29 Comments

ShopAtHome Stabs Fellow Colorado Affiliates in the Back

Feb 5, 2010
by

Affiliate marketing indeed is a cutthroat industry, but never in my opinion have I seen such a display of cold and calculated ruthlessness.

Under the guise of working towards stopping Colorado’s version of the so-called Amazon Tax, and in front of industry counterparts and members of the Performance Marketing Association (PMA) gathered to testify against the Senate version of HB 1193, ShopAtHome took the opportunity to flex its muscles.

Earlier Rebecca Madigan, Executive Director of the PMA, had emphasized how crucial it was for affiliates to present a cohesive front so that the negative impact such a bill would have on small business in Colorado would be readily understood by legislators.

With apparent disregard for the unity in message theme, Marc Braunstein, Co-Founder of the Belcaro Group who owns large affiliate ShopAtHome, did the industry no favors when he presented his testimony to the Senate Finance Committee.

In an unanticipated move, instead of giving testimony as to how the bill would hurt Colorado businesses, he stated in its current form he was not opposed to the legislation. Despite the fact that, according to his own figures his business might suffer a drop of 20% in revenue if the bill was passed, he assured senators that the legislation would not hurt ShopAtHome. He further stated that the intended targets of the bill, Amazon and Overstock who are expected to terminate Colorado affiliates, were of little significance to him and, that after a short educational period, advertisers would return to ShopAtHome because of their compelling model.

But Marc Braunstein didn’t stop there. He used his time on the microphone to flaunt ShopAtHome’s sales numbers, their ability to retain legal advisors to deal with such legislative matters, and even managed to suck up enough to the Senators that one suggested Marc should look into getting a binding exemption to the tax.

Now I don’t fault Marc for looking after his own business. Any shrewd business man might do so. And this is still a free country, Mr. Braunstein can use his time in a public forum as he sees fit.

I fault Marc for throwing fellow Colorado affiliates under the bus despite having no compelling reason to do so. Marc didn’t do so out of necessity, he did so because in his mind they were small and insignificant. He could have leveraged the size and obvious importance of ShopAtHome’s standing in Colorado to support his fellow affiliates. Rather, his grandstanding robbed affiliates of their valuable time in front of legislators who have the power to devastatingly impact their business. He was a one man filibuster.

In an industry that is full of cutthroats it is hard to stand out. But as many affiliates in the industry said on Twitter, Marc just won the public douche bag award. I hope he’s proud.

About Angel Djambazov

Born in Bulgaria, Angel Djambazov has spent his professional career in the fields of journalism and online marketing. In his journalistic career he worked as an editor on several newspapers and was the founding Editor-in-Chief of Wyoming Homes and Living Magazine. Later his career path led to online marketing where while working at OnlineShoes he earned the Affiliate Manager of the Year (2006) award at the Affiliate Summit, and In-house Manager of the Year (2006) award by ABestWeb.

For four years Angel served as OPM for Jones Soda for which he won his second Affiliate Manger of the Year (2009) award at Affiliate Summit.

Currently Angel serves as OPM for KEEN Footwear and MedicalRecords.com. His former clients include: Dell, Real Networks, Jones Soda, Intelius, Graphicly, Chrome Bags, Onlineshoes.com, Vitamin Angels, The Safecig, and Bag Borrow or Steal.

Angel is the Editor-in-Chief and Co-Publisher for ReveNews.com and ReveNews.org.

Angel lives north of Seattle, spending his free time reading up on obscure scientific references made by his wife MGX, while keeping up with a horde of cats and a library of books.

You can find Angel on Twitter @djambazov.

Filed under: Affiliate Marketing + Sounding Off + Taxes
  • http://pandabearmarketing.com/ PandaMarketer

    I agree, I felt like going through the audio stream and wringing his neck! (or at least tackle him off the microphone)

  • Shawn

    Well said Angel..

  • http://microsteph.com Stephanie Lichtenste

    It was so uncalled for and I was in shock. I hope to never meet Marc Braunstein and am happy to have never done business with ShopAtHome. Thanks for summing that up for those who were not able to hear that live.

  • http://affplan.com Todd Farmer

    I normally bite my tongue — or at *least* strive to be diplomatic and civil. Listening to his testimony *against* our industry (for clearly self-serving competitive ends) was just despicable – and I cannot help myself from making a stance against this.

    I said it on twitter, and re-proclaim it here: You're a douchebag and we are not friends, Mr. Shop at Home.

    (In an industry of friends – this kills me to say it.)

  • Jonathan

    I know Rebecca and many people put a lot of time into this and it's too bad they did this and being a Gold PMA member on top of that, this is one of the issues I thought we all would be unified on. But they don't have the best history, old thread from Jangro

    http://www.jangro.com/affiliate-marketing/shopath…

  • http://www.SleepTightInsurance.com Brad

    Just got off the phone with @jeannine_crooks @jgoode and Rebecca from PMA regarding tweets on Shop at Home All three said that Shop At Home is not being portrayed accurately on the twitter #noadtax stream. Please contact them on Twitter for details

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

    Hold on just a minute! Listening to the testimony didn't tell the whole story by far! YOU HAVE IT ALL WRONG!!!

    The political reality that we all experienced over the past two days, and I mean all the affiliates in Colorado who spent 2 solid days walking the halls, making phone calls and showing up to testify: the bill was going to pass – period.

    There is a strong partisan agenda at play, there is nothing anyone could do about it.

    EXCEPT: the legislators heard the voice of the Colorado affiliates – big time. And I mean big time! The affiliates became famous in the capitol building for showing up and making themselves heard, writing letters, sending emails, posting on legislators facebook pages – unbelievable activity.

    And the result? At the 11th hour, the governor, the party leadership, the finance committee and department of revenue all said they'd work on an amendment that would do its best to protect affiliates. The language, negotiation and debate was spearheaded by SHOP AT HOME! They absolutely had every single affiliate in mind!

    Is this amendment perfect? No. And they haven't finished it.

    Do we still want the whole law to go away? Yes.

    Was that even a possibility? No.

    Is it going to give some advertisers confidence to still work with Colorado affiliates? YES!!!

    Is it more complicated than that? COMPLETELY!

    Most of us were at the capitol from 8am until a few minutes ago, so I'm sure several people will update more tomorrow. Please withhold judgment until the entire story can be understood.

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

    I must say that I don't share this opinion.

    Of course we wanted the bill defeated but if you listened to the testimony tonight, the amendments that are proposed and that are pledged to be written in will give us a great deal towards fighting mass cancellations. It is my understanding that there were a lot negotiations that got us to that point… which is a good thing. Testifying before a Senate committee is extremely difficult, and all I can ask of anyone is that they speak honestly and I believe that everyone testifying tonight did so.

    Anyone who worked for us, towards this end, deserves our thanks. I don't feel that the anger towards anyone is deserved tonight – they all fought for us and spent a considerable amount of their time doing so.

  • http://affplan.com Todd Farmer

    Okay, Brian.

    I'll defer to your judgment and give them a second chance. Listening to what happened tonight just made my blood boil in reaction.

    I'll let your level head try to keep mine balanced…

  • http://pandabearmarketing.com/ PandaMarketer

    Well, it just sounded like his testimony was "I'll be okay if this bill passes, so go for it."

    It was even stated by one of the committee that upon hearing his testimony, "there was a wave" of reaction from the affiliates behind him. This means there was visible objections to his words. And words are all we heard over the internet.

    Jen Goode says SAH is okay, so I trust her judgment. It's just really difficult to contain my reaction and feelings. You can measure the reaction on the twittersphere search for hash tag #noadtax.

    My internet connection was intermittent so I did not catch everything. I hope the audio is recorded and available to the public in the future, if not the transcript.

    A word of advice to all affiliates of any size, give out your websites' URL. I wanted to see what they were seeing on Jen's site. Her twitter profile has a link to her blog, not her affiliate site.

    Let me take the time to use this forum to say that I appreciate all that @JGoode, @Jeannie_Crooks and "Ken" had to say tonight.

    These politicians need better education, that is abundantly clear!

    ~Dave

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

    Hi Rebecca, Hi Brian,

    You know I have a lot of respect for both of you. I am glad to hear that SAH put effort toward getting in a more comprehensive amendment to the Senate version of this bill then there was in the House.

    I also get that there is a strong partisan battle going on in Colorado and that it often matters little what's in a bill when it comes to partisan politics. Political realities are not cut and dry and often come at the expense of logic.

    I did not have the full text of the amendments in front of me. I am not sure many have seen them yet. But what concerns me is the tone and nature of Marc's testimony. The battle in Colorado will be repeated elsewhere. What message did Marc's public testimony send?

    Rebecca you yourself asked for cohesion in the message in Colorado. Marc's statement to Senators was that SAH will continue to flourish and provide state tax revenue whether or not this bill passes. That they will not be hurt by the bill. He even stated that although he wouldn't pass the bill himself he couldn't say whether it would hurt small affiliates. How is that on point?

    The committee was obviously responsive to Marc. He holds some influence. What would have been different if a company of their size said they would have been hurt? That the bill would have cost them jobs? Maybe one more Senator's mind would have been changed.

    Now we won't know.

    Instead we now have promised amendments in the bill that will attempt to exempt affiliates further. Is that good thing yes. But as has been repeated before many merchants/advertisers won't look at the body of such legislation. Being risk adverse many will still cut loose affiliates if it is passed. Many affiliates will lose their income and have their livelihood impacted if it is passed. Marc himself even hinted to the fact that it might not be enough to save smaller affiliates. That there would be an "educational" process at best.

    So I ask again why the public support of the bill? How did it serve the industry?

  • Ken O'Donovan

    I was at the hearing. Smaller affiliates in attendance knew what Marc Braunstein was going to say before he said it. We knew the stand he was going to take. We had a discussion about it. We were good with it.

    There were a lot of tired people in that hearing today. Marc Braunstein was one of the people who spent all day yesterday personally lobbying with people (in high places) in the state house.

    Think about the people who put a lot of time, effort, and money into trying to defeat this bill. Marc was one of them.

  • http://www.jgoode.com JGoode

    I appreciate all the love and support this industry has for one another and although I applaud those of you who spoke your view toward the SAH message – please know that Marc and the SAH crew were fantastic – HE IS ON OUR TEAM. There are many to thank for the strides we made today.. we all played a different role and we all played it well. I found myself frequently disheartened at this process as I am a firm believer of never giving up nor giving in and it's that attitude that pushes us forward into greatnesss (or is supposed to).. however, today I learned that sometimes there is compromise to enable a more positive outcome. We don't always get our way the way we want it and sometimes the outcome can be called a win but it still really sucks. Everyone played a big role is making it this far I can't think of a single person who didn't bust their bootay for the progress we've made.

    Sometimes it's not a clear and pretty win – if you all lived in my world, maybe we'd all get milkshakes .. instead we faught hard, they heard us, we're not done yet – and we still got milk shakes (chocolate, if you're curious).

    Angel, thank you for sharing your view. Honesty and open comentary is the best kind of dialog there is!

    Thank you all again, all this support is so inspiring!

  • http://microsteph.com Stephanie Lichtenste

    At the moment of listening to him I was in shock. I respect what Jen and Brian had to say about SAH. I will keep an open mind and listen to Jen about what really went on behind the scenes. I definitely appreciate everyone who put in their time and efforts into this.

  • http://affbook.com Scott Jangro

    Angel, we on the outside looking in can't really know what happened there today. Like Brian said, every affiliate was on the same team there.

    Can you at least feel the cohesion from the folks who were actually there in their comments here?

    Please withhold (further) judgment. I think you'll have written a very different post here if you had the full story.

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

    As Rebecca pointed out the fight in Colorado was/is very complicated. A lot happened behind the scenes, and a lot is still happening. I encourage you to read the amendment before commenting on the amended bill. We will try to get a link to it up here as soon as we can.

    Most importantly we as an industry need to stay together and prepare to fight (and explain the issue) anywhere that this type of legislation is proposed.

  • http://www.lisapicarill.com lisa picarille

    i'll defer to the judgment of others i trust who were there and aware of what SAH had planned to say. however, it must be acknowledged that for those simply listening in and unaware of the planned tactics, the political wrangling, etc. the SAH testimony came off much differently to us. i'm willing to apologize for my comments and thank marc for his participation and help. i also understand that we cannot all be privy to tactics being used. but i also think that the speedy reaction shows the passion and commitment of the affiliate community to rally around this cause and show unified support.

  • Christoph

    I have never been involved in politics other than voting and maybe a (heated) discussion with friends (I usually stay out of it and mind my own business and opinion as political discussions lead nowhere but hate and anger).

    What I saw in person yesterday, was kind of shocking and I feel disgusted with this political game that is being played here in Denver right now. What a waste of resources on all sides.

    The amendments will help a little bit, but they will open the doors in other states and then this issue is going to spread like a wild fire. The amendments are also not enough and I will soon feel that pain when termination notices arrive.

    It was good being there yesterday and putting names and faces together (and probably caused some confusion as well due to another affiliate having the same name). It was good to get some insight into how things works and hey, even got to testify (even though I suck at public speaking … lol (and did not expect to testify really, but felt it was necessary during the discussion)).

    There is more work to do, but it is also time think about that this issue is not going away. Lawmakers follow the money to fill empty koffers. If you fight it off this year, it will come back next year for sure. "we" as an industry could play hardball and do an all or nothing game. Some of us can afford it and some of us cannot. Some people would be out of work (employees), some would have to terminate their businesses, or move out of state. In one way I like that all or nothing approach as lawmakers will go home empty handed (think poker game here), but on the other side we all have to pay our bills and make a living. And as mentioned above, this politics and it is a game of give and take and sometimes we win and sometimes we lose. Also, each state is cooking their own soup and that makes this so unpredictable. This solution might work for some merchants, but not for others. This feels like being part of an experiment and I did not sign up to be a lab rat.

    As an affiliate it pays to diversify ;-)

  • Jonathan

    I know lots of people fought hard and put lots of time in and this isn't against them, it's against the people passing these laws that are hurting their own states but these amendments aren't wins, not even little wins if the end result is affiliates getting dropped.

    I don't think you realize what you might be setting other states up with. They might be reading this and thinking, these bills aren't so bad, if we included these type of amendments. Or you might have one state leaning to defeating it, look over here and say, hey, we can still have this bill, we just have to add in these amendments to protect affiliates, everybody wins. But that's not how things turn out because most merchants still end up dropping affiliates because they're not taking the chance with affiliates doing something that might cause nexus.

    These bills are bad because as evidenced with Rhode Island, it results in a net loss for the state. These bills aren't bringing in new taxes, it's causing people to lose their jobs/businesses and some to move out of state, so you're losing those taxes.

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

    Hi Rebecca,

    To know how Marc's public testimony came off all you have to do is search on Twitter under http://twitter.com/#search?q=%23noadtax%20shop, or under
    http://twitter.com/#search?q=%23noadtax%20marc

    I get that, for the sake of political expediency and maneuvering in order to try and exempt affiliates, further concessions were made. But as has been repeated before (by you as well) many merchants/advertisers won’t look at the body of such legislation. The subpoena powers written into the bill, unconstitutional or not, raise the stake considerably. Being risk adverse, many will still cut loose affiliates if it is passed. Heck, even the local Colorado News gets it: http://tinyurl.com/ydjxn7a

    Tell me Rebecca, does the new amendment contain the phrase: Amazon and Overstock pledge not to terminate Colorado affiliates? Does it contain language guaranteeing, as an example, like Bill Crooks said "Jen Goode was told by Finance Committee that her site would be okay?" If it doesn't then I am still at a loss as to how public support of the bill served the industry?

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

    FYI, an excellent post as usual by Scott Jangro on the matter:
    http://affbook.com/what-really-happened-in-colora…

  • http://www.lisapicarill.com lisa picarille

    angel,

    i believe rebecca is traveling today and has a short (but long-planned) vacation happening over the next few days. so, if she doesn't respond immediately don't take that as a sign she is not addressing your concerns or questions. i'm sure she will get back to you as soon as possible.

    and i agree that once again scott jangro has an excellent post on the topic.

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

    Thanks for the heads up Lisa. I know Rebecca has done a lot of work for the industry. I sincerely hope she is able to disconnect and recharge. Lord knows she deserves it.

    Furthermore I hope this weekend brings some rest to all the industry folks in Colorado and their families (yes even Marc), I know the work has been tremendously difficult.

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

    Angel, I love ya, but you jumped the gun here. We were in a world of politics. We played politics too.

    Coordinated messaging doesn’t mean we all say the same thing. All of us who were there knew what each was going to say before we said it.

    The amendment isn’t completed yet, more revisions are being worked on to clarify some very critical points. I feel uncomfortable with this kind of public discussion until the bill, with the entire and approved amendment has been passed into law.

  • http://www.BestVideoGameRentals.com Pat Maher

    All those who are BLASTING Shop at Home for Turning their backs on "fellow affiliates" are WAY WAY off target.

    I spent 13 LONG hours at the hearings with many other affiliates including Shop at Home and know that they were instrumental in amending HB – 1193 to be more favorable to ALL affiliates. Essentially – They saved are asses!

    If you all knew the facts you would be praising their efforts!!!

  • http://www.adperio.com David Asseoff

    Hello Everyone,

    Marc Braunstein (ShopatHome), Rebecca (PMA), Jeanenne Crooks, Jen Goode, several lobbyists, several local affiliates and the our Adperio team (formerly Memolink) have been sprinting for the past two weeks trying to convince Colorado decision makers (mainly the Democrats) that HB 1193 wasn't going to raise any tax revenue and potentially force many Colorado affiliates to close their doors. Collectively, we met or spoke directly with several media outlets, 65 House Representatives, 35 Senators, employees from the Dept. of Revenue, two top Governor Aides and the Governor himself!

    The amendment that was negotiated directly with leadership only happened because of this incredible team effort. On some days, Marc and others were at the Capitol for 14 hours straight. The effort was superhuman.

    While we all wish Colorado would just see things our way, this was not the political reality. We didn't have the Democrat’s votes, and 7 Lobbyists on our side, who have worked here for a combined 100+ years, confirmed this. In fact, I personally spoke with one of the leading Democratic Senators after the Senate Finance Committee hearing the other night, and he said that we had negotiated a great deal and the Bill was going to pass, no matter what we did. Bottom line–party lines and politics were mostly out of our control.

    In my opinion, our face to face meetings with House Reps and Senators, our powerful grass roots effort and considerable anti-1193 media coverage brought leadership to the table. At least now, with the amendment, Advertisers have a chance to correct any Nexus issues that occur in CO. This positive outcome wouldn't have been possible without Marc Braunstein.

    Testifying in front of 7 Senators is not a fun experience, especially when you’re fighting to save so much and you’re not sure if anyone is listening. I know that after I completed my testimony, I felt there were things I could have said better or in a more convincing way. At the end of the day, we all hopefully do the best we can, even when you’re running on fumes after 14 days of nothing but HB 1193!

    I am confidant most advertisers will continue to do business with all of us in Colorado. I also believe that our unified front and approach will benefit affiliates in states who propose similar legislation at some point in the future. When that happens, you’re going to want Marc Braunstein involved in that fight!

    Thanks to everyone!

    David Asseoff (Adperio)

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

    Hi David,

    Glad someone from the Adperio team posted. Your team has done a lot of work spearheading the fight against this legislation. In fact the amount of work that has been done by everyone involved in this fight is mindboggling.

    Statements from both Adperio and ShopAtHome were given that evening and both represent testimony from relatively large companies. In Adperio's statements the case was clearly laid out that the bill itself was detrimental to Colorado and would indeed hurt affiliates. This is completely unlike Marc’s statement which publicly supported the bill and was unable to support the fact that the bill’s passage would hurt small affiliates.

    Simply because we do not have the votes does not mandate supporting the passage of this type of legislation in any format.

    So I repeat the question that no one seems to want to answer; why the public support of the bill? How did it serve the industry?

  • http://www.sportsmuseums.com Jeannine Crooks

    As someone who's spent the last two weeks working on this issue, meeting with Reps and Senators, testifying and enduring some very long days, I want to respond to your questions – but it isn't time yet.

    The final version of the bill is still undergoing revision. Once everything is finished, we'll be able to offer a great deal of insight into the process. I'll just say it's very different than anything I ever learned in Civics classes.

    I can say this – Marc Braunstein has worked his tush off on behalf of ALL affiliates in Colorado – big and small. He's given freely of his time and resources. So has David Asseoff of Adperio. When the time is right, the full story will emerge. Then I hope all in our industry will send just as many notes of thanks as the other stuff that's been posted.

    I want to add how much we all appreciated knowing that there were so many people across the country cheering us on. We didn't find out until after the final Senate testimony just how many people were listening online – that's probably best, because we were nervous enough as it was. But with all the kind wishes and prayers, now I know why we still had the energy to get passionate about the cause after waiting 11 hours to testify!

  • Holly Eagans

    Angel,

    Your journalism skills are the worst I've seen. Next time a state has to battle this type of legislation, since you are so supportive of affiliates, why don't you get more involved? Show up and see what is really going on. Then hopefully you will get your facts straight and report something that is useful and informative. Are you going to report the outcome? I hope not, I'm sure you'll get that wrong as well.