In its Interactive Marketing Forecast Report, Forrester Research portends that search, display advertising, mobile, email marketing and social media will drive a 35% increase in ad spending by 2016. That’s certainly good news worth believing in, especially coming from such a respected source. The report is full of interesting statistics and industry forecasts but one prediction is particularly eye-catching; the growth of interactive marketing will essentially sign the death warrant of the daily deal. Again, it’s tough to argue with Forrester but this may be a tad rash.
Daily deals have become an important results-driver within the affiliate marketing channel, which is conspicuously absent in the Forrester growth model. This is strange considering Forrester predicted US affiliate marketing spend would hit the $4 billion mark by 2014. Also, other performance channels like email marketing and social media have spearheaded the success of daily deals through advanced geo-targeting and effective consumer engagement. Perhaps Forrester is equating the recent trials and tribulations of Groupon with the whole of daily deals. Groupon is the big fish but it isn’t the only fish. Nowhere was that more evident than at last week’s DailyDealMedia Conference where some of the heaviest brand hitters sung the praises of the daily deal.
Daily deals detractors often point to the savvy consumer as the eventual downfall of the industry. Can a company really grow with a fly by night customer only interested in a 90% coupon? No, not if the sole ROI metric is profitability. Many companies leverage daily deals for engagement or branding similar to the non-revenue ROI goals of many social media campaigns. And yet it’s doubtful any research firm will be signaling the end of social anytime soon. Given their positive impact on the affiliate marketplace, daily deals deserve a place at the interactive marketing table. Maybe the industry needs to offer Forrester a kick arse coupon.
Today is Day 2 of Affiliate Summit East 2011. The ASE website calls it the premier affiliate marketing conference and few would argue that assertion. But few would also deny that the affiliate landscape has matured recognizing and acknowledging the need for cross-channel, agency-based program integration to drive results and profits for advertisers and publishers. Even though the ASE is unlikely to re-brand, signs of this shift in mentality are evident in the diverse panels and speaking engagements at the event. That’s the good news.
The not-so-good news is that the evolution of affiliate marketing isn’t well known outside the industry. For instance, public sentiment on the Nexus Affiliate Tax is only now beginning to slowly turn in favor of affiliate marketers. While that’s a step in the right direction, federal regulation remains a very real possibility, one that can hinder short-term and long-term profitability and growth. The bottom line is many people still have an adverse view of affiliate marketing.
They say good things come in threes. Over the three-day Affiliate Summit East 2011 conference, emerging platforms like social media and mobile will be addressed and broad and niche-based affiliate and SEO topic discussions will be held. The event is always fun and chock full of insightful learnings. But what happens after the conference is just as important as the conference itself. Affiliates must drive conversions; they should strive to change the minds of outsiders currently fearful of the marketplace and help them understand the ROI benefits of a cross-channel and integrated performance approach.
Affiliates have grown weary of threats made in recent years by legislators looking to regulate the marketplace. The insistence that legal protections must be implemented to protect consumers is due in large part to the influx of shady, fly by night newbies infiltrating the space. Unfortunately for reputable affiliate marketers who already adhere to best practices, the bad often outshines the good. In the interest of easy political wins, pundits on the state and national level have been pushing the passing of the Affiliate Nexus Law. Proponents of the law insist it will even out the playing field by imposing the same sales and use tax obligations on both out-of-state retailers and small businesses with a physical storefront presence within a given state. Though that is framed to sound plausible and logical, it is misleading and potentially devastating to small businesses who will likely have to either close shops or drastically downsize.
Last week, the Performance Marketing Association took a definitive stand against the newly enacted law in Illinois by suing the Illinois Department of Revenue. And it is a stance that is long overdue. Apparently other performance marketers with a social presence feel the same. The hashtag #NoAdTax was trending well on Twitter and the press release PMA was widely distributed. It is too early to predict the long-term ramifications of the PMA’s actions, namely whether it will stave off future law passage. But the PMA has certainly energized its base of affiliates and publishers. And for that alone they should be lauded, appreciated and cited as champions of the performance marketer.
Last week, Social Media Examiner released its comprehensive 41 page 2011 Social Media Marketing Industry Report. In it, blogging was listed among the top four social media tools used by marketers. At least 73% of marketers polled planned to increase their blogging efforts. I knew I was doing this for a reason. This is not only good news for bloggers, it is also good news for affiliate marketers. Blogging for dollars is back!
The report also stated that 69% of marketers want to learn about blogging and how it can impact social initiatives while 72% of these marketers cited increasing traffic as a major social media benefit. For affiliates interested in expanding their reach, leveraging every social media channel – not solely Facebook or Twitter – can drive traffic to user blogs translating into increased affiliate sales. StumbleUpon, Digg and Reddit are growing networks that can help your blog improve its social standing. More eyes on your blog, the better your chances of driving sales opportunities.
Online performance marketers understand that targeting the right offer to the right consumer is the name of the game. By leveraging performance-based media across a variety of channels including display advertising, search, affiliate, email marketing and social networks, advertisers and marketers can help brands better locate relevant customers. This brings us to digital couponing.
According to Kantar Media, digital couponing increased across key CPG websites in 2010 by close to 60%. This includes a 23% increase in digital coupons offered to consumers by over 260 manufacturers. Unlike their paper forerunners, they offer consumers a convenient, and dare I say even trendy means of saving money. Perhaps more importantly, they create brand awareness and drive results for advertisers and marketers at the all-important local level. Local is so “of the moment” I expected it to be working the katwalk during Fashion Week.
Still, some doubt digital couponing has legs. They believe it to be nothing more than a way to grab the attention of the fickle deal seeker at the expense of true relationship building with consumers. And though that might be the case, how’s that working out for Groupon?
Affiliate marketing fraud, or at the very least the perception of it, remains an industry-wide blight. Regardless of federal regulations and threats of increased government oversight, affiliates, advertisers and publishers continue to do themselves more harm than good playing a constant game of one-upmanship. Whether it’s buying bad conversions, deceptive ads and links or charging for clicks that haven’t been used, affiliate marketers must cease and desist with these irresponsible practices.
The temptation of affiliates to adopt new traffic sources without considering the effect they will have on advertiser conversions is an example of individual greed undermining industry growth. But affiliates are not solely at fault. Advertising and publishing networks have their own bottom lines to meet. As profits and conversions rise, networks tend to concern themselves less with the long-term health and tricky legalities of affiliate marketing. But this needs to change.
Affiliates, advertisers and publishers need to resist the temptation of the quick money fix. Business owners rely on sound publishers just as publishers rely on legitimate network offers. Advertisers, publishers and business owners must view themselves as being part of a trilogy responsible for driving results and continuously improving profitability and the industry as a whole.
Though affiliate marketing fraud is a problem, all is not lost. The release of the Blue Book’s Top 20 performance marketing networks proves that following the rules can maximize profits. Still, these performance marketers must apply the best practices they used in achieving their top 20 rankings to put an end to the misleading affiliate offers currently polluting the online space. Affiliate abusers have been one step ahead of the game for far too long. As skilled marketers, this is one game of one-upmanship we need to win.
Kirshenbaum Bond has developed a novel way to put some skin in the game with their clients. They have developed a stock portfolio of their publicly traded clients and will link their financial rewards to the portfolio’s success. See the NY Times article:
Advertising: Agency Combines Clients’ Stocks for a Mini-Mutual Fund .
Having an agency link their financial reward to the client’s is a great thing. It aligns incentives and gets the agency focused on the returns the client’s marketing investments are generating. Not something typically seen from large brand oriented agencies, but clearly a winning formula. Hats off to Lori Senecal and the KBS&P team for aligning their rewards with their client’s financial results in this clever way.
But, “hello,” we in performance marketing have been doing just that for nearly a decade! MediaWhiz, and other performance marketing agencies, have been getting paid for results since 2001. We get paid to create the specific customer actions that our clients know, with statistical predictability, will generate profits. In most cases it is not our bonuses that are on the line but our entire fee. It’s not just some “skin in the game” but our financial lives on the line. We live or die by daily market results which determine whether our programs are providing a positive ROI.
As the competition for high quality customers becomes increasingly intense, every dollar a client invests in marketing needs to be productive. Great marketing programs will be continuously optimized to ensure they are creating the customer response that will lead to profits. Aligning the agency’s incentives with the client’s financial results is a strong step toward making this work. It’s great the KBS&P team will get a bonus if their client’s stock goes up. But if an advertiser wants more than a little skin in the game, if they want marketing partners fighting for their client’s profits as if their lives depended upon it, they should add more performance marketing to their overall marketing mix. As a performance marketing agency, we at MediaWhiz understand our financial life, just like our client’s, depends upon driving more profitable marketing. Now that’s alignment!
In a recent article penned by Mediawhiz CEO Jonathan Shapiro and published by iMedia Connection, Jonathan makes the argument that traditional marketing budgets should be tossed out the window. To his point, the Internet allows brands more visibility into the performance of their marketing efforts than ever had before. Combine the visibility the Internet allows with performance based distribution channels and you’ll see there is no cap on what you can spend.
In Jonathan’s words;
“Future winners in the online marketing space will understand that success means investing in performance marketing programs of continuous improvement that provide increasing and demonstrable profits. That’s performance marketing, and you won’t want to cap its success with an annual budget.”
Read the whole article here.
Death of the Marketing Budget
MediaWhiz SEO industry expert John Carcutt is popping up everywhere. This time, at Affiliate Summit West in Las Vegas, as a member of an expert panel discussing the relationship between SEO and Affiliate Marketing.
Blogger Stephanie Lichtenstein, creator of the influential affiliate marketing blog, stephanielichtenstein.com had this to say about John;
“Since I know a little more about John Carcutt, I can tell you that he is the real deal when it comes to SEO. He hosts a weekly podcast called SEO101 on Webmaster Radio every Monday. He also has been in the game for a long time calling himself the, “SEO Oldtimer.”
The details of the panel are listed below.
When: Sunday, January 17, 2010
What: Monetizing Blogs for Affiliate Marketing and SEO
Learn to maximize affiliate commissions using blogging, increasing your community, and utilizing SEO.
Kristopher B. Jones, President, Pepperjam Network, A GSI Commerce Company
(Twitter @pepperjamceo) (Moderator)
Drew Bennett, Professional Blogger, BenSpark.com (Twitter @BenSpark) John
Carcutt, SEO Manager, MediaWhiz (Twitter @JohnCarcutt)
Tim Jones, Owner, TheRealTimJones.com (Twitter @TheRealTimJones)
Murray Ross Newlands, Founder, Affiliate Heat (Twitter @murraynewlands)
When: 1:30pm – 2:30pm
Where: Brasilia 1-2 Rio Hotel
Passes: Platinum, Gold
Look for John’s video summary =of his panel session on January 17. Stephanie Lichtenstein will also be covering the session and explore MediaWhiz’s MonetizeIt business.
Hi ShoppingAds Publishers!
Starting this payment cycle we will be paying out Net30- that is, your December 2008 payments will be made to you on February 1st, 2009, and so on and so forth.
We have made this adjustment in order to be able to pay all of our pubs as efficiently and completely as possible.
Thank you all for your continued patience and cooperation!