9 Comments

Are Internal Corporate Politics Killing Real Pay-for-Performance Marketing Opportunities?

Oct 25, 2010
by

If a marketing professional walks up to the founder of a company and says: “I am so confident that I can generate sales for you, I am willing to risk my time and my own money to market for your company and am willing to only get paid if and when I generate results for you”; the founder of the company will often see a great opportunity.

If the same marketing professional were to talk to someone in the company’s marketing department and say: “I am so confident that I can generate sales for you, I am willing to risk my time and my own money to market the your company and am willing to only get paid if and when I generate results for you”; the response is often, “We already have people generating sales for the company…”

This is no joke, we hear these types of conversations all the time. Why do you think pay-for-performance marketing/affiliate marketing gets such a bad rap?  Are internal politics squashing true business opportunities? Are internal marketing teams defending their turf? Is there more to the story?

Share with us some of the responses you’ve heard as a performance marketer or if you are on a company’s internal marketing team share some of the responses you’ve given.

About Adam Viener

Adam Viener is the Chairman & Founder of imwave, inc, a leading performance search engine marketing agency. Imwave focuses primarily on building and launching effective pay-per-click search engine keyword marketing campaigns for companies paying commissions on sales and leads generated. In both 2009, 2010 & 2011 Imwave was recognized as one of the fastest growing privately held companies by Inc. Magazine. Imwave recently announced they had served over 5 Billion ads for their clients!

Adam, a serial internet entrepreneur, founded one of the first commercial internet service providers (ISPs) in 1993. He has a deep understanding of internet technologies and profitable internet marketing tactics. Adam currently sits on the publisher advisory boards for Commission Junction and the Google Affiliate Network.

Social Media:

Twitter: adamviener
Filed under: Affiliate Marketing + Performance Marketing
  • http://www.performancemarketingassociation.com Rebecca Madigan

    Adam – this is SO true. I know one affiliate manager for a B2B software company. They advertise online, on radio, TV and print. The entire marketing department has 75 people. She, as the one and only affiliate manager, is responsible for 10% of the company's entire revenue. The rest of the department is jealous and unfriendly.

    Another story: a few years ago a (former) affiliate manager for a very big retail clothing store had her affiliate program closed down in August because she exceeded her budget (i.e. affiliates generated too much revenue!!!!). She was competing with someone else who wanted budget for more displays for their retail stores. She had to escalate it to the CFO to explain that her marketing costs were tied to directly to sales. Mind boggling.

  • http://twitter.com/djambazov @djambazov

    The fact is there are legitimate concerns about players in the performance marketing space. Facebook's recent lawsuit, the indictments of the two eBay affiliates, and recent moves by forums telling their users how to reduce spam by reporting affiliate ids to networks, are all indicators that as an industry we are doing a poor job of policing ourselves.

    This is not to say that there aren't both internal politics and petty budget jealousies at play. I am also not trying to discount the strength of performance marketing as a model, which is often the highest ROAS of any channel in the marketing arsenal. However without a more coordinated effort on the part of networks to cooperate in policing efforts, I feel it is only a matter of time before more federal regulation steps in.

    It always amazes me that companies can get together and say these consumers are a lending risk but networks can't get together and say these affiliates are a business risk.

  • http://www.affiliatefairplay.com Kellie Stevens

    Internal competition within a company between the marketing channels certainly can and does exist. It's not new though. I remember an affiliate manager telling me years ago that their job was to cannabilize as much traffic from the other channels into the affiliate channel as possible. It's a coporate mindset that has long existed, even before affiliate marketing. Although I think you are more likely to see it in the bigger companies than in small companies.

    Not sure if I would characterize it as "killing" it. Seems a bit strong. Mayber hender at times.

    Agree with Angel that company politics isn't the only thing that can diminish the perceived value of performance marketing. We do need a more coordinated effort within our industry to sow the real value of the channel.

  • http://www.imwave.com Adam Viener

    Working as a performance search engine marketing firm, we see a lot of times where these internal political issues prevent companies from even testing affiliate search. I think that the "fears" of fraud and cannibalization are the triggers used by advertising agencies and internal search groups to prevent real opportunities from being presented to their companies.

    I do agree that we have a major perception issue in our industry, as a whole, we spend way to much time focusing on the "bad" instead of the "good".

  • http://twitter.com/djambazov @djambazov

    I agree we spend too much time on the bad. But it is the bad that get’s the news. It’s hard for those outside the industry to pay attention to network awards when there are juicy stories involving $20 million dollars in fraudulent commissions. In fact when was the last time you saw industry awards of any type (network or Affiliate Summit) get covered by news agencies outside our industry?

    Part of the problem, of course, is back to the politics. When advertisers do find a gem of an affiliate to work with they often don’t want to share. Also, rarely do advertisers, even when they win industry awards, share the numbers behind how well their affiliate program is doing. Yet the industry continues to grow year over year even during a down economy so we must be doing something right.

    Occasionally companies like MediaTrust, Fatwallet, and ThisNext get coverage about their individual success. Heck Upromise even made it on Opera and NextJump scored an exclusive deal with MasterCard. But even in those features, if performance marketing is mentioned at all it is glossed over. ThisNext is one of my favorite examples. It’s backed by Jason Calacanis who doesn’t seem to know it engages in affiliate marketing.

  • http://www.imwave.com Adam Viener

    There is a lot of crap that gets lumped into the term "Affiliate" and as an industry I think we tend to throw the baby out with the bath water way to much.

    The truth is, that the general digital media world doesn't really understand the pay-for-performance marketing channel. We all live and breath it everyday, and we ASSUME that everyone else knows that this channel even exists, or what it is capable of producing. The reality is, that very few companies fully understand the power of the performance marketing channel. Many that know of its existence, only dip their tow in the water and assign the channel little significance within the organization. Companies that "get it" throw a full team of resources towards it and reap the rewards.

  • http://www.performancemarketingassociation.com Rebecca Madigan

    This discussion falls smack into the lap of the PMA (although not exclusively – by any means). The PMA is charted with growing the performance marketing industry. That's all it is really, that's our charter, our top line mission statement. But how we do that is the challenge. You're both right. We need to clean up the industry ourselves, or we need to create a safe haven for the legitimate and viable partners (not just clean affiliates but really good ones…I think crappy affiliates get thrown in the same bucket as dishonest ones). We need to self regulate to protect our industry too. But we also need to tout the benefits of the channel more loudly.

    Doing both is, frankly, costly. As we grow, we have to prioritize. The feeling by this current board and the last board, who set our strategy, is that we really need to aggressively work on solving the bad reputation first. So our emphasis this coming year is focusing on fixing the bad. Some of that is not only taking a stance against fraud and abuse, but it's creating a way for the good to stand out from the bad.

    However, we still have to look at opportunities to evangelize performance marketing. We may soon form a working group to help us build a marketing plan in this area (we try to have member working groups formulate our strategies and tactics, it's member driven, cross-functional and provides a much more balanced approach). This article does a great job of justifying the need for some attention in this area.

  • Tony Pantano

    There are bad actors in ALL industries. You don't "Not Buy Used Cars" for fear of finding that "used car salesman" Our own fears of being lumped in with bad actors are causing us to focus on them to the detriment of all of us.

    (NOTE: Following is not a JAB AT PMA…Rebecca and I have actually talked about this) Do you see the Direct Marketing Association, American Marketing Association or any other association talking about the couple of bad actors in their ranks? NO. They spend all their marketing, time and PR resources trumpeting the value of their industry. If all we do is talk about the bad, that's all that will get heard. If all we do is let OTHERS talk about the bad in our industry, then too, that is all that will get heard.

    Then people use this fear of bad actors to fight the internal wars, especially in SEM to fight their turf wars. When you can escalate the conversation above individual or department goals you get a much better picture of how it can help boost sales overall. So yes, I think it's a combination of bad PR that assists in the turf wars that create a negative feeling about our industry.

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