26 Comments

PMA Attempts To Rally Participation During Affiliate Summit West

Jan 24, 2010
by

The Performance Marketing Association (PMA) hosted their first public meeting at Affiliate Summit West 2010. The meeting was free and open to the public to learn about the PMA and why it is crucial for advertisers and publishers to become more involved.  There was also a recap of the nationwide advertising tax issue and an update on each state.

PMA_member_mix_1209Approximately 50 – 60 people were in attendance when Rebecca Madigan, Executive Director of the PMA, called the meeting to order and introduced the current board members.  PMA members represent all facets of the performance marketing industry (see chart to left), however there is a need to increase membership particularly in battleground states.

This was a major theme of the meeting.  Afterwords, I caught up with Rebecca to get her thoughts on the importance of membership:

“Membership in the PMA is for people interested in helping grow the performance marketing industry. There is unrealized potential in this marketing channel, and to obtain it we need to demonstrate our unique value, build trust, and improve results through best practices. We need broad involvement from a diverse group of industry leaders.”

Despite a strong push from the top networks membership has been a difficult hurdle for the PMA as there seems to be a bit of apathy in the industry. As Shawn Collins, Co-Founder of Affiliate Summit, said on the matter during the ReveNews 2010 Affiliate Industry Preview Series,

“It is frustrating to see only a small group of people are really working on it, even bothering to talk about it and try to fight it.  I’m not sure how to make it more “sexy” or “relevant” to the rest of the industry. If we maintain this level of apathy more and more states are just going to roll over and do what New York did. Then we’ll just be stuck with it and you’ll have a lot of people in the industry asking what happened a year from now. It’s just so urgent for people to get with it and really pay attention in their states and be proactive.”

Taking part in the same series, Kristin Hall, Industry Marketing Manager at Google, echoed the need for involvement,

“I think many affiliates need to understand the importance of it.  It was not easy, as Connie Berg of FlamingoWorld can tell you about the fight in Minnesota, she had a hard time getting other affiliates to join her in that discussion and we need people when the time comes in the publishers’ particular state we need to rally and tell the story and thankfully now we’re prepared and we have the infrastructure with the PMA to do that but affiliates have to do their part if asked to tell their story.”

Steve Schaffer, Founder & CEO of Vertive, highlighted the benefits of becoming a member of PMA.  Additional goals of the PMA include sharing best practices, developing standards for datafeeds, industry code of conduct with versions for publishers, networks and advertisers.

There are two levels of membership, Gold and Platinum; dues are $500 and $5,000 a year respectively.  Members must apply and their applications are subject to approval by the PMA Board.  You can apply for membership here.

The meeting closed with an update on the battles won in 2009 and the states to watch in 2010.  Many industry leaders like Brian Littleton, Owner of ShareASale, feel that this will be a critical year:

“Probably twice as many states considering such initiatives this year (like New York’s so-called Amazon Tax).  That’s just a huge thing.  It’s going to be a huge thing that is going to come to a head in 2010 and it’s going to impact things in the industry on a very large scale I think.”

I’ve included a breakdown below of which states are currently facing proposed Advertising Tax legislation according to the PMA blog:

  • Alabama
  • Colorado – being proposed week of January 25th
  • Connecticut
  • Hawaii
  • Maryland
  • Minnesota
  • New Mexico
  • Rhode Island
  • Tennessee
  • Virginia – urgent issue

Laws have been passed in the following states:

  • New York – bill passed in April ’08 The PMA announced it has filed a legal motion with the state of New York, as part of an effort to reverse its 2008 law.
  • North Carolina – passed in August ‘09
  • Rhode Island – passed in June ’09 (a recent bill has been proposed to reverse this decision)

I came away from this meeting inspired to become more actively involved in this fight which impacts all of us working in the online marketing space, whether it is as a publisher, advertiser or network.  For me, it is time to get off the sideline and get involved; I would encourage you to do the same.

Whether you are an affiliate marketer or advertiser, you can make a difference by participating in a grassroots campaign, making phone calls and writing letters to Legislators to fight the advertising tax.  You can participate and be updated on the latest developments in this fight by registering here.  Don’t miss out on this opportunity to become more involved in this fight.

About Stephen Robinson

You can follow Stephen on Twitter: @srobinson.

Filed under: Affiliate Marketing + Events + Taxes
  • Laura

    The affiliate industry has always been very dynamic. In 2009 alone we saw

    1. New FTC regulations targeting many CPA offers (some of which were very bad for consumers).

    2. The emergence of social networking for shopping, for coupons, for rebates. Which consolidated information that used to be spread out over many affiliate websites. Good for shoppers but not good for affiliates competing with those web 2.0 sites.

    3. Google kicking over 33,000 advertisers out of Adwords. Many of whom used an affiliate marketing business model.

    Now, personally, the only successful affiliates that I know who are left, aren't pure affiliate marketers. They have traffic that they are trying to monetize. They monetize most with advertising. After advertising, they continually test affiliate products and that still works fine when they match their traffic's demographic with a good affiliate product. Advertising pays better per 1,000 impressions in almost all cases. An affiliate product is profitable but they always peak and fade until you find the next one. Advertising revenue tends to be more stable.

    Now that affiliate marketing is not their number one priority, hearing that they are going to be taxed more on that income or have to track sales tax on that income and report it properly just gets factored into their calculations for whether or not it is better for monetizing their traffic than selling advertising is. They aren't motivated to fight it.

    Your membership price is commensurate to what PMA provides and I do not think that is the problem as some have said. The problem may be the lack of successful pure affiliates. You have a lot of them as members already. It is a powerful and impressive list of members.

    As the industry grows I am sure that your memberships will grow but it won't be the mom & pop crowd it once was.

  • RJ

    "Your membership price is commensurate to what PMA provides and I do not think that is the problem as some have said"

    You don't think $500 and $5000 a year is stopping people from joining, lol. I think you missed the part above where they talked about membership being a difficult hurdle. It's stopped me from joining and others I've talked too as well. Laura, can you share with everybody what is being provided at $500 a year and please be specific. I couldn't find the answer on the site. Also, are you current member of the PMA? If so, in what capacity. If not, why haven't you joined? Thank you.

  • Laura

    Wow! You sound angry. Um, I'll just try to be more clear…

    SUCCESSFUL affiliate marketers should have no problem with the fees.

    :)

  • http://www.jebcommerce.com Stephen

    Laura,

    Thank you for your comments. I agree that the recent FTC regulations and Google's migration to the AdSense payout structure have created barriers for some of the smaller "mom and pop" crowd to be successful. One of the main goals of the PMA is to defeat the Advertising Tax which threatens the livelihood of some many affiliate partners, whether they are a "mom and pop" or a large company.

  • Mark Welch

    I must disagree with the underlying messages here.

    First, the $500 membership fee is prohibitive for 99% of web publishers who might otherwise consider joining the PMA.

    And second, the PMA doesn't seem to share some of my key "affiliate marketing industry" values.

    Of course, the PMA does share some of my interests and values, especially regarding the "Advertising-Nexus Tax Laws" and bills pending in state legislatures — so I'm glad to work cooperatively with the PMA on such efforts, in a limited way.

    But I'm not going to join the PMA, and my decision not to join the PMA does NOT mean that I am "apathetic" about the industry.

  • http://affbook.com Scott Jangro

    Mark, I don't think anyone would accuse you of being apathetic regardless of your decision to join. There's really no reason for you to take that comment personally.

    I think the word apathetic is pretty accurate in describing many people out there.

  • Mark Welch

    Scott, the issue here is this post's blurring of the distinction between "apathy about the PMA" and "apathy about the Advertising-Nexus tax issue."

    I'm one of many people who aren't interested in joining the PMA, but who are interested in fighting these absurd, unconstitutional, counter-productive laws.

    I don't think "apathy" really is a fair word to use in describing any serious industry participants regarding the advertising-nexus tax issue. Many folks have written and called their legislators on this issue.

    I even sent personal thank-you notes to the governors of Rhode Island and North Carolina, thanking them for their generous work to shift advertising revenue and tax dollars away from their states' for the benefit of publishers (including me) and tax collectors in other states.

    Certainly, we all wish that other people would do more work — but I am actually offended to see someone from Google being quoted here (I'm worried now that they seem to be relying on the PMA instead of their own direct efforts, which may explain their public silence).

  • http://www.revenews.com Angel Djambazov

    Hi Mark,

    The quote from Kristin Hall, as referenced in the article here, was part of the ReveNews 2010 Affiliate Industry Preview Series. In that interview, which also features Larry Adams, Kristin goes into detail about Google's efforts on the matter. They have been far from silent.

    Angel

  • http://www.ericnagel.com/ Eric Nagel

    How were others informed of this meeting? I don't remember seeing any Tweets about it (only 3 tweets with PMA ASW10 during the event), no Facebook event / invite, wasn't on the sched.org tool for ASW.

    I do remember seeing a sign as I left the conference one day, but thought the word private was on there (maybe I'm mistaken).

    I would have loved to be there to learn more about it, but communication about the event was poor. If you only inform current members, don't expect to recruit new ones. If current members truly believe in what the PMA is doing, they should tell their peers!

    As @Route53 said, Didn't know about it

  • http://affbook.com Scott Jangro

    Hey Eric, I didn't scrutinize the sign, but I can't imagine it said "private". If I remember correctly, more than half the attendees were non-members so the word did get out to some.

    Just the same, fair criticism on promoting it better.

    I will say I did promote it in the AffBook newsletter I sent out on the 12th. (To which I hope you're subscribed!)

  • http://www.offers.com Steve Schaffer

    Laura said:

    “Now, personally, the only successful affiliates that I know who are left, aren’t pure affiliate marketers.”

    I think the affiliate and performance marketing industry is more robust than ever. Perhaps there are less people doing it as a sideline. But there are a large number of very successful and growing affiliate and performance marketing companies.

    Mark said:

    “I’m one of many people who aren’t interested in joining the PMA, but who are interested in fighting these absurd, unconstitutional, counter-productive laws.”

    I think there is defiantly apathy from many affiliates about the Advertising Tax. I don’t know that there is apathy about the PMA. We are a new organization and we are growing well. I think the Industry needs the PMA more than ever. I think the best way to fight this is to be organized. Right now the PMA seems to be in the best position to lead this effort.

    Eric said:

    “…communication about the event was poor.”

    We are sorry you did not know about the event. It was posted on the PMA website and at least 2 emails were sent to all the current members. We will do a better job of getting the word out about future meetings.

  • http://blog.shareasale.com Brian Littleton

    The only reason I see for low participation at the event is based on timing. There are literally dozens and dozens of events going on – and that doesn't include the many naps that people needed after a long day in the exhibit hall.

    As the event was scheduled as the PMA meeting, it probably didn't register with a lot of people that it would help them to attend re: the advertising tax.

    I'd probably recommend a booth as a primary vehicle of membership growth next time around, as the timing of this probably hurt attendance.

    re: the advertising tax… I wouldn't use the word "apathy" … but I will say that there have been less people getting actively involved than I would have hoped for.

    That being said… the people that HAVE gotten involved have been incredible and inspirational.

  • http://affiliate-blogs.5staraffiliateprograms.com/ Linda Buquet

    AFFILIATE TAX APATHY – Important reason below.

    There are core groups of VERY informed and active affiliates at ABW, the PMA and AffiliateAdvocacy who are very active on the affiliate tax front. What I'm about to say is not directed at their efforts at all and I applaud everything they are doing.

    But I think the biggest problem with the lack of interest and involvement by the general affiliate population is lack of understanding about the issue.

    I've done TONS of blogging and forum posting about the affiliate tax, advertising tax or whatever you want to call it, since the beginning of the New York problem. I can't tell you the number of times affiliates completely misunderstood the tax issue.

    GREAT EXAMPLE, right here in this thread. (I'm not sure I know who Laura the 1st commenter is, but I have an idea.) She sounds very intelligent and informed. However even she seems to misunderstand the affiliate tax issue, confusing it somehow with income tax or tax reporting that the affiliate needs to do.

    Laura was talking about affiliates when she wrote:

    "Now that affiliate marketing is not their number one priority, hearing that they are going to be taxed more on that income or have to track sales tax on that income and report it properly just gets factored into their calculations for whether or not it is better for monetizing their traffic than selling advertising is. They aren’t motivated to fight it."

    Many people, like Laura just don't understand the problem and what the real ramifications are.

    So in spite of the effort all of us bloggers and people at the PMA have put into trying to make affiliates aware of the issues as they come up, I think our message goes largely ignored.

    Partly I think because affiliates pass over blogs with the word tax in it, just thinking it sounds boring PLUS if it's about a specific state tax, they simply think it doesn't concern them.

    But largely I think many affiliates don't understand the issue at all and have a fuzzy picture of something about maybe having to pay a little more income tax or something and aren't that worried about it. They don't realize this issue could potentially put them out of business or severely impact their earning potential.

    I think that's the reason for apathy on the part of many merchants too, they just don't get it. Here's one example of a merchant/AM that has the issue totally garbled. This is a shakedown!!

    So I don't know what the answer is… Those of us that are involved in discussing and blogging this issue, maybe need to carefully think about our headlines. It may also help as we write our umpteenth post about the issue, not to assume everyone understands it by now and we should possibly link to a good concise explanation near the top of each post or something.

    I think the majority that don't understand though are the affiliates and merchants that don't read forums or blogs much, so maybe with those folks some education by the networks may help.

    My 2c…

  • Jonathan (Trust)

    "But largely I think many affiliates don’t understand the issue at all and have a fuzzy picture of something about maybe having to pay a little more income tax or something and aren’t that worried about it."

    There is a solution. You ever see the movie Philadelphia when Denzel was talking to Tom Hanks and said "All right, Mr. Laird, explain this to me like I'm a four-year-old, okay?"

    We have to go there but visually. Make pretty illustrations, pdfs, video, etc. As an example and you'll have to log in to ABestWeb to see it since it's an attachment

    http://forum.abestweb.com/attachment.php?attachme…

    Have to make it as simple as possible and not only for affiliates, imagine some of the politicians or interns they pass this stuff off to.

  • http://www.MarkWelch.com/ Mark Welch

    Linda wrote (insightfully): > "Many people … just don’t understand the problem and what the real ramifications are…. I think many affiliates don’t understand the issue at all …. They don’t realize this issue could potentially put them out of business or severely impact their earning potential. I think that’s the reason for apathy on the part of many merchants too, they just don’t get it." <

    Individual web publishers (in states that have adopted or are considering Advertising-Nexus tax laws) would be most affected by these laws, because they will lose their relationships with all out-of-state merchants that don't already collect sales tax for the state. Since most web publishers are small businesses that are relatively easy to relocate to another state, their input is likely to be most effective with legislators.

    Alas, getting the word to these publishers is unlikely to be successful, unless through a direct communication from the affiliate networks and merchants to the publishers. Yes, some of the networks have sent emails and 'alerts' to affiliates — but as Linda notes, the word "tax" does cause eyes to glaze over.

    I'd like to hope that account reps at the affiliate networks, OPMs, and the in-house managers of large merchants' affiliate programs are all taking the time to call affiliates who are likely to be impacted significantly. But I'm not sure that's happening — and many publishers operate in a stealth mode and don't want to disclose the scale of their earnings. (And the vast majority of merchants with affiliate programs don't have a full-time affiliate manager.)

  • http://affiliate-blogs.5staraffiliateprograms.com/ Linda Buquet

    Excellent point Trust! We need a KISS image that really explains it well.

  • http://www.ericewe.com Eric Ewe

    I think the PMA, ABW and Affiliate Advocacy made a positive impact in the industry and we are still charting the way to further improve it.

    Stephen Robinson said:

    "Despite a strong push from the top networks membership has been a difficult hurdle for the PMA as there seems to be a bit of apathy in the industry."

    I would like to play a devil's advocate here. I think apathy is a very strong word.

    What if a person feels that the $500 is beyond the value that he/she will get from PMA. Or what if the point of diminishing return for membership fees is $300 and at that level, there affiliates will join PMA by the heards?

    I do not know and I do not have a magic 8 balls.

    Personally, I think that $500/$5000 is steep and I was hard for me to justify it for my company. It is all about the cost-benefit analysis and I could not see paying a $5k price tag, eventhough I managed a multi million marketing budget. Also I found other chanels/organizations to address the same affiliate/industry concerns without that hefty price tag.

    Laura said:

    "SUCCESSFUL affiliate marketers should have no problem with the fees."

    Yes, but many of them might think that the $500 fee might be better utilized elsewhere.

  • http://www.offers.com Steve Schaffer

    The PMA is always looking at membership levels and price for membership. We are trying to balance the funds we need with the costs and investments we need to make. Right now our focus is more on attracting members that see the need for the organization and can afford to support it at one of the current levels. It is difficult to show an exact return for the membership fee.

  • http://www.massimpact.com Haiko de Poel Jr

    The affiliate masses would rather save *BOTH* their time and money not because of "apathy" but more accurately because a true Pavlovian response to the continued reaming and unfair activities from the industry and it's "players".

    The disengage revolves around the saying – “You can't eat your cake and have it too" not because of a lack of knowledge nor "apathy".

    PMA – You set the price at $500 to keep your so called "whiny non producers out", yet you keep wondering why the masses won't respond to the battle cries?

    Networks – you do nothing to police theft, parasites or worse, yet you question a lack of response when you tell affs that their earnings are at risk?

    Sadly, yet once again, it's the affiliates that are to blame – apathetic? Should we move that tree so that the "powers that be" can actually see the forest?

    Haiko

  • http://www.revenews.com Angel Djambazov

    Haiko, Jonathan, Eric, Mark,

    Your points about the membership model are well taken.

    One of the reasons I am not currently a member of the PMA is because of the price point issue. While personally it is not a high threshold I felt that it would preclude the inclusion of affiliates who are in most need of representation. As evidenced by the lack of membership that seems to be the case. Representation, which is needed, is what the PMA is attempting to provide. Similar to Congress I may not like every player but I do agree with the concept of the model. However, the current membership pricing model is supremely flawed.

    I do agree with Mark's notion a 100% that one can cooperate with the PMA in order to fight legislation and yet choose not to become a member. The PMA is however, currently, the most organized central resource we have in that fight (as noted by the heads of the big 4 networks when the question of combating nexus issues was posed to them).

    I am not concerned about apathy towards the PMA. I am concerned about that apathy translating into lack of an effective effort in each of the individual states.

    Angel

  • http://www.offers.com Steve Schaffer

    Angel,

    I am not sure there is apathy toward the PMA. I think there is a lack of understanding about the seriousness of the issues the industry faces.

    Also, one of the reasons the PMA is organized is that we have some resources from membership dues. Pricing is a tough balance and one we continue to evaluate.

  • http://danielmclark.com Daniel M. Clark

    I'm one of the little guys. I'm an affiliate. I don't earn hundreds – or even tens – of thousands of dollars a year yet. I'm on my way up, but a membership fee of $500 to join an organization that does not give me a clear ROI is wasted money.

    Don't for a moment think that there isn't apathy toward the PMA. Many of you who were active at ABW at the time may remember the heat I took for supporting its creation. After all that, and seeing what was finally formed, and then realizing that they don't want me as a member – you can be sure that this affiliate is pretty apathetic toward it.

    Pricing is not a "tough balance", Mr. Schaffer. There is no economic reason that you can't offer a basic membership for $50, an amount that most affiliates would be willing to pay if they thought it was going to an organization that cared about having them as members. As I stated elsewhere, the only reason I can think of why it's set so high is to keep out the riff-raff. There's a really good reason why that pie chart up there shows affiliates (er, advertisers) as having the smallest representation.

    Excuse me, not "riff-raff" but "unsuccessful" affiliates – isn't that right, "Laura"? Defending the membership fee by saying that "successful" affiliates should have no problem with it is pathetic. The attitude that the people with money are more valid than those without is vile.

    I'm not angry.

    I'm apathetic toward the PMA.

    I'm an affiliate.

  • http://www.offers.com Steve Schaffer

    Publishers (aka Affiliates) make up the largest percentage of the membership 27%.

  • Laura

    I apologize.

    It was Sunday night and I was bored so I thought this was a good opportunity to get Mr B's gall.

    I actually had my second comment ready all along and just waited for him to lunge angrily at my first post. He did. He always does.

    I did not want to make such a big deal. My first post is all fluff except for the part about the prices being fine. That was the trigger to activate my trap. There is no malice. Like I said, it was Sunday night and I was bored.

    The PMA is a great organization made of people who really care. I do not want to do anything that hurts that organization. It was Sunday night and I was bored.

    Mr. Clark, you are incredible.

  • http://danielmclark.com Daniel M. Clark

    I was mistaken then, in my interpretation of the chart above, and I apologize for that. I stand by my other assessments of the situation, however. Thanks for pointing out my error :)

  • http://www.revenews.com Angel Djambazov

    Hi Steve,

    Definitely it's a good sign that affiliates make up the largest portion of the PMA but shouldn't the ideal mix of affiliates (considering the makeup of our industry) be closer to 50% of the membership?