ReveNews
Questionable Business Practices in Affiliate Marketing Part 278
Update Note: Kris Jones of PepperJam contacted me via email and asked me to correct some of my statements to accurately reflect the known facts. Some of my statements were a misinterpretation of some facts on my part. I corrected the post accordingly and marked my changes for transparency purposes.
I don’t know If 278 is the exact number of questionable business practices in the affiliate marketing industry, but it is probably not too farfetched either.
The latest example is a practice by the largest affiliate network in the United States, namely Commission Junction, and how it deals with potential threats to its business. In this particular instance is the victim the newly launched affiliate network called PepperJam Network, whose founder and CEO, Kris Jones, published on his blog about actions CJ did in response to his network launch.
Commission Junction allegedly black mails advertisers of its network to terminate their business relationship with the network, if they do not terminate their relationship with the PepperJam Network.
Corrected Statement: Commission Junction allegedly black mails advertisers of its network to terminate their existing marketing services business relationship with Pepperjam. CJ gave Pepperjam’s clients an ultimatum - fire Pepperjam immediately or you’ll be kicked off our network. CJ also goes on to offer Pepperjam’s clients the same management services Pepperjam was offering them.
In contradiction to other affiliate networks like LinkShare, does CJ have no “exclusivity clause” in their contracts, which prohibits advertisers to use additional affiliate networks parallel to LinkShare. LinkShare’s exclusivity clause is still cause for debate and the vote is still out that declares it unethical, illegal or perfectly okay. The big difference is also that the LinkShare clause includes any affiliate network, without exceptions. LinkShare also prohibits their advertisers via legal agreement to run an in-house program on the side.
Commission Junction has no problem with advertisers who use other networks such as Performics, any of the numerous CPA networks or run an in-house program in parallel to their program within the CJ network. Excluding one particular network without providing any reasons that would justify singling out an individual player is IMO very questionable.
Addition: Although CJ does not prohibit advertisers to use the PepperJam network in parallel to CJ, does the demand to advertisers to fire their often long time OPM, PepperJam, right after the launch of the PepperJam network, clearly has to do with CJ’s perceived threat of the PepperJam network to their business. CJ had no problem with PepperJam as OPM for CJ clients for several years, until now.
I would also imagine that this violates existing laws and regulations, which are very strong when it comes to singling out a minority without any good reason that would justify this. I am not a lawyer to be able to make the final determination of that, but by gut instincts tell me that there got to be a law against this type of business practice.
My fear is that CJ never made any of those threats in writing and only verbally without any recording made of the conversation. I can say from personal experience that this is typical business practice by Commission Junction. This allows them to say that this never happened and that it must have been a “misunderstanding”, which they sincerely regret. I would ask CJ to acknowledge their demands in writing, but I honestly do not think that they will ever provide you with something like that. It would not be the CJ who I got to know over the years, as an affiliate in their network, affiliate manager of a CJ Access advertiser and blogger who was writing more than once about the issues with CJ and their practices.
The consequences were never pretty, but I also moved away from CJ as much as I could to be able to point out these issues without having to fear CJ’s wrath coming down on me and destroying me professionally.
On another personal note I have to say that I am very disappointed in Kerri Pollard’s response to this (Kerri is the newly appointed General Manager of Commission Junction). I know Kris well enough to believe what he wrote in his blog post about what Kerri told him in person at Affiliate Summit. I also talked to Kerri a few times in person and had a good feeling about her and her ability to change how CJ conducts business. I guess that my good feeling was more based on hope than reality, which I regret.
It is not too late yet to straighten things out and fix what is broken. I wonder if Commission Junction did not realize it yet that this kind of behavior is the biggest threat to their business and not the launch of another network.
I can’t miss this one. Just popping in to get updates in e-mail.
[…] Original post by ReveNews […]
That sucks but why would someone want two networks anyway?
I have nothing but contempt for the way CJ treats people. I learned a long time ago that unless you are making a lot of money for them they will take what little you do have away from you. As such I have as little to do with any company that uses them as I can. While I would never say that CJ has black hat business partners in a way that would allow them to sue me I would have to say my experience was not white hat. I find then to wholly unethical and a bad company to invest one’s time with.
As you can imagine I refuse to use them and several companies with whom they do business. They probably don’t care one bit but I feel morally better for being clean of CJ. If they ever go under I will actually be quite pleased but big bullies like that rarely do.
Shame, but something I will have to live with. The good news of which is I have discovered many better affiliate programs that have been far more profitable than CJ ever were. So I guess I should be thankful.
FYI - I e-mailed Carsten and made a recommendation to clear up a few facts above. I imagine he’ll be doing that shortly.
In short, CJ didn’t tell Pepperjam clients that they couldn’t launch on another network; instead, CJ told them that they had to immediately terminate contractual relations with Pepperjam as it relates to marketing services or the client would be kicked off CJ.
Imagine that you are a relatively small innovative technology firm and you start selling a product or service to your existing clients who also have an existing, contractual relationship with a huge publicly traded company like Microsoft. Microsoft becomes concerned that your innovation poses risk to their market share dominance so Microsoft tells your clients that they need to either immediately break existing contracts with you or Microsoft would refuse to do business with them.
Clearly, Microsoft has much more leverage here than your little ole company. In fact, it’s highly likely that your clients depend on Microsoft so much that they have no choice but to protect their business, which includes firing you and staying with the market leader.
If you are not diversified as a business this situation can put you out of business. For instance, I can name at least a dozen other outsourced affiliate program management (OPM) companies who would be out of business tomorrow if CJ applied the same rules to them that they are applying to Pepperjam. Therefore, if you are an OPM or ever dream of launching your own affiliate network or similar technology, you might want to strongly consider how you might be treated by CJ or any other similar company with unlimited financial resources and power.
You work years to build something (in my case eight years to build the affiliate program management business CJ just crushed) and all of a sudden it’s gone. What do you do with the 20 full-time employees that do nothing but manage programs on CJ - that’s the dilemma Pepperjam has been put in by Commission Junction?
By the way - this so-called David and Goliath scenario is not supposed to happen. There are laws in place to prevent it, but occasionally companies, including Microsoft get away with it and sometimes they don’t.
Normally it takes an incredibly brave company to stand up and say - this isn’t right.
Most people we’ve talked to find CJ’s behavior against Pepperjam to be absurd, heavy-handed, disrespectful, and potentially illegal. Others, like Carsten expresses in this post, just say it’s business as usual for CJ.
As Kerri Pollard said to me during Affiliate Summit: “It’s Just Business.”
I guess it’s up to you as a member of the affiliate marketing community to decide whether this type of business practice is acceptable and for the lawyers to decide if it’s lawful.
For Pepperjam, well…we are just dealing with the fallout of CJ’s actions the best we possibly can.
…As a caveat (or full disclosure in the Calacanisian sense), PJ has been and is a sponsor here at ReveNews. However, that doesn’t reflect on the content here or Carsten’s post and thoughts. Back to your regularly scheduled commenting…
Thanks for pointing out my errors Kris. I updated the post and marked the changes and corrections for transparency reasons.
Sam, thanks for the disclaimer. I didn’t even know/notice that PJ is a sponsor here at RN.
That would also not change anything. I would have made the same post if CJ would be a sponsor here at RN. That’s my disclaimer
Frankly, I’m outraged. As a competitor of Pepperjam and also an admirer of what they have accomplished, I am just totally outraged that CJ would be the least be worried about a brand new network and take such drastic, bullying action! Who’s next? Me-PartnerCentric? Forge? AvantLink? AMWSO? They don’t like something we do, and they tell our clients they can’t work with us?!?!! How many OPMs in the space, including Pepperjam have generated millions in revenues for CJ by proactively running excellent affiliate programs, increasing sales and thereby increasing CJ’s transaction fee revenue?!?!? Yes, PJN is competitive network, BUT folks CJ is a 10 year old global company earning millions a year and owned by a giant conglomerate worth billions, and they are SO worried about Pepperjam they do such a underhanded, aggressive and boneheaded move?
The fact is I’m sure that many if not most of PJ’s clients WILL choose PJN just because who likes to be bullied by a vendor who tells them who they can and cannot work with? Especially if it is not contractually binding! As far as I know CJ still is a non-exclusive network which has been one of the most attractive features for merchants for their entire history!
So, when 30+ of CJ’s clients leave to join the PJN, they just overnight lost all that revenue and helped PJN become successful faster! Not to mention, the top affiliates of any of those top brands will follow the brand, and that means doing business with PJN! This means they will generate lots of transaction fees for who? PJN not CJ!
The boneheaded of this move is SO wrong on so many levels, that whoever orchestrated this fiasco at CJ ought to be fired.
Now I might be worried about how they feel about me making this post, and perhaps try to hurt me in some way, but I have already made my feelings known in no uncertain terms to CJ executives, and I currently still have a good working relationship with them and a preferred agency status.
I can only hope that someone there will see the light, and make whatever amends can be made, though I fear it may be too late to repair the good will damage done between PJ and CJ, and the fallout of disappointment and mistrust from the rest of the affiliate community.
Good luck Kris, Michael, Brock and the whole PJ team. You guys are the “David” and everyone loves an underdog.
This a great topic - business practices in the affiliate community. I’ve never paricipated in this sort of forum before but thought my experience as a former (long time) CJ employee and current client might add some perspective.
To hear Mr. Jones tell it, he’s been done a tremendous wrong. But has anyone looked at how Pepper Jam was able to launch its “next generation” affiliate network? The way I see it, Mr. Jones & Co have tried to turn a decent OPM business into a network play. It’s such a brilliant idea - build your own platorm and then simply migrate the programs you manage and all their affiliates (or at least the high volume ones) and boom, you’ve cut CJ out of the picture, get to keep their fees and have seeded your fledgling network. A brilliant idea with only one problem - PJ needed CJ to stand by while they worked to steal that business. That’s what you call a hole in your business model….
So it turns out that Mr. Jones blundered by not understanding the full value of his CJ relationship to his business and miscalculated how CJ would respond. Had I been in his shoes, I would have asked myself “what if CJ decides they don’t want to do business with me?”. Just seems to me that greed and hubris clouded PJ’s judgement.
And now what is left for Mr. Jones to do? Engage in a bunch of blog fueled fear mongering. Get the OPM community worked up and concerned that they could be next on CJ’s list. The fact is that OPM’s perform a valuable role in the CJ ecosystem and CJ has no interest in harming those partners (CJ doesn’t have enough staff to manage everything themselves). So despite what Mr. Jones might say, OPMs should rest easy as long as they’re being a good parter.
Which brings us back to the title of this post. What can we say about PJ’s business practices? Was PJ really being a good partner to CJ? Did they really have their clients’ best interest at heart as they worked to migrate their business to the PJ network?
The simple answer is no. PJ was interested in CJ’s piece of the pie and is now paying the price for over reaching. And as the old saying goes, hogs get slaughtered.
Alright here is the question.
Is it possible for a network one to tell their publishers (aka affiliates) that they are to stick exclusively to one network. This is extremely hypothetical question. But no one can assure me that it will never happen.
Let say you have a website and feature products on it from LinkShare, CJ, PJ and others. It’s all about money right? So if CJ sees me promoting the products of their merchant along with the products from LinkShare. Can anyone assure me that I will not be kicked out of that network? This of course goes all ways.
Mr. Jessup? What is your take on this?
[…] -Pepperjam / CJ Spat: ReveNews - My Mobile Podcast Feed […]
[…] Pepperjam / CJ Spat: ReveNews - My Mobile Podcast […]
I’m pretty confident that Jim Jessup isn’t a real name, but just in case it is, here’s my response:
Thanks for your comment.
Under no circumstances do I believe it was acceptable for CJ to cold call Pepperjam clients.
I’ve been told by enough people and I myself believe that this situation is CJ’s error, not Pepperjam’s.
I’m not sure how Pepperjam could be considered in the wrong for being more innovative than CJ.
I think most reasonable interpretations of the facts conclude that CJ abused their financial and decision making power as a publicly traded company to thwart competition.
Thanks again fr your comments.
“Did Commission Junction Act Fairly, Break the Law, or Simply Overstep its Power Against Pepperjam?”
Kris, why are you asking that on a blog? Don’t you either have a lawyer(s) or can afford to talk to one, get legal advice? Of course. I’ll tell you how this reads to me. Just pure promotion, nothing else.
Jonathan (Trust) - try telling that to the 20 PJ employees who exclusively manage CJ programs or to the 50 odd clients that CJ ambushed and gave an ultimatum to decide between us or them.
Pepperjam Network has been live for less than two months, our affiliate program management business is eight years old.
This is much, much more than a publicity stunt - that would be easy - this is a nightmare for my company and our clients.
Well, it’s what mom and dad named me but you can believe whatever you want.
I don’t think there’s any error here. CJ may have handled this poorly but ultimately made the right decision for their business. Bummer for you of course.
As for innovation, you’re correct in saying CJ is not pushing the envolope these days. But that said, poaching affiliate relationships from CJ (or any other network) is nothing new either. You folks just attempted it on a grand scale.
BTW, I don’t believe the affiliate blogger crowd can necessarily be expected to produce reasonable interpretations of facts (provided solely by PJ). The only reason I posted is I dislike the fear and distrust mongering that is so common to these forums and wanted to inject a little perspective.
Hi Jim-
Thanks for stopping by and I, for one, am glad that someone is taking an alternative stance to help us all realize the important issues here since CJ hasn’t issued a public statement yet.
However, as publisher of this blog I do take offense to your high and mighty “I dislike the fear and distrust mongering that is so common to these forums” statement. Is that why CJ doesn’t blog?
Come off it.
Seems a little high and mighty to dismiss a respectable (and respectful) site that has been around for 10 years as one of “these forums” doesn’t it?
Other than that, I agree that there are deeper issues here than CJ going after OPM’s.
Sam
Funny Jim - you said, “I’ve never participated in this sort of forum before” in your post above when I called your indentity into question and then in your most recent post you conclude by saying “The only reason I posted is I dislike the fear and distrust mongering that is so common to these forums and wanted to inject a little perspective.”
How is it possible that you “never participated in a forum like this before,” but you “dislike the fear and distrust mongering that is so common to these forums.”
Your opinions can’t be considered anything more than spam.
Jim, It sounds like you might be talking about my post being about “fear and distrust” among OPMs and I take offense to that also. I am a respected and long time participant in the affiliate industry, and have one of the largest and oldest OPM firms out there. My comments aren’t spurred by fear, they are spurred by anger at what I perceive to be a very hostile action taken against a fellow OPM by a company that I also have very close ties to. I am in the know about this matter, and have spoken at length with both PJers and CJers, and feel I have most of the facts at hand and speak with some clarity on how this move affects our community. Suggesting this is a PR stunt by PJ is ridiculous, as it is a major and unexpected attack on their company by a huge company, and one they have helped build in the many years they have been in business. My beef about the whole thing is if you have a partner you have done business with for a long time, and you have a disagreement about how your partner is behaving, you communicate about that issue quickly and concisely. CJ has every right to be concerned about this new network, but in my opinion, you don’t make stealth attacks on their company because you are worried about the competition. You go directly to them, and say hey - this isn’t ok for us, and let’s figure out what to do about it.
In our business, there’s plenty of business for everyone, and why a 2 month old brand new network would be singled out by CJ, a 10 year old global brand, as a threat, is just downright wrong.
That’s what’s at issue here. Both companies (and mine) will undoubtedly survive, but this kind of behavior by a leading company does create a feeling of mistrust by other partners. I have an open line of communication with CJ, and will continue to do business with them on behalf of my clients, but I am very disappointed in how this situation with PJ was handled, and I hope none of you find yourselves in a similar situation because they don’t like something you do.
One last point, it takes YEARS to build a solid network, and just because PJ has a solid OPM business and a solid affiliate-side business doesn’t mean that all they have to do is bingo-presto start a network and populate it with their CJ merchants and voila - success at CJ’s expense. Believe me, I know, I have tried unsuccessfully to launch my own network. It’s a herculean task, and launching is only a 10th of the effort, growing it, maintaining it, innovating it, etc etc, takes alot of effort and hardwork. CJ wasn’t event profitable for at least 5 years, and needed massive venture capital investments to succeed over the years. So to think that overnight PJN would be any kind of threat, a self funded, small network with a few new bells and whistles, to a network the size of CJ, is just naieve. That’s why I think there was plenty of time for a candid discussion with both parties to have taken place that would have produced an equitable decision for both parties, with NO inconvenience to the clients involved, no hostile stealth mode tactics and no loss of revenue for CJ or PJ.
That’s all I’m saying.
Linda Woods, President, PartnerCentric
It’s hard to even discuss an issue like this when there is another side to it. People are giving their opinions left and right on it without having all the information. Rush to judgement. So I have no idea who’s wrong/right and it’s something that’s going to be handled by legal. And it’s very unlikely CJ is going to respond to it out in public, on a blog.
Sam - Apologies. Revenews is a respectable forum. But to be fair, I don’t think you can construe most of these posts as fair or respectful. As for why CJ doesn’t blog, you’d have to ask them but I think the interest in taking on that burden left with Crawford.
Jeff - There’s a difference between particpation and reading. Check in out: http://dictionary.reference.com/browse/participate
Linda - How come you’re not applying the same standard to PJ? Did PJ go to CJ and say “Hey, by the way we’re going to launch a new network and move a bunch of your business over there. Hope you’re ok with that…” Why should CJ be expected to treat PJ any differently than they were treated?
That’s all from me.
[…] the meantime, there is an active discussion over at ReveNews about this […]
what?
Clearly, CJ is in the wrong by letting their anger get ahead of themselves. If you don’t have exclusivity clause, you can’t tell someone to not use the services of another company. It’s bullying and wrong.
However, I have no sympathy Pepperjam. It seems CJ saw PJ’s tactics as parasitic way to take away their clients, then acted on it, although prematurely. (Funny how swiftly the networks are acting when they are the target of parasitic behaviour but not when the affiliates are. )
I thought PJ would take the lawyer-esque direction when something they don’t like happen:
http://forum.abestweb.com/showthread.php?t=66845&highlight=pepperjam
(upon being accused of cookie stuffing on their affiliate site )
I guess they don’t feel as confident this time.
It maybe what Jonathan is suspecting; an unexpected but juicy way to promote their baby network.
Hmmm.
@Trust Completely agree.
As I said on Twitter and on my podcast today (and as Willie Nelson sang), “there must be two sides to every story.” I’d like to hear the other side.
Sam
Think about this from a different angle for a minute. Let’s just say that CJ (Not that this would happen, just giving an example) was managing a company’s affiliate program, and the affiliate program wanted to launch in another network (Let’s hypothetically call it PepperJam). Do you really think that PepperJam would want CJ’s employees managing an affiliate program in their network? Talk about the ability to gather and “borrow” intelligence and affiliates between the networks. I haven’t seen an advertiser contract at CJ, but a term like this may exist…
@Trust / Sam,
You don’t honestly think you’re going to get an honest answer out of Commission Junction - do you?
Any response from CJ will be vetted by lawyers and PR experts - they are part of a multi-billion dollar machine.
With all due respect to CJ - the reason why they took action against us is that we launched a next generation affiliate network that they felt was growing too quickly and generating too much buzz. As a result, they saw our innovation as competition and concluded that they must do something about it - it’s the something and the approach that is totally unacceptable, not the decision.
What I don’t appreciate and where CJ overstepped and potentially broke the law is that they contacted existing Pepperjam clients and demanded that they break contractual relationships with us.
At the same time, which is almost equally unsettling is that Commission Junction didn’t approach Pepperjam or notify us that they were going to take action of any kind, let alone cold calling our clients with very specific demands. That can’t be OK on any level, especially with a strategic partner like Pepperjam and existing CJ advertisers.
Instead, Commission Junction, the very powerful publicly traded leader in affiliate marketing, attempted to squash Pepperjam.
I’m willing to go on record saying that I’m not surprised that CJ is concerned with the growth of Pepperjam Network.
However, the way Kerri Pollard and her team at Commission Junction handled themselves with this situation is unacceptable.
Jim, no offense, but the clients pepperJam is allegedly stealing from CJ, are virtually all CJ Access clients (they wouldn’t need pepperJam as an OPM if they would be a Vantage client).. those clients are the lowest in the food chain at CJ and treated not with the foremost respect and priority. For those clients is CJ a platform that offers certain benefits, which are beyond simple tracking. There is no need to pay a 30% cut for this service alone. Any in-house tracking solution would be more cost effective than that.
If it would be just the tracking, a switch to any platform would be not a problem at all. Most networks offer the same tracking for lower cost as well, if the advertiser prefers a network over an in-house solution for whatever reason.
Your arguments sound nice at a glance, but they don’t hold up if you look at the situation a bit more closely.
CJ did not consider pepperJam the OPM a threatening competition to their CJ Vantage program, didn’t they?
Yes, the pepperJam network is another competition for CJ on a different level, but that does not excuse blackmail as a legitimate business practice. Where I come from is blackmail considered unethical to say the least and illegal to say the worst.
This business practice is what I am complaining about and the reason who I bothered to post about it. Business can be rough, no doubt about that, but by all fierce competition does ethics not have to be thrown out of the window and written off as a casualty of war.
Vlad, regarding your question.
networks could include an exclusivity clause for publishers into their legal agreement, but this would have to be limited to site or a clause that prohibits competing affiliate links from other networks on the same page.
Did you ever read the Google AdSense agreement? Do you use AdSense? If you do, there you have an example of such a exclusivity clause.
Carsten,
I am aware of Google Adsense exclusivity. So my question is this can I have CJ and LinkShare links on the same page?
Sam,
Quote ” “there must be two sides to every story.” I’d like to hear the other side.”
- 2 years ago I would have laughed and said …
- 1 year ago I would have agreed
- today I rather say nothing. One major disappointment is already enough for one day.
Carsten
Vlad,
… yes you can.
Carsten,
You don’t know how much you scared me….lol I just put in one week of work into website where I used the datafeeds from both.
Vlad,
hehehe.. you are doing just fine, unless the networks change their affiliate agreements one day (which is unlikely to happen).
… or they attempt something silly like the CJ LMI again, which would have enabled network “battles” on a publisher page hehe (theoretically).
Kris, you say it isn’t about promotion but in every response, it’s promote, promote, promote.
“they are part of a multi-billion dollar machine.”
Yes, David vs. Goliath, big guy picking on the little guy. Got it.
“As a result, they saw our innovation as competition and concluded that they must do something about it”
Yes, they’re scared of your innovation. What exactly is innovative?
“What I don’t appreciate and where CJ overstepped and potentially broke the law”
Again, get legal advice. Maybe, potentially, why not find out for sure? You have that ability, do it.
Look at the rest just in your one post:
“That can’t be OK on any level, especially with a strategic partner like Pepperjam and existing CJ advertisers.”
“Instead, Commission Junction, the very powerful publicly traded leader in affiliate marketing,”
“I’m willing to go on record saying that I’m not surprised that CJ is concerned with the growth of Pepperjam Network.”
C’mon. Even with your response to Performics. (Fill in the blank) Spoke, (Fill in the blank) Listened. Like Larry pointed out, that’s a template marketing slogan, nothing new. Just more promotion.
Instead of guessing if CJ broke any laws on blogs, get legal advice.
Jonathan,
he is a marketer in flesh and blood, what do you expect, one who is proud of what he does and did as well. Furthermore, I also hear out of the “marketing talk” a pitch for something different than just a network. Did you hear that other pitch too?
p.s. that CJ is concerned is obvious, because there wouldn’t have been a reason for their action if they were not, or would there?
p.s. A lawyer isn’t that quick, especially if you consider what CJ did and how. You can bet a million $ that they had their lawyers look at this first and make recommendation for how to approach this without breaking any law that would stick out like a thumb.
The problem is that this cat and mouse game played in the legal arena does not care what happens to the world around it, which tends not to stand still and wait until the cat and mouse game is over.
This whole situation is not overly surprising. I spoke with a CJ business manager last week notifying him we would be setting up all future affiliate programs with PepperJam instead of CJ.
I have a strong distaste for CJ that has built up over the past nine months. It takes up to two weeks to get phone calls and e-mails returned by them sometimes. Their tech support replies with canned responses that have nothing to do with my questions. Simply put, I’m tired of their piss poor customer service and inept employees. Not saying PepperJam is the best, but anything has got to be better than CJ.
Tyler,
We sincerely appreciate your business and look forward to working with you on Pepperjam Network.
Kris
I am waiting to see if any on besides Sam of the “advisory” board will comment on the issue:
https://www.cj.com/publishers/advisory_board.html
Kris,
Have you looked over your agency contract and advertiser contracts to see if you inadvertently violated any terms? I know it’s not a network exclusivity issue, but they may have terms about who is allowed access to an account.
Just want to re-emphasize an important point that Carsten has brought up, going the legal avenue is going to take time, possibly years. As Kris has mentioned, he has full-time employees on staff and payroll, that he has to pay for now / next week / next month. I don’t begrudge him doing anything and everything he can to apply pressure to CJ and fight back. He’s trying to save a business, so why not utilize every possible avenue available.
Secondly, does CJ have the right to fight back against PJ competition, of course. However, I think the issue is the demand to sever relationships (if this is accurate) with PJ is dirty / bad business. I don’t think you would have any controversy at all if CJ went to their existing clients, and offered a enhanced/cheaper service than what PJ was offering to “win back” or keep the business…but ultimatums to cut or dump just don’t sit very well with me. It’s very nasty. Win through offering a better choice, not through threats, intimidation and ultimatums.
Imagine what a different story we’d have here if CJ had taken the high road….who would have been the bad guy?
Now, as some comments have pointed out, this is “just business.” Something being just business doesn’t make it ethical or “right.” After all, parasiteware, coupon-stuffing, black-hat tricks, etc. are “just business” as well.
Josh,
Thanks for your comments. We looked over all contracts in question very closely. The facts are very clear.
CJ took action against Pepperjam because we launched an innovative network that created positive buzz and started growing quickly because we addressed several of the issues that CJ has failed to address for years, namely (1) poor communication tools, and (2) lack of affiliate transparency. Pepperjam Network addresses both of these shortcomings that are lacking in differing degrees on the other networks.
As I mention in my post on Pepperjamblog - Michael Jones, Pepperjam’s COO / General Counsel and I confronted CJ’s General Manager, Kerri Pollard, and another member of the CJ exec team, David Osmond, last week in Vegas during Affiliate Summit.
I asked Kerri and David point blank why they directed their staff to aggressively contact Pepperjam’s clients and demand that they either terminate managed services relations with Pepperjam or get kicked off CJ. The responses I got, which were acknowledged by both Kerri and David were twofold: (1) Sorry guys, it’s just business, and (2) Commission Junction wants “that” business.
After Michael and I suggested that we found it completely unacceptable and potentially illegal (i.e. tortious inteference of contracts) Kerri and David backed off a bit and asked Michael and I if they (CJ) could consult with their attorneys and call us back later in the day.
We got a call and then met in person later that night (last Tuesday) with Kerri and David. Kerri and David instructed us that CJ would stop cold calling and pressuring our clients for 30 days if if we (Pepperjam) would sign a legal document that would have waived our rights to sue and also disallowed us (Pepperjam) from going public with our story, unless we got Kerri’s personal editorial approval before putting anything out in the public sphere.
Michael and I concluded that the damage was already done. We consulted with our attorneys rejected CJ’s proposal.
Sure enough - CJ got back on the phones and began aggressively soliciting Pepperjam’s clients.
I’m not prepared to say how many clients CJ won / loss and Pepperjam won / loss at the present time; however, I’ll say that is was absolutely humiliating to try to convince our existing clients that they should stay with us, especially when a behemoth company like CJ was aggessively attempting to (no holds barred) convince our clients that they would be better off with CJ managed services and the CJ platform.
Jonathan (Trust) - Pepperjam has been in contact with lawyers since the beginning of this horrible situation and we are well aware of our legal rights. Among other advice, we have been advised that we have a responsibility to protect our business interests.
[…] help but to be a spectator. Just as Affiliate blogs began to calm down over Mr. Mahalo, a new controversy is brewing on the horizon. In fact according to Kris Jones the controversy was taking place during […]
PepperJam really isn’t that Innovative. I’m sorry, but you guys haven’t gone so far above and beyond CJ in my opinion. I know, you are marketing your product, and I use both CJ and PJ, and quite frankly, their interface is about equal to me. Sure, CJ doesn’t innovate as much as they used to, but at the same point, PJ really hasn’t innovated anything either. They copied what other networks have already done and added two new elements to it.
I agree with an above statement that you didn’t think about how CJ would react to the situation when you threatened their business. You are now a competitor to CJ. Why should they help employ your people, that asinine. And furthmore, I don’t think that CJ is afraid of PJ in any way shape or form. I think they are simply protecting their interests and keeping the business they earned separate from their competitors. You can use your marketing tactics to continue to play the victim, but in my opinion, this is nothing but a gimmick. Don’t expect anyone to ever play fair in war, especially when you are the one starting the war, and you were not playing fair either.
Looks like Mike Johnson has arrived in place of Jim Jessup. Where did you say you are from Mike?
Anyway - thanks for your opinion.
I’m wondering what you would have done differently in our situation?
I’m also wondering how you believe we brought this on ourself?
BTW - I just checked our affiliate name database and there is no Mike or Michael Johnson; therefore, I’m not sure your qualified to talk about whether Pepperjam Network (PJN) is innovative or not.
FYI - the two areas we addressed with PJN (1) communication and (2) affiliate transparency remain lacking on the other networks. We also used some Web 2.0 technologies such as AJAX to make the user experience much better.
Unless I’m missing something, the other major networks offer the same or a very similar user experience to what I remember back in 2000. Very little innovation.
Pepperjam Network has exploded with growth since we launched less than 2-months ago.
Everyday we are launching new programs and expanding opportunity for our advertisers and affiliates to make more money.
Thanks again for your opinion.
You are very combative Kris. I am obviously not using my real name and does it matter where I came from?
The bottom line is that I can reach program reps through every major affiliate network, just like yours. In terms of transparency, coming from experience as an affiliate manager and a publisher, neither are that important to me.
I never said your company isn’t growing, and I even said that the other networks have had any major innovations over the last few years. But what I must say about the other networks compared to how you are representing yourself right now, is at least they act professional. I know you are frustrated and upset, but there is no need to come out and attack me and discredit my knowledge of affiliate marketing, which you know nothing about.
Mike,
Sorry about that.
I just find it hard to give your statements any value since you are using an alias and unwilling to reveal who you are. I don’t think that’s unreasonable.
Using an alias should not be allowed and I would recommend that Carsten or the Revenews staff consider not approving comments on such an important matter unless the person making the comment is willing to reveal their name.
For all we know you can work for CJ’s legal or PR team, which of course would be fine, but if you want to participate in the discussion you should reveal your identity.
I’m not claiming that you work for CJ, but I find it hard to value your posts, unless you attach your identity to it.
In terms of acting professional, the gloves came off when CJ aggressively and unprofessionally reached out to dozens of Pepperjam’s clients delivering an ultimatum to break contracts with us or get kicked off CJ.
Reveal your identity and I’d be more than happy to have an open dialogue with you.
“Using an alias should not be allowed and I would recommend that Carsten or the Revenews staff consider not approving comments on such an important matter unless the person making the comment is willing to reveal their name.”
If someone is anonymously trolling or posting defaming comments, I ban their IP. However, I don’t have a problem with anonymity if the person is furthering the conversation or engaging responsibly in a debate.
Well, I am sorry that our conversation will have to end. I won’t reveal my identity for a number of reasons.
I do understand that you need to protect your business. I can respect that. But I also respect CJ for protecting theirs. Like I said, I am a fan of both networks, but I hold no higher allegiance to one or the other.
In the end I feel that you threatened Cj first, and Cj has simply retaliated, all-be-it in a far more aggressive way. In the end, I do feel this is being blown some what out of proportion when you look at the big picture.
Pepperjam fulfills a need that CJ lacks; customer service and care for the affiliates. I can personal attest that CJ WILL demand that you terminate certain relationships they (CJ) don’t like. I have those demands in writing (email), not verbal hearsay. CJ only cares about the Merchants. Am I the largest CJ affiliate? No. Can I touch the six figure annual mark with CJ? Yes. CJ has turned into the Gestapo attempting to control the affiliates. Yet, should you have one easy challenge with a merchant, CJ responds with, “We are sorry you are having difficulty with X merchant, but CJ can not get involved”. However, if a merchant dare have a challenge with me, I would have the CJ police at my place of employment with batons and hand cuffs.
Thank goodness for companies like PJ that can manage the balance between an affiliate and a merchant. CJ is so demanding, I will not even reveal my identity as there would be repercussions from CJ.
Heck, NeverBlue, CX, and the Azoogle’s of the world can’t even return a call or get your application approved for months. PJ had me handled in 1 day. I look forward to getting PJ (and a personal shout out to Mandy at PJ, my rep!) all the business I can. Kris, great job, I was the person who personally approached you after the ASW panel and thanked you for PJ and entering the business.
[…] All this sounds illegal right? Since CJ.com is a Corporation and should abide by certain laws. You can read up more on this from Kris jones blog and from an active discussion at reve news […]
Just to play Devil’s Advocate here, Kris, do you think the comments from “Sledge” should be stricken, too?
“FYI - the two areas we addressed with PJN (1) communication and (2) affiliate transparency remain lacking on the other networks. We also used some Web 2.0 technologies such as AJAX to make the user experience much better.”
Little off topic but I hear this a lot but can someone break that down for me, network by network. Good idea for a blog post, Jangro, Sam, somebody, hint hint
Because I’m seriously trying to figure out what exactly is new.
As far as Web2.0 technologies, other networks are and have been moving forward, sometimes slower than we like but Linkshare is coming with Flex Links/video, Kowabunga has LinkBuilder, Buy.at has the Content Engine, reporting widget for the desktop, Avantlink has all kinds of great tools, SAS has widgets and other tools etc.
Communication - leave out any marketing spin, exactly what do you mean? Are you talking about affiliates being able to contact merchants, merchants being able to contact affiliates etc. First tell me exactly what you mean and then lets actually take a look at each network and see where they’re at.
Affiliate transparency - Specifically what are you talking about? Names, sites etc. of course. Keywords, marketing promotions, how detailed are we talking about etc?
I keep reading about this but have never seen it defined. Need to do that first and then we can compare.
Jonathan,
I am guessing you do not have account with PepperJam?
I think the sky would not fall over your head if you registered and took a look for yourself. There is a huge banner on my blog. Let me make a little money…
Jocking aside. When it comes to communication one huge think that PJ has done is to make it easy for affiliates to contact their merchants. Huge improvement as far as I am concerned.
Yes there are some merchants at CJ that are very easy to reach. But there are numbers of those that do not list any contact info at all. So far I did not see a merchant without contact info on PepperJam.
Innovative communications tools? Transparency? Seriously? C’mon, Kris. You don’t really expect us to believe that over the facts.
Fact: Kris Jones always fails to mention (why??) his company was an AFFILIATE operating within CJ (hence, building itself on the back of CJ advertisers which it now courts DIRECTLY via the network) since 2000. Linda W., cool your jets — there’s no comparison here
Is it any surprise that CJ is angry? Kris is biting the hand that has fed him for so many years.
This whole situation reminds me of how it went down with Jason Wolfe, formerly the CEO of Direct Response Technologies vs. the Harlan brothers of Primary Ads. Airing dirty laundry (whether Jason was right or wrong) in the media and blogosphere just completely backfired on Jason, so not sure Kris would expect his outcome to be any different.
Kris, general comparatives between networks simply come off as marketing spins, unless you back them up with details. So please, tell us why PJ is so innovative.
Shawn,
Yes - I would recommend removing Sledges comment since he / she used an alias.
Jonathan (Trust) - I think it was Sam Harrelson that posted the other day here on Revenews about the interrelationship between communication and transparency. I agree strongly with him on this point, especially as it relates to the development of Pepperjam Network.
In short, if you improve the one (transparency) you naturally set the ball moving in the right direction of the other (communication).
PEPPERJAM NETWORK TRANSPARENCY SYSTEM:
On Pepperjam Network every publisher receives a transparency rating between 1 - 5. The transparency rating system is driven by an algorithm, but I can tell you that the most important factors are disclosure by the publisher and verification by Pepperjam of each publishers basic contact info (i.e., e-mail, telephone, etc.), promotional methods (i.e., PPC / SEO / Direct Linking / Coupon, Blog, etc.), and Web sites (if any) used for affiliate marketing. If the publisher accurately discloses and Pepperjam verifies the above, the publisher will have a transparency rating of two or three. The other two to three points come from a range of automated and manually applied factors, such as proven performance within Pepperjam Network or any Pepperjam managed program, among other factors.
Once the factors above are calculated the publisher is given a transparency score. Less than 5% of Pepperjam Network publishers have a transparency rating of four or five. Publishers with a four or five are automatically entitled to exclusive private offers and incentives from participating advertisers.
Most of Pepperjam Network’s publisher base, the other 95%, have the ability to reach out to a Pepperjam representative about learning how they can increase their transparency score. The goal is to get as many publishers as possible to full, or close to full transparency.
NOTE: We do not ask, nor do we disclose sensitive publisher information to advertisers. This includes non-disclosure of sensitive publisher keyword information (i.e., SID’s), referral traffic, traffic sources, and tax ID.
PEPPERJAM NETWORK COMMUNICATION SYSTEM:
Unlike any other network I’m aware of, Pepperjam Network offers ALL advertisers access to full contact information for joined and unjoined publishers. We also have a “recruit partners” tool that allows advertisers to push out offers to any publisher within the Network. Of course, the publisher can accept or reject the offer, ask for a higher offer, delete the offer, etc.
Since part of the transparency rating process is to verify contact information and disclosure of promotional methods, Pepperjam Network advertisers have a high level of confidence that the information provided by the publisher is accurate and reliable. Clearly, the higher the transparency score the more confidence the avertiser is likely to have.
The basis for the Pepperjam communication system is our transparency rating system. As I mentioned above, advertisers also have the ability to recruit joined and non-joined publishers. At the same time, we require all advertisers to disclose detailed information about their program, including contact information about the affiliate manager (i.e. direct e-mail, phone #, etc.), terms and conditions, etc.
Aside from providing the level of detail that we do for all advertisers and publishers we also offer a technology we call Pepperjam Chat.
In short, Pepperjam Chat is a chat module that allows publishers and advertisers to chat in real-time, thereby providing a reliable communication system to build stronger, more profitable partnerships.
To the best of my knowledge, Pepperjam Chat is the only integrated chat technology available on any major affiliate network. Correct me if I’m wrong. We’ve been getting incredibly powerful reviews about making Pepperjam Chat available to publishers and advertisers as a powerful, integrated communication tool.
Instead of an affiliate manager / publisher sending a detailed e-mail to a current or prospective publisher / advertiser, only to go unanswered or returned-to-sender, Pepperjam Chat allows our partners to take action in real-time, which has many benefits across the board. Of course, if the publisher or advertiser does not want to be bothered, they simply set the chat module to “offline.”
So Jonathan (Trust), between our transparency system, which requires full disclosure and verification of critical information related to better and more effective communication, along with Pepperjam Chat, we feel that Pepperjam Network has made considerable progress in providing publishers and advertisers with better communication tools and unfettered transparency.
Thanks for the question and taking the time to listen.
Kris
[…] Pepperjam / CJ Spat: […]
Pepper Whaaa Network?
Quit whining. Get aggressive, win. Or fail. Just stop whining.
[…] Pepperjam / CJ Spat: ReveNews - Jangro’s […]
Vlad, I had a long post but the short version is, I have hundreds of CJ merchants on my site for many years now and for the most part have no problem contacting them. Most have email contact in the merchant details and in affiliate newsletters they send out. Some also put in their phone numbers and some I have on IM.
And with the whole PJ vs. CJ deal. Wanting to become a full fledged affiliate network is basically jumping in a swimming pool full of sharks. You can’t cry don’t eat me, don’t eat me. CJ, Performics, Linkshare are big enough, then look who they have in their corner, which you touched on above. ValueClick, Rakuten, Google, big players. If you go from managing programs for a lot of CJ merchants to a direct competitor (and still managing programs), they consider you possible competition and they’re going to get at you, that should be expected. Can agree or disagree/argue on the tactics, the legality of them etc but that’s something legal will have to work out and again, we don’t have all the info and probably never will out in public. So I can’t make a judgement on it without having all the facts.
And hopefully somebody does a blog post comparing the networks. The facts, no fluff. Lots of ways to compare them but with recent posts, I would focus on Transparency, Communication, Tools. Would have CJ, LS, Performics, PepperJam, Avantlink, Buy.at, SAS, in that comparison.
Thanks for your post Kris. My last post was posted about the same time as yours.
@Trust Working on that comparative post now. Will be pretty with graphics. Should be up later tonight.
Thanks for the challenge!
just pinging to stay in the loop, no comment..
Readers,
I want to sincerely thank each of you for your comments over the last two days.
This has been a very difficult time for Pepperjam; however, we are confident that we will find the fortitude to come out of this situation stronger and more innovative than ever.
Pepperjam Network speaks for itself.
I’m hoping that those of you that haven’t given it a try will at least test it and then share your experiences.
For those of you that are already part of Pepperjam Nework thank you! I encourage you also to share your experiences.
As for existing Pepperjam Network affiliates that are in Pepperjam managed programs that have decided to migrate from Commission Junction to Pepperjam Network we appreciate your support during this transition.
Something is not properly configured yet regarding the comments. I should get email notifications as the author of the post with the comment, the IP, name, URL and email used for each comment posted and administrative links to take action. This is not the case and I don’t know if Sam gets any or not (I will clarify that).
I leave the anonymous comments active for now and for the record, the IP and date stamp was logged for each comment.
I encourage everybody who wants to comment to this post to use his real name and reveal his relationship to any of the involved parties, if there is any. It was brought to my attention for example, that “Jim Jessup” actually was an account manager at Commission Junction who now works for Yahoo! as director of affiliate marketing. I don’t know if the Jim Jessup who posted here is actually that same person or just an impersonator.
I also advice people to be cautious about what they state here in public, because I am sure that anything that was said here might be used in court, if it should come to that.
Casten-
I do get updates of every comment and if the person leaves an anonymous username, I check their IP. Often times an anony commenter will have posted here before under their real name, so it’s not rocket science.
However, it has always been (and will continue to be) RN policy to facilitate conversation in a responsible manner. That means allowing for anony comments if it is fruitful for the convo and that person wishes (or is mandated) to protect their actual identity. Most reputable blogs adhere to that dictum.
I will agree that we encourage people to post under their actual identity. However, that’s not always possible given the nature of business.
Sam
Sam, We are on the same page when it comes to anonymous comments. Just in case that you misinterpreted my previous statement.
Since I did not get any notification (I sent you another email) did I had to catch up with some of the comments a bit delayed and wasn’t able to read all of them thoroughly before I made my comment, which I made due to the urgency that I felt to do so. I knew that I won’t be able to get back to it right way, because of some appointments. .. That was what I meant with “for now” :). Just a clarification hehe.
I think this whole situation is a bit sad. It’s a shame to see two partners act in a seemingly deplorable manner towards one another. I don’t think we’ll ever get to hear an answer from CJ, but seeing as Kris seems to be responding well to these comments I would like to ask a simple question that none of you have managed to bring up:
WHAT DID YOU THINK WOULD HAPPEN?
Your obviously a smart business man - you’ve managed to build a great company and your network does have some innovations that hopefully will help shape affiliate marketing.
That being said there is absolutely no way you were daft enough to think CJ wouldn’t react to you launching a competing network while still having access to proprietary information within their systems.
I really don’t think this has anything to do with being scared of competition - Pepperjam has some nice features but it is going to take years of development to even be on the same playing field as ShareASale.
You pissed CJ off by contacting their publishers and advertisers using their internal tools, which violates their agreements, hence the termination. If a LinkShare rep set up a publisher account and started messaging CJ’s advertisers, the same termination would have happened.
While I do agree with you that the tactics used by CJ to contact your clients was harsh, you drew first blood and started this whole fiasco.
So back to the question, what did you think would happen? Were you really expecting CJ to sit idly by while you tried to take their clients and internal information?
Ryan,
Thanks for your comment.
I sincerely understand CJ’s concern about Pepperjam launching a network, especially one that purports to address some of the shortcomings of CJ and others.
However, the fact that CJ acted against Pepperjam by aggressively contacting Pepperjam clients with ultimatums to break existing contracts with Pepperjam is not only unacceptable, but potentially illegal.
That is the issue here.
Another issue is whether a publicly traded company with the financial and decision making power of CJ is allowed to thwart competition the way they’ve attempted to thwart Pepperjam.
We launched Pepperjam Network less than two months ago. I understand that we launched strong, but CJ is a 10-year old company that in 2007 generated nearly $500 million.
The idea that we were using CJ’s internal tools to contact clients is absolutely false and that is not the reason CJ had a tiff with Pepperjam.
Furthermore, as an outsourced affiliate program manager, Pepperjam launched its first program in the year 2000, nearly eight (8) years ago. Over the years we’ve managed 75 odd programs on multiple networks, including Commission Junction, Linkshare, and Performics, traveled and participated at countless conferences, and built transparent relationships with thousands of affiliates on multiple platforms.
BTW - This whole idea that any one network “owns” the affiliate (or advertisers for that matter) is garbage - I’m not saying you suggest this, but I am suggesting that CJ and the other networks act as if they own the affiliates that do business on their network - I absolutely disagree with this and will go on record saying that this is yet another shortcoming of the other major networks compared to Pepperjam Network. That’s why we aren’t afraid to disclose information about affiliates who do business on Pepperjam Network to ALL our advertisers (see my post above RE: communication / transparency).
The fact that you suggest we violated any agreement we had with CJ is false. Since this incident occurred, Pepperjam has met in-person (in Vegas) and has spoken on the phone with CJ execs and CJ attorneys several times. The reason for CJ taking action has been repeated several times - they see us as a threat to their dominance (i.e. “we want that business.”). At no point did CJ claim that we violated any agreements. To the contrary, it is clear and obvious that CJ violated the agreements of each and every one of thier avdertisers that were using Pepperjam to manage their program when they gave the advertiser an ultimatum (CJ or PJ). At the same time, CJ interfered with separate contracts between PJ and our clients.
Again, I’m not trying to deny that CJ had reason to reach out to Pepperjam and express concern; however, they never reached out to express concern. Instead, they ambushed Pepperjam clients, which is unacceptable, especailly considering they are part of a publicly traded company and therefore governed by antitrust laws.
***************
Same playing field as ShareASale? Hmmmmm. I’ve never logged into the SAS interface in the eight years I’ve been in affiliate marketing and Pepperjam does not see them as a competitor.
Pepperjam is a full-service internet marketing agency that recently launched an affiliate network - Pepperjam was a logical outgrowth of our existing clients base of many of the top names in e-commerce.
My understanding is that SAS is soley a network so the comparison is a bit off, plus we have a much different clientele.
Pepperjam’s agency business drives and supports the rapid growth of Pepperjam Network, not the other way around. That makes us unique to SAS.
I know Brian Littleton and I respect him and find him very smart and personable. However, PJ and SAS rarely if ever compete for the same business because we target a different client base.
That being said - I’m sure the SAS platform is solid and wish Brian and his talented team the absolute best.
Please forgive me for not using my real name, as a sucessful publisher, I plan on being ongoing partners of both companies and would prefer to leave my name out for now.
Question: Can CJ ask PJ partners to choose a side?
Answer: I think so, these merchants had a client relationship with CJ and CJ has a right to contact them and tell them whatever they want. If the merchants have a contractual relationship with PJ, then it is their responsibility to determine what their rights are regarding that contract and make a business / legal decision as to what choices they have. If CJ’s contract with the merchant gives them the right to terminate the relationship, then that’s it.
Question: Did CJ overstep their bounds?
Answer: I think not. I think CJ, as a public company has a fiduciary responsibility to protect their business and not to just allow a competing network to poach their merchants, which is obviously what PJ had in mind for the long term.
Question: Should PJ have seen this coming?
Answer: Yes, the same basic situation played out in 2005 with Azoogle, it should come as no surprise.
Question: If PJ should have seen this coming, is tihs just not the timing PJ wanted, or just a PR opportunity?
Answer: I think perhaps it is.
Question: Is PJN the be all end all of affiliate networks?
Answer: No, not yet. Although PJ has created some nifty communications tools, they still lack some of the basic functionality of the big players. It’s a good start, and an ambitious goal, and I wish them nothing but the best of luck, but they still have a long way to go for their technology to match their hype. Additionally, a network is only as good as the merchants and affiliates participating, so that will be the toughest challenge.
Good luck guys! Stop wasting your time bitching about what CJ has done to you, and use your nimbleness to continue to innovate and win customers. That is the only path to success in the space.
I hope to work with both CJ and PJ, and look forward to watching both the networks grow and innovate.
Unless I missed it, there is no