11 Comments

Affiliate Marketing Is Dead

Jun 27, 2005
by

Now that I have your attention…

It’s not that Affiliate Marketing is dead. It is more that change is happening… faster than we think. AdSense is changing Affiliate Marketing. The introduction of YPN will keep that change coming. (I don’t think Kanoodle will change much but I’ll be happy if I am wrong.)

Beth Kirsch has often written here at Revenews that Affiliate Marketing is the farm team for business development. She’s right. I often say that merchants need to pick their partners more carefully. I’m right. (It’s always nice to pat yourself on the back, eh?)

The change that is coming is something that CJ has seen all along. CJ has no affiliates. I don’t think that BeFree has any affiliates. At this point you are asking if I’ve gone insane. You’re thinking that my company is a CJ affiliate. Nope. We’re not and they don’t have any.

CJ has Publishers. BeFree has Partners.

While you may think that I am playing semantics, this is an important point and an important distinction to make.

Affiliates are those anonymous folks out there who join programs and try to get as much from merchants as possible. They are not partners. They don’t want merchants to call.

Publishers are Partners. We want to talk to you. We know that our businesses will grow together.

Then again, we also know that we have other options. Merchants are Advertisers just like CJ has been saying for years. While performance-based advertising may be acceptable in some areas, it may not be in others. If it does not perform as well as other advertising (read: contextual PPC ads from the search engines), we’ll supplement it or replace it. Look at the shopping comparison engines. They charge a PPC whenever possible (and were absent at Affiliate Summit).

Just as Advertisers have businesses to run and make decisions that Publishers may not like, the same goes in the other direction. You can’t get free placement everywhere. Enjoy it when you get it and make sure that your Publishers are your partners.

So it’s not that affiliate marketing is dead. It may be that we need a new name for affiliate marketing. It may be that people who still want to call publishers who use this thing we used to call Affiliate Marketing need to have a different view of Publishers. In any event, change is coming.

Filed under: Affiliate Marketing
  • http://www.linkshare.com Peter Chun

    “Publishers are Partners. We want to talk to you. We know that our businesses will grow together.”

    You are correct. As a merchant, I want partners that will do exactly the above.

    Having an EPC metric doesn’t get me these partners that will go the “extra” mile. They may be in it solely for the buck. my EPC may be lower, but I have a brand that I built for years and a level of service that just isn’t communicated by an EPC metric.

    This very metric is what makes these “publisher/partners” very “affiliate”

    Regards,

    PC

  • http://www.anycoupons.com David Lewis

    Peter, I’m not sure why you call yourself a “merchant”. You work for a network, Linkshare. There is huge difference and there are different responsibilities for each.

    Your network has a new platform. If you have a problem with EPC (aside from wanting to criticize CJ and use Revenews as a Linkshare sales platform), please comment on how Athena can help make Publishers into Partners.

  • http://www.audible.com Beth Kirsch

    Peter,

    EPC is a key to affiliate marketing.

    Publishers like EPC and for that matter Network Bars in CJ. Why, because it’s a view into program performance before a publisher takes a risk to run an offer.

    This is a game all about earnings per click or or earnings per impression. Shouldn’t a potential partner know, in general, what they might expect from an adverstiser if they are paid on performance.

    Don’t you think it’s fair to give publishers a dim view in a dark room before trying an advertier.

    Affiliate marketing works if the partners can build a relationship on trust. EPC/network bars is a good first step towards building trust. I actually wrote about this issue a while ago.

    WHO BEARS THE RISK ON THE MORPHING REV SHARE LANDSCAPE: Commission Junction weighs in with key metrics to provide publishers a guiding light.

    http://www.revenews.com/bethkirsch/archives/000265.html

    Partners grow together and EPC is a key metric to help a publisher know if it’s worth their time to try.

    I’d ask the same question that David asked about Athena espeically in relationship to the mophing rev share landscape. How is Athena going to help publishers trust merchants more and lead to a win-win partnership for both sides.

    Beth

  • http://www.linkshare.com Peter Chun

    David,

    The very context of my response is from a “merchant” POV – hence my response “as a merchant.”

    Let’s make something clear here. I don’t represent LinkShare’s POV here, nor do I speak for them. I speak for myself. Network preference has nothing to do with my response. I could easily mask my identity and pretend to be someone else, but I choose not to.

    Let me ask you, if i masked my identity to be “someone” else would that have changed your perspective of my comment? If I were a fortune 100 merchant would my claim be of more value?

    Don’t look at my info and assume the tone or direction of a post. Criticize a post for its content. I’m not expecting everyone to agree with me.

    Criticizing CJ or leveraging Revenews as a sales platform is incorrect. CJ does what it does and LinkShare does what it does. Flaming on a public forum is not my intention and is just plain dumb. As you referenced above, this landscape is evolving. The success of each other’s business is crucial in differentiating the value of this industry.

    Revenews is a good platform for industry discussions, insights and opinions – which is why I choose to post here.

    As for Athena, Partners can no longer “pretend” to be who they want nor can they hide under identities. Their existence, business, staff and methods of distribution will be listed very clearly to their merchant partners. I would argue that “True” Affiliates/Publishers/Partners biggest challenges have been their very own peers that have questionable or vague methods of distribution. Hopefully this process will show visibility into the value many of these partners bring.

    Regards,

    PC

  • http://www.cj.com Todd Crawford

    I like to think of EPC and other metrics as a dim light in a dark room. Is EPC perfect? No, but I do not think that anyone wouldn’t appreciate a little light (in a dark room) on how a program is performing. Frankly, too many companies have tried to recruit publishers with promises of earning big commissions and publishers find out the hard way that these were empty promises.

  • http://www.anycoupons.com David Lewis

    Peter, thanks for offering another lead in to my soon-to-be-written article on anonymity. You mention a great benefit of Athena (especially when it works properly). I have commended Linkshare for bringing transparency to affiliate marketing.

    Your point has nothing to do with EPC or other metrics. Knowing that CJ does not verify identity aside, what is wrong with EPC and what does Linkshare (or Athena) do to help provide information to Advertisers and Publishers to help them pick one another?

  • http://NoCookie Beth Kirsch

    Peter,

    Of course your comments are welcome and appreciated. As you said this is a forum to exchange ideas.

    In responce to your answer, your point on Athena is that it helps advertisers understand who their partners are, but does it help publishers choose their partners wisely?

    We all need to choose our partners wisely from both sides.

    Cheers,

    Beth

  • http://www.molanderassoc.com Jeff Molander

    Peter. Congratulations on earning the battle scars.

    While like every one of David’s entries, this one is valid and interesting yet, again, somewhat of a flag-waive for the status quo IMO. The thesis seems to be something like “call me this, don’t call me that because that has nasty connotations and is so ‘yesterday.’” It’s also, for some reason, focused on ValueClick/CJ. Again – that’s valid but the attack on Peter for showing up and making a sales pitch… to the tune of taking advantage of Revenews… is fairly absurd.

    Peter has very plainly challanged (indicated some of the deficiencies) the notion of a network-based Earnings Per Click system being overly useful. This has been debated (not on Revenews, granted) for a long time. I (and others such as Wayne Porter) concur: even if policed or not… it can be gamed heavily (to the point of defying business logic). Indeed, it doesn’t factor in a myriad of vitally important elements such as brand presence (as Peter points out).

    Many affiliates, publishers, partners (whatever!) create their own EPC metric once involved with an advertiser. EPC is an important measure but it’s certainly not one that has enough value to make one network more valuable or useful than the other – given its inherent weaknesses.

    To Beth’s point… the industry does appreciate having *something* more to go on and, hence, the “bar system” and, to a degree, the availability of network EPC has influence.

    Which is more important… knowing who your affiliates are or earnings metrics that work and can be relied upon? Both!

  • http://www.revenews.com/wayneporter/ Wayne Porter

    There are two forms of the EPC metric. The network metric like CJ provides and one’s own EPC.

    EPC is not a perfect metric, especially on a network basis (where as Jeff notes the skilled can game it), but combined with more information e.g. program volume, average ticket, number of publishers in program, etc.

    It is a very useful thumbnail guide. I appreciate CJ’s move toward casting more light into the dark room. I think the days of lots of promises with nothing substantial to back it up are going to the wayside.

    As for David’s post, this is not just a game of semantics. I am NOT an affiliate- never was. I am publisher. If I choose to entertain a rev. share deal with a merchant then they become MY affiliate perhaps. I do not need them to survive. I have the premium real estate and content. They have goods to sell.

    Three to five years ago one had little choice but to sell direct ads or do rev. share.

    I have choices now and revenue sharing is the absolute last choice because there are too many risks to bear. Yes- I will entertain them, but not when I see ad dollars moving again and opportunities like AdSense, impending YPN, and other contextual opps.

    I am not the only one that feels this way. One group that I am on (a private group of elite publishers) revenue sharing is the least likely form for them to entertain with few exceptions. They prefer the simplicity and fairness of CPC.

    The networks CJ and Linkshare should wake up to that reality. I think CJ has (since its now a part of the Valueclick regime) but I am not so sure Linkshare understands the shift from the publisher perspective.

  • http://NoCookie Beth Kirsch

    “As for David’s post, this is not just a game of semantics. I am NOT an affiliate- never was. I am publisher. If I choose to entertain a rev. share deal with a merchant then they become MY affiliate perhaps. I do not need them to survive. I have the premium real estate and content. They have goods to sell.”

    Wayne, they become your partner. Affiliate, publisher, etc. The bottomline is the game only works when it’s a true partnership. Both sides needs must be met.

    As for the CPA vs. CPC issue, what matters is eCPC/eCPM you know that. I know you like CPC because it decreases risk, but my big guys earn more with me than AdSense and by offering two free audiobooks, add value to their site, etc. I think to view the world only in CPA vs. CPC can be limiting, but not always.

    Beth

  • http://www.anycoupons.com David Lewis

    I am surprised at how some people can miss the point.

    Wayne, you are dead on. It’s more than semantics and it’s not about CJ. I used CJ as an example because I used to wonder why they chose terms different from everyone else. It’s now clear to me with all of the new choices. [Note: I am not addressing the merchant vs. advertiser distinction because there are no major industry changes that it highlights.]

    If you analyze ROI from the perspective of a Publisher, you can see the importance of using the term Publisher, especially for merchants and networks to understand that difference. The industry is changing. There are choices available now that have not been there in the past. Merchants cannot count on placement on Publishers’ sites the way they used to count on placements on Affiliates’ sites.

    Peter point on EPC while interesting has nothing to do with the article. That said, it seems logical to ask him to elaborate. There is more to Athena (or maybe I should have said Synergy Analytics) than verification of identity (and I already commended Linkshare for that in an earlier article). I am giving Peter an opportunity to brag (even sell Linkshare’s abilities) about the new metrics that are available through Linkshare.

    I don’t see how anyone at Revenews can consider such an offer to be “battle scars”.