Half the money I spend on advertising is wasted, and the problem is I do not know which half
Lord Leverhulme 1851-1925, British founder of Unilever and philanthropist
I was recently asked to recap my thoughts on this past Affiliate Summit for colleagues in my Company as many are new to the business and we are going through a reogranization . It was pretty remedial and I wished I could have elaborated more. The industry has come a long way but it still has a long way to go. The good thing is that it has been two months, so nobody will read this anyway.
When I posted before I left for the annual Affiliate Summit, I had lots of thoughts about the industry and its direction. And while the Affiliate Summit gave me many more things to ponder, I think many of the assumptions I had going in were answered or at least became a little more clear to me. I have to say that I probably find myself on the more conservative side of the industry, but since I work in the more corporate end of the affiliate marketing industry that is probably where I get my opinions. That said, as an affiliate marketer industry veteran like most in the industry, we are rogues, entrepreneurial thinkers, outside of the box workers, and sometimes just plain troublemakers.
This year’s Affiliate Summit keynote was delivered by Dr. Robert Cialdini, psychologist and author of Influence: The Psychology of Persuasion. I’d actually heard Dr. Cialdini before and thought his speech would be rather interesting with this crowd given that the last time I’d heard him was in a room full of MBA alumni in our local Commonwealth Club. Online affiliates are a crazy mix of people. Most are on their second careers. I’ve met ex-lawyers, ex-dcotors, empty nesters, etc. But if there is one way to describe them all in one, it’s tenacious marketers. these people sell all day long and thus Dr. Cialdini’s speech while maybe falling on virgin ears to many was a rallying call to them. “How can I influence people and make them buy from me?” So why is this relevant and why am I rambling? Well one of the psychological influencing tools that Dr. Cialdini uses is to tell you the good news last. And that is why I reversed the title of this entry to The Ugly, the Bad & the Good”.
The UGLY – Given that I’ve been in the affiliate marketing world for 12 years now I expect to see change. How long is 12 years in this business? Scott Jangro just received the industry “Legend” award which I think qualifies me as a dinosaur (my boss so aptly called me a relic). Well there has been change, but we are still getting a lot of new people in the industry. I stomp my feet and smile when standing in front of a big sign that says “Ticketmaster” and someone asks me what we’re selling. There are lots of people new to the industry and patience (lots of it) goes a long way. I actually think that the most interesting person I met at the conference was a new first time attendee that I met at the blackjack table at 2 in the morning (Yes the conference was in Vegas, and part of why this was Ugly).
So what’s ugly? It’s that this industry has become more complex in its problems. It still struggles for the respectability and recognition of the contributions that it provides to the online world, and many of the basic understandings of the industry are still questioned and not being practiced in a respectful manner. This is not the fault of the industry but the greater understanding of affiliate marketing in general
THE BAD? The bad is that while there is innovation, there needs to be more. There appear to be a lot of businesses which are varations of others. The exhibit floors are aisles of networks peddling the same things. Everyone claims their network or platform is better than the next. As a merchant one could just look at all those networks and say forget it. In speaking with other merchants, many said that they couldn’t fathom the commoditization of networks. Sure, some had unique propositions such as video or mobile implementaions, but there was very little else different between the models. While the idea of belonging to multiple networks turns off many people because of the lack of control, publishers are left to play with many of them, not being able to really differentiate one vs. the other. That doesn’t mean that merchants are any better. The lack of representation from merchants such as Amazon, the leading merchant innovator, as well as traditional brand names leaves the publishers very little choice but to deal with the networks who try to act on the behalf of these merchants. It also shows a bit of concern about the lack of interest by management of these companies.
THE GOOD Well for all the issues, there are still some cornerstones that enable the industry to thrive. Affiliate marketing continues to be the most economical marketing online tool. ROI driven companies are starting to notice how efficient these programs are in terms of sales. As Gary Vaynerchuk said, affiliates are the hardest working people on the web (the also are the hardest partying). Many of the original pioneers in the business have done very well for themselves and many veterans in the industry (Todd Crawford) continue to innovate and develop new businesses to adress many of the problems that have plagues the industry for the last decade.
The industry doesn’t have as much low hanging fruit as it used to but there still exist lots of opportunities to innovate There are people still focused on financial gain or first mover advantage. We have to move beyond that. As this past year’s speaker (@copyblogger) mentioned, those who work at it longer will win. There is still a lot of opportunity to win in social media, feeds, APIs, etc. when you combine with affiliate marketing.
In the end though, what makes the industry is the people. It is one of the best parts about the affiliate market industry and as long as it attracts more smart and knowledgeable people. And if it retains the learnings of the past 12 years, it would become a staple in the arsenal of all successful online marketers and not just an afterthought.