Spam – UtilitesDB

Winning With Authority

It’s all good – from online advertising being up 25 percent, according to the IAB; to online commerce on the rise 23 percent, according to comScore; to Google search queries that are up 41 percent, per Nielsen//NetRatings. It’s clear that online marketing grew strongly through the first three quarters of 2007.

However, as industries grow, so does the attention paid by state and federal legislators, regulatory bodies and enforcement agencies. From the Federal Trade Commission (FTC), to Congress, to state attorneys general, to the courts, those empowered to oversee online marketing took a more active role in 2007. While the focus was more on enforcing existing laws to protect privacy and eliminate fraud than expanding authority, the active deliberations over the government’s role in guiding online marketing indicate that more rules could be on the way. Here is a rundown of the key governmental activities and what they mean to your future.

Targeting the Targeters

Behavioral targeting, which delivers relevant ads based on consumer interests as determined by prior online activities, is growing in popularity with online marketers, but privacy advocates are calling for government intervention. Marketers’ ability to more closely track – and share – information about likes and purchases will likely lead to a showdown in the courts or the halls of Congress.

Privacy groups prompted the FTC – for the first time in seven years – to hold a “town hall meeting” to discuss behavioral targeting and consumer protection. More than a dozen privacy groups either spoke at the November event or issued statements calling for greater FTC oversight of behavioral targeting.

Pam Dixon, executive director of the World Privacy Forum (WPF), says more government intervention is needed because the industry has been unwilling to self-regulate, and because it must be made simpler for individuals to prevent their online activities from being tracked. “The oversight has not been there,” Dixon says.

Opting out of cookie tracking through a Web browser doesn’t guard against other technologies used in tracking, Dixon notes. The current system for allowing consumers to opt out of being tracked isn’t working. Her organization issued a report criticizing the National Advertising Initiative (NAI) – a group that was formed after the last FTC meeting on targeting – as ineffectual because technology has far surpassed its requirements.

NAI has been criticized because of a lack of publicity and public awareness, and because many marketing organizations have not joined the voluntary effort. Advertising.com, DoubleClick.com, Revenue Science.com and Yahoo are current NAI members, and Microsoft and Google submitted applications to join late in 2007.

Dixon says technologies such as Flash and Microsoft’s Silverlight have grown well beyond the narrow definition of tracking by cookies as originally set up by the NAI. Deleting cookies and configuring a browser to protect against tracking are too cumbersome for most consumers, she says. According to the WPF report ” … the opt-out is counterintuitive, difficult to accomplish, easily deleted by consumers, and easily circumvented.”

The WPF and eight other organizations are calling for the FTC to set up a national “Do Not Track” list, where consumers could opt out of being tracked. The proposed system would require marketers to comply regardless of the technology being used. “It has to be a one-stop shop for consumers … they should not have to opt out individually to different types of ads,” according to Dixon.

Alissa Cooper, policy analyst at the nonprofit Center for Democracy and Technology, which joined in the request for a Do Not Track list, says legislative action might also be necessary to create and enforce the list. To make consumers more aware of how they are being tracked, Cooper suggests making the privacy controls in Web browsers more accessible to consumers, and to code information into the ads themselves about the tracking techniques. For example, right-clicking on an ad could provide details about the tracking mechanism and how to opt out, she says.

Cooper says marketers have a “tremendous amount of interest in behavioral targeting,” but “it remains to be seen if the cost of building behavioral programs is worth it in the end.”

Just days after the FTC meeting took place, the Center for Digital Democracy and the U.S. Public Interest Research Group filed a complaint with the FTC asking for more involvement in regulating behavioral marketing activities. New marketing technologies “have sharpened the precision with which Internet users are tracked and targeted,” including “schemes on the part of both Facebook and MySpace, that make clear the advertising industry’s intentions to move full-speed ahead without regard to ensuring consumers are protected,” according to a letter from the groups to the FTC.

Mike Zaneis, the vice president of public policy for the Interactive Advertising Bureau, says a Do Not Track list is unnecessary and would be overly complicated to administer. Zaneis says the online marketing industry is “in near unanimity in opposition,” to the government overseeing a Do Not Track website.

Government-imposed protections could “block large swathes of the Internet,” Zaneis says. Sites that personalize e-commerce options or that customize content might be blacklisted under such a system.

What Consumers Want

Unlike the Do Not Call list, which was set up by the government because of frustrations with telemarketers, Zaneis says there is “not the same outcry from consumers.” Research conducted by the IAB indicates that consumers would be willing to pay to receive more relevant ads, according to Zaneis.

One member of the U.S. House of Representatives believes more oversight is needed. Representative Edward J. Markey, a democrat from Massachusetts, urged the Federal Trade Commission to look into targeting practices. “The Federal Trade Commission should promptly investigate the privacy impacts of Internet tracking and targeting techniques to ensure that loss of privacy is not the price consumers must pay to realize the benefits of online commerce,” according to a statement by Markey.

IAB’s Zaneis believes that Congress should not draft new privacy laws, as the FTC currently has sufficient authority to enforce existing laws. “The FTC has enough precedent … in defining the rules of the road.”

Within days of the FTC meeting, social networks Facebook and MySpace unveiled plans for intertwining data about individuals and their purchases with online advertising that could prompt congressional action or litigation.

Facebook’s “Beacon” program was altered in December after an outcry from users. The program originally alerted all of a member’s online friends when a purchase, such as books, CDs or tickets, were made on a partner site. This feature was changed to an opt-in. Similarly, Facebook’s Social Ads puts ads for related products near member’s activities, such as when they rate or purchase music.

Some Facebook members have complained that delivering information to friends about purchases has interfered with gift giving, as significant others prematurely found out about holiday and birthday gifts.

Political action group MoveOn.org is using the social networking tools of Facebook to protest the behavioral program. MoveOn.org, which has successfully organized members to communicate en masse with their congressional representatives, has formed a Facebook group to petition the behavioral programs for what the group sees as an invasion of privacy.

Competing social network MySpace expanded its behavioral targeting program to search member pages for words indicating interest in specific categories (such as music or travel) and enables marketers to target the audience that will see its ads.

The European Union is also investigating behavioral targeting practices, and new rules there could ripple across to practices in the U.S. The Article 29 Working Party is considering whether culling data about buying habits and Web-surfing history violates consumer privacy. While U.S.-based sites may not be directly affected, changes in targeting policies could be enacted globally to provide consistent experience to consumers.

Government Becoming Adware-Aware

The FTC also clamped down on propagators of adware for failing to disclose the less-than-noble intentions of their software. In March, the FTC settled a case against software company DirectRevenue for using unfair and deceptive methods to get consumers to download adware and for obstructing its removal. As part of the agreement, DirectRevenue forfeited $1.5 million in “ill-gotten gains” from adware distribution and agreed to cease and desist from distributing same.

As part of the government’s increasing prosecution of adware peddlers, the FBI and the Department of Justice cracked down on a major distributor who was hijacking computers to generate spurious ad revenue. John Schiefer, a former security consultant, pleaded guilty in November to masterminding the installation of adware on 137,000 computers.

Schiefer installed the software onto a network of unwitting individuals’ PCs to create a botnet that generated ad revenue and also stole PayPal and bank account information. According to the U.S. Attorney’s office of central California, this was the first prosecution for using a botnet in violation of federal wiretapping laws. The software generated more than $19,000 in revenue from a Dutch advertising company, which had to be refunded as part of Schiefer’s plea bargain agreement.

Adware proponents were on the losing end of a significant court battle. In September, software distributor Zango (which the previous year settled an adware case with the FTC) was unsuccessful in arguments before a district court in Washington to prevent software tools company Kaspersky Lab from classifying Zango’s software as posing a potential risk to a person’s computer.

“Zango lost big,” says Ben Edelman, a spyware expert and assistant professor at Harvard Business School. Based on the ruling, Edelman says software tool vendors are “inherently protected” from liability in their efforts to protect consumers from adware, spyware and other malicious software.

Despite these prosecutions for distributing adware, deceptive advertising software is still abundant, according to Edelman. A suit filed in California in 2006 against Yahoo alleges that the search company distributed popups that were bundled with spyware software, generating allegedly bogus ads, says Edelman, who is co-counsel in the case. The ads were also placed on “parked” domains – websites created by scripts that did meet the criteria of quality content that Yahoo promised its advertisers. A trial date has not been set.

Congress Eyes Spyware Legislation

While legislators on Capitol Hill did not take action on many of the online marketing and privacy issues that were investigated by governmental agencies or decided in the courts in 2007, two competing anti-spyware bills passed the House of Representatives.

In May, the House passed the Internet Spyware Prevention Act of 2007, which focuses on providing funding to the Department of Justice for enforcing laws against spyware and the practice of phishing (fooling consumers into revealing personal data). Less than a month later, the Securely Protect Yourself Against Cyber Trespass Act (SPY ACT) was passed, which gives greater authority to the FTC to seek larger fines, and more broadly defines acts that surreptitiously collect personal information.

The IAB’s Zaneis says his organization supports the SPY ACT because it emphasizes greater enforcement of existing laws. The IAB testified in Congress against passage of the SPY ACT because it overemphasizes the requirement for consumer consent and could stifle innovation, according to Zaneis. He says that the Senate has not moved toward developing similar legislation to either House bill, and is unlikely to do so anytime soon.

Affiliate marketing expert and blogger Shawn Collins is wary of any spyware legislation that Congress would craft. “My fear is about some comprehensive anti-spyware law that includes harmless cookies,” Collins says. He is concerned about elected officials’ lack of knowledge of online marketing, worrying about laws “written by bureaucrats who never touch a computer.”

Spammers Put in the Can

No legislation or regulatory action in 2007 addressed the continuing problem of spam, but the existing laws are being enforced more vigorously. The CAN SPAM Act of 2003 was used in the prosecution of “Spam King” Robert Soloway, who was arrested in May for sending billions of spam emails. Also getting busted for spamming were Jeffrey Kilbride of Venice, Calif., and James Schaffer of Paradise Valley, Ariz., who will each spend more than five years in prison. The pair was sentenced in October for spamming AOL customers and others and was asked to return more than $1.1 million.

IAB’s Zaneis says he doesn’t expect any legislation in the near future regarding spam because the existing laws are sufficient. “The industry must keep doing what they are doing … now it’s an enforcement issue,” he says. The industry has “stepped up,” and an FTC spam summit meeting in July provided the necessary feedback about what was working and the latest authentication tools that could block spam, according to Zaneis.

Florida Takes on Lead Generation

An investigation into ringtone sales in Florida could affect affiliates’ lead generation practices across the country. Florida Attorney General Bill McCollum’s office’s investigation of “unfair and deceptive trade practices regarding online ringtone” sales by AzoogleAds resulted in a $1 million settlement from the company and an agreement to change the wording of its advertisements.

Ringtones previously described as free, though they required a monthly subscription fee, will have to include language describing the applicable fees, according to the agreement with AzoogleAds. Collins says that due to the lack of self-regulation among affiliates, “it was a positive for Florida to get involved.” Ideally affiliates would set up their own rules regarding lead generation practices, but Collins says no one in the industry has volunteered to fill that role.

The FTC is also investigating lead generation practices, with network ValueClick in its crosshairs. John Ardis, vice president of corporate strategy at ValueClick, says the FTC began looking into lead generation in the spring, but only ValueClick’s name was made known because it was the sole public company being investigated.

“Lead generation has become big enough in the last year for the FTC to review it, as it should,” according to Ardis. He says that the investigation has “put a cloud over lead generation,” but he hopes that the resulting clear rules from the FTC that will improve consumer confidence and allow lead generation to become “bigger and better.”

The Tangled Web of Link Spam

In my last column, you were warned to “Never watch sausage being made,” lest you find the process so unappetizing you’d never eat it again. But even if you find sausage links tasty, you’ll want to spit out those spam links every time.

Last time, we explored the consequences of content spam, which include bad publicity and getting banned from the search engines. This time around, we’ll explore link spam techniques so you can avoid them or notice when your competitor stoops to them.

Before we do, let’s review why legitimate links are so important to your organic search rankings. Suppose you have a page that you’d love to be the No. 1 result for the search query “digital cameras.” Tens of millions of Web pages contain the words “digital cameras,” with millions of those pages featuring those words in the title. Search engines distinguish the quality of each of these pages by checking how many other pages link to them. Think of each link as a vote for the quality of the content. To get your page ranked No. 1, you’d need to get as many links to your page from as many other high-quality pages as possible.

Links are extremely important in determining search rankings for “digital cameras” and other highly competitive queries. So it’s no surprise that spammers have come up with a bag of tricks to fool search engines about their link strength. Link farms are the most popular technique, so we’ll tackle them first.

Link Farms

Link farms are the name for a spam technique in which spammers set up dozens or hundreds of ersatz sites to be crawled by search engines. Spammers create link farms just so they can put in thousands of links to other sites that they want to boost in search rankings. Search marketers need to be able to tell the difference between link farms and legitimate directories, so they can spend their time soliciting real directories for links, rather than sites that will do them no good.

Here are a few ways you can spot a link farm:

Links R Us. Each directory category has dozens and dozens of links – more than any visitor could ever use. Your suspicions should grow if the URLs seem to be strings of hyphenated words. Or if an IP checker reveals that many of those URLs come from the same “C” block (the same set of IP addresses in the network). Or if the pages from these sites are all from companies you’ve never heard of, and those pages resemble each other.

Odd Lot. The sites linked seem irrelevant to the directory topic or seem like a set of odds and ends with no central idea. You see links about baby care and the petroleum industry on the same page. Link farms are often thrown together haphazardly, most often by automated programs that spew the links onto pages with no rhyme or reason. A cousin of a link farm, a “free for all” site, allows anyone to post a link on any topic. It’s similarly worthless for improving your search rankings.

Dollar Store. None of the links seem very valuable. They consist of pages with nothing but advertisements, or content that makes no sense. Don’t be fooled if these pages have high Google PageRank values shown in the Google toolbar. Some spammers can artificially inflate a site’s PageRank for a while, but Google eventually catches on and adjusts the value.

Before requesting a link to your site from a directory, look it over to see if it exhibits the tricky business listed above. If it does, it’s probably a link farm. Search engines recognize more and more link farms every day. When they do, they stop counting those links toward a page’s ranking, so there’s no point in you getting your site listed there.

The Art of Wooing Affiliates

“You spammed me,” I said with a smile to the affiliate network manager standing next to me as we posed for a picture together at the last Affiliate Summit. Her smile suddenly disappeared.

Kind, compassionate and understanding person that I am, I fervently hoped to hear an honest, if not apologetic reply that would give me the slightest reason to consider ever doing business with her network’s merchants.

Despite tripping over herself with admissions of having been “horrified” when she realized that she’d spammed me, she left me in the dark as to why she would try to solicit my attention through the email address that I use only for domain registrations.

Here’s a tip for affiliates: Creating a unique email address for individual functions such as domain registrations is an effective way to ferret out spammers. Filter email sent to that address into a separate folder and check it occasionally to see who is operating on the dark side. Delete the address to which the spam was sent and make a note never to do business with that company.

OK, it should be fairly obvious that I have almost no compassion for spammers. I was simply curious to see what excuse she could come up with on the fly. However, there was no excuse because there simply is no excuse.

First of all, spamming is illegal, which makes it a lousy way to try and recruit super-affiliates for anyone who cares about their reputation as a trustworthy business partner.

Secondly, I am hardly an under-the-radar affiliate. My contact information is almost too easy to find. Google my name with or without quotes and my affiliate marketing “how-to” site floats to the top of the natural search results. In the upper right-hand corner of every page on that site there is a link to my Support Desk, at which my virtual assistant, Joel, is eagerly standing by to field questions from affiliates, managers and merchants alike. Our Support Desk is open to anyone and everyone. No proof of purchase is necessary and the only skill required is the ability to correctly enter an email address.

If a not-so-savvy surfer somehow misses the listing for that site in the search results, the vast majority of the other 999 results which Google serves on a query for my name are affiliates who link to another of my sites, which also includes a clearly labeled link to my Support Desk.

Regardless of how one chooses to get to the Support Desk, the manner in which a solicitation is worded determines the response (or lack thereof) that it receives.

Authors of generic blasts that do not include my name or are addressed to some variation of “Dear Affiliate” or “Future JV Partner” are sent a canned but friendly TYBNTY (Thank-You-But-NO-Thank-You) note. And they should consider themselves lucky that we take the time to do them the courtesy of a reply.

Those who address their request appropriately but then hype the offer receive the same note, as do merchants and managers who provide insufficient or incomplete details.

The number of correspondents that fail to show basic courtesy by including their real name and full contact details is staggering. I used to try making the point by addressing replies to “Dear ___” or “Dear Your Affiliate Team,” but I am not in the business of teaching basic email etiquette, so they too now get a canned TYBNTY.

I’m also not in business to research offers that are not only unsolicited, but which are also apparently a secret. I don’t really care if you have a “ground-breaking opportunity which will make affiliates a lot of money.” So does every other merchant, and Sherlock Holmes I am not.

Tell me what the product is, and include a link to the specific offer’s sales page. Also, if the offer is restricted to a U.S. audience, please provide a link that does not redirect my Canadian IP address to Classmates.com. Please apply the same technology within your network interface so that non-U.S. affiliates can view all merchant landing pages. I asked for that feature at MaxBounty and they were only too happy to oblige, so we know it’s doable.

Then there are those pitches for products that are completely irrelevant to my audience. If I find those before Joel has a chance to send a TYBNTY reply, they are summarily deleted. Seriously, why waste your time trying to get me to promote George Foreman grills on my dating service review site?

Do your homework and check out my sites before you contact me with your offer. Find the page on my site where your offer should be placed for the greatest impact and don’t bother to suggest that it should be placed on my home page.

Answer the question, “What’s in it for Ros?” If the offer is available on several other networks or directly through the merchant’s own affiliate program, the commission rate you offer has to beat them all, or any chance of further discussion will stop right there. Furthermore, be specific about how much more you can offer than each of the other guys.

Better yet, if the product is an online service or piece of software, kindly provide me with a username and password so that I can assess the product for review purposes. Doing so costs next to nothing, and if I really like the product and continue to use it, your product will receive a stellar review and subsequently many more sales. On the other hand, you could provide me with time-limited access, but then there is no guarantee that I will make time to review the product by your deadline.

Best of all, if you have a real product and are inclined to send samples, hit me up for my mailing address. It’s unlikely that such a request will be denied. You can be sure that affiliate Colin Mc- Dougall promoted the heck out of the inflatable boat that he was paddling around Vaseux Lake last summer.

We super-affiliates also work harder for merchants and managers who go the extra mile to get to know their affiliates. For example, while attending a conference in Los Angeles, two of my Australian- based merchants went 1,568 miles out of their way just to take me out for dinner. By result, I have been promoting their product for almost nine years and don’t intend to stop anytime soon.

If you’re not inclined to visit Beautiful British Columbia, then chat me up at a conference. Make it your job to learn that the super-affiliate you wish to recruit prefers beer over wine and dark beer over light. Super-affiliates eat too; so an invitation to lunch is always a good segue to doing business.

Having shared a belly laugh or two over lunch, you by now have my business card and telephone number. Do a follow-up call. Propose your best offer and have the name or number handy of the offer that you want me to look at.

Next, follow the call up with an email (yes, by now you also have my private email address) and include a link to the offer along with a list of keyword suggestions. Consider sending unique copy targeted to my audience and which I am allowed to edit. Barring long copy, a bullet list of product benefits and features is also very much appreciated. At this point, your job is done. Now just sit back, relax and watch for the sales spike.

There are many ways to get my attention and me working for you as a super-affiliate. Plaguing me with spam, however, is not one of them – especially when I’m already affiliated with your network!

Rosalind Gardner is a super-affiliate who’s been in the business since 1998. She’s also the author of The Super Affiliate Handbook: How I Made $436,797 in One Year Selling Other People’s Stuff Online. Her best-selling book is available on Amazon and www.SuperAffiliateHandbook.com.

The Ingredients That Go Into Spam

“Never watch sausage being made,” folks say, lest you would find the process so unappetizing that you’d never eat it again. Regardless of how you feel about Spam®, the venerable luncheon meat, all search marketers must understand the ingredients that comprise search spam.

In our last column, we explored the dangers of spam, which include bad publicity and getting banned from the search engines. We also looked at a spam technique called cloaking, in which spammers feed a different page to the search spider than what they show to real people.

This time around, let’s look at stupid content tricks. The goal isn’t to teach you how to use spam techniques, but rather to help you spot them on your site (oh no!) or on your competitors’ (so you can report them). Content spammers generally employ two kinds of tricks: page stuffing and doorway pages. Let’s look at each one in turn.

Page Stuffing

Content spammers treat their Web pages like a Thanksgiving turkey. They stuff as much extra content into each page as possible, hoping they’ll include something that search engines like. Let’s look at the three major types of content spamming tricks:

Hidden text

Don’t use tricky techniques to show the search spider text that is not seen when a reader looks at your page. In the old days (two years ago), content spammers tried displaying text with the same font color as the background color. Today the trendy spammer uses style sheets to write keywords on the page that are then overlaid by graphics or other page elements. Whatever the technique, if the search spider sees your words but people never do, that’s spam. The only exception to that rule is HTML comments, which are ignored by both the spider and the browser.

Duplicate tags

In times past, the use of multiple title tags (and other meta tags) was rumored to boost rankings. Although few search engines fall for that trick nowadays, spammers have adjusted. The same style sheet approach that can hide text can also overlay text on top of itself, so it is shown once on the screen but listed multiple times in the HTML file, adding emphasis for the repeated keywords.

Keyword stuffing

Also known as keyword loading, this technique is really just an overuse of sound content optimization practices. Do emphasize your target keywords on your search landing pages, but don’t overuse them. Dumping out-of-context keywords into an <img> tag’s alternate text attribute, or into <noscript> or <noframes> tags, are variations of this same unethical technique.

Search engines have gotten much better at detecting page stuffing in recent years, but the cat-and-mouse game continues. Each year, spammers develop new content tricks and search engines try to catch them.

Some extremely clever and hardworking people really can fool the search engines with advanced versions of these tricks. Most of the time, however, spam techniques are like stock tips: Once you hear the tip, it is probably too late; the stock price has already gone up and the search engines are already implementing countermeasures.

What should you do instead of page stuffing? Write your pages for your readers. Yes, use the popular keywords on your pages, but don’t repeat them endlessly like mindless drivel. Write engaging and informative pages that use the right keywords and you’ll attract the search engines. Moreover, when a reader gets to the page, your copy will persuade them to take the next step and buy something.

Doorway Pages

A few years ago, doorway pages were all the rage. Every search marketing “expert” was explaining how to create pages whose sole purpose is to appeal to search engines. The idea was that searchers came from the search engine to your site through a “doorway.” Some called them entry pages, others gateway pages, but the idea was the same. If your page exists only to get search rankings, it’s probably a doorway page.

In a sense, doorway pages are doors that only open “in” because they are not part of the mainstream navigation of your website. Doorway pages link to other pages within your website, but none of your other pages link to them.

Spammers use various techniques to get high search rankings for doorway pages, such as cloaking (which we discussed in our last column), page stuffing, and link spam (which we’ll tackle in our next column). Search engines have tightened up their detection mechanisms to avoid high rankings for doorway pages, but a smart spammer can still slip them through.

What should you do instead of doorway pages? Create search landing pages that are optimized for both search engines and people. Like doorway pages, search landing pages are designed to be the first page a searcher sees on your site when coming from a search engine. Unlike doorway pages, search landing pages are legitimate pages intrinsic to your navigation that are linked both to and from many other pages on your site. In fact, they are designed for people first and for search engines second.

Some paid search landing pages can be legitimately designed to be closer to doorway pages. Because you may want to target many more keywords for paid search than you can optimize for organic search, you can create paid-placement landing pages that are not part of the mainline site navigation – with links leading into the site only. The difference between these pages and doorway pages is they are not being used for organic search at all. (In fact, you should use a robots tag or robots .txt file to block them from organic search.) Because you are not fooling the organic engines with these pages, they are not spam.

For any pages that you want to optimize for organic search, just make sure they are heavily linked into the main navigation path of your site. That will ensure that the search engines treat them as landing pages rather than doorway pages.

Comedian Buddy Hackett joked that his mother’s menu consisted of two choices: Take it or leave it. The search engines’ terms of service (their rules for you to follow) are similar. Search engines decide which techniques are spam and there’s no higher court for an appeal.

Those who engage in content spam run a grave risk of having their sites banned by the search engines. So don’t be reckless. Stick to writing for readers and you won’t go wrong.

That’s it for content spam. In the last part of the three-part series, you’ll bone up on link spam, so that you’ll recognize the tricky link techniques that might fool the search engines.

Mike Moran is an IBM Distinguished Engineer and product manager for IBM’s OmniFind search product. His books (Search Engine Marketing, Inc. and Do It Wrong Quickly) and his Biznology blog are found at MikeMoran.com.

Spiders Don’t Eat Spam

It’s the headline any search marketer would dread: “Google Bans BMW for Search Spamming.” For well-known companies, such bad publicity is reason enough to stay away from deceptive search practices. BMW’s plight was published in leading newspapers worldwide. But even small companies have reputations to uphold, because the blogosphere can trash a carefully cultivated image for ethics in a heartbeat.

On top of the public relations headaches, getting banned from search engines hurts your bottom line. Perhaps large companies can say their “mea culpas” and get reinstated quickly, but small companies may wait months to get back in Google’s good graces. What if your search traffic suddenly stopped?

Whatever the consequences, you must understand the terms of service of the major search engines. Google’s guidelines are located at www.google.com/webmasters/ guidelines.html (and other search engines have similar rules). Sure, a few people make a living fooling Google, but you’re not likely to be one of them.

Even if you think you can fool the search engines now, they increase their vigilance each day. Moreover, tricky techniques leave you vulnerable to being reported to the search engines by your competitors, causing an investigation. It’s safer and less work to know the rules of the road and abide by them.

Is Your Site Banned?

If your site’s pages are highly ranked in one search engine, but missing in action from another, your site may have been banned, or at least highly penalized. When search engines detect your use of spam techniques, they may ban your site (completely remove its pages from the search index) or penalize your site (remove some pages from the index, or lower your rankings from normal levels).

You should suspect a ban or penalty when:

Your home page can be found only by a direct search on the URL – queries for words on the page don’t work anymore.
The number of your site’s pages included in the search index rapidly decreases. To check, do a search for site:www.yourdomain.com to check.
The search engine shows fewer and fewer links to your site each month, maybe decreasing to zero. Search for link:www.yourdomain.com to find out.
Your site’s search engine referrals have dropped drastically in a short period of time. Use your Web metrics software to detect this situation.

If you suspect a problem, you first need to diagnose the cause. Let’s look at the technique that tripped up BMW. We’ll explore others in columns to come.

The Old Bait and Switch

BMW was caught using a spamming technique called cloaking. Cloakers employ tricks to show the search spider one version of their page and show searchers another, in a high tech version of the old “bait and switch” scam.

In BMW’s case, they coded a JavaScript that showed their normal Web pages when people looked at them with their Web browsers, but the script delivered highly optimized pages full of search keywords when spiders came to call. Google detected BMW’s use of JavaScript cloaking, but more clever methods of cloaking are harder to spot.

Some cloakers use a sophisticated technique called IP delivery, in which the spider’s name (called the user-agent name) and its IP address (the unique identification of a computer’s location on the Internet) are used to switch the page. The cloaker creates a program to dynamically serve a Web page, but that program checks the user-agent name and the IP address to decide which version of the page to show.

IP delivery is a bit more difficult to detect than JavaScript cloaking, but one clue shows up in the “cache” link in the Google results. That link shows the page as Google actually crawled it. If the cached crawled page looks significantly different than the actual page, you may be seeing a cloaker. Clever cloakers code their page as “nocache” so that Google does not show the “cache” link, but “nocache” could be a sign of funny business.

It’s sometimes acceptable to use cloaking techniques, as long as the effect is not to show one page to visitors and another to search engines. One ethical use is to deliver pages to spiders that require cookies (which spiders choke on). If you use IP delivery, make sure you present essentially the same content both to spiders and people.

My SEO Made Me Do It

BMW didn’t blame its incident on a rogue search engine optimization consultant, but many spam violations are indeed caused by unethical consultants. Understand that the search engines hold you responsible for your site’s spamming regardless of how it happened. If you want to stay out of Google jail, ask yourself some questions about any firm you are considering hiring:

Do they guarantee top rankings? Reputable firms don’t. Expect ironclad guarantees to be fueled by cheating, and expect those ill-gotten results to be fleeting.
Do they promise that you won’t have to make big changes to your site? Be suspicious of link spam if the only changes needed are weird links to other sites hidden on your pages. Those other sites are your consultant’s other clients, whom they also coerce to link to you. If it seems fishy, well, it is.
Do they talk about special techniques that give you an edge? Pay attention to the old bait and switch, or suffer BMW’s fate.

If you answered yes to any of these questions, you may be working with a spammer. One way to trick the trickster is to pretend that you really want to hire a firm that does spamming. See if they promise they will. Ethical companies will try to talk you out of spamming instead.

What if you catch competitors spamming? Turn them in to the search engines. Google and the other search engines investigate each spam report and take action when warranted. When you report a spam violation, make sure you include the search term you used, the shady URL from the search results, the exact spam technique you suspect (with whatever evidence you have) and why it’s bad for searchers for this violation to continue unchecked.

We looked at cloaking today, but many spam techniques are in use that you need to be aware of. In my next column, we’ll examine content spam techniques, and finish up our three-part look at the dark side of link spam. Whatever the technique, spam leaves you vulnerable to negative publicity and outright ban by search engines, so steer clear.

MIKE MORAN is an IBM Distinguished Engineer and product manager for IBM’s OmniFind search product. Mike is also the co-author of the book Search Engine Marketing, Inc. and can be reached through his website MikeMoran.com.

Going to the Mat

In the last two issues of Revenue magazine I’ve written about mistakes that affiliates make, highlighting common errors that most affiliates commit at some point in their affiliate marketing ventures as well as detailing my own outrageous faux pas. Turnabout is fair play, so in this issue we’ll look at an example of how affiliate managers prove that they too are only human.

Before I begin however, I must say that I have a lot of respect for most of the affiliate managers with whom I work. Theirs is an unenviable position. They’re doing a j-o-b for a network or independent merchant and must deal with entrepreneurs, many of whom do not understand the industry. More difficult still, many managers have the added responsibility of policing their programs and trying to ferret out those affiliates who violate terms of agreement and incur needless costs by using underhanded methods of traffic and lead generation.

All too often managers are trying to communicate with affiliates who, after years of doing a lucrative business on the Net without the requirement to carry or ship inventory, process orders or administer customer service, may be a tad lazy. Speaking from experience, many of us in that situation join programs, put up links and then go on vacation, making us almost impossible to contact through ordinary channels.

But here’s a tip for managers who want to get their affiliates’ attention in a hurry. Send an email with “Link Expiration” in the subject line, such as the one I received recently from Cheryl Averill, the affiliate manager at CardOffers.com.

The body of the message read as follows: “A representative from XYZ Bank has notified us that your account has been participating in email marketing campaigns known as Spam. Due to this, the card issuer has asked that you be excluded from marketing their products. We have expired your links for the XYZ Bank cards today. They have asked me to let you know that they have put your site on a ‘blacklist’ so that you cannot get their links from another source.”

Now, if you read the issue of Revenue in which I detail my foibles in the financial services sector, you know that I have little or no interest in my credit card site which is, and always has been, a waste of time from an earnings standpoint.

Regardless, when falsely accused of sending Spam – with a capital ‘S’ no less – I’ll stand by and up for my site and marketing methods until the issue is completely resolved. The last thing any affiliate wants or needs is to have his or her reputation as an honest broker ruined for lack of proper investigation.

To this end, I emailed Cheryl to say that in eight years as an affiliate, I’ve never spammed anyone and demanded that XYZ Bank provide proof of their allegations, which of course I knew they wouldn’t be able to supply.

To her credit, Cheryl has always been one of the most responsive affiliate managers with whom I’ve dealt, and is one of the few who makes the effort to get to know even her least-productive affiliates, a.k.a. yours truly. She quickly replied that she “did find it very strange that you would have come up in that list.” Also to her credit, she didn’t simply accept my “I don’t spam” explanation but chose to investigate the situation further by asking if I sent out “an opt-in newsletter or anything of the like that they may have confused with Spam?”

Although I had been quite peeved at being falsely accused of spam and moreover, having my “hammock time” disturbed, I did appreciate the suggestion that it was her client that was “confused.”

I explained that although there is an opt-in form on the site and a series of eight messages programmed into the autoresponder, that broadcast messages are rarely, if ever, sent to that list.

Cheryl then went to bat for me and said she would try to obtain proof from her client, prior to expiring my links. I found their response very interesting indeed.

Apparently, according to XYZ Bank, my site was “engaging in very active comment spam,” which is just one of many types of spam that warrant termination from their program. Cheryl then asked me, “Do you even have a comment area on that site? I can’t find it.”

Cheryl couldn’t find a comment area because no blog exists on my credit card site. Further correspondence with XYZ Bank would therefore be required to find out exactly on which site they found the offensive spam comments.

XYZ’s answer was that the comment spam was located on my “personal blog.” For some reason, however, they neglected to provide Cheryl with either screenshots or a URL for the site – in other words, PROOF.

Considering that I don’t write a “personal blog” and run only three commercial blogs, each of which is moderated and spam-controlled to the nth degree, I still wasn’t satisfied with XYZ’s lack of appropriate response to this very serious allegation.

Neither was Cheryl. In a later email chat she informed me, “Due to these issues we are now going to have to modify our T&C [terms and conditions] and send out a notice to all partners about it.” She went on to say, “I feel bad for affiliates ” there are so many rules. Don’t bid on these terms, don’t bid more than this much, etc. They are being resourceful and using other methods of getting traffic to their links and now those are getting shut down.”

There’s another good hint for affiliate managers. Show empathy for our increasingly difficult plight and we’ll be more responsive to your emails and requests – perhaps even forever grateful.

Judging by her next correspondence, I suspect that Cheryl was now becoming as frustrated as I was by the inconvenience of this needless accusation, and probably just wanted to wrap things up.

“Here is the final word. We do not have to expire your links. Yesterday it was explained to me that partner links would have to be shut off if those links were posted in a blog. Today when I told them that another partner produced 717 sales for XYZ Bank from their blog page and it didn’t seem like good business sense to cut them off, they said that people could post them in THEIR OWN blog, but not in OTHER people’s blogs.

“After they clarified that for me, I asked them if I would have to expire your links since you posted them in your own blog. They said no I didn’t, which brings me to the question that I will most likely never get the answer to … Why did they even bring this up if you were not posting in someone else’s blog?”

Yikes! But I DIDN’T post anything to my blog, and I thought the issue was about an unmoderated blog with comment spam!

Oh well, occasionally you just have to let some things go. Especially when your affiliate manager wraps up her assessment with the best solution possible.

“I have told them, the next time there is a problem, we would like to have proof such as links where the violation was found and/or screenshots,” Cheryl explains.

Eureka! Just as I’d requested right from my first reply to the false accusation, the burden of proof rests with those making the allegation. Fortunately for Cheryl, unlike other affiliates who might have ditched the program, I’m not so overworked as not to have time for affiliate managers with whom I have a good working relationship, and was therefore willing to see this issue to the (almost) bitter end.

More to her credit, Cheryl ended with “Sorry for all the stress this has caused.”

Actually, I wasn’t stressed at all. I was out lounging by my pool, soaking up a few rays, while responding to all those emails, so no harm done, other than a few finger cramps induced by more typing than usual.

ROSALIND GARDNERis a super-affiliate who’s been in the business since 1998. She’s also the author of The Super Affiliate Handbook: How I Made $436,797 in One Year Selling Other People’s Stuff Online. Her best-selling book is available on Amazon and www.SuperAffiliateHandbook.com.

New Network Flavors

The affiliate network menu is expanding to offer many more options than just vanilla, chocolate and strawberry.

Call them what you wish – ad networks, sub networks, CPA networks, CPA ad networks. No matter the name, these aggressive challengers are mounting pressure on the “Big 3” affiliate networks.

CPA ad networks, which use a cost-per-action payment model, are providing increased competition, which is likely to mean publishers will benefit from more choices, bigger payments, a wider range of potentially lucrative offers and what some observers claim is a more nurturing environment.

Affiliate consultant Shawn Collins refers to ad networks as the “hybrid of affiliate marketing – part merchant and part affiliate.”

Like traditional affiliate networks, CPA ad networks rely on publishers willing to promote their advertisers’ offers. But unlike their cousins, ad networks act more like direct CPA-deal brokers and generally focus on lead generation, registration-based offers and bounty programs. In addition, CPA ad networks often don’t require start-up fees and advertisers to prequalify, thus lowering the barrier to entry. It’s estimated that one needs approximately $5,000 to get a CPA network off the ground.

However, many claim the life span for the bulk of these emerging ad networks is limited and this crop will never be able to truly compete on a larger scope with the bigger established networks such as Commission Junction, LinkShare and Performics. “

CJ started in 1999 and the landscape has changed over the last six and a half or seven years,” says Kerri Pollard, director of publisher development at Commission Junction. “There’s been an increase in competition and new CPA networks.”.

Some affiliate managers argue that CPA networks fail to add value because they poach advertisers who are already in merchant affiliate programs. Others insist CPA networks add tremendous value because they attract new and unique advertisers who in turn, deliver new valuable customers.

Regardless, CPA networks are emerging as major players in the online marketing world. These marketing companies have direct access to groups of advertisers who, through a wide array of techniques, have the potential to drive a high volume of clicks, sales and new customers.

Maybe that’s why you can’t attend a conference or trade show related to online marketing without seeing the booths of the exhibit hall jam-packed with CPA ad networks looking to woo affiliates and garner some attention.”

Who’s on First

With so many players in the game, it’s difficult to keep tabs on everyone. Some well-known current networks include CPA Empire, DirectLeads, Endai Worldwide, Adteractive, Metarewards, The Vendare Group, XY7.com, YFDirect, eMarketMakers and TheBizOppNetwork. In addition, several new ones are popping up nearly every week.

In 2005, many of the major players gained a bigger foothold by partnering with other companies. Affiliate Fuel, also known as Thermo Media, LLC, was acquired by Experian in April. PrimaryAds was bought by Think Partnership for nearly $10 million. And ValueClick purchased Web Clients for $141 million.

For affiliates, much of the appeal of these ad networks is the size and frequency of payments. Affiliate networks usually pay on a monthly schedule or when a certain revenue level has been achieved, whereas CPA networks typically pay affiliates weekly so they don’t need to float the costs of advertising or, in the case of incentive sites, the costs of the incentives themselves. CPA networks often negotiate top-rate commissions for their publishers. In many cases, these deals are much better than what a publisher can negotiate from the merchant’s affiliate manager.

A post on the ABestWeb.com forum from an affiliate sums up the appeal of CPA networks:

“As an affiliate, I love them because they often pay considerably higher commissions than the major networks, they often pay quicker, and most don’t allow reversals,” writes Michael Coley, president of AmazingBargains.com.

While the affiliate appeal is high, some downsides to dealing with ad networks exist, including poor practices, such as cookie stuffing, adware, spyware and spamming. “

The biggest problem I’ve had is that campaigns will get canceled without any notice sometimes, so I end up having to find another source and switch out my links,” Coley continues. “I don’t think any of them are ‘clean.’ Most seem to work largely with email marketers, some of which are notorious for spam.”

Merchants claim to be somewhat cautious for a variety of reasons. Although CPA networks reduce the risks for publishers while maintaining the direct-response needs of the merchant, the merchants have no control over how their offer is presented. “

As a merchant, you don’t know who is promoting you, and the CPA network is not going to tell you, because you’d cut them out of the deal if they did,” according to Collins. “

What I like least about CPA networks is they build loyalty between the network and the affiliate with merchants’ money,” says Beth Kirsch, group manager of affiliate programs at LowerMyBills.com.

J.T. Stephens, director of auctions marketing and business development at Overstock.com Auctions, offers some tips for advertisers dealing with CPA networks:

Communicate your business needs;
Provide networks with an email suppression list of marketing companies/ affiliates on your blacklist and a list of your top affiliates that the network cannot contact;
Be on the alert for unsavory affiliate activities (adware, spam, spyware); and
Do not let the networks determine how to market your offer.

Many CPA network advertisers are huge proponents of free iPod offers and promotions. That tactic is likely to bring in customers more interested in the prize or giveaway than the merchant offer. This type of promotion fuels the perception that CPA ad networks only cater to less-savory advertisers.

Still, some figures state that big brand names make up 30 to 45 percent of all CPA advertising. Big-brand sites can also act as affiliates accepting CPA ad buys, such as MSN, when it has remnant inventory. Big-name publishers are selling CPA buys, but often it’s directly to the advertiser and not through the network.

Everybody into the CPA Pool

Though networks generally make more money selling on a cost-per-thousand (CPM) basis, some will sell leftover inventory and run CPA offers, according to an executive at one of the major affiliate networks, who asked not to be named for fear that the industry stigma associated with CPA practices would be damaging. In most cases, the networks are “booking these revenues as CPM,” the source says.

Another network executive says her network will continue to stay focused on its overall value proposition.

“We want to make CJ remain the preferred place for the new publishers,” Pollard says. “We have many different categories of publishers. They are the backbone of affiliate marketing. The top request from our 1,500 to 2,000 advertisers is overwhelmingly, ‘How can we help publishers trying to make money?'”

Pollard claims that by leveraging CJ’s connection with its parent company ValueClick, it can provide more value than CPA networks can by going beyond affiliate marketing to include lead-generation business, click integration, tracking and email.

“It’s a bigger and better picture to the clients. We have more synergies and offer them in a streamlined way,” she says. “But there is a lot of value that CJ brings as a trusted third party and the value associated with that is worth a lot to our clients. It’s currently a win/win situation and we want to make sure it remains that way.”

Rob Key, president and CEO of online agency Converseon.com, says the Big 3 are doing well with fraud initiatives and payment services. He also applauded LinkShare’s efforts in the area of analytics, which he says adds a higher level of sophistication to its program. However, he feels there is some room for improvement in the area of data feeds and customization.

“There will always be a place for LinkShare, CJ and Performics,” Key says. “But the space is expanding and people want more customization than the Big 3 can offer.”

He claims the movement toward more customized platforms has “topped out in the networks, which are looking to be all things to all people.” Instead, by offering specialized services, certain network alternatives help “people look beyond the traditional and reinvigorate.”

Converseon’s network-agnostic custom platform is designed to aid companies that are trying to get a view of their data across all channels, Key says. “You can’t do that if the affiliate data is off to one side, like it is with the networks,” he says, adding that the traditional networks will see continued price pressure.

Pollard expects to see consolidation in the CPA network space over the next year or two and says there’s no threat of a CPA network displacing any of the Big 3.

“I also expect that one or two other larger players may come in, but nobody that’s the size of LinkShare and CJ. CPA networks will evolve for months and years, but many of them will not be around for long,” she says.

The increasing power of ad networks was brought to the forefront at the end of last year when Commission Junction ousted AzoogleAds from its network. Because AzoogleAds was a CJ affiliate that grew into its own revenue-sharing network, many industry watchers claim it was just a matter of time before CJ kicked out the sub network.

Joe Speiser, AzoogleAds.com cofounder, called the move by Commission Junction “flattering,” adding that his company was clearly “dangerous enough from ValueClick’s point of view” to warrant giving up the “nearly 80 percent of traffic we brought in on the eBay campaign.” That’s a huge factor, since eBay is CJ’s biggest campaign.

Speiser also says that CJ was threatened by Azoogle’s growing presence.

Pollard says despite the incident with Azoogle, CJ has no plans to ban sub networks.

“Our business is always changing and we never want to put policies in place that hamper publishers and stop them. I want the creativity to remain,” she says. “Sub affiliates are great partners and we want to continue to have relationships with them.”

From Pollard’s point of view, sub affiliates “have found good niches and are good at servicing the advertisers.” However, she notes that it’s important for CJ to maintain network quality and ensure sub networks do not do business with affiliates that are engaging in questionable practices, such as performing downloads and software installations.

Collins says CPA networks are a dime a dozen. “A good amount of them fail quickly. If 10 new CPA networks open today, most of them will fail within months,” he says. “I guess it’s sort of like affiliates; there are a million affiliates and only about 10,000 that are doing things. Some aren’t going to move the needle,” Collins continues. “The networks certainly don’t need to sweat it just yet.”

Rather, according to Collins, pay per click is a much bigger threat to the networks than CPA. He expects a viable challenger to soon emerge (such as Direct Response or KowaBunga) that is backed by significant capital from a public company.

Regardless of the challenges, Pollard claims the good news is that the performance marketing pie is getting bigger and there’s room for everyone.

Feeding the Beast

If you’re doing online marketing and you’re not leveraging RSS, what the heck are you waiting for? New technologies that both publishers and advertisers use to connect with online consumers are always continuing to emerge. From HTML to Macromedia Flash to streaming video, the arrival of distribution methods requires organizations to periodically reinvent how they speak to their audience.

And that’s just what RSS does, according to Amanda Watlington, a marketing consultant for Searching for Profit and co-author of Business Blogs: A Practical Guide. Tapping into this new distribution channel provides a great opportunity for marketers to connect with consumers.

“I have never been as excited about anything for the Web as RSS,” she says.

She’s not alone. The latest online communication format is the blog format, which features short personal commentaries about timely and topical issues. Driven largely by political and technology content, but rapidly expanding into every niche imaginable, the number of blogs is doubling every five months and is on pace to pass 20 million in late 2005, according to blog search engine Technorati.

While blogging won’t replace traditional Web publishing, it is fast becoming an important content delivery platform for reaching new audiences. However, capitalizing on blogging requires forgetting much of what you know about search engine optimization and following a new set of rules for content preparation, discovery and distribution.

That’s where RSS comes in. Many attribute the popularity of blogs to a handful of technologies such as RSS and Atom, which allow users to subscribe to feeds and also gives publishers more effective and efficient ways to deliver constantly updated information.

The Blog World Order

And while blogging is a relatively new frontier, it is not difficult for marketers to create RSS feeds that are easily distributed, says Watlington, who notes that RSS is misunderstood as being difficult to create even when there are many user-friendly tools for adding XML tags to structured text.

“It is a challenge of imagination, not implementation,” she says.

In addition to the personal and unfiltered nature of blogs, RSS feeds are growing in part because consumers are in control of the media. After finding a blog or news feed of interest, consumers subscribe to a feed through an RSS reader website or application. Feeds are then piped directly to their desktops. This has an advantage over newsletters since it is not being blocked by spam filters or lost within the volumes of email. For marketers this can be a valuable direct pipeline to consumers and a way to further establish loyalty.

According to an October 2005 study by Yahoo and consulting firm Ipsos Insight, 27 percent of people online have read content from RSS feeds. However, there is still an RSS learning curve for consumers as just 4 percent of those surveyed knew that they had interacted with RSS content; the remaining 23 percent had read RSS feeds through personalized home pages such as My Yahoo.

The demographic of those reading RSS feeds is also encouraging for marketers. According to the survey, those reading RSS feeds tend to be wealthier and more educated than the average person online. RSS feeds can also include advertisements, providing access to an audience that tends to spend less time browsing commercial websites.

Raising the RSS Flag

Launching an RSS feed in the preferred format of short commentaries is just the first step in creating a blog to expand your business reach (see Revenue Volume 2, fall 2005). In addition to writing compelling blog entries, capitalizing on blogging requires understanding new parameters, such as how to tell blog search engines that a blog exists. Also, like “Blanche Dubois,” blogging to a certain extent relies on the kindness of strangers, as others must link to your blog to spread the word and increase your search rank.

Also, for RSS feeds, timeliness is next to godliness. Unlike standard search, where a site with relevant content or keyword optimization can remain at the top of the search results almost indefinitely, the timeliness of blog posts factors heavily into blog search rankings.

Much like news searches (many of which are also based on RSS feeds), blog content has to be “bakery fresh” as most of the top blog search results are usually only hours old. Posting once or twice a week on popular topics will not likely be sufficient to penetrate the first page of search results.

In addition to being timely, blog content must be optimized for keywords. Rodney Rumford, co-founder of marketing consulting firm Leveraged Promotion, says bloggers have to walk a tightrope by including many references to the keyword in question without the content becoming obnoxious to readers or being identified by search engines as spam.

Blog searching has many players and no dominant force, so the strategy for optimizing keywords is less defined than traditional search engine optimization. For example, optimizing for one blog search engine may hurt a blog’s standing elsewhere. “No one knows exactly how their algorithms work,” Rumford says.

Blog publishers also must be proactive to be discovered by the blogosphere. While search engines crawl the known universe for content, blog search sites require new content to be submitted for their inspection.

Google and Yahoo’s blog search sites, along with competitors including Bloglines, Technorati and Weblogs, require bloggers to submit their URLs for consideration. Or, services such as Pingomatic or FeedShot can submit sites to many of the top blog search engines, but that may require paying a fee.

Sites such as Pingomatic will monitor your site for new content and send pings (a notification among Web servers) to the search engines every time new content is posted. A group of blog-interested companies is attempting to streamline what is currently a disjointed ping process through a central hub called FeedMesh.

Companies that receive pings will share data with FeedMesh members including Bloggdigger, Blo.gs, Google, PubSub, VeriSign and Yahoo. While some bloggers are skeptical about FeedMesh, the group effort has the potential to make blog searching more comprehensive and less complicated for newcomers to gain exposure.

Unfortunately, blog spammers have been quick to abuse the blog distribution process, and have created tens of thousands of spam blogs (see sidebar on page 71).

The hope is that once a blog search engine is aware of a blog, other bloggers who find the content useful will take notice and include links to your content on their sites. Tapping into the blog community (or blogosphere) can do wonders for a blog’s traffic. Being listed on sites such as Digg.com, Kottke.org or Waxy.org that blog the best blogs, or bookmark-sharing sites including Del.icio.us or Furl.net, can increase exposure more than search engines.

It’s Only the Blogining

Interest in blogging from the major search engines is likely to increase the number and readership of blogs by several magnitudes within the next year. The recent surge in interest and acquisitions by AOL, Google, Microsoft and Yahoo will rapidly bring RSS feeds to the majority of the general public. “We haven’t seen the hockey stick growth yet” in blogs, says Searching for Profit’s Watlington.

In recent months, VeriSign purchased blog site Weblogs, and Yahoo added blogs to its news search, while Google initiated a blog-specific search and a Web-based RSS reader. In May 2005, Google launched AdSense for feeds, which enables publishers to intersperse content- related pay-per-click ads within their feeds. Although few publishers are currently including ads with their feeds, that is likely to change because an increase in the readership of RSS feeds will enhance the revenue potential. One potential drawback for advertisers is the unfiltered nature of content on blogs, which some companies might be hesitant to support through advertising.

Microsoft’s embracing of RSS will likely have the greatest impact on the use of feeds by bloggers and marketers. Microsoft’s next Web browser update, Internet Explorer 7.0, due out in early 2006, will alert readers when RSS feeds are available for a website and will automate the subscription process. (Similar technology is currently included in Mozilla’s Firefox and Apple Computer’s Safari browser.) Microsoft is also adding visual cues to the browser to show when RSS feed subscriptions contain new data.

Microsoft Vista, the next version of the Windows operating system, will centralize RSS feed data and provide programming tools to make it available to applications. This paves the way for business applications to directly collect and organize data from RSS feeds, opening up a plethora of new uses for RSS feeds.

“Internet Explorer will fix RSS in terms of making it invisible” to consumers, says Ron Rasmussen, chief technology officer at KnowNow, an information infrastructure company. Microsoft’s endorsement of RSS could make it a mass-market technology within the next few years and may propel feed subscriptions to become as relied upon as search engines. “You don’t know what happens once you go to 95 percent awareness,” Rasmussen says.

After consumers become comfortable signing up for RSS feeds from blog and news services, they are likely to be more comfortable subscribing to feeds about items for sale, Rasmussen says. For example, consumers can track time-sensitive items such as concert tickets or real estate listings through RSS feeds. Craigslist.org and job site Monster.com are among the first organizations to produce listings as RSS feeds.

Pushing the Future

Building a business around sending content directly to desktops was attempted before without success during the Internet boom. However, “push” technology failed because most consumers at that time were using slow dial-up lines, and because the leading companies such as PointCast used proprietary technology that was licensed and required customizing content. RSS feeds have a greater likelihood of success because the format is free to implement.

A technical similarity between RSS readers and push applications are that both periodically (about once an hour) crawl websites looking for new content on the feeds. While bandwidth has greatly improved since the late 1990s, a rapid rise in the use of RSS feeds could take its toll on the Internet infrastructure. Having tens of millions of RSS reader programs continually querying blog websites for new content could dramatically increase Internet traffic and create a bottleneck.

Two subscription service companies are developing service that they say will reduce traffic by automatically pushing content as it is updated to subscribers. RSS subscription services from KnowNow and PubSub remove the need for each desktop to be continually polling for content by collecting new feeds and sending the data directly to consumers’ Web browsers.

The new services also have the potential to enable online merchants to streamline communications with their affiliates and customers. KnowNow’s Rasmussen says the subscription services consolidate all of the feeds about a given topic, such as golf, reducing the number of feed subscriptions.

PubSub works with publishers to push new content that matches consumer interests to their desktops. For example, when a blog publishes something related to antique cars, everyone who has subscribed to that feed would receive an alert to their browser. PubSub is currently delivering RSS feeds to more than 750,000 subscriptions, according to CEO Salim Ismail, adding that advertisements will likely be added in the future to pay for the free service. Under this model, consumers receive information more promptly, while publishers and advertisers get exposure to a focused audience.

PubSub and a group of blog services are developing a next generation of RSS that enable blogs to add styles to their feeds. Structured blogging includes formatting descriptions for common types of content such as movie reviews, journal entries, job postings and events so that each can be uniquely identified by search engines. Blog creation sites WordPress, MovableType, and Drupal have adopted structured blogging, and publishers could similarly create styles for distributing product information.

KnowNow is developing an RSS feed notification that will be marketed to merchants to provide timely updates to their affiliates, according to CTO Rasmussen. The company would push data such as product information or sales reports that are currently sent in batches through RSS feeds. RSS “takes that latency out of the business process,” he says. Marketers could respond to changes in demand or inventory within minutes instead of waiting for overnight reports.

These days of uncertainty and rapid change in implementing blogs and RSS feeds provide an opportunity to gain valuable experience that can be used to influence future developments. While diving in early has its risks, so does waiting until everyone else sets the agenda.

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

Win Or Lose

In a lot of ways, Cynthia Fanshaw is just another star in the affiliate marketing universe. With a specialty in search engine marketing, she works hard to drive traffic to her company’s site and then to convert visitors to customers. She’s anxious to learn new tricks that give her an edge over competitors, and glad to share a few tips with newbies.

But there’s one thing that sets her apart from most of her colleagues. Fanshaw promotes adult entertainment, a completely legal yet unmistakably controversial product that has simultaneously emerged as one of the most popular and most vilified areas on the Web. And she makes no apologies.

“My friends and family don’t mind,” Fanshaw said. “They just don’t want me to be involved in being in the content, which I really have no desire to be. I’m actually doing pretty well for myself, and as long as I’m happy, they’re happy.”

Along with online gambling and prescription drugs, adult entertainment is a subject that is sure to spark furious debate whenever it is discussed among lawmakers, affiliate marketers, prosecutors or parents. Each category, in its own way, offers benefits to the consumers who support it. And each draws bitter ire from its detractors.

What can’t be debated is the soaring popularity of the three industries. Nielsen//NetRatings showed 115.6 million Americans visited adult, gambling or drug sites during January – nearly double the number that watched the Super Bowl. They’re also ubiquitous, thought not always in a good way. Worldwide, more than 13 billion spam email messages are sent each day, comprising about half of all email traffic. According to London-based email security company Clearswift, two-thirds of that spam pitches drugs, adult entertainment or gambling.

The rewards for affiliates are generous. Revenue spoke with numerous program managers who said they often pay monthly commissions well into the tens of thousands of dollars in each category.

“As an affiliate myself, I can tell you my motivation for joining such programs is money,” said Graeme Eastman, owner of Australia’s AffiliateGuide.com, a network that promotes gaming and adult entertainment affiliate programs along with more mundane pursuits such as autos and computers. “There is really no other reason to join an affiliate program.”

Or is there? Many of the affiliates we interviewed spoke of the thrill of working in areas considered by some to be on the fringe of polite society. And many pharmaceutical vendors earnestly discussed the need to provide low-cost drugs in the American market, the only major Western power that doesn’t cap the cost of medications. In all three cases, it was clear that something in addition to money was motivating affiliates.

Yet shifting laws and long-standing taboos have left these industries in a social twilight zone where most affiliates are afraid to publicly acknowledge how they make their living. Revenue contacted dozens of affiliates in these areas, and most declined to be interviewed, citing fear of harassment by authorities or simply fear of what their neighbors might say. Although we observed virtually no evidence of criminality, we found a nearly universal desire among these affiliates to operate in obscurity.

It isn’t hard to understand why. Each area carries a special burden for those in the trade:

Gambling: Affiliates promote offshore companies that cannot legally operate in the US, at least not yet. Affiliates are stuck in a legal gray area somewhere between free speech and abetting a crime, and nobody – not even federal prosecutors – could say exactly where the line is.

Drugs: While most online drug stores operate with high ethical standards, the unrelenting river of spam pushing narcotics and male potency pills taints the public’s perception. Plus, some offshore pharmacies have been caught shipping drugs that fall short of US standards.

Adult Entertainment: Tens of millions of Americans view it, but few will admit they do. And the all-too-frequent nightmare of child pornography leaves the industry with an ugly scar that darkens against a backdrop of X-rated spam. Controversial maybe. But affiliates have the US Constitution on their side. “Commercial speech, such as advertising, is entitled to First Amendment protections under well-established constitutional law,” said Larry Walters, an attorney for the Internet Freedom Association who represents clients in the adult entertainment and gambling industries.

Still, problems like these have caused some mainstream companies to shy away. Such large affiliate networks as ValueClick’s Commission Junction won’t carry adult or gaming programs, partly because credit card charge-backs are more common in these industries. Insiders say the rate is higher because customers are caught by spouses or parents when credit card statements show up. Rather than owning up, cardholders tell the credit card company that someone else was responsible. “With CJ, you can see why they stay away from online gaming sites,” said Allan Schneider, former director of the Interactive Gaming Association. “You don’t have disputes with the other industries. [In other industries,] if a guy bought $10,000 in products, I get my commission.”

Even payment processor PayPal backed out of servicing adult transactions in May 2003 and gambling transactions in October 2002. “It’s still unclear how online gambling is going to be regulated, and based on that we felt that we had a legal risk,” said Amanda Pires, spokesperson for PayPal. “We saw higher rates of charge-backs in the adult businesses specifically – and that means a higher operational cost (for us). With adult sites there was a risk and it was just best to exit the business.”

Even Yahoo, which launched a gay and lesbian portal in April 2003 and runs its own dating site, won’t allow adult sites to use its hosting service. “We’re so brand-conscious that we can’t be on a site that contains adult content,” said Michael Brucker, affiliate marketing manager for Yahoo. To be sure, Yahoo flirted with adding adult content in mid-2001, but email campaigns and threats of boycotts persuaded the company to back away from the adult entertainment industry.

Trash or Treasure?

But one man’s trash is another man’s treasure, and some companies have rushed to fill the void. Take dating service FriendFinder.com. Soon after its 1996 launch, “we found people were pushing the envelope (with risque content and photos) on the site,” said CEO and founder Andrew Conru. “Rather than pushing away the industry, we decided to embrace them. We rolled out AdultFriendfinder as a kind of relief valve for the more erotic content.”

Now AdultFriendFinder has more than 8 million members, making it the Internet’s largest adult personal site. While other personal sites downplay their adult content, FriendFinder promotes it just like it does BigChurch.com. “We’re one of the few companies that looked at their marketing and said we’re going to make this a legitimate offering rather than the stereotype of the dark and seedy underworld,” Conru said.

Many niche and mainstream affiliate networks also list adult entertainment, gambling and prescription drug affiliate programs. “As a major directory owner, I thought it was important to list programs from as wide a range of categories as possible,” said Eastman, the owner of AffiliateGuide.com.

From here, the similarities among adult, drug and gambling sites end. Each has its own standards, demographics, pluses and minuses that are explained in detail in the other stories in this issue of Revenue. Here’s a sneak preview of what every affiliate should know.

Gambling

“The Internet is a very good learning environment,” said Schneider, who is now business development director of the affiliate marketing firm RUOnTheNet.com. “Most people won’t go to a gambling table, because of the fears they have. Here you can go online, bet $50, and not be embarrassed or humiliated at the tables.” A study released by Peak Entertainment in 2003 showed online gamblers are 38 percent female and 62 percent male. They’re most likely between 30 to 59 years old and well-educated, with degrees ranging from bachelor’s to doctorate’s. They’re heads of household and solidly middle class, with household incomes around $60,000 per year. Men are more likely to play blackjack; women are more likely to play slots.

Since the US Communications Act of 1934 doesn’t allow broadcast of gambling activities, and the Internet arguably falls in this category, foreign sites have stepped up to fill the huge US demand. There are now two types of merchants: 1) corporations – such as Canada’s Criptologic.com, which was one of the first out of the gate – working within the regulatory systems for their respective countries, and 2) offshore companies, largely unregulated.

“Internet users assume it’s legal if they find it on the Net,” said Schneider. This leaves affiliates open to the possibility that they are “aiding and abetting” the entry of illegal content into US home computers. Odds are the charge would be overshadowed by free speech protections, but that’s a bet many affiliates won’t take because of the widespread uncertainty over what’s legal and what’s not.

In any case, “it’s a good cash-grab for the publishers [affiliates], because these people have a boatload of money,” said Schneider, who still pulls down commissions from his past efforts as a gaming affiliate. To best grab that money, affiliates we interviewed suggested signing up with programs that pay a percentage of client deposits (typically 25 to 50 percent of the money gamblers put up to potentially lose) rather than a pay-per-account structure (a straight fee per sign-up, typically $50 to $150) or a proportion of client losses.

“You’re playing a numbers game,” said Schneider, who still pulls in commissions from his past efforts as a gaming affiliate. “You may as well just play like a casino, and go for the jackpot.”

Even land-based casinos are feeling the online hit. “Six of the last seven years we’ve seen declining sport pool/wagering, and that coincided with Internet sports wagering,” said Frank Streshley, a senior analyst with the Nevada State Gaming Control Board. Meanwhile, “in the last four months, poker revenue has spiked up 35 percent. From talking to properties, they’ve felt what has increased the play is Internet poker sites. (Gamblers are) playing on the Internet, watching TV and coming in to play it in person.”

With this growing demand, affiliates are scrambling to address online gambling’s hot buttons. First, the US doesn’t yet allow US-based sites so affiliates do assume a bit of risk from the “aiding and abetting” angle. However, few if any prosecutions have been initiated against affiliates involved only with promoting online gambling operations; the Justice Department declined to comment on that question.

Second, there is the fear of fueling addictions. The Wall Street Journal recently told the story of Kansas City Mayor Betty Burch who supported bringing a riverboat casino to town only to have her sister lose her home to gambling debt.

Third is the issue of non-payment. “I have dealt with some of the larger (off-shore) programs out there and still I had to fight tooth and nail in order to get paid,” Schneider said. “You have no recourse if you get burned.”

Prescription Drugs

Because there are no price caps on prescription drugs in the US, there is a surging demand for drugs shipped from other countries. A September 2003 Harris Interactive poll found 7 percent of its US respondents already purchase drugs from other countries, and 48 percent said they’ll do it down the road.

Who’s buying? Twelve percent of online households now buy some prescriptions on the Internet, reports Forrester Research. They’re older, more affluent and almost 50 percent more likely to be retired than offline-only purchasers. A Families USA study found that prices for the 50 medications most used by seniors are rising at three times the inflation rate. That’s why 44 percent of Medicare members who buy prescriptions buy some online.

Meanwhile, drugstore affiliates are making substantial incomes, often more than $2,000 per month. “Those are the private entrepreneurs in the United States; they’re all American,” said David Mackay, executive director of the Canadian International Pharmacy Association.

While the spammers get most of the attention, most of the online drug market is mundane in nature. Even WheatenRescue.org, a Houston-based dog rescue group, used an affiliate link to Drugstore.com to help finance its efforts. The money didn’t pour in, but “we got a little bit from it,” said Director Gwen Arthur.

The American Medical Association classifies online questionnaires as generally substandard medical care, and the US Food and Drug Administration agrees. That’s why some online pharmacies are now requiring visits to local doctors. Still, a PharmacyChecker.com evaluation found 33 percent of online pharmacies don’t require an original prescription. The report also noted that half of foreign online pharmacies don’t have a verified license to dispense drugs.

Counterfeit drugs will continue as long as copycats can be made. A recent investigation by Dallas TV station WFAA found these copycat drugs, sold under the brand name of the drug they mimic, were 78.6 percent and 92 percent less potent.

Online pharmacies must follow the regulations of and be licensed in their country of origin. Search engines such as Google, Overture, Yahoo and Microsoft’s MSN have recently started policing the market themselves, screening for and dropping advertising from unlicensed pharmacies. Still, half of foreign online pharmacies don’t have a verified pharmacy license to dispense drugs, reports PharmacyChecker.com.

“States are looking at taking action against the search engines and sites that allow (illegal) operations, but there are no guidelines for affiliates that advertise them,” said Carmen Catizone, executive director of the National Association of Boards of Pharmacy. “And I don’t see any legislation coming down the pike to regulate that advertising.”

Drugstore affiliates should pick their partners carefully. Check the drugstore’s home page for licensing information (usually at the bottom). Work with sites that have previous-prescription policies. Work only with sites headquartered in developed nations with strict drug regulations. To be sure, there’s still the risk of partnering with a fly-by-night operation more interested in profits than in providing safe or real products.

Adult Entertainment

Seventy million people worldwide visit at least one adult Web site each week. In the US alone, 36.3 million checked out adult sites in January 2004, reports Nielsen//NetRatings. As many as 10 million plunked down $20 to $40 for monthly subscriptions. Most are men, but there’s a growing number of women. For this new generation, adult content is no longer looked at as risque; it’s looked at as a choice. “Frankly, the youth of America is laughing at us old fuddy duddies,” Walters said. “I talk to some of these young Webmasters who aren’t shy about their bodies, their sexuality or fetishes. This new generation is driving a sexual revolution, to be sure.”

Still, a societal bias persists. “Oftentimes journalists will have a headline that says, ‘Pornographer Gets Busted.’ But they neglected to say in the headline that it was a child pornographer, someone who was doing something illegal,” said Jay Kopita, vice president of YNotMasters.com. “There are plenty of people that are doing it legally, but they lump us all together. We’re up against a distorted public impression.”

Flying Crocodile, a hosting firm, estimates 9,000 US affiliates already participating in this space. Matt Mickelson, affiliate manager for XXXPressToys.com, AdultToyChest.com and NaughtyCards.com, breaks those into two categories: “One is affiliates with some kind of large membership, whether from a dating site, a gaming site or a porn site, and we’re a component within that membership section,” he said. “The other is the average guy who’s been in the search engine trenches for the past five, six, seven years, (who) has optimized html pages to feed the search engines, and is going after keywords and basically directing, or shuffling, traffic.”

There is some money to be made in this industry, but most affiliates won’t get rich. “The majority of the people in this industry in the US make $15,000 or $20,000 per year,” said Kopita, who polled adult Webmasters on the subject in 2002. “More than half the people who are involved in the adult Internet in one way, shape or form need to have another job to make a livable income outside of it. On the same token, I know several people in this industry who are more than likely self-made millionaires, and they’re still in their 20s.”

This industry also has its challenges. First, it’s become so large that existing sites dominate search engines and online marketing, leaving little room for affiliates to squeeze in. “Going back six, seven years, you were able to make money as an affiliate in the adult sites,” said Schneider. “However, they’ve reached such a saturation point where you can’t make anything unless you’re in the top one or two tiers.”

Then there’s an uncertain legal climate. Even though the industry has a certain amount of free speech protection, it’s still beefing up its defenses. That means warning labels, age verification, and records that affirm that the model is 18 or older for all photos on the site. Even banners downloaded from an affiliate program are subject to age verification laws. Since affiliates must get the records from their merchants, it’s imperative to work with sites that have them all.

The adult industry does offer a fast track to technical skill. It was the first to launch widespread affiliate programs, and has remained on the cutting edge for streaming video, pay-per-view content, coercive click conversions and community publishing. “There are still new innovations coming out all the time,” said Kopita, who also heads the CyberNet Expo, a San Diego-based adult Webmaster convention. “Something that takes a week or two in the rest of the world, takes a day here.”

The secret to success in this industry still lies in the most fundamental small business tool: a good business plan.

More than Money

In the end, it may be the potential risks as much as the money in these industries that make them so desirable for some affiliates. “They’re willing to take the risk that some public company is not willing to take,” Walters said. “The reason that people can be successful, and that the small guy can make big bucks, is because these industries are tumultuous.”

JENNIFER MEACHAM, managing editor of Revenue, has been writing about business and technology for more than a decade. She was named the Region X Journalist of the Year by the US Small Business Administration in 2002.

Hot Profits

The marketing of adult entertainment is a lot like any other segment of the affiliate industry, except that it is nothing like any other. The business model and best practices are the same, with skills that easily translate to this sector. But the content makes this a world apart. X-rated sites commercialize one of the deepest human drives, one that’s idealized, demonized, desired and feared.

Sexual expression is one of the most contentious cultural issues. And pornography has been condemned in Western culture for most of recorded human history. Those who create, distribute and market it are well aware that they’re working on the fringe.

Why do they do it? Fun and money. To some people, it’s an exciting industry, enjoyed by millions of hard-working, productive and otherwise average adults who choose to view adult entertainment legally and safely from the privacy of their homes. It can be lucrative, too. According to “Online Adult Entertainment Report 2003,” a research report published by Reuters Business Insight, only 1.5 percent of Web sites contain adult-oriented content, but those sites reaped 66 percent of all online content revenues in 2001. The entire adult entertainment industry is estimated to be worth at least $2.5 billion, and perhaps four times that. Getting in on that while working with exciting content seems like a dream come true to some of us.

Different Strokes

Let’s start with how the X-rated sector of the affiliate marketing industry is different. Like it or not, most of the obvious differences are negatives.

First off, adult-oriented affiliates work with material that’s deemed offensive by many of their peers, as well as the general public, so they may find themselves stigmatized. Next, that same material tars them with the brush of the most egregious form of spam. Finally, they’re subject to more regulations than mainstream affiliates, so they’re also more likely to have legal troubles, even if they try to obey the law. The public face of the adult entertainment industry – the bionic babes and overbuilt guys – is quite different from the reality for those who toil behind the scenes. You couldn’t pick adult affiliates out of the crowd at a computer trade show. But the negative stereotype of the pornographer is a powerful cultural image, one that many avoid by trying to stay anonymous.

For example, the head of Booble, a guide to X-rated content that’s also a parody of popular search site Google, has carefully hidden all traces of his identity. He is known only as Bob. Bob says he heads an interactive advertising agency that works with a variety of traditional clients and started the site for fun. While he thinks his advertising clients would laugh at Booble, he isn’t about to bet his agency on it.

“My suspicion is that most of my clients would think it was pretty funny, but I certainly don’t want to test them,” Bob said. “Plus, I have an ex-wife and kids, and I have to respect my private life. That’s why I choose to remain anonymous.” Many affiliates are like Bob, maintaining a firewall that keeps the quotidian world of jobs, family and friends separate from this secret avocation. But they should realize that there’s always the risk of being exposed.

Even other affiliate marketers look down on those in the X-rated line of business. “Most of our clients see the pornographic sites as the scourge of the earth,” said Drew Jackman, business development manager for 10x Marketing, a company that manages pay-per-click campaigns and provides statistics on Web searches – except for the adult industry.

Another issue that every upright affiliate in the business must contend with is X-rated spam. Triple-X spammers have a special place in hell. Their dirty tricks, from innocent-sounding headers to spawning windows that can’t be closed, are a primer on how to give commercial email a bad name. “The tactics that a lot of the porn Web masters use is really unscrupulous. They use search engine spam, they create an inordinate number of popups, they make users frustrated. We try to stay away from them as much as possible,” said Haiko de Poel, CEO and administrator of ABestWeb.com, an affiliate marketing forum. He said that while those who promote the X-rated sites are affiliates, they’re not part of the mainstream – and not of interest to most merchants. In short, he said, “We see them as the scum of the earth.”

Affiliates use tactics to trick users into opening emails because they work. People who might never seek out an X-rated site can be tempted to click on an explicit picture to see more. Unfortunately, this quirk of human nature makes it nearly impossible to stop sneaky spammers. “Particularly in the adult marketplace, you know they’re doing [spam], but no one will own up that they’re doing it,” said Colin Daniels, CEO of Phoenix Group, merchant of a network of X-rated photo galleries. While his company mails a weekly newsletter only to those who have asked to receive it then confirmed the request in a process known as double opt-in, he acknowledged that over-eager affiliates are a big part of the problem. “It seems to be primarily affiliate-based. If you look at codes, buried beneath the HTML, there is affiliate code buried in there.”

While legitimate X-rated merchants like Daniels are as diligent as any others in warning affiliates against spamming, it’s impossible for them to police the thousands of anonymous affiliates that drop in and out of their programs. But spam-happy affiliates run the risk of having their email service shut off or getting blacklisted by ISPs.

Unfortunately, this is the company you’re keeping if you’re an adult entertainment affiliate. You may have a triple-opt-in list, but, unfortunately, in this hot-button segment, the public is a lot less willing to take the time to separate the ethical affiliates from the spammers.

Lawyer Trouble

Booble, the search-for-X site, got itself into legal trouble not for its sizzling content, but for the staid old rap of copyright infringement. Lawyers at search engine Google, a former iconoclastic upstart itself, sent Booble a cease-and-desist letter, claiming Booble is an encroachment on its world-class brand. Did Google pick on Booble because of its content? In their response to Google’s complaint, Booble’s attorneys argued the search company hadn’t objected to other Web sites with similar URLs and graphic design, such as the European search site Elgoog.

There’s a lot more for adult-oriented affiliates to worry about. Those who affiliate with the wrong site can find themselves linked to illegal material or practices, for example, providing X-rated content to minors.

Most X-rated sites use possession of a valid credit card number as the de facto proof of age, said Jake Ludens, spokesperson for affiliate network ARS. Merchants only provide censored content on their premium sites until someone registers – and they need a credit card to do that. “That’s the age verification,” he said. When it comes to members of the ARS network, he admitted that there’s no way to stop all juniors from getting inside the gate. In such cases, he said, the site is responsible. “Age verification is on the affiliate.”

ARS regularly polices its affiliates, checking the sites for illegal material. Because affiliates choose which merchants they want to represent, the attitude of the industry seems to be that it’s up to affiliates to perform equal due diligence on a site before signing up to promote it.

According to Dorn Checkley, director of the Pittsburgh Coalition Against Pornography, studies show that anywhere from 70 to 85 percent of teenagers have been exposed to explicit material on the Web, most of them by accident. Seeing this stuff at an to problems ranging from inappropriate behavior to sexual violence. Unfortunately, Checkley said, the requirement of a credit card to view paid sites does little to keep minors away from content that’s illegal to show them. “Sure, you need a credit card to download or to see more, but you don’t have to pay a dime to see the most explicit stuff out there,” Checkley said.

Sizzling Success

While the challenges for XXX affiliates are many, there are rewards for those who get it right. Here’s where the segment begins to look like the rest of the industry. To succeed, adult-oriented affiliates need to work hard, find a way to rise above the clutter of mediocre sites and provide value to their visitors.

The adult affiliate marketplace has gone through changes in the last few years, according to Phoenix Group’s Daniels. Like the rest of the affiliate industry, it moved from pay-per-click to revenue sharing, typically on a 50/50 basis. The business moved to today’s flat pay-out model, where affiliates receive set payments for referrals that convert to paid memberships. Pay-outs zoomed from $25 or $30 to $50 and up, as merchants competed for affiliates’ referrals. Life was good.

But the big payouts and privileged access to X-rated content flooded the market with low-end affiliate sites. “All the affiliates had little sites with a few pictures and advertisements all over them. There was this huge influx of free [material],” Daniels said. The problem was, merchants want their affiliates to entice visitors just enough so that they’ll click through to the premium site and spend some money there. Too often, he said, after they spend a half hour looking around the affiliate sites, they’ve had enough.

Daniels said that to be successful today, X-rated affiliates should concentrate on building one or two quality sites. “Unless you have some exclusive content, it looks like everything else,” he said. Phoenix Group’s most successful affiliates write reviews and guides. “This is the type of pre-selling that’s almost critical at this point,” he said.

Booble is a prime example of combining useful reviews with unique style. Although it masquerades as a Web search site, in fact, it’s an extremely well-indexed body of original reviews created by a team of volunteers and freelance writers. All the links that show up in searches lead to sites with which Booble is affiliated – about 150 at press time; Bob said that represents about half of all available programs.

Affiliates who show they can produce traffic that converts can often forge special relationships with merchants, Phoenix Group’s Daniels said. They can negotiate for exclusive content to use on their sites, a tactic that further differentiates affiliate sites.

Scratching a Niche

Creating a niche can work as well in the adult industry as in the mainstream world. Sssh.com is a woman-oriented erotica site operated by the Phoenix Group that’s extended the market by catering to the sensibilities of female affiliates. Its program, SpiceCash, uses the same technology as the hard-core merchants, but with a softer front end.

“We made a page specifically for women, so when they sign up they don’t see the hardcore or stronger Web sites. So women feel okay about it,” said editor Angie Dapery. Because of this, Sssh.com gets a different sort of traffic, devoted not only to erotic writing and artsy photography but also things like astrology or psychics.

Many affiliates operate a mix of explicit and mainstream sites. ARS widened its purview from erotica in order to accommodate its multitasking affiliates. Founded in 1996 as the Adult Revenue Service, its acronym now stands for Affiliate Revenue Service. Last year, it relaunched its private network as a full-fledged affiliate network, and began seeking mainstream marketers and retailers to take advantage of its network of some 5,000 affiliates generating a reported 70 million unique visits a month. “We’ve noticed that a lot of our merchants had to turn to other affiliate networks in order to promote mainstream products,” said ARS vice president of customer relations and marketing John Valigorsky. “We figured, why make them go anywhere else? Let’s incorporate the companies that they’re also promoting in their mainstream sites [into our network].”

Just as in the wider world of affiliate marketing, there are a glamorous few affiliates promoting adult entertainment who have hit it big, flashing the cars, the clothes and the rings. Most are hard-working aficionados who haven’t quit their day jobs.

Said Booble’s Bob, “We’d like this little adventure to pay for itself. If we weren’t having to pay lawyers, we might make a little bit. But not enough to pay for a whole other employee.” But hey, it’s not all about the money. XXX affiliates get the thrill of being insiders in an industry that still pushes all kinds of buttons.

SUSAN KUCHINSKAS has covered online marketing and e-commercesince their beginnings for Revenue, Business 2.0, and othermedia. She also has published erotic fiction.