The guys over at NetExponent did and Affiliate Survey earlier this year, and just released the results of it today :

http://www.affiliatebenchmarks.com/

Definitely worth checking out!

Malcolm basically told me that the deal will create new monetization opportunities for his affiliates across video, mobile and display and that by leveraging the reach of advertising.com, they can bring new and exciting advertiser opportunities to the table for their affiliates. He also said that there is a plan to invest both in staff and technology to support the growth in the US.

I really thought that this was an interesting move for AOL, in terms of creating new monetization streams. ISP’s are constantly having their margins eroded, and they need to find ways to monetize their portal’s and other properties. I believe that the future for ISP’s will be in providing web applications to their users as part of the monthly subscriptions they charge for Internet access.

I said this a long time ago, and I’m reiterating it. ISP’s cannot afford to play purely in the commoditized subscriber game anymore.

PepperJam has a lot of experience in the PPC Affiliate arbitrage space, both in managing PPC affiliates and running the actual campaigns. Arguably, launching an affiliate network has become a bit of commodity and does not necessarily warrant a review every time. I’ve had access to the platform ahead of this blog piece in order to review it – and I was quite impressed with such a comprehensive set of tools, especially for a first release.

I also though that the speed was incredible – most interfaces that I’ve worked with are quite slow, and perhaps it might slow down as they load more affiliates and merchants onto the backend, but the experience was great, especially some of the uses of AJAX in the interface. PepperJam provided me with a list of highlights in their press release.

Here is a list of some Highlights of Pepperjam Network:

- Pepperjam Network addresses two of the most significant shortcomings found on other existing affiliate networks: (1) poor, unreliable communication tools and (2) lack of affiliate transparency.
- With Pepperjam Network, affiliates and advertisers can communicate in real-time via Pepperjam Chatâ„¢, thereby providing a reliable communication system to build stronger, more profitable partnerships.
- Pepperjam Network provides advertisers with an unprecedented measure of affiliate transparency, which helps to establish trust, protect brand integrity, and lays the groundwork for open, long-term, profitable relationships.
- Pepperjam Network uses Web 2.0 technology to provide affiliates and advertisers with an easy-to-use, clean interface.
- Pepperjam Network offers industry leading SID-level tracking and reporting (great for sophisticated search marketing affiliates)
- Pepperjam Network introduces pepperjamADSâ„¢, which is a first-ever affiliate marketing widget that affiliates can use to serve customized contextual ads from multiple Pepperjam Network advertisers at the same time.
- Pepperjam Network contains a knowledge vault, which is exclusive to Pepperjam affiliates. The vault contains exclusive access to a list of tools and educational resources used by Super Affiliates.
- Pepperjam Network represents over eight years of research and development and the combined ideas, feedback, and intelligence of hundreds of affiliate marketers and advertisers.
- Pepperjam Network launched with over 100 merchants and growing quickly, including Blockbuster, Jelly Belly, AeroGrow, Oscar de la Renta, BabyPhat, Rocawear, Ben Sherman, FlyCell, SinglesNet, SEOmoz Premium, and many more.
- Pepperjam Network has its own affiliate program that pays out up to $7 per approved publisher application
- Check out the Pepperjam Network Blog for videos, commentary and updates on Pepperjam Network and the broader affiliate marketing community
- Pepperjam Network is FREE to join.

And here is the official press release:

Pepperjam Announces Launch of Next Generation Affiliate Marketing Network

Pepperjam, a two-time Inc. Magazine fastest growing company and industry leading full-service internet marketing agency, today announced the launch of Pepperjam Network, a proprietary next generation affiliate marketing network.

If you are an advertiser or affiliate and would like to sign-up for Pepperjam Network please visit www.pepperjamnetwork.com.

“Pepperjam Network represents an evolution in affiliate marketing. The creation of Pepperjam Network represents eight years of research and development and the combined ideas, feedback, and intelligence of hundreds of affiliate marketers and advertisers. Pepperjam Network will forever change the face of affiliate marketing by putting power back in the hands of affiliates and advertisers to build long-term, profitable partnerships through better communication tools and transparency,” said Kristopher B. Jones, President & CEO of Pepperjam.

Among a variety of affiliate marketing enhancements, Pepperjam Network addresses the two primary shortcomings of other existing affiliate networks, namely (1) poor, unreliable communication tools and (2) lack of affiliate transparency. With Pepperjam Network, affiliates and advertisers can communicate in real-time via Pepperjam Chatâ„¢, thereby providing a reliable communication system to build stronger, more profitable partnerships. Pepperjam Network also provides advertisers with an unprecedented measure of affiliate transparency, which helps to establish trust, protect brand integrity, and lays the groundwork for open, long-term, profitable relationships. Pepperjam Network also introduces pepperjamADS, which is a first-ever affiliate marketing widget that affiliates can use to serve customized contextual ads from multiple Pepperjam Network advertisers at the same time.

Pepperjam Network was designed to make the experience of affiliate marketing profitable and educational with the goal of allowing affiliates and advertisers to truly understand and maximize the affiliate channel, which is critical to their online business. Unlike most other traditional networks Pepperjam Network uses Web 2.0 technology to provide affiliates and advertisers with an easy-to-use, cutting-edge interface designed to facilitate and optimize the affiliate marketing process. In addition, Pepperjam Network offers industry leading SID-level tracking and reporting – this robust technology is especially beneficial to search marketing and sophisticated super affiliates that want to take advantage of the most up-to-date technology available to track commissions at the keyword level.

Here is just a sample of what many industry experts are saying about Pepperjam Network:

“Even after all these years using Commission Junction on the merchant and affiliate side, I still find it terribly clumsy to find what I want. With Pepperjam Network it is quick and easy. Pepperjam Network is what an affiliate network would look like if it were built from a wish list from both the affiliate and merchant perspective,” said Shawn Collins, Cofounder of Affiliate Summit.

“As both an advertiser and a affiliate, I am on the lookout for affiliate marketing systems that meet all our company’s needs. Pepperjam Network is without a doubt the most comprehensive, practical and useful affiliate marketing system I have seen the date. Pepperjam Network demonstrates that it is possible to combine style with substance in a network that provides site owners and advertisers with tools and resources to increase their bottom line,” said Joel Comm, New York Times Best-Selling author and CEO, InfoMedia, Inc.

About Pepperjam:

Pepperjam is an industry leading full-service internet marketing agency offering marketing services and advanced technology in the areas of pay-per-click, search-engine optimization, affiliate marketing, and online media planning and buying. The company was founded in 1999 by internet marketing expert, conference speaker, and published author Kristopher B. Jones. Pepperjam has received numerous awards and achievements, including recognition by Inc. Magazine for two consecutive years as one of the fastest growing privately-held businesses in the United States. Learn more at www.pepperjam.com

All in all, it’s a great start – there aren’t too many merchants pre-launch, but I’m sure that will grow quickly. Often with these types of systems, they are built by people who don’t sit on both sides of the fence – in PepperJam’s case, they do and this should really give them an edge in the market. I’ll be interested to see how quickly they can get traction.

Disclaimer : PepperJam proved how smart they were and bought one of the 125×125 blocks on the right hand side of this blog and are now an official sponsor of VinnyLingham.com .

Question for my readers: List all the affiliate widgets that you can find in the Google Gadgets directory!

SAN JOSE, Calif.–On the morning of day three here at Search Engine Strategies (“SES”) San Jose, Marissa Mayer, Google’s vice president of search product and user experience, gave her keynote presentation. She said a lot of interesting things, but of particular note to me was that she deemed cost-per-action (CPA) “the Holy Grail.”

According to Marissa, Google is making moves towards cost-per-action as a more ideal auction-based pricing model, but she also pointed out that it’s a long way away.

As quoted, Marissa Mayer states that the model is a long way away, as per my prior analysis on CPA posted last year (and also this one).

What Google realises, but often overlooks, is that affiliates have been successfully arbitraging CPC to CPA for longer than Google even begain doing paid search. We started Clicks2Customers in 2003 and that business quickly grew on the back of the fact there was considerably margin between CPC & CPA – and even today, there are still a number of affiliates out there that still do this very successfully. Clicks2Customers have since evolved the business to a CPA / Performance Marketing Agency, and are working more closely with clients than the traditional affiliate marketers. Our technology was built on the back of ROI creation from marketing campaigns based on CPC costs and therefore is far better aligned to what Google is trying to do, than many of our competitors.

If Google wants to accelerate their move to CPA, they really should focus on who the super affiliates are, and learn from them. Kris Jones put together a decent piece on how Linkshare acquired on of their top affiliates earlier this year. If Google is this serious about CPA – then Valueclick/Linkshare and the other affiliate networks become targets, if Google cracks what the affiliates have been doing all these years.

Saying that it’s a long way off is only true if in fact Google does not acquire the internal skills to do this. It’s very difficult for Google to justify the cost of hiring a top affiliate, as the top guys are pushing out $1m/year paychecks from CPC/CPA arbitrage and typically have their own businesses. There are at least a dozen world class CPC/CPA guys out there – so let’s see if Google makes the move and does an acquisition!

First of all: What is Affiliate Marketing? My definition of it is: The use of third party specialists who are capable of targeting audiences on behalf of advertisers/merchants and who are also willing to take financial risks in the delivery & performance of the traffic, in the form of no/low upfront fees and instead higher backend/success payments (commission).

This applies to both offline and online environments, incidentally, as I notice that many affiliate marketers are now even using TV ads, with unique URL’s, to drive traffic to merchants (I saw this in the USA).

Some quotes from Internet Retailer:

Affiliates also are beginning to change the way they operate, moving to nontraditional venues such as social networks and customer reviews, says Kerri Pollard, vice president of client development at Commission Junction, a unit of ValueClick Inc.

“They’re really following wherever the consumer may be,” she says. “We’ve seen a lot of change in the consumer with the onset of Web 2.0 and user-generated content. We’re seeing publishers going in that direction.”

I must disagree with Kerri’s quote (sorry Kerri!), as I believe that affiliate marketers have always “Followed the money!”, and what we’re seeing now with respect to affiliates moving into non-traditional venues, is not a change in the way they operate – this has always been the case! The only difference is that now the volumes and access to the audience is becoming worthwhile for affiliates to operate there, whereas 18 months ago, it was not.

I’m typically a Jerry McGuire/”Show Me The Money” type of guy, and I believe that the reason that Clicks2Customers became a highly successful Paid Search Marketing company, is that we always followed the money! Many affiliates tried to diversify with alternative search engines, etc – and in some cases they were successful – but we just followed Google (and Yahoo to a lesser degree), as they grew (and still have!) the lion’s share of the search market and gave us the best Return on Effort (which is a good read!).

One of the things that drives the affiliate marketing industry, is the fact that most affiliates understand online marketing far better than any merchants do – bust mostly only in their specific niches (PPC, Email, Display, SEO, etc), and given their willingness to take risks and test new avenues for reaching audiences, affiliates will find pockets of traffic that most merchants are unaware even existed.

Back in early 2003, when Google started taking off with Adwords, most of the growth was initially through affiliates, as evidenced by all the ads with “Aff” (which was subsequently made redundant), that Google actually had to lay down affiliate policies in order to reduce the amount of affiliate advertising displayed on a set of results at any point in time! Merchants suddenly figured out where the affiliate traffic was coming from, and followed suit by launching direct campaigns on Google. This is why Adwords really took off so quickly, in my admittedly biased opinion

However, some online retailers are hesitant about using nontraditional venues, Pollard says.

“Right now, the Web 2.0 world and the user-generated content side are a little scary, especially for some of the bigger brands,” she says. “As they look at the affiliate as an extension of their customer acquisition efforts, they’re making sure as they’re reaching this new consumer that they’re also keeping their brand management guidelines in mind.”

The bigger brands tend to be the most concerned about the possible downside of affiliate marketing in social networks and other nontraditional venues, she says. “There’s a little more dipping the toe in the water with the bigger brands,” she says. “But a lot of them are on the innovator side and willing to see the positive and negative.”

Web 2.0 is going to open up a realm of possibilities for affiliate marketers. Here Kerri is quite right – in that merchants are quite scared of how to tackle Social Networks and Web 2.0 – affiliates are certainly not! The number of avenues for online marketing in general is increasing daily, with Yahoo announcing today that they have just launched SmartAds, and even the most sophisticated merchants will argue that they cannot keep up, or even have the budgets to test everything.

I’m written many posts in the past, and even spoken at conferences proclaiming how affiliates are (and will be) making a lot of money through widgets, desktop/web applications & the like. Affiliate revenue driven applications will certainly be a major driver, and even in Synthasite, we’re looking to enable developers to make money by creating widgets for other users – and if they find a way to make money out of it through affiliate links – then good for them!

Jamie Birch, over at Revenews, wrote a piece on video newcomer, Nuuvy.com, and how it will allow affiliates to use video in order to promote product!

The future certainly bodes well for Affiliate Marketing…

Last month we announced we are closing our in-house Affiliate program and migrating everyone to Affiliate Network X. I was shocked at the outcry of our community who are under the impression Network X is full of parasites. This camp of unhappy people glean most of their information from AbestWeb which has a lot of posts on this issue and they are now debating the issues on our (The Merchant) forums which is stirring loads of panic. Assuming we can control the true *bad* parasites, we still want to partner with companies like Upromise and eBates – but even some of their methods of come under fire. I was wondering how you view their shopping toolbars? Do you believe they in any way hijack commissions from your company? My understanding is the number of people using this applications is very low, but who knows.

My response:

Good question! The simple answer is that we factor in any losses like this into our ROI calculations, so even if they do affect us, we maintain margin. I know that this doesn’t answer your question, but it helps explain why we don’t feel the heat. Also, I find that affiliates are often the most paranoid people around (which is what makes them so good!). We even did studies on anti-spyware cookie crunching which showed that the whole thing is blown out of proportion, once you actually run the numbers through the revenue loss calculator the effective loss of revenue is negligible at worst. That said, all networks have their pro’s & con’s and no single network, like Network X can be singled out as a problem.

I would suggest being creative and offering things like extended cookies for SEM affiliates and shorter persistent cookies for Toolbar distribution companies like Upromise – that would even things out quite a bit in the minds of the affiliates. At the end of the day, the market share that those individual companies have is not big enough to impact any one affiliate’s campaigns, unless they’re fighting over branded head terms – in which case, it’s probably not the affiliates that you want in any case!

These are my view… what are yours?

My powerbook is literally dead, and all the information on it is safe, however, my blog notes are there – so I’ll try to give a roundup of Affiliate Summit Day 2 when I’m able to access those notes later this week!

To all those of you who made it to Affiliate Summit – hope you had a great show, and it was fun shooting the breeze with all of you!

See you at the next one!

Before I continue, you may want to also check out my recent post on Revenews today, on this topic as well.

Assuming that Urchin is implemented, one or more of the following after effects will occur:

1. Prices rise, forcing out affiliates and marginal merchants

The reason for this would be that merchants begin to find more flaws and issues with the website that affected conversions, by repairing these items, they begin to buy more traffic, and given that the number of searches are not increasing at the same pace, due to demand and supply constraints, prices can and will rise.

2. Prices on poor converting keyword start to fall and become less competitive

Those not monitoring their traffic at a keyword level will be hit by surges in poor traffic due to advertisers ending their bids on those keywords.

3. Smaller merchants grow faster

Those who previously could not afford Urchin now start understanding their traffic better and start pushing prices across the board, due to newly increased demand.

4. More Private/White Label Websites (I personally think that this is the way to go, but I’m biased because of synthaSite)

Affiliates start producing more and more white label websites with transactional capabilities (ala Priority Click, in order to have more understanding of the traffic.

5. The Tail become Visible

The long tail of search marketing will become more visible to those who previously did not access their server logs. This will assist small websites in finding keywords that convert very well, but were not obvious from their Google Adwords accounts.

In my experience with data analytics, the key is not the gathering of the data, which is what Google is now providing a tool for, it’s in the analysis of it. Most small companies who are the targets for Urchin, do not have the knowledge, skills or resources to dedicate to analyze their data.

All-in-all, I think that the move is great for the web, and will ultimately improve the user experience and hopefully combat SEO spam (as per my prior post).