Affiliate Summit West 2008 kicked off today at the Rio Casino in Las Vegas with Jim Kukral (from) the conference MC and Jason Calacanis (CEO, Mahalo) providing the Keynote address.

Jim reiterated the clear fact that Affiliate Marketers play across not only Search marketing, but also email, display and the entire range of online marketing tactics and strategies. With over 3,000 attendees this year, it’s hard not to see how critical affiliate marketing is in any online marketing strategy.

Jim introduces Jason as the founder of Engadget and the Weblogs blog network, which was acquired by AOL a few years ago for about $25m+.

I met Jason briefly before his keynote, an honestly, I didn’t recognize him. He also didn’t go to great lengths to tell me who he was, which I always find is a very redeeming quality (i.e. he introduced himself as Jason, and not Jason Calacanis – which I would have recognized).

Jason starts with a quick background on the Internet, by delving into Usenet and how it has evolved from a great knowledge sharing environment, to a spam honey pot.

Jason calls content that is designed for the purposes of selling a product, using copied content, “Affiliate Spam”. Jason basically went on about how people are polluting the Internet with spammy content and how even Google can’t deal properly with this spam. Remember though, Jason’s startup, Mahalo, is focusing on taking Google listings and hand sifting through them to remove spam, so his experiences will be a bit biased.

Here are some of the points he put across:

Arguments against gaming the search engines (Black Hat SEO):

Human powered search can’t be gamed.
The semantic web is impossible to game.
Increasing number of niche high-quality sites will make it impossible to compete
Arguments for gaming

Any system can be gamed:

Gamers are getting smarter and smarter
Social networks, social news, and social search are ultimate covert marketing system

The Brutal Truth according to Jason:

“You guys think small. Holding up a six figure check is just pathetic.” – which is a direct swipe at Jeremy. That’s your industries biggest success? Really?
SEOs and Affiliate gamers are some of the smartest, most resourceful people I’ve ever met.
Jason would like to hire some of the top SEO people.

What should you do? (Selfish version – i.e. what Jason wants you to do, for his business benefit)

Stay the course
Keep polluting the web with low quality sites
Increase the amount and complexity of the gaming in social news and bookmarking sites like: dig, delicious and StumbleUpon
Find new ways to covertly advertise unsuspecting users
Be more creative in your use of malware, adware & click-fraud

What should you do? (Unselfish version)

Realize you’re the bottom of he food chain and fight up
Create loving, long-term relationships with users, based on high-quality content and services.
Give up a life of crime and instead of holding up $100,000 checks.
Realize that you guys are smarter than half the folks working at large internet companies
Bottom Line:

“Someone in this room could create the next dig, StumbleUpon, Flickr, Gawker, or Weblogs, Inc.
Someone in this room could create the next Yahoo, Google, PayPal, Facebook, MySpace or eBay.
But you probably won’t, because you’re wired for making the quick buck and because you’re afraid of the potential disappointment that comes from trying to do great things and failing.”

Short Version:

Jason is basically taking a swipe at every affiliate out there, by saying that chasing the short term buck, is not creating true value. To an extent, I agree. Affiliates are very opportunistic, and they will take the cash today, instead of the promise of tomorrow. Jason is very right in saying that the next Yahoo or Google etc could be created by someone in the room, but instead, many are focused on making short term returns. Jason is 100% right on all accounts, assuming that everyone is a money hungry affiliate.

The reality is that many people in the industry do live in Silicon Valley and do not have access to capital and therefore don’t have the opportunities to create the next Yahoo or Google. These people live in countries where it may be impossible to raise capital – so the monthly cash flow from affiliate marketing is great. Many people can’t move there for personal reasons (family, etc). And what’s wrong with being an affiliate and making a decent living, with little stress? My point is that there are different strokes for different folks. Affiliates could achieve everything that Jason says they could – but why would they want it?

Yeah – I know, those who know me personally probably think it’s rich coming from me. Sure, I’m trying to run a Web 2.0 startup and build some great value, but having gone through the startup stresses for many years – I know it’s not for everyone, and that’s the part that Jason missed. The cream will rise to the top, if it wants to. I know many great affiliates who sit waiting in the weeds for the FedEx cheque to arrive (You know who you are ) – and they absolutely are smart and capable, but instead, choose to focus on family and lifestyle – and there is nothing wrong with that.

And on another note – 6 figure checks are not the affiliate marketing industry’s success. Companies like Clicks2Customers do well into 8 figures, and they’re not the only ones – but the only difference is that these are real companies with employees and costs – not affiliates sitting at home. Jason would be proud

Anyways, for you affiliates that don’t want to chase the “big one”, don’t feel obliged – for those who do – good luck, it’s a tough road, but well worth the journey…

Lead Generation Basics

Clicks -> Landing Page ->  Decision Engine ->  Lead Transmission (Sale to Buyer) -> Follow Up.

Benefits of Lead Generation

Shared Risk
•    Data itself has no value
•    Advertisers paying on potential value

End User Value
•    Something you could use
•    Does not rely on breakage

Just the beginning
•    Already multi-billion dollar market
•    Nothing buy upside

This is a very interesting, but graphical presentation.  Will try to get copy of presentation from Jay later and post a link in the comments section.

Advances in Lead Generation

Marketplaces
Outsourced Sales Force
Variable CPL’s (potentially disruptive force)

Optimization
Multivariate Testing – More than Landing Pages
Applying ad network rigor to ad display

“Cross Media” – Search Traffic to use to banner traffic

Challenges in Lead Generation

Increased competition among lead generators
Going “wide & deep” – do not assume that success in one vertical will assure success in any vertical.

Key Takeaways

Quality – Buyers get it; leads for leads sake do not help their business
Sustainability – Being caught by surprise
Value – Consumer & Buyer
Future Thoughts

Large Opportunity as companies move toward lifetime value, e.g. more advanced remarketing and bundling.

Continued vertical segmentation

New verticals forming

Summary

Quality – the only metric that matters
Market today has changed dramatically from that in years past
Still money to be made, but ever declining low hanging fruit
Efficiency and improving on the process is king

We were stranded in New York and were not allowed onto the cruise ship by Carnival Cruises, but that didn’t stop us!  At about 6am in the middle of early spring, we headed down to the Canadian embassy and managed to get a 1 day Visa, headed over to JFK, boarded a flight to Halifax, spent the night at the Prince Georgian hotel (one of the best nights rest I ever had!).  We also had dinner at the Press Gang Club (a great restaurant)!  To cut a long story short – we boarded the boat back to New York at Halifax the next morning, and managed to enjoy half an Affiliate Summit.

This year, I’m pleasantly surprised to hear that there are over 2000 attendees – that’s 1000% growth in 3 years!  Well done to Shawn Collins & Missy Ward for running a fantastic that without a doubt fuels the growth in Affiliate Marketing globally.

The show starts with a funny opening from MC Lisa Riolo (formerly VP of Commission Junction).  Michael Sanchez, CEO of ClubMom (and CafeMom), takes the floor for the Keynote Address.

Michael kicks off with some personal anecdotes about his pay for performance experiences with his kids – very funny.

Potential Role of Affiliate Marketing in the Larger Marketing Landscape

What Web 2.0 Means to Marketers

Consumer is completely in control
Consumers want to create and interact with their media
If you don’t have a great product – GO HOME
Be absolutely crystal clear about your metrics
Do less, go fast, try stuff – repeat based on the numbers and what your  customer tells you.
Make sure the cost of learning and changing is low.

Marketing 101 – Obviously but so Important

Develop a great product that is an absolute wow for an identifiable segment of customers
Establish positioning, brand, segmentation, and value proposition.
Reach the RIGHT PERSON at the RIGHT TIME with the RIGHT MESSAGE.

Classic Marketing Funnel:

Awareness ->  Consideration -> Qualified Lead -> Transaction -> User Loyalty

SEM Analysis:

Strengths

Marketers can often reach the RIGHT PERSON at the RIGHT TIME – only paying when a consumer click
Marketers can calculate ROI and manage & adjust budget process in real time
Massive scale

Weaknesses

Marketers learn very little about most of the people clicking the ads (1% conversion means that 99% got away).

(He is going to fast for me to capture all this!!).

Affiliate Marketing Analysis

Strengths

Pay for Performance is the Holy Grail of Marketing
Marketers only pay when they receive a desired outcome

Weaknesses

Too often affiliates and marketers are not aligned on true metrics
Too often affiliates are not driving quality traffic – wrong incentives

ClubMom Grocery/Retail Loyalty Program

ClubMom delivered 10%+ sales lift and hundreds of millions of dollars in incremental sales – for than 5 years.  Retailers still did not like paying on all sales, despite huge, measurable ROI.

This talk reminds me a lot of the work we have published around Performance Marketing Profit Share.

CafeMom.com Current Analysis

CafeMom is a social netowork for moms to connect with friends – old and new, express themselves, and have fun.

New Member are averaging 100-200 pageviews / member (except one channel) – results in $25-$50 revenue per member per month.

Ideas and Recommendations – E-Commerce Marketers

Pay Per Sale

Align with sites that have loyal and engaged user bases
Find as many strong content / social networking / niche affiliates as possible
Pay for True Performance
Consider programs that involve affiliates post Sale

Pay Per Lead

(He is moving way to fast for me to catch up, because he is running out of time).

In short, all he is advocating is that we align merchant & affiliate interests better – interesting talk overall.

$1m Challenge – Mother’s Day Challenge

He wants to pay an affiliate or consortium of affiliates $1m by Mother’s Day – if they can deliver true performance.

He is looking for several affiliate partners to work with ClubMom on a 2-3 week test basis.  I’m sure there will be details on his site.

Conclusion:

Affiliate Marketing has breakthrough potential.
Think big and long-term
Maintain quality across the board
True Performance is the key
Test out a big program with CafeMom

Winners will be anounced on 16th October!

Here’s a different approach – this speak started with : There are a lot of people in the industry who THINK and SAY they know what they are talking about, but they actually just mislead people.

SEO Myth : Every site ranks well for SOMETHING!

Online Success Recipe

Topics of Discussion for Today’s session:

• 5 Time Wasters
• Developing a search architecture
• Keyword Selection
• Linking (why you should use firefox)
• FIY vs. Outsource

Rules change, I will send to you all my SEO bookmarks which I have aggregated and reviewed for the last 5 years if you are looking for tools, directory lists, forums, automated tools, etc.

Technique’s not used by speaker in 4 years:

• Image Alt
• Keyword Meta Tag
• Keyword Density Analysis
• Optimize 1 word terms
• Submissions / Re-Submissions

Techniques he does use:

• Circular Architecture (not hierarchy)
• Intense Keyword Research
• PR Optimization
• Heavy Link Valuation
• Forums / Blogs (research)
• Resurgence of meta description tag

Developing a Search Architecture:

Wheel and Spoke site development vs. hierarchical site development:

• Dropdowns
• Sitemaps
• “Useful links”
• All the optimization in the world may not help your site if you have major architectural issues.
• Sitemaps are critical!

Architectural Issues:

• JavaScript-Based Menus
• Important links in flash/images
• Orphan pages / entry pages
• Redirected homepages (use 301′s)
• URL’s with ?’s, =’s, &’s (dynamic pages, shopping carts, CMS’s – Ektron / Interwoven)
• Search friendly vs. Search Optimization – Ex: Automatically generated title tags
• Linking Techniques, strategies, tools

Develop something worth linking to & people will link to it. Calculators, free trials, articles, etc.

• Spread yourself thin on links
• How many links are on the page?
• Robots.txt or nofollow tags?
• Search for people linking to you and see if you can get more heavily optimized text.
• Use a pagerank search – competitors

Keyword Development

We all stink at developing our own keyword lists (it’s not our fault):

• We are biased by our own search behavior
• Too close to the product / service (acronyms, jargon, product features, etc)

All is not lost:

• Use Tools (not just overture keyword tool)
• Start wide (Prilosec – heartburn)
• People search for solutions to problems not products and services

If you build for humans, you don’t have to worry (as much) about getting penalized.

Ways to spot a bad SEO company:

Good chat overall – nothing I disagreed with.

Tom Manspeaker – Direct Leads
Linda Goodman – The Goodman Law Firm
Steven Richter – OptinRealBig.com
Mark J Rosenberg – Of Counsel, Sills, Cummis, Epstein & Gross P.C.
Ernie St. Gelais – LinkConnector

The panelists kick off by discussing the legal issues relating to behavioural targeting. The key is that information is build up using non-user identifiable information.

The Federal Trade Commission is looking into deceptive advertising. When is something that is free, not free? It seems that they’re targeting companies that get consumers to be automatically enrolled into survey products. The FTC is looking at ruling that incentive sites are not operating above board and the free ads for iPods, for example is deceptive.

The FTC has an entire e-book on their site, called Dot Com Disclosures, but according to Linda, the book contradicts itself.

This session seems very to and fro, as most legal discussions are. Not sure how much more I can take! This can happen, that can happen, this can happen, that can happen – usual lawyer rambles.

Apparently, also, there are State laws, regulating the use of the word “Free” on incentive sites. Steven Richter basically compares affiliates incentivized site law with the CAN-SPAM act of 2005, and how in the past, all the states also had different laws, which were finally combined under one law.

Can trademarks be used in your campaigns? According to Mark, yes you can use it – but if you cause confusion, then you are infringing it. He also says that different courts have different rules. If you’re selling a trademark product or comparing it – there should be no problem using that trademark.

There is far too much legalese/technicalities here – my brain is shutting down. It’s amazing how complex law is in general – and if startups had to follow rules by the book – they would never startup!

Alan Lewis (eBay Technical Evangelist)

“Web Services provide great opportunities for innovative affiliates to make money”

•    What is the eBay Affiliate Program?

The eBay Affiliate Program is a community of developers, webmasters and entrepreneurs who get paid to promote Ebay.

Originally launched in the US in 2001, there are now programs in over 25 countries worldwide.

Top 100 Global Affiliates make an average of more than $500,000 a year.

•    Affiliates and the eBay API

o    Data

Knowledge is Power.  You can use the eBay API to extract data and information around their marketplace, like Keyword Market Trends, Supply/Demand Discrepancies

Key Calls:
-    GetSearchResults
-    GetPopularKeywords
-    GetRelatedKeywords (Upcoming)
-    GetContextualKeywords (Beta)

Historical Data
- Not free, but worth the money – through their data partner, DataUnison.

o    Content

Quality Content is available at a low cost by using the API.

Shopping Comparison:  Use eBay Search and listing data to understand pricing trends for products. Display items with a low price on your site for frugal shoppers.

Key Calls:
-    GetSearchResults
-    GetCategories

eBay is one of the largest source of free content on the web.

You can also use the RSS Feed Generator from eBay, which has customizable feeds embedded in eBay Advanced Search technology appended with the affiliate tracking information.

Key Call:
-    GetSearchResults

o    Communications

Instant Messenger

Concept:

Search/Browsing
Alerts (Price, Listing)
Contextual

Key Calls:
-    GetSearchResults
-    Instant Messenger API  (provided by the IM platform)

Email is already a huge driver of eCommerce Revenue…IM could be to.

Mobile Technologies

Concept:

Search/Browsing
Bidding
Alerts: Text/Call

Key Calls:
-    GetSearchResults
-    PlaceOffer (Upcoming Pilot)

Takeaway:

-    Take advantage of the rapidly expanding mobile marke

o    Platform

eBay exposes the eBay platform, for free.

Concept:
-    eBay Widgets
-    Television Set Top Box
-    Desktop Search Tool
KeyCalls:
-    GetSearchResults, GetItem, GetMyeBayBuying

eBay is extending the reach of the eBay Platform to reach a broader audience in new/creative ways.

•    eBay Web Services Overview

eBay Developers Program started in 2001

Auction tools were already screen scraping, eBay wanted to standardize the data through XML.

47% of listings are through eBay Web Services (about half through 3rd parties)

30,000 members, who have created 2,200 live applications

Total number of calls in Q4: 8 Billions!!!

Buyer-oriented web services started in 2003

Features of eBay Web Services:

o    Search
o    Listing Items
o    Transaction/Order Management
o    My eBay
o    eBay Stores
o    Feedback management
o    Watch list
o    Anything that you can do through the eBay site

RSS:

Very low-tech API – search terms and options are specified in the feed URL
Similar to REST API , but with standardized schema (non-eBay specific)
Look at the bottom of any eBay search page for this.
RSS Feeds can be affiliate-enables too.

He also went into a lot of the stuff like AdContext from the eBay Developers Conference – so I’m not going to repeat that in this blog – just browse the categories on the right and look at the eBay category if you want more information.

Adam’s company IMWave builds landing pages and sites, as well as sending traffic directly to merchants.

Mike manages all the campaigns for iMarketing’s clients – HotJobs & New York times, as well as being an affiliate himself.

Tim’s company build a bid tool, BidGuard, and eventually realized how good their software was and used it to arbitrage instead of selling it. They eventually diversified into SiteTuners which optimizes sites for conversions.

Dan opens with some leading questions:

“How do PPC affiliates fit into the merchant’s programs?”

Mike hits the first part – PPC arbitrage – buying clicks cheap and sending them to the site and taking the risk on the click. Tim focuses on comparison sites on a CPC basis.
Arbitrage is defined by Mike as simply buying clicks cheaper than their average EPC (Earnings Per Click).

“What’s happening right now in the PPC world?”

Tim hits out at the AdSense arbitrage guys who build sites and buy clicks from Adwords. He makes the distinct definition of Click Arbitrage on a CPA/Rev Share basis, and an AdSense Arbitrage basis. I personally think that the model of buying Google clicks to send to Google AdSense ads is going to disappear as Google improves it Landing Page Algorithms for Adwords with the Quality Score.

Adam mentions that Google AdSense ads are on by default – which is what affects many advertisers, without them even knowing about it. Adam also notes that as part of the AOL-Google deal, AOL will receive their own search platform.

Tim also impresses the fact that Google is driving out Private Label sites with the same functionality & content as the original. If the sites have different content and functionality, they should be fine.

Mike forces home his views that Google are tampering with the Min CPC in the backend – I don’t quite buy his view on this, but he has seen rising Min CPC’s on good keywords in the past.

“Are any of you using the MSN Adcenter?”

“Microsoft needs to taken seriously” – that’s the word from Adam. He says with the launch of Vista, that MSN will become a serious player. There are much higher margins for affiliates right now, and MSN allows duplicate display URL’s.

“Should you let affiliates bid on your brands?”

There is a quote from the Marketing Manager at Travelocity in Revenue Magazine May Edition, which basically said that when Travelocity stopped affiliates from bidding on their trademarks, they saw a marked increase in the number of competitors ads and losing sales to their competitors on their own trademark terms. They have since changed their stance on trademarks.

Adam points out that merchants are now looking toward trusted affiliate partners to work with companies on trademark bidding. This topic got very interesting – and now we moved onto questions – so I’m going to shut my laptop and aggravate the speakers a bit ?

No, seriously, I’ll be speaking on Tuesday (& blogging) at the Affiliate Summit in Orlando, Florida this weekend – stay tuned to this blog for all the details. On Wednesday, I’m flying through to London (on the red eye), to speak at Commission Junction University UK. After that, I’m not sure where I’ll be as I have an open ticket back home depending on some things – but probably San Jose, CA & Germany.

See you at Affiliate Summit – tickets are already sold out! Oh, right, what about the freebies? Well, we managed to overbook our squad for this conference, so I have 4 free full conference pass tickets to give away by tomorrow (each valued at nearly $2000).

I’m sure that I’m going to make blog history with this one – we paid hard cash for these tickets – so here goes:

To coincide with the launch of the new WordPress version of this blog, I’m giving away 4 tickets (which incuBeta has graciously paid for – and realistically, we could have sold on eBay!), to someone who is a registered member of this blog (i.e. a reader who is able to post comments). All you have to do, is signup (try posting a response to this comment, for example, and it will take you through the process) and then send an email to vklingham-affiliatesummit@yahoo.com (email address will expire in 1 week) with your email address used to signup, Name, Company & Title. Please not that you must email me, as I obviously get daily signups so I’m not sure if the person signing up is looking to attend the conference in Orlando. All entrants will go into a lucky draw.
I will post details of the winners (with permission) once it’s been finalised.

Good luck – and forward this post to friends who may be interested in attending!

UPDATE: Apologies – I have 3 Full Conference Tickets (I included mine in the original count, but I am attending), instead I am also giving away 3 Nights Free Accomodation at the Hilton Orlando Disneyword with one of the tickets!!!