The BHOs Have Won: Ebates Dines On FatWallet And Its Golden Rep
What do you do when one of the companies you trust least buys one of the companies you trust most? That scenario happened for me today as news came Ebates bought FatWallet. For affiliate industry advocates this news is simply worse than a kick in the gut. For diehards it is the industry’s equivalent of Greedo firing first.
A Black Spot
Once you develop a bad reputation it can be hard to shake.Ebates has not had any high profile legal issues or backlash within the industry for a while. Still they’ve had a hard time shaking the reputation they earned from developing Mo Money Maker. The sites ultra-aggressive “rebate reminder” software is considered a Browser Helper Object (BHO); such objects are often associated with spyware/parasiteware since they are usually bundled with innocuous products the consumer wants. In Ebates’ case, along with other tactics, they used to bundle it with screensavers.
Although Ebates has cleaned up, due in part to industry pressure, and is technically in compliance within the terms of affiliate networks like Commission Junction, the reputation they earned still persists. Now, by no means is Ebates remotely close to being the worst player in the space. But it is telling that ABestWeb, the largest affiliate marketing community, still maintains a forum for Ebates under the inauspicious headings of Parasiteware and Suspicious Activity.
By comparison FatWallet and founder Tim Storm, have enjoyed a stellar reputation. They’ve been embraced by networks, merchants, and publishers alike as a winning model. FatWallet even enjoyed recognition outside the industry being recognized as one of the 50 Most Engaged Workplaces in the United States. Their reputation was so bulletproof that when they announced a forthcoming toolbar, something most advocates would bristle at, they went by unscathed. In fact, when affiliate network ShareASale decided to open up the debate on allowing toolbars, the fact that FatWallet had one was used as an argument as to why the technology might be okay.
So why sell a successful company with such a golden reputation? Two reasons:
- The recent nexus tax legislation in Illinois hurt FatWallet and forced it to move out of state.
- Increase in industry competition, specifically due to WhaleShark Media’s recent buying spree. The fact that Ebates is using this opportunity to launch of Performance Marketing Brands is a sure sign they are gearing up against WhaleShark. Combine that with the rise of the daily deal sites (Groupon, LivingSocial, etc.), competition for merchant’s offering and budgets is fiercer than ever.
Tim even states in the acquisition announcement that â€œshoppers are bombarded with an overwhelming number of coupon codes, deals and sales.â€ Staying competitive was obviously key to FatWallet’s decision to sell.
The Good Guys Lost
Since I began writing this piece, I’ve had Leonard Cohen’s song Everybody Knows in my head. It’s an appropriately jaded song for such a post.
Over the last two years there has been a decrease in industry advocacy around what constitutes an ethically acceptable affiliate marketing business model. Some would say that because the industry has cleaned up the need has lessened. That might be true, but I think rather than really cleaning up by making the tough decisions, the industry has simply become more compliant out of fear of legal repercussions. The success of openly blackhat forums like WickedFire seems to testify to that.
Some say that many of the advocates have simply stopped speaking up for various reasons: they’re tired of being marginalized; they’re tired of the networks being so slow to listen; they’re tired of bad behavior being rewarded. Whatever the case, when controversially outspoken industry advocate Haiko de Poel Jr. sold ABestWeb there is no doubt that the volume of advocate activity dropped sharply.
Ultimately I don’t have the energy to begrudge Ebates’ success or their acquisition of FatWallet. Part of me just says, â€œThat’s how it goes…and everybody knows.â€
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.