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“Life is an Occasion, Rise to It.” – Dustin Hoffman in Mr. Magorium’s Wonder Emporium

 ( The opinions expressed here are strictly are those of the author and are not in anyway endorsed or promoted by any relation, acquaintance or employer)

Chris Brogan, Keynote at ASE09

Chris Brogan, Keynote at ASE09

 As an  attendee at a recent Affiliate Advertising conference I  found myself motivated by the speeches, yet dismayed by the situation the affiliate  industry is in.  Like most conferences, this conference did a  pretty good of providing you with “go forth” motivational messages  and tools for what to do next, but it is the attendees who need to bring it on home and practice it. 

The messages about trust, personal PR, building your own brand, social medias future role, weathering the current economy, etc.  were all there and for the most part delivered on target.  Those are what I gathered of the themes of the panels and keynotes, but as I looked around I could see there is something missing at the day-to-day level and that in order for these messages to thrive, there needs to be more directness in not only what those messages were, but who is delivering them.

We had two keynotes delivered at our affiliate conference.  Filter through them and you can see the impetus, but wonder where the practice will be.  You can watch the keynote videos here:

Peter Shankman:  http://www.ustream.tv/recorded/1965661

Chris Brogan & Julien Smith: http://www.ustream.tv/recorded/1960635

Peter Shankman, 2nd day keynote at ASE09

Peter Shankman, 2nd day keynote at ASE09

When you combine these two speeches with the keynote delivered by Gary Vaynerchuk of Wine Library TV from the Winter Conference, you can begin to see where the transformation needs to begin.  Gary said it best when he said, “Affiliate marketing is hard work, and those in the industry are the hardest working people out there.  They are the Rocky’s of the advertising world.  They drink raw eggs and do push ups on rocks before getting on their computers in the morning”.  Armed with Gary’s motivational speech resonating in my ears, and refueled by the two keynotes at this latest conference I feel there are a few things that need to be revisited as we get back to basics.

1.  Merchants: Know your salesforce (affiliates).  Be a face for them, and not just a brand.  These are your hardest working employees.

2.  Affiliates: Know your merchant industries.  Don’t just sign up for a program without truly knowing the product and industry you are working in.  Focus on the title of being a top salesperson, not a hired gun.

3. Affiliates: Be honest to your followers.  Don’t give them something unless you truly think it might benefit them and not simply because it gives you a high commission.  Trust is something you earn, not something you buy.

 Having attended these conferences since 1998 (Many consider the online affiliate business to have truly started when Amazon launched their program in 1996) I’ve seen the birth, the growth, and now I think we need to begin to see the disintermediation or at least a reaching out across the divide by merchants and affiliates.  Back in 1998, the panels featured online merchants such as Borders, Barnes & Noble, Sears, Target and Amazon on panels with other merchants hanging on their every word and affiliates clamoring to figuring out how to market with them.   Harking back to the theme of trust, big named brands are ones that people know and trust.  Depending upon who you are, trust comes in different ways.  For those big brands you know that they have real products and that there are real people, buildings, and business practices behind them. When buying products from Bestbuy.com, you know there are real stores and places to go when you need help.  Would you as an affiliate tell your audience to buy products from Cheapcameras.com over BestBuy.com? 

Sadly, I only saw Ticketmaster, Amazon and eBay as the major brand retailers with a booth.  If you wanted to talk to gap.com you needed to talk to Commission Junction (CJ).  I’m sure CJ didn’t have anyone there who could help affiliates understand this coming season’s new fashion trends.  That’s not CJ’s fault.  Same if you wanted to talk to iTunes.   They would rely on Linkshare to spread the word about new releases this Fall?  That is a mistake on the side of the merchant for relying on the networks to get the message out. 

Social Networks are expanding and decentralizing the world of affiliate marketing with more new affiliates selling online every day.  As a merchant, you HAVE to meet these people at the door.  According to Shawn Collins of Affiliatesummit.com, there were more affiliates at this eastern conference than ever before.  With the economy in flux and many unemployed, there are people turning to the industry for extra income.  I met one woman who has a family plumbing business which is suffering with the lack of new housing developments.  She decided to create a website fueled by affiliate referral fees.  Every day I checked in with her and by the last day she said it was too hard to filter and there were so many companies she had never heard of.  I told her to go with what she knew, what she’d be comfortable talking about with other people, and  to experiment without spending a lot of money.  By the end she decided to go with the Amazon program selling books in a niche topic area that she knew of, Home Improvement and would focus it in her local area.  She had met with the Amazon reps and felt comfortable with them, so this was not much of a stretch for her.

The core of affiliate marketing are the merchants and the affiliates.  Since this online industry started, new role titles such as advertiser, network, agency, and publisher have been all added to the mix.  These are all great, but what is missing is the interactivity between merchants and the affiliates.  In fact, at these conferences, you often see networks speaking to the affiliates about the merchants andvice versa.  As a result, many large brand merchants choose to let the networks speak to the affiliates.  As my current network, Buyat.com, can tell you, the ticket business is a lot more complex than it sounds.  They’ve probably learned more than they ever cared to know, but understand how Ticketmaster might be the better party to answer a lot of these questions.

Over the last decade, Networks (Linkshare, CJ, Google (nee Performics)) have added much value to the industry and fueled the growth to what the industry is today and will continue to shape its future in some way.  They add additional products and services that allow them to manage aspects of the affiliate business beyond traditional tracking and reporting.  Management services such as widgets, feeds, affiliate recruiting, and servicing are all value added services that have helped to  make the online affiliate marketing industry become much more prevalent.  These are all important parts of the affiliate puzzle, but in the end, the best merchant andaffiliate relationships are the direct ones.   Affiliates seem to be using these services as a proxy for getting to know what it takes to become a successful affiliate.  They are forgetting the human aspect.  Would you ever work for someone you didn’t know very well or sell a product to friends that might not be around tomorrow?

 

Message for the Merchants

As a merchant, the best relationships I’ve had are ones where I’ve worked closely with the affiliate to create a unique online experience.  I often heard affiliates say that their network knows nothing about the merchant that they are representing and that they have never talked to a representative from that merchant organization.  One affiliate at the conference told me that they felt more like an outsourced consultant rather than a field marketing and sales representative.  That isn’t good (and this particular affiliate is pretty important if you ask me).  Affiliates should be treated like regional sales people and the affiliate manager from the company should be the leader of the external sales force.  This means they are responsible for training and communication with this group.  I will speak only about my current program so as not to defame others, but I know that I have to go through a thorough education process to help people understand why ticket commissions are the way they are.  These days most affiliates are all looking at who offers the highest commissions and not about what it is exactly they are selling.  Someone might say they could earn $50 for the sale of some insurance product for a lead versus only $2 for selling a ticket to a Beyonce concert, but they need to know the difference in the effort to sell one vs the other.  They need to understand conversion rates, uniqueness/scarcity of product, and the likelihood the consumer will have a good experience with a known name brand product over one they’d never heard of.  Yes, brands = trust and to Chris Brogan’s point, they are Trust Agents.

It doesn’t mean that being a big brand you can’t have an individual identity.  Look at Frank of @comcastcares on Twitter as a good example.  He has personalized the Comcast service.  So when people who are upset with Comcast go online they know that Frank is just a person who is trying to help and he works to make that experience better.  He puts a face to that persson on the other end of the message.  Also try Dick’s Sporting Goods CMO, Jeff Hennion who provides discounts online (@dickssportcmo on Twitter).  So those are cases of a traditional brands  reaching out and getting personal.  On the other hand Tony Hsieh, the CEO of Zappos, really put his own name out there to promote Zappos into a trust brand over other lesser known shoe sales companies like Shoebuy.com and shoes.com.  There is nothing new here.  We’ve seen this for a long time in traditional advertising.  Both trusted celebrity endorsements as well as the founders lend their personasto connect with the consumer.  Arnold Palmer was the face of Pennzoil for years, Steve Jobs is the man behind Apple innovation, Jared is the face behind Subway ads, and all the faces of Blue Shirt Nation (the Best Buy staff)  have developed a reputation for knowledge about products.  Even if you can’t talk to these people directly, their persona makes the brand come to life.  Last night I had an interaction with a woman on Twitter who wasn’t happy.  When I responded to her via our twitter account in a direct message, she was not only shocked that Ticketmaster had a voice, but that we were funny (I made a reference to a Kelly Clarkson song knowing that she was a Kelly Clarkson fan by saying “Life would suck without you”).  She told everyone she could on Twitter that our brand had won brownie points with her.  It turns out that she is also an affiliate which has been part of my mantra for merchants:  “Affiliates are your best customers”.  We also know the customer is always king.   If you want to work well with ShoppingBargains.com, you don’t use your network.  You work closely with Michael Allen, but first you have to build a personal brand relationship with him that leads to trust.

Edelman, one of the largest PR firms in the country, recently came out with a mid-year study on Trust in Brands.  The findings were pretty obvious, but merchants have a chance to change this:

 

What can the Affiliate do?

If you are new to the affiliate game or maybe think you don’t know the inner workings of your current merchant programs, make sure you understand the business.  Shoot off an email to your merchant and ask them for some good sources of information about their industry and what would be a good example of an affiliate that does well.   Becoming an affiliate is not all about the biggest commissions.  This isn’t about instant success or overnight riches.  As Gary Vaynerchuk says, “It is hard work”. 

Get to know your merchant business.  Don’t just pick up a pamphlet and take it for granted.  Don’ t just go with the numbers promised to you.  This isn’t a get rich quick scheme.    This is a business remember?  I often see new affiliates starstruck by the big numbers: High percentage commissions, promises of strong clicks, high conversion rates, and high lead fees.  Later they find that while those numbers might be real for them, the actual transactions are few and far between.  Affiliates get a quick lesson in ROI and humility. People spend lots of money buying keywords on search engines and run out of money in days.   I often tell people 20% of nothing is nothing, but 3% of $100 times 50 transactions can get you a nice dinner.   Yes I can tell you stories of the movie nut college who was in my program at Reel.com who earned $15k/month pushing potty training videos to moms all over the web (Potty Training for Him outsold Potty Training for Her in case you are interested).  But he had a secret.  His parents were a pediatrician and a pre-school teacher.  He was a video nut kid, but really focused on educational videos.  Sure he sold a few copies of Titanic, but who didn’t.  I had other affiliates who knew the release dates of every movie on DVD for sale or rental and were all over our site before our content people could announce it on our home page listings.  They would even tell us when there were mistakes on our site.  I had another affiliate tell me how low my rates were compared to another retailer and I told them that as a car salesperson in the real world, you’d get more for selling a new car over a used car, and you’d get more for selling a Porsche than a Honda.  Why should this be different in the online world.   Every product has a different audience, a different purchase cycle, different margins and a different value to the consumer.  Remember, you have to act like the key salesperson for your boss (the merchant).  Let them know you understand their business or at least want to know more.

Yesterday I was sent an tweet by the blog, Internet Marketing Review 101, in which they explained affiliate marketing as someone accidentally coming across your ad.  There is no accident in the online marketing world anymore.  Recommendations and promotions are highly targeted and when you send someone to a merchant, it is done with a purpose.  Would you tell your grandmother to go to the corner of 42nd Street in New York and buy a diamond necklace from a street vendor in a raincoat who promises you the same thing as Tiffany’s for $200 less  but with no service or warranties?  I don’t think so, unless you no longer want to inherit her estate.   There is no accidental recommendation there.  The article went on to speak about how the key to success was finding the right ad networks to use.  I almost choked on my spring roll (warning: Do not eat lunch and read Twitter SPAM at the same time).  I will not say this again.  Affiliate marketing is not about the commissions you earn, but the number of transactions and long-lasting relationships you build.  Its not just about eyeballs (impressions in the online world).  A friend who runs a dating site said that his company only succeeds when they make a connection between two people and  that connection lasts more than 2 dates.  It isn’t about how many possible profiles that individual looks at before choosing one.  Good matchmakers/marketers build relationships that last because they know their business.

Last, once you build trust with your merchants by showing them you are knowledgeable, then build that trust with your customer base.   When I looked at the marketing sheets at the conference I saw merchants promoting their programs by leading with their rates.  That hardly is the way affiliates will sell products.  You need to go out and examine these merchants for yourself.  You need to be able to look these people in the eye and tell them you gave them the very best you could.  Novice affiliates will often build their followers through friends and family who spread the word.  Can you feel comfortable when your mother in law tells you she followed a link from your Facebook page and that  she got scammed, yet you have that $100 in your pocket for the lead you provided?  Don’t you want people coming back to you for more?  Gary Vaynerchuk isn’t going to recommend wine that he doesn’t like or thinks that you won’t like.  That is why people follow him!  He’s trustworthy or as Chris Brogan says, he’s a Trust Agent (caveat: living in San Francisco near the Napa Wine Country and as former Board Member of the Northern California  American Institute of Wine and Food, I don’t follow Gary personally for wine recommendations, just his entertainment factor).

 

Summary

This is an important time in the online marketing world and the affiliate industry has a chance to bump  up its value in the advertising food chain.  Networks and Agencies are providing new tools and programs for the merchants and affiliates, but the fact is that they cannot do it alone and cannot act as a proxy one to one relationship between a merchant and an affiliate.  The world is becoming one big salesforce and we all know that the best salesforce is the most educated one.  In the new world of decentralized social media the best salesforce is also the most trusted one.

There are two lines of relationships that need to be reinforced:  The one between the merchant and the affiliate and the other between the affiliate and the consumer.  Okay, lets get text book here.  This is in any business Marketing 101 class  you might have taken and again in any Brand Management MBA course, but it has some application here to help the merchant and affiliate see eye to eye.  They need to go over the Four Ps of marketing together: Product, Placement, Price and Promotion.  If you are an affiliate and don’t understand the dynamics of these four keys of what you are selling for your efforts, then call your merchant today.  And if you are a merchant and have not put out materials to educate your associates on these points, publish it now.  These are just some basic points to cover in your relationship amongst others but they will more than likely improve your understanding of each other.

Now for the Affiliate and the consumer relationship the text book answer is the Four C’s of Marketing (Convenience, Cost, Consumer Needs andCommunication) which are the consumer oriented aspects of marketing.  You need to communicate clearly with your audience to build that trust in today’s world and you have to provide some or all of the other threes C’s to your audience.

I know those last thoughts sound basic, but isn’t that what we want or need?  We need to get back to the basics.  There might have been over 3K people at the last Affiliate Summit but in my mind there should have been 10K.  Everyone needs to go.  Everyone, merchants and affiliates alike, needs to be at the next gathering and talk openly and freely about how they can help each other.  We need to see merchants and affiliates hugging in the aisles and maybe even see a few Karaoke duets.

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