’t enjoy trademark protection.

The company disagrees. “We spend millions of dollars annually to build brand awareness and cannot stand idle while Google allows our competitors to ride our coattails,” according to a statement from Steve Katzman, CEO of American Blind, which says it has spent more than 50 years and $70 million building its reputation.

American Blind says the outcome of this suit will have repercussions for other businesses that include generic words in their names, such as General Motors and National Car Rental System, which could also be targeted for keyword-based advertising.

What About The Networks?

And while some affiliates are relying on the courts to protect them, others think it is the responsibility of the networks to stop this practice. However, some say the networks gain from helping affiliates profit from brand confusion.

“These people are interested in making money, and when a trademark is infringed on, they are still getting paid,” said one affiliate who asked not to be named. “It’s not in their best interest financially to enforce or police rules to try to stop these unethical practices.”

One affiliate manager says that networks are supposed to be the trusted party in this equation, and they must try to uphold fair business standards.

“The industry is failing to recognize that there is widespread use of trademarked keywords,” says Alan Schneider, president of R U on the Net, an affiliate manager, who has stopped many of his affiliates from using trademarks.

However, he also notes that when affiliates in his network were asked to cease and desist from using trademarks or competitors’ URLs in their advertising, their sales often dropped by as much as 80 percent.

Search For Tomorrow

Search engines are also profiting from brand confusion. Both Overture and Google allow marketers to bid for keywords that may be trademarks or linked to trademarks. Some say they are not eager to police trademarks because they risk losing thousands or tens of thousands of dollars a month on lost pay-per-click revenue.

Paid search is one of the fastest growing and most closely watched segments of the online advertising business. According to Jupiter Research, paid search will grow from $1.6 billion in sales in 2003 to $2.1 billion in 2004, and it will continue to grow at a compound annual rate of 20 percent through 2008.

In addition, more than half the total searches are for branded keywords such as Wells Fargo, according to comScore Networks, a market research company.

The search engine companies have long had ambiguous policies on trademark-related advertising. Most refuse to actively police infringements. Instead, they opt for a hands-off approach, acting only if there is a complaint from a trademark owner.

More than a year ago, Overture changed its policy and posted a trademark notice on its site, informing advertisers that it is their responsibility to respect the trademark rights of others.

“In cases in which an advertiser has bid on a term that may be the trademark of another, Overture allows the bids only if the advertiser presents content on its Web site that refers to the trademark … or uses the term in a generic or merely descriptive manner,” according to the policy.

It’s All About The Meta Tags

Meta tags are HTML code embedded on a Web page used to identify its content. Meta tags are powerful tools because they have a direct effect on the frequency with which many search engines will find a Web site. When a search engine finds a search term in a meta tag, it indexes the Web page for display in its search results.

In the early days of Internet search engines, Web page programmers influenced Web searches by spiking the meta tags with the same word over and over to improve their standing in search engine results. Most search engines have since been trained to largely ignore these repetitions.

But not every meta tag use of another company’s trademark is illegal. When the trademark is used only to describe the goods or services of a company or their geographic origin, it is permitted under trademark law as “fair use.” For example, if a site delivers content such as music from the Amazon region of South America, it may use the word “Amazon” in its meta tags. This use would not infringe the Amazon.com trademark because the term “Amazon” is being accurately used to describe the goods offered.

Unfortunately, there is no clear test for proving fair use, and even a merely descriptive use of a trademark in a meta tag may trigger a lawsuit. Legal experts say, “When in doubt about using a trademark in your meta tag, leave it out.”

The Resolution

Most agree this issue is going to take some time to be resolved.

“I think it’ll take a couple of years,” says Jeffrey Riffer, a partner at Jeffer Mangels Butler & Marmaro, a law firm in Los Angeles. Riffer was the lawyer for defendants Excite and Netscape when Playboy sued them for trademark infringement. Playboy prevailed in that case.

“There needs to be some appellate court rulings on this before it will settle down. We are still at the beginning. There was nothing like the Internet before, so the courts didn’t know how to deal with the issue. There was tension between what the search engines want to do and what the trademark holders want. But there are still more of the fights that will happen in the trial courts.”

Riffer says that when everything finally does settle down, he believes that search engines will be allowed to sell keyword advertising.

“It’s good public policy to allow advertisers to sell advertising to the audience that is most likely to be interested in that advertising,” he says. “It’s good for consumers, pro-competitive and the right application of trademark law. Under the law a trademark holder doesn’t have a monopoly on the trademark. They are only allowed to stop other companies when there is a likelihood of confusion.”

But what if things don’t shake out in favor of the search engines?

“The world will go on if things go the other way, but it’s bad public policy, and at that point the search engines should hire a lobbyist and go to congress,” Riffer says.

Barry Felder, a partner head at Brown Raysman Millstein Felder & Steiner, a New York law firm and Playboy’s counsel in the suit against Netscape and Excite, says he expects that traditional trademark analysis will be applied, but in the context of the Internet, over the next one to three years.

“I expect guidelines for both the search engines and the trademark holders,” Felder says. “They will both have to be familiar with and adopt the appropriate conduct. I don’t know that one party or the other will prevail. The analysis will turn on whether the use [of the trademark] is confusing.”

Attorney Ross says that absent congressional action, the earliest he expects guidance from the appellate courts is late 2005. “The problem is that in the meantime, businesses need to figure out how to operate in an uncertain environment,” Ross says. “And that is creating a mess.”

Lisa Picarille is the editor of Revenue.

Three Great Search Engine Marketing Myths

As search engine marketing has become ubiquitous and, in most marketers’ minds, synonymous with generating profits from their Web sites, lore has sprung up around the process. Those who have an axe to grind or a product to sell mainly propagate these myths.

When the success or failure of your Web site can be determined by a creature as capricious as the Google spider, then it’s not surprising that rumors and misinformation abound. Let’s try to dispel some of the myths that have been repeated so often that they’ve become accepted as truths.

Myth 1 Anyone can build a Web site and use search engine marketing to make it profitable.

This one is a holdover from the early days of pay-per-click (PPC), when all anyone needed to do was buy thousands of clicks for a penny, sign up for an Amazon affiliate program and watch the checks roll in. I personally spoke with several advertisers when I was at Overture (back when it was GoTo) who made big bucks just buying clicks and sending the traffic to their favorite affiliate program.

Nowadays, with most of the competitive keywords on the Internet costing a dollar or more, you need a strong marketing plan, a well-designed Web site and a good business model to generate a living. Yes, you can put up a site, sign up for a few affiliate programs and display a few banners, but don’t expect to quit your day job. To make it work, you need to know what you are doing. In order to generate significant traffic to your site, you need to have a decent enough profit margin in your product so that you can afford to spend money marketing it.

Whether you are an affiliate or a retailer, the product or service you are selling needs to generate at least $20 per sale for you to even think about doing PPC – unless you already have a guaranteed stream of traffic to your Web site, a very large marketing budget and you are building a business model around volume rather than individual sales. Remember this when thinking about which affiliate programs to join, because there are very few products that can be sold successfully and sustainably on the Web without traffic from search engines.

Unless you know Web design and site optimization very well, you are going to end up having to troll for traffic by buying clicks. In order to do that, you need to have enough leverage in your profit margin to be able to build your sales, and you need a product and Web site that are attractive enough to generate repeat customers and continue to lower your cost per acquisition.

I’m not trying to paint a bleak picture; I know many smaller advertisers who have quit their day jobs and built a business using PPC advertising alone. They just made sure their profit margin was strong enough to allow them to do it, and they didn’t buy into the new get-rich-quick schemes.

Myth 2 You’ll never be the victim of click fraud.

While the search engines take this stuff very seriously (at least Overture and Google do), they are at the mercy of bots and hackers constantly assailing their systems for their own nefarious gains. By now, most people out there realize that they have to have a virus program installed on their computer or they are bound to get burned by a vicious attack. The same thing is true of your Web site. If you are a PPC advertiser, eventually you are going to get hit with fraudulent clicks, especially if you are in any of the competitive channels.

Overture and Google catch the majority of them, but your campaign is still going to get hit by at least 5 to 10 percent of clicks that are not real. This number is not now, nor has it ever been, 50 percent, by the way. That’s another myth that’s being touted around the Web right now that simply isn’t true. I personally know at least 100 advertisers, both large and small, who are getting at least 5 percent conversion rates from their PPC campaigns, and that just wouldn’t be possible with 50-percent click fraud rates.

This is your campaign and your livelihood. Do yourself a favor: Before you spend a whole bunch of money on PPC advertising, set up tracking URLs. Take advantage of conversion tracking from Overture and Google, and buy yourself a good click-tracking solution.

Some good, inexpensive ones include WhosClickingWho.com, Click Auditor from KeywordMax.com and ClickTracks. com. Not only will these programs inform you about the nefarious clicks, but they will also tell you about the real ones so you can determine how much you should actually be paying for clicks.

With your click information in hand, you can go to the search engines and question any clicks that you know are bogus. The search engine companies will research this, and if they find the clicks questionable you will get a refund. Partnering with the search engines in this way is the best way to safeguard your business, and no one benefits when click fraud is allowed to continue.

Another way to guard against click fraud is to be very careful when selecting smaller search engines to work with. Many of them simply don’t have the resources to invest in the technology needed to safeguard their advertisers from fraudulent clicks.

Myth 3 Once you build your Web site and start getting traffic, you are done.

Search engine marketing is one of the most iterative marketing processes ever developed. One of the hardest things about marketing on the Web is that you’re never done. The search engines are constantly changing their processes, and you should constantly test landing pages and creative on your search engine marketing campaigns. New affiliate programs are constantly arriving on the scene, and everyone is in search of the next big thing.

You don’t need to follow what’s in fashion to be successful. You just need to make sure you stay up to date on issues and take full advantage of all the latest marketing channels that become available.

That means trying local and international traffic and seeing how it converts, adding things like contextual advertising to your site to try to monetize every square inch of the page and continuing to learn how you can provide a better product or service for your customers.

One of the great things about the Internet is that it truly does create an even playing field for all. Search engine marketing makes it easy for a small marketer to compete with a Fortune 500 company.

You can sell your product internationally or locally, work at home in your pajamas and generate a good living. All you have to do is play it smart, market to a niche and watch your profit margin like a hawk!

MARY O’BRIEN is a partner at Traffic-Mentor.net. She has worked in Internet marketing for five years and was formerly senior director of sales at Overture.com.

What Clicks At Performics

To the surprise (and delight) of many, 2004 has put the spotlight back onto e-commerce for the first time since the dot-bomb exploded in the spring of 2000. Web stocks rose over the first three quarters, while mainstream stocks were weighed down by geopolitics.

Google went public with the kind of swagger that conjured up memories of the late ’90s. Online spending continued its rapid rise. And big advertising companies went shopping for smaller Web properties.

ValueClick bought Commission Junction. And Internet ad giant DoubleClick bought Performics.

Few have more insight into the recent past or the long-term future than Performics President and CEO Jamie Crouthamel, who shares his views in this one-on-one chat with Editor in Chief Tom Murphy.

TM: How and when did you get into the affiliate marketing business?

JC: I started Performics, which at the time was called Dynamic Trade, in 1998 and we started as an affiliate marketing service provider addressing the needs of the catalog industry, now really the multichannel marketing industry. The needs they had at the time were affiliate marketing and performance-based technology as well as services and execution help as they were executing these programs.

TM: Why and when did you change the name from Dynamic Trade to Performics? What was the strategy on that?

JC: Early on in affiliate marketing, the term performance marketing wasn’t really being used. As we grew the business and saw other performance marketing opportunities start to evolve out of affiliate marketing, Performics was a better descriptor of what we were trying to accomplish. Today, we view ourselves as a performance-based marketing services and technology company. The fact that we’re leaders both in affiliate marketing and search engine marketing points to our focus in those areas. The two needs that companies have to be able to execute on are technology to facilitate these programs and marketing expertise to execute on them as well.

TM: The acquisition by DoubleClick is complete, and now the real work begins. What changes do you foresee at Performics in the coming months?

JC: DoubleClick acquired Performics because we have a proven track record for success. So many things will remain the same. But we immediately began to work together to build DartSearch, which is a DoubleClick solution, powered by Performics’ technology. Performics also uses DartMail for merchant email campaigns and affiliate communication, and our clients think the product is terrific. Already, we see the benefit of being part of a larger company and ultimately clients and affiliates will enjoy that benefit too. We now have global reach with 19 offices around the world, so as our clients look to expand into new markets, we have the right resources in place. In addition, DoubleClick has great research and a lot of talent. Affiliate marketing is a very good fit within the DoubleClick suite of products. The biggest changes at Performics are always driven by growth. For example, we already have more than 130 employees and will add at least another 30 or more before the end of this year.

TM: The acquisition is another sign the interactive media business is converging. Is the day of the independent affiliate network coming to an end? Do you think a new network could start up independently at this point?

JC: The online marketing industry is consolidating, and affiliate marketing is part of that. Last year, there were four major networks, and now there are three, with two of us owned by larger online advertising companies. So clearly the industry has consolidated. A new network would have many barriers to entry, because established affiliate networks have already built successful companies and achieved some level of efficiency with their businesses. That still does not mean it would be impossible to launch a new network, but a new affiliate network alone wouldn’t be enough today. Marketers want access to multiple performance- based marketing channels, and they expect more from fewer vendors. They want to participate in several performance- based marketing opportunities. Affiliate networks that provide only affiliate marketing services while ignoring other performance-based marketing services lessen the value they can provide clients and hurt their own chances for success in today’s environment.

TM: Are there ways that you would say Performics is different from the other major affiliate networks?

JC: We’re very different in that we look at the performance-based marketing sector as a whole versus components of it being affiliate marketing or search marketing or other forms of it. We started out in affiliate marketing. If you look at affiliate marketing today, and back then, it really set the benchmark for performance- based marketing. Today, everything is really compared to it. It’s interesting to note that affiliate marketing, often the most cost-effective channel in an online marketing mix, provides a platform for pricing. And any media today is really based off of an effective affiliate marketing or rev-share measurement that people use. We started off with that and we started seeing other concentrations of performance-based marketing around affiliate marketing. The first one, which really is pretty obvious, is search marketing. So we broke that out as its own practice per se. We’re the only major affiliate marketing leader who is also a leader in search marketing. We looked at what our clients needed and branched out from there.

TM: A lot of affiliates do search engine marketing as well as affiliate marketing. How does your company avoid competing with your own affiliates on that level?

JC: One way is we know very much about every affiliate in our network. We take great pride in that. Every affiliate who enters our network is screened and it’s understood what their business model is, versus an open network where they come in unfiltered and just start performing their activities. Many clients prefer that Performics run their affiliate marketing program and their search marketing program in parallel because of the inter-workings of the two programs you just described. There are a lot of affiliate programs and a lot of affiliates within those programs who help to complement the marketer’s search program. There are many terms and many categories in which the affiliates are better off participating. That’s advantageous to the affiliate and to the merchant.

TM: There are other areas emerging in the performance marketing field that seem to be fairly lucrative. I wonder if Performics might start competing in such areas as search engine arbitrage or creating blogs to increase revenue flows.

JC: We keep looking at performance-based marketing opportunities as they would be beneficial to advertisers. We always represent the advertiser in ways that would be beneficial to them. We probably wouldn’t get into the blog creation market because that would basically be creating content, which we don’t necessarily do. We just help our advertisers take advantage of it. So as blog advertising may or may not unfold, we would participate in that. With search arbitrage, we tend not to work in that market. But we would convince our clients that it’s better for them to run their own programs so they can reap the benefits of those programs.

TM: You guys are well known for your proprietary tracking technology. How is that system run? Is that a cookie-based system?

JC: There are different elements to it, and there is also a cookie component as well. As with any tracking technology, if you’re trying to track some return-day or some come-back to the site, you have to use cookies. So every tracking technology uses cookies. But there are other elements to it as well.

TM: In our last issue, Steve Messer from LinkShare raised some eyebrows by suggesting cookie systems weren’t accurate enough for this business. Would you care to comment on that?

JC: Well, in our technology, one element of it is a cookie technology. And DoubleClick, which now owns us, also leverages cookie technology. And everybody in the industry uses cookie technology, including LinkShare because they track some type of return-day. So I would think that’s a standard.

TM: Is there something beyond that you use to back up the accuracy of the cookies?

JC: Yes, we have other means that are a little technical to describe in an interview that also do backups to it. But if you’re trying to track any sort of return to a site once you leave, cookies are about the most accurate way to do that. There’s no tracking that is 100 percent. For every pro, there’s a con to it as well.

TM: There’ve been some complaints on the forums that links from Performics don’t go live right away, and that of course makes it harder for affiliates to check their links as they upgrade their sites. Why does that happen and can it be changed?

JC: I don’t know the technical answer to that. But once our links are created, they’re basically live in the system within seconds of being created. So it might be getting approval of those links instead of technically being ready.

TM: Like some other networks, Performics is said to block its affiliates from speaking directly to merchants, which could prevent affiliates from seeking higher commissions.

JC: That’s not true. We encourage meetings between our merchants and our affiliate partners. There’s contact information where a merchant can contact an affiliate. In most cases, an affiliate can contact a merchant. In a lot of cases, a merchant prefers that Performics handle the potential thousands of conversations on their behalf. So it’s really an efficiency request by the merchant, but it’s not a restriction.

TM: People seem to be a lot more aware of predatory advertising now. Do you think that problem is lessening, growing or staying about the same?

JC: I think it has picked up over the last few years. I think it has leveled off. It has become more heightened in the marketplace, and I think that’s why people hear more about it now. At Performics, we’re strong opponents of it. We’ve taken steps with our code of conduct, with our partnering with Commission Junction on that. Again, we screen every affiliate in our network, so it’s difficult for the spyware or the wrong side of the equation, predatory advertising, to take advantage of our merchants.

TM: Blogging, of course, is exploding with affiliates right now because they’ve figured out they can get high search engine rankings. What do you think is going to happen with that trend?

JC: We’re watching blogging very carefully. I don’t have any predictions at the moment. It’s a very efficient form of moving creative content back and forth, but there’s still a kind of non-standards going on right now with blogs being created and with blog writers. So I think there are still a lot of things that will unfold in that area.

TM: As merchant revenue grows in the affiliate marketing arena, do you think some of the smaller affiliates will be forced out by bigger players in their field?

JC: No, I do not. I think the beauty of affiliate marketing is that it’s a way for small publishers or affiliates to participate in the marketing mix of a merchant. I think that’s the beauty of affiliate marketing, that publishers of all shapes or sizes can participate because of the leverage you can get out of an affiliate program.

TM: Do you think, as the industry grows, more merchants will bring their programs in house instead of going through a network?

JC: Again, from the past question, I’d say not, because affiliate marketing allows publishers of all shapes and sizes to participate efficiently in it. It allows for the next evolution. Affiliate marketing seems to create new performance-based marketing vehicles. That’s the catalyst of it. So participating in a network that gives you broader reach in new opportunities allows you to see those emerging trends.

TM: What do you see as the biggest challenges for affiliate marketing in the coming months? It’s an area that changes all the time. Is there anything on the horizon now that seems like a threat to affiliate marketing?

JC: I don’t think there’s a threat per se to it, but I think what you’ve seen over the years is a trend toward more tightly controlled networks. You’ve seen folks who’ve run massive affiliate programs with tens or hundreds of thousands of affiliates starting to scale those back in an effort to get better understanding and control of their affiliate marketing program, as merchants are performing their other performance marketing-based activities.

TM: You said you screen affiliates closely. Do you also remove unproductive affiliates from your ranks? Do you keep them active in hopes they’ll start producing?

JC: Performics reviews each affiliate applicant as a service to all clients. Many Performics clients provide criteria for their program, and the evaluation matches the affiliate against the provided criteria. If a new affiliate applies to our network, we don’t necessarily make a judgment upon application about how productive that applicant will be, but we do make sure they have an active Web site and check for any content or practices that violate Performics’ policies, including our Code of Conduct for Fair Practices. Performics may remove affiliates that do not generate transactions over a period of time, usually one year. Many clients ask that we clean up non-productive affiliates more regularly, but before we remove an affiliate, we attempt to contact them to inquire about the status of their account. We do our best to encourage productive referrals from and commissions for all affiliates.

TOM MURPHY is Editor in Chief of Revenue and the author of Web Rules.

Search For Tomorrow

It was the summer of 1998 when GoTo.com launched its pay-per-click (PPC) program in a fairly straightforward way. Back then, there were few competitors and the bids were low. Often a top slot could be had for a penny a click, and the reporting was bare bones.

It was morning in paid search country.

Six years later, the paid search landscape has gotten a lot more crowded. According to PayPerClickSearchEngines.com, there are now about 600 PPC engines. It has also gotten a lot more expensive, with the minimum of a dime per click at Overture. And all that has made things a lot more complicated.

If you want to know what the future holds for the fusion of paid search and affiliate marketing, strap in and hold on tight.

The typical affiliate program is heavy on affiliates utilizing either natural optimization or paid placement. A third of all affiliates promote their links in PPCs, according to a survey in the AffStat 2004 Report. Additionally, 16 percent cite data feeds as their preferred method for promoting an affiliate program.

When CAN-SPAM (Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003) took effect on Jan. 1, 2004, the email affiliates were significantly bridled. This has resulted in a seismic shift by affiliate programs and their growing reliance on search engine affiliates.

According to Kevin Lee, CEO of the search marketing technology firm Did-it .com, paid search is moving toward more personalization, automation and the greater emergence of vertical portals. There are also some changes on the horizon with regard to use of company trademarks by affiliates, says Lee.

Personalization Per Click

Affiliates using Google AdWords can now target regionally and locally, so they can reach the prospects who are most appropriate for the affiliate program they are promoting. For instance, if an affiliate is running a fan site for the New York Jets, it wouldn’t make a whole lot of sense for them to use paid search to push a Jets banner to a national audience. But with regional, city-level and IP targeting (using the address uniquely identifying a certain computer on the Internet), affiliates may focus on specific cities and metropolitan areas to market Jets goods. Google even enables affiliates to define their own target area by choosing a point and a surrounding radius of 20 or more miles or by picking points in order to define a border.

Personalization could be focused on regions or interests. “Rich media search, image search and news search will gain in popularity, and paid results will become available within these areas,” says Did-it’s Lee. “All the search engines will roll out some kind of personalization or personalized search where the engine remembers things about you. This will help with targeting ads better as well as algorithmic results.”

You can expect affiliates to begin using this option more extensively, bringing in a more attractive and effective CPM (cost per thousand advertising impressions) and CPC (cost per click).

Automate To Elevate

Affiliates have long relied on spreadsheets to manage all of their keyword bid campaigns, but as the paid search space matures, the administration and tracking of PPC campaigns is getting more advanced.

“In order to continue participating in the ever-increasingly competitive marketplaces for keyword bids, marketers will be forced to use marketing automation techniques that take into account order profit values and lifetime value, not just simple ROAS (return on advertising spending) or immediate ROI (return on investment),” according to Kevin Lee.

Some of the more popular tools for automating paid search processes are Atlas OnePoint (formerly Go Toast), the Maestro Client from Did-it.com, and PPC Track from KowaBunga Technologies. Additionally, search engine marketing firm iProspect unveiled iProspect Search Engine Bidding Agent (iSEBA) in the summer of 2004. ISEBA manages the keyword bidding process for pay-per-click advertising campaigns on both Google and Overture’s paid search programs.

Making A Vertical Leap

As affiliates get deeper into personalization, it’s natural that they’d also gravitate to vertical portals that serve the channels for the affiliate programs they promote. While search engines do not generally define themselves as servicing certain types of users, the MarketingSherpa Search Marketing Metrics Guide reveals that just like any other media property, each search engine has a remarkably distinct type of user.

This MarketingSherpa report, which surveyed 3,007 marketers in July, reveals that highly educated men with an interest in technology tend to use Google. Kids are more likely to Ask Jeeves for their search results. Older teens rebel by making MyWay their way. Moms tend to prefer MSN search.

So for affiliates trying to reach the men and kids, Google AdWords is the way to go to get your ads on Ask Jeeves, MyWay, and of course, on Google itself. But if you want to hawk wares to moms, you’d better be using Overture to place your targeted ads on MSN. Bear in mind that things may change due to consolidation and new business arrangements, so keep an eye on who’s serving whom.

Lee expects that vertical portals will become hotter, including the shopping portals, as well as portals within specific industries or customer segments.

On Your Mark. Get Rules. Go!

In the early days of affiliates bidding on keywords, there were no regulations being enforced by the affiliate programs. This can be attributed to a number of issues, including good old-fashioned ignorance; many affiliate managers have never been affiliates and don’t know how they do what they do. However, you could also attribute it to self-preservation. Affiliate managers are aware of activity that’s not particularly beneficial to their company, but it makes the affiliate program look better. This resulted in an environment where multiple affiliates, and the trademark owner, were competing for ad placement on trademarked terms.

The bad news for affiliates is that things are changing. Over the past year, there’s been a significant shift. In a poll of affiliate managers on the AffiliateManager.net Forum in August 2004, 65 percent said they were no longer allowing affiliates to bid on their trademarks.

And why wouldn’t they feel that way? It’s a low hanging fruit that converts well, and if the company isn’t in a bidding war with their affiliate, it’s a cheap cash outlay. Why outsource that sort of thing to affiliates and pay exponentially more for it?

Don’t Jerk That Knee

But all things considered, merchants ought to be most concerned about controlling what’s above the fold. At least that’s the contention of David Lewis, president of 77Blue, which operates private- label shopping portals and coupon sites with more than 800 merchants in three countries. “There are unintended consequences to restricting trademark bidding. It’s not all about ROI. You have to consider PR,” says Lewis.

Lewis’ view is decidedly merchant-centric, which is surprising for an affiliate. According to Lewis, “Advertising on a merchant’s trademarks is a privilege and not an affiliate’s right. Merchants should consider creating a separate agreement with two or three affiliates they trust, and allow them to bid on the trademark,” he says. “This gives the merchant control that is forfeited when banning trademark bidding.”

By banning affiliates from bidding on trademarked terms, Lewis argues, “merchants are giving management of their brand to Google and Yahoo, with whom they may have no relationship. I would want to control the results that come up when a user searches on my trademarks, especially knowing that most users click predominantly on the first 10 results.”

While the majority of merchants are currently banning their affiliates from bidding on trademarks, Lewis’ view is gaining ground. Beth Kirsch, the affiliate manager for Audible.com, had a policy against affiliates bidding on her company’s trademark. But after taking Lewis’ thoughts into consideration, Kirsch did something of an about-face.

She says, “While Audible is our trademark, it’s also an everyday word. No affiliate PPC bidding left room for other companies to promote ‘audible’ products. It clearly damaged the brand. David’s input made us change our policy, where we now allow a couple of trusted affiliates to bid on our trademark,” she says. “What’s a few bucks, when we have spent millions to build a brand?”

Another affiliate, Steve White, sounds a similar note. “Affiliates have an incentive to apply creativity to the bidding and keyword selection process. That incentive is more commissions,” he says. “Therefore, a dedicated group of affiliates can far outweigh the internal efforts of a program, unless that program has the resources to hire full-time search engine experts, as well as the capital to bankroll the campaigns. The affiliates bring both to the table at no cost (to the merchant), and the results are almost instantly calculable.”

The Other Trademark Issue

Even though affiliates may not be able to bid on the trademark for Company X, they can bid on the trademark of Company Y (the chief competitor to Company X). The bids on Company Y can then direct traffic to Company X. This is an escalating problem, says Lee of Did-it.com.

“There may be some significant litigation regarding trademarks and search engine marketing (SEM),” he says. “Some marketers may try to encourage affiliates into bidding on competitive trademarks (not their own) in an attempt to shield themselves from litigation.”

In the past, Google granted requests from advertisers to bar competitors from bidding on their trademarked names. However, Google will now only review trademark complaints that relate to text appearing in sponsored listings on its Web site and those of its partners. So affiliates cannot mention a company in copy for their competitor, but they can bid on the trademarked name of that company, and that could be a liability for the affiliate program they are promoting.

Trademarks aside, the bulk of affiliate programs permit bidding on most keywords, and there are still bidding bargains to be had. Communication between affiliate managers and affiliates is essential, and the well-informed affiliate is the most efficient affiliate.

Audible’s Kirsch knows this, and she makes a “keyword kit” available to her affiliates. It’s a document outlining which keywords affiliates cannot bid on, as well as a list of suggested keywords for affiliates to use that convert well.

It’s The Brand, Stupid!

In some cases, affiliate programs have forbidden SEM outright for their affiliates. For instance, the fund-raising affiliate program for the Republican National Committee doesn’t mince words when it comes to how their affiliates may promote them. The description of their program states: “Please note that search marketing is NOT allowed. Affiliates will NOT be paid for donations generated through search engine marketing.”

Often, the reason that companies will ban affiliates from utilizing search engines in their promotion efforts is that they are concerned about the way affiliates will represent them if left to their own devices.

“We’re seeing some increased dissatisfaction from consumers who are clicking on paid search ads and being directed to an affiliate site,” commented Rob Key, president and CEO of Converseon, a communications agency. “Companies need to think very carefully about how they allow affiliates to bid on their brand names. For brand-sensitive companies, we recommend they own their brand names and derivatives. With inflation expected to grow in paid placement, finding efficiencies is absolutely critical. A merchant’s affiliate network cannot afford to work at cross purposes.”

One cautionary tale, or marketing parable, depending on where you are sitting, was on a popular marketing message board. As affiliates debated whether it was okay to use pay-per-click search to promote affiliate programs, one affiliate comments, “If in doubt, just do it!” This was followed by another affiliate who commented “It’s always easier to get forgiveness than permission in anything … just do it.”

It may come as little surprise that when affiliates were asked in the AffStat survey, “When signing up for an affiliate program, do you read the affiliate agreement?” only 45 percent responded that they always read it.

Ignorance of the affiliate program terms is bliss for some affiliates. And when an affiliate program is on autopilot, it makes it that much simpler for affiliates to game the system.

So where are we headed with all of these changes? Well, we have seen the future of affiliate marketing and paid search, and with all of the personalization, automation, verticalization and gate keeping, we will be better equipped than ever before to measure ROI.

Gone are the days of pray-per-click.

SHAWN COLLINS is CEO of Shawn Collins Consulting, an affiliate program management agency; webmaster of the AffiliateTip.com affiliate program directory; and a founder of the Affiliate Summit conference. He authored the book Successful Affiliate Marketing for Merchants and the AffStat affiliate marketing benchmark reports cited in this story.

Land Rush

Suddenly, Joe Speiser’s phone rings more often than it used to.

The calls are coming from venture investors and executives at some “very familiar companies” who’ve taken a sudden interest in buying all or part of AzoogleAds.com, the performance marketing company that Speiser co-founded four years ago.

“It just kind of started,” he says, somewhat stunned by all the attention. “A lot of advertisers right now are just getting used to the idea of performance marketing. A couple of years ago, they didn’t understand the concept.”

Speiser is hardly alone. Since Revenue last looked at the consolidation trend six months ago, mergers of online marketing firms have created the sort of frenzy that hasn’t been seen in the online universe since the dot-com explosion of early 2000. Suddenly, large portals and advertising networks seem intent to acquire affiliate networks, search engines and interactive ad agencies in a quest to create end-to-end performance marketing products.

The numbers explain why. The online ad market, which was pronounced dead in 2000 when the average CPM rates dropped by more than 90 percent, rose like Lazarus to claim $6.6 billion during 2003, according to JupiterResearch.

What’s more, it’s expected to reach $16.1 billion by 2009 thanks largely to the emergence of marketing techniques that give marketers a low risk, highly measurable method to draw in new customers. Simply put: If a big advertising company can’t offer performance marketing to its clients, it won’t be big online.

“If you look at the marketplace today, I would say all the other players out there – the Yahoos, the Googles, the traditional ad guys – are feeling the pressure of what the affiliate marketing world has created, which is the ability to actually give back an ROI and to give back measurable success,” says Steve Messer, CEO of LinkShare, the largest privately controlled affiliate network. “You can’t get away with CPM alone anymore.”

ValueClick helped light the bonfire by purchasing the BeFree network just before snapping up Commission Junction. In other high profile deals of the past year: DoubleClick snared Performics; AOL bought Advertising.com; Yahoo acquired Overture; aQuantive grabbed Go Toast and SBI.Razorfish; Digital Impact took over Marketleap; and Agency.com absorbed Exile On Seventh.

While those names represent a diverse mix of online businesses, together they represent a crazy quilt that patches together every facet of performance marketing. From New York’s Madison Avenue to San Francisco’s Multimedia Gulch, companies are courting one another as the long-elusive promise of online marketing moves closer to reality.

“More and more players are looking at companies that survived and thrived in the downturn and are seeing them as great opportunities for the future,” says Jeff Pullen, general manager of CJ, now part of ValueClick.

While this activity may result in substantial rewards for determined entrepreneurs who built better models for online marketing, it also raises questions about the effect such mergers will have on affiliates, the companies, their services, the public, ad rates and competition in the marketplace. Are the lofty valuations offered in these acquisitions justified given the fast-changing nature of the performance marketing field? Will the lack of competitors result in higher rates and fewer options for performance marketers?

The real benefits (and drawbacks) of these mergers won’t be known for years. But our survey of industry executives found agreement on two points. First, it’s highly unlikely that a few big players will dominate online marketing the way they have dominated radio, billboards, TV and print publications because, unlike other media, cyberspace isn’t bound by frequency spectra and distribution channels. Second, the performance marketing space will continue to evolve for at least another decade, suggesting that some of today’s acquisitions may turn out to be tomorrow’s folly.

To be sure, mergers represent enormous gambles. If expensive acquisitions don’t perform, the strategies behind them can turn into nightmares for senior managers, employees, customers and, of course, the shareholders who financed the gambit. Case in point: the AOL-Time Warner debacle.

After the companies announced their plan to merge in the fall of 1999, Time Warner shares soared to an all-time high in the upper 90s. By mid-2002, Time Warner shares had fallen below 10. More recently, they’ve been trading in the upper teens, off about 80 percent from their highs. Over the same period, the Dow Jones Industrial Average has lost only about 12 percent.

Driving Forces

As philosopher George Santayana pointed out, those who forget the lessons of history are doomed to repeat them, and some companies will pay too much for too little. But the financial motivations for buying performance-based companies overshadow the risks for some industry players.

“Performance marketing is an enduring trend that is going to force the marketing community and their advertising agencies to embrace performance. It’s a different DNA set than the traditional advertising agencies have embraced,” says Rich LeFurgy, who serves on the executive committee of the Interactive Advertising Bureau, the group he served as founding chairman. LeFurgy’s view may be biased by his position as the principal of Archer Advisors, a San Francisco-based marketing firm. Still, he makes a strong argument for long-term change in the way advertising is valued.

As a stop gap measure, LeFurgy says Madison Avenue firms are working with consulting firms to develop economic models that show traditional advertising is returning an acceptable ROI, but that model won’t work for long. “I think it’s very much the lobster in the lobster pot where the heat is slowly being turned up in terms of performance expectations from marketers,” says LeFurgy.

As more media properties acquire performance- based expertise, media buyers negotiating ad contracts will demand more empirical evidence that ads are working. “That is going to trickle down from the marketer to the agency to the media property. There are companies, for example, that are looking not just for performance and ROI, but whether ads run at all,” says LeFurgy.

Another force driving consolidation is the economic recovery. To survive the downturn many performance marketing firms became lean, mean, competitive machines. They pared excess costs, closed offices, developed efficient technologies and bid jobs with a focus on winning and retaining top clients. As a result, these firms are attractive takeover targets because it’s faster for bigger players to buy them than to develop those capabilities internally.

“As the established players look to expand, they’re doing it through acquisitions, and these [performance marketing] guys are pretty close to the top of the list,” says Gary Stein, senior analyst for Jupiter Research. “They figured out a way to make the ads more effective, whether it’s through behavioral targeting or through an affiliate network where the affiliate guys are going to reach into niche audiences or do something clever with the brand.”

The most attractive targets, Stein says, are those that offer search-driven features or performance marketing abilities such as affiliate networks. Performics, recently taken over by DoubleClick, offered both.

“As any industry picks up, one of the methods for growth for larger companies is acquisition,” says Performics CEO Jamie Crouthamel. “So they look to acquire things that are complementary or additive to what they’re doing. In the case of affiliate marketing, it was additive in CJ’s case. It was complementary in our case.”

The Limitations

Aligning expectations with realities is a challenge following any merger and, without exception, there are surprises on both sides. Integration is always tricky. Perhaps the cultures don’t mesh, or the technologies prove problematic or the talents fall short of expectations. Quite often, the acquiring company will expect to save money by scrapping redundant operations, or by cutting back unprofitable lines of business. Other times, the acquiring company will invest more capital to grow certain capabilities faster than the smaller company could have grown on its own. Crouthamel says that is what’s happening now at Performics.

“In our case, DoubleClick had neither search marketing nor affiliate marketing,” he says. “So you wouldn’t reduce any services or people in a business that’s growing as fast as our segment is growing. You actually see more resources put against it.”

In the case of ValueClick, the acquisition of both the BeFree and CJ networks raised the potential for consolidating the two into a single, more efficient network while reducing redundant operations. “Commission Junction and BeFree have been integrated. ” We’ve done away with the BeFree brand name,” says Pullen, who now leads the combined entity.

“My personal sense is [ValueClick] is going to sunset the BeFree technology. Then you’ve got a lot of people who thought they bought the Maybach but found out they got a Mazda,” says LinkShare’s Messer. “People who picked BeFree actively chose not to pick CJ, and now it’s being imposed on them. So it will be interesting to see over the next few quarters how that plays out.”

Pullen notes ValueClick is still delivering BeFree products, which include the BeFast platform, and adds: “We’ll continue to do so. But at the same time we’re looking at ways to improve upon it and operate it more cost-effectively.”

The shifting dynamics in the affiliate arena mean good news and bad news for Messer. First the good news: He’s got two big competitors instead of three. Now the bad news: The two remaining competitors are backed by bigger companies. Still, he seems confident, almost to the point of being cocky.

Messer also takes a shot at DoubleClick, saying, “They’re talking about Performics as their great white hope for a company that’s struggling.” However, Crouthamel responds like a man preparing for a war, promising his affiliates a cache of new weapons as a result of the DoubleClick- Performics combination. “You’ll continue to see innovation and other things available to affiliates because the marketers want it,” he says. “Consolidation isn’t always a bad thing.”

Beyond Affiliates

The intramural sniping isn’t limited to the affiliate space. At Adteractive.com, Diego Canoso, the agency’s vice president of sales, raises questions about AOL’s decision to acquire Adteractive’s bigger competitor, Advertising.com. He noted the deal changed the playing field because Advertising.com has historically bought ad inventory from many companies and now may face limits.

“The interesting question now is whether Advertising.com can continue to structure big bulk contracts with the other big portals. Is MSN wanting to sell their inventory, essentially, to AOL?,” he asks. AOL declined to comment on that question, but in a June news release announcing the acquisition, the company appeared more concerned with building a performance marketing monolith than with buying remnant inventory from AOL’s competitors.

“We now have all of the pieces in place – premium inventory, a strong and growing search business and the ability to deliver customized pay-for-performance programs,” Michael Kelly, president for AOL Media Networks, said at the time.

Questions about the value of search engines also exist. Just five years ago, Yahoo was the undisputed heavyweight champ, then Google showed up. Yahoo’s purchase of Overture appears intended to make up some lost ground, but there are literally hundreds of smaller search companies fighting for market share.

“We’ve met with a number of publishers in the past couple of months who are coming up with Web-based, contextual-based platforms designed to compete directly with the Google AdSenses of the world, and some of these contextual models are desktop based,” says Tom Storm, VP for online sales with VentureDirect Worldwide, a marketing company. “If that model continues to play out, I think it will take market share away from some of these search engines who probably have more than they should.”

Executives at Yahoo and Overture declined to discuss their strategy for coping with that, but previously have spoken about Yahoo’s focus on building “the largest position in the rapidly growing Internet advertising market.” Between Yahoo’s bravado and Google’s rapid growth, the niche engines will need to fight to maintain their positions or grow, according to Scott Delea, a senior vice president of the Web management consultant DigitalGrit Inc. Delea also sits on the search engine committee of the Interactive Advertising Bureau.

“Look at Google’s mission statement – ‘to organize the world’s information,'” Delea says. “If I were an engine, I’d feel threatened. ” For a niche engine, as long as their content is unique, or their audience is unique, they will survive. Other than that, I don’t think they have too much to stand on.”

Who’s Next?

Enterprises such as VentureDirect, Adteractive, AzoogleAds and, of course, LinkShare all may be candidates for consolidation, along with dozens of others. But none would admit the prospect of sudden riches has altered the way their companies are run. “Everybody has a price,” says LinkShare’s Messer, “But that’s not what we’re looking at. We have a mission, and we’re executing very well on our mission.”

Meanwhile, Hagai Yardeny, editor of the marketing newsletter Digital Moses, points at a possible side effect as the merger craze rolls forward, one that portends more challenges for affiliates.

“With any kind of consolidation, there is less choice,” he says. “With less choice, there is less competition. It could adversely affect affiliates by lowering the bounties for the different advertisers.”

Tom Murphy is Editor in Chief of Revenue.

Killer Content Brings in Money

There are three main factors that determine the success of your Web site:

  • Effective site optimization;
  • Site popularity; and
  • Great content.

Site optimization is the process of placing your keywords in the right places and making sure your Web site is accessible to search engine spiders so that they can find you and index your content more easily.

Site popularity can be achieved by online and offline marketing (mainly good PR) and the number of people who link back to you. This is often confused with page rank, but page rank is only one factor in determining your site’s popularity.

The best long-term solution for high search engine ranking, and the factor that is easiest to tweak, is to create first-rate content. You don’t have to be a Pulitzer Prize winner to do it. You just need to focus on addressing the needs of your customers, and by doing that effectively you will also attract search engine spiders in droves.

Many search engine marketers would have you believe that the best way to get high search engine rankings is to stuff your pages full of keywords and use tiny text at the bottom of the page to create great spider fodder. They don’t focus on the usability of the page or think about how users want to view your copy.

This may be a good short-term strategy, and may get you good rankings, but in the long term that’s not a good idea. Spiders are getting smarter. They know when you are trying to spam them. From your customers’ perspective this also does a lot to minimize the credibility of your Web site.

We have all been to sites where the copy was poorly written and grammatically incorrect. It looks sloppy and leaves customers questioning the wisdom of giving you their credit card numbers. It doesn’t matter how many clicks you get or what your rankings are if you can’t convert a visitor to a buyer. First-rate copy serves all of your audiences – spiders and customers alike.

As far as high quality content goes, remember that it should offer significant value to your customers and other sites. Why other sites? Because they’ll link to your site. Good content should also be unique and be updated regularly, so that people will come back to your site often to see what’s new.

Structuring Your Content

When thinking of how to structure your page to make it usable for both spiders and customers, a good rule of thumb is to start to think like a newspaper publisher. The same rules apply when determining what your Web site copy should look like. The newspaper editor focuses on the way readers like to view content. The editor knows that users typically scan the headlines first and then, when something piques their interest, they zero in on the content they want to read.

If you structure your pages the same way, it will increase the usability of your site and also make it more spider friendly. Make good use of headline sizes to clearly identify to your readers what is the most important copy on your pages. Direct them to where you want them to go by allowing them to see at a glance which items are the most important. Include your keywords in your headings to reinforce the focus of the page for both users and spiders.

The same rules apply whether you are building landing pages to submit to paid search engines or for organic traffic. Users and spiders want clear, grammatically correct copy that helps them to find the value in your pages fast. You only have about 13 seconds to catch your users’ attention, so every page on your site should focus on one message, and include a clear call to action. It’s really just following the basics of direct response marketing and applying that to your Web site.

Once you have created great headlines, pick one topic per page and write decent articles that appeal to your users. More pages equal more spider food and more specific landing pages where you can send users for one-click information. What works for one Web site in terms of content may not work for another, so you’ll have to keep testing until you see what mix of copy makes users want to stay on your site, return again and convert to a sale.

Here are some examples to help you start thinking about what valuable content might look like:

  • CD retailer: Provide reviews of new releases and bands;
  • Accounting: Offer regular updates about legal changes that affect your clients;
  • IT trainer: Show IT folks how to train their internal clients, or offer some free online training or white papers;
  • Gardener: Show beautiful gardens from around the world, and offer tips on gardening;
  • Travel agent: Offer reviews of hotels, restaurants and attractions on different areas.

As you may have realized by now, creating and updating your content is a lot of work. It’s also hard to stay motivated if you don’t see immediate gains. It takes a very long time for word to spread about your Web site. Just as with paid placement, you have to test creative frequently. With paid placement you can see results immediately whereas with this, you need to wait a long time to get feedback. You need to hang in there and over time you will see that it really does pay off.

Another relatively pain-free way to offer frequently updated content is to create a blog. There are many great inexpensive blogging tools out there that will integrate well with your Web site and allow you to update your content on the fly. Savvy search engine marketers are rushing to add them to their sites. But be sure the quality of your blog is high. Blogs are easy to set up and are proving to be very spider friendly. After all, what the search engine wants to see is just what your users want: frequently updated, quality, relevant content. Nobody wants to read yesterday’s news, least of all search engine spiders. Increasing conversion is what it’s all about, and that’s what makes a successful Web site.

MARY O’BRIEN is a partner at Traffic- Mentor Inc. She has worked in Internet marketing for five years and was formerly senior director of sales at Overture.com.