What’s interesting to note, is that Brookstone is divesting of Search Affiliates, as they are not seeing enough margin in that business for them. From the many discussions I had at CJU, this is a growing trend and the larger Search Affiliates are reinventing themselves into technology companies (Traffic Strategies was recently acquired by Linkshare), having had many years in which to build technology platforms without the need to go through long sales cycles to close business. This put Search Affiliates way ahead of traditional SEM agencies vis a vis focusing on value and not “bid management” – which drove SEM agency revenues. We also took the business on risk, which gave us the opportunity to experiment at our own expense, and determine what the optimal PPC solution should look like, and not be bogged down by client demands in the interim. The result is Media Manager, a proprietary multi-million keyword management system, that allows customers to target ROI, focus on very detailed business intelligence and growth the revenues by optimizing their campaigns, not just increasing their bids – as most other companies propose – especially since they work on a % of spend model.

The role of networks in this evolution is still up for debate. My view is that larger networks such as CJ, Linkshare, Tradedoubler & Performics will become dis-intermediated if they do not change their business models for larger affiliates. The good news is that many of them are already having this discussion and are very co-operative in evolving their businesses into platforms. In a world of mass supply, aggregators hold much of the value of the long tail. Affiliate networks have an aggregation business model, and therefore the value is really in the long tail that they have – the super affiliates or high volume players will need to be treated differently in order to support the business model evolution. The margins for search affiliates are certainly under threat, and Brookstone is experiencing zero-sum returns – this really means that it’s lose lose for networks and search affiliates if there is no margin left for the merchant – something has to give…

Clicks2Customers realized this shift in the industry a while ago, and has quietly become an in-house solutions company, supporting in-house teams by providing access to tried and tested technology that allows them to manage and optimize their multi-million PPC keyword campaigns with precision ROI management. Our Media Manager platform was build on the back of years of generating revenue for merchants, so unlike many of our competitors – it’s a tried and tested solution that focuses on generating revenue, and not increasing bids or spending more money (as per traditional SEM agencies). We’ve only recently embarked on the change in our business model and we’ll be announcing more details in the weeks to come – for now, it’s only being offered to select partners as we roll out. Our model is still performance based and we only make money for value added to a campaign – not the amount spent. We’re evolving from a Super Affiliate to a world class performance search marketing solutions provider!

If you’d like to be considered for our product roll-out, please fill in the contact form on this site. We’re currently only targeting advertisers with spend levels above $500k/year and the budget to grow aggressively.

More news to follow soon!

Mark Papia from MySpace presents this session and starts off with a video of people telling us how addicted they are to MySpace.

His presentation is entitled “Never Ending Friending”. This presentation will be available online – I’ll get the link to it later – he is moving to fast to get the content down. I’ll just take some notes.

Ad spending on social networks is expected to reach around $865m in 2007, with MySpace taking up 60% of the revenues. There is a lot of market analysis published at Never Ending Friending .

Mark is basically pitching MySpace and obviously, Social Media in the process. He believes that the viral/word of mouth impact from the advertising campaigns leads to strong ROI, but not directly from the actual campaign itself. I’m skeptical

He is going to Q & A now, time for some grilling…

Rebecca Madigan from CJ presents this great session.  Unfortunately, I didn’t manage to get to blog the opening sessions – due to not being able to find a place to sit!  The room was packed!

Rebecca conducted interviews with Top Performing Publishers & Advertisers in order to provide content for this session.

Topics Covered:

• Perspectives
• Important Issues
• Suggestions
• Trends

1/3 international respondents

•  Average of 10 Weeks to receive commission payment
•  Up to 50% fees charges
•  9 more countries added to direct bank transfer payouts

Advertiser Profile:

• Average time in affiliate marketing : 4.8 years
• Number of hours a week : 40
• Percentage of time dedicated to Affiliate: 58%

Publisher Profile:

• Average time in affiliate marketing : 8.5 years
• Number of hours a week: 61.5
•  Average ramp up to full time: 8.5 months
• Biggest business threats:
  • Disinformation about the affiliate channel
  • Time

Publishers:  Selection criteria when choosing an Advertiser  (in order):

1. Advertiser Response
2. Brand
3. Conversion Rate
4. Deep Linking
5. Commission
6. Consumer Incentive
7. Keyword Policy
8. Product Feed
9. Network
10. Publisher Incentive

(Advertisers should consider consumer incentives, above publisher incentives for their program).

Advertiser:  Selection criteria when accepting Publishers (in order):

1.  CJ Performer
2. Vertical
3. Geographic Location
4. ( a few more that went past faster than I could type!!)

It’s very difficult to blog the rest of the session, as the camera man keeps switching my screen over to Rebecca, and not the slideshow!  I’ll try to put some notes down:

On the survey, almost everyone said that both the publisher & the merchant share the consumer.

“The consumer is married to the advertiser, but the publisher is her best friend” – comments from a loyalty site owner.

Partner Tip:

Advertiser :  Ad key target markets and program objectives in your advertiser detail page.   Send your promotional calendar and marketing plan to your top publishers and find mutual opportunities.

What’s next in the Affiliate Sector?

•  Consolidation:  the big overtaking the small by acquisition or competition
  • Publishers, Advertisers, Networks
• New tools to make it easier for consumers to choose & buy (e.g. web services), in new places to buy (e.g. Social Networks)
• Increased demand for measurable results
• Affiliate sector getting a bigger piece of the marketing pie
• SEO growth
• Everyone needs to ‘come clean’
• Will cookies continue to be viable?
• Affiliate is just beginning – lets do a better job at it!

The full members of the board are:

Adam Viener, Imwave, Inc.
Connie Berg, FlamingoWorld.com / iShopDaily.com
Craig Cassata, MrRebates.com
Dan Murray, Ravenwood Marketing
David M. Lewis, 77Blue
Eva Klein, FatWallet
Jennifer Nissenberg, Upromise
Jeremy Palmer, QuitYourDayJob.com
Michael Coley, Amazing-Bargains.com
Paul Nichols, Ebates.com
Scott Jangro, MechMedia, Inc.
Scott Kluth, CouponCabin.com
Steve Schaffer, Vertive, Inc
Vinny Lingham, Clicks2Customers.com

In addition, Kerri Pollard made the following message:

At Commission Junction, we are always looking for ways to develop sustainable relationships and improve our services to our clients in order to drive quality results. Keeping with that tradition, we aspired to enhance the communication channel between Commission Junction and our publishers. As a result, I am proud to introduce our Publisher Advisory Board (PAB).

The objective of the PAB is to help Commission Junction build mutually beneficial solutions for the future. To meet this objective, we have recruited a group of notable, established publishers from within our network to serve as the voice for their community.

Commission Junction will proactively obtain feedback from the PAB regarding successes or opportunities they observe throughout the lifecycle of a business or technical initiative. The PAB will collaborate with the Commission Junction executive board to implement enhancements in order to warrant success for all parties.

I look forward to working with this esteemed group of individuals, and I cannot wait to watch their ideas come to fruition at Commission Junction.

Sincerely,

Kerri Pollard
Vice President, Client Performance
Commission Junction, a division of ValueClick, Inc.

Agenda

About Web Services
Commission Junction Web Services
Examples of Working Applications
Working with us
What’s Next

What are Web Services?

Web services can provide the basic building blocks to build simplex, or complex solutions.

It’s possible to create a solution using Web Services from multiple Web Service providers.

Most modern languages support Web services and have specific features to utilize SOAP services

What is the CJ Web Services Vision:

Enable and promote innovation and differentiation in the CJ Marketplace by creating new opportunities for publishers and advertisers.

Create innovative new solutions that drive increased transactions
Enable rich user experiences
Decrease development time
Develop a service based foundation for the future

What problems does it solve?

Example:  Commission Junction Product Catalog

Over 700 advertisers with a product catalog(s)
Over 850 product catalogs
Over 20,000,000 products

Web Services being launched:

Publisher:

Product catalog Search
Advertiser Search
Link Search

Advertisers:

Branded Sign-up
Branded Login
Publisher Lookup

Publisher Web Services:

Frank goes through 3 examples.

Ideas for Web Services:

Innovate & Differentiate
Plug-in for blog software
Widget for a web site
Product search incorporated into coupon site
Browser toolbar
Price comparison site
A new interface for finding information

What’s next?      

Advertiser Signup enhancements
Transactional Reporting Data
Performance Reporting Data
Relationship Management Data

Emerging Markets Panel

Cindy Timmons, Publisher Biz Dev Director, CJ
Brent Hill – VP Biz Dev – Feedburner
Greg Stevens – VP Client Dev – Pronto
Oliver Luckett  – Co-Founder – Revver
Patty Mitchell – VP Worldwide Sales – Six Apart

The panelists all proceed to introduce their respective companies.

Revver is a viral video marketing company, which aims to monetize viral marketing movies.

Feedburner is the world’s largest feed management system (I use them).

Pronto is Interactive Corp’s (IAC) shopping search engine.

Six Apart is the maker of TypePad, Moveable Type & LiveJournal – blogging platforms.

Cindy proposes that embracing these new channels for marketing in the early adoption stage will open up great avenues for growth.

Question:  We continue to see huge growth and traffic for a handful of large social networks, such as MySpace & YouTube.  How does your business model interact with these social networks.

Everyone sees these tools as complimentary and wants to embrace those markets.
There is a lot of interest around MySpace.

My battery is dying, so I’m going finish off right here!  My session is next, so pick up what happens there on the Clicks2Customers Blog.

“Creating Time” – The New Brand Challenge

Sarah start with a new definition for CPA – Constant Partial Attention

I can see this session is going to be tough to blog – lots of graphs. She starts with a graph of how alternative media devices have penetrated our daily lives.

Sarah predicts that by the year 2020 – 80% of all media will be digital and very fragmented and personalized.

There is an imbalance of spend – more time is being spent online than other mediums, however the marketing dollars are spent more on offline channels.

The New Digital Consumer

Consumer is in control
Advertising avoidance
Multi-Tasking
Mobile (over 10bn text messages per month in the US)
Communities

A lot of this looks regurgitated from the works & talks of guys like Chris Anderson, Steve Jobs, etc. I’m not finding it particularly interesting at this point, probably because I’ve heard this all before. The next bit of stuff was quite fun though.

From buying time to creating time

The brands that will win are those whose consumers tell the best stories.

In practice : Creating Brand Time

Adidas : Social Networking

Created a custom MySpace page video-submission contest, adidas soccer player pages and Ad builder feature

Results: In 6 weeks, 1MM page views, 55k+ friends, 22k+ ads created

Electronic Arts – The Godfather video game launch

Guerilla campaign involving 30,000 oranges (stickered with URL) placed among heavy commuter routes on launch day in NY, Chicago & San Fran, driving people to web site featuring game footage.

Veronica Mars – Building Community through Mobile

Website traffic increased 500%
8% click through on WAP ads
Ratings for the show doubled
Subscription increased 100% week over week for the 3 week duration of the program
New Horizons

Possibilities to Sell
Possibilities to interact
Possibilities to connect

When creating time, CPA (Cost Per Acquisition) is just one many important score keeping measures.  You have to pay attention to metrics like Direct Response & Branding.  Is the customers connection to our brand giving a greater brand value.

How do we measure and improve?

It needs to be metrics based, but overall brand building should be part of the process.

Tom Vadnais kicks of with a nice slideshow of a few of CJ’s clients. He also discusses that the focus of this years conference is relationships, which is what drives their business.

The Industry – Growth Ahead

• Online ad spending in Q2 2006 grew by 13.8% from Q1 2006 and this trend is projected to continue

• Ad Spending on the Internet is expected to account for 7 percent of global ad spend by 2008, a 76 percent growth between 2005 & 2008

“Growth is never by mere chance; it is the result of forces working together”

Tom goes through the various ValueClick businesses (CJ, Pricerunner, Mediaplex & ValueClick Media).

Commission Junction – The Industry Leader

Over 40% of the top 500 retailers choose CJ to power their programs over the next two providers combined, next closest provider ranks at a distant 26%.

Commission Junction is the leading provider in over 70% of Internet Retailers catalogs.

Key Efforts over the Past Year

Performance Reporting
Value-Added Services
Program Management
Strategic Planning
Publisher Prospecting
Publisher Optimizing
Blueprint for Profitability
Five live, interactive training seminars
Action Life Cycle

Just announced: CJ launched Web Services
Web Services
Adobe Contest Announced
Q1 2007 Contest
Future Plans
Horizon Awards for Best Web Services Application 2007
More API’s
Looking Forward

Your ability to develop long-term profitable relationships will remain CJ’s priority
Use resources and tools to grow and innovate
Continue to build profitable relationships

Jeremy Palmer did a great job today on this session – here are the notes:

CJU 2006 Session:  R is for Revenue
Presented by Jeremy Palmer – QuitYourDayJob.com

Growing your affiliate revenue through the power relationships.

Affiliate Managers

Affiliates are your program’s greatest assets (and liabilities)

Your affiliatesor “human capital” account for 100% of your program’s value

Successful merchants manage their human capital weel
Recruit good affiliates and give them the resources they need
Motivate existing affiliates so that they remain loyal and help to grow the program

Optimize Current Affiliates

Forget about the 80/20 rule

Super affiliates are important and can drive a lot of volume, but represent only a small fraction of your program’s potential.
Imagine the impact on your program if you could get 50% of your affiliates to drive 1 sale a month

Merchants expect affiliats to be self made and pull themselves up by their own bootstraps.

Provide additional tools

Provide new content (articles, creative, Datafeed, RSS)

Enable phone tracking

Consider trademark bidding for top affiliates

Consider opening new marketing channels (e-mail marketing, SEM)

Unique destination URL’s

Remove Obstacles

800#’s should benefit affiliates, not take away sales
Poor conversion rate – evaluate your landing pages and checkout
Open communication-IM, phone and email
Survey the competitive landscape

Promotions and Contests

Temporarily raise commission rates
Offer bonuses for volume increases
Create a contest that can involve everyone – most sales, most improved, etc
Run the promotion or contest as long as possible

Run a Clean Program

Have a clear and strictly enforced policy for spammers and spyware affiliates
Protect trademarks – Make exceptions clear
Remove black hat affiliates
Test your tracking
Be transparent

Build Relationships

Send personalized emails
Make “no pressure” phone calls
Snail Mail gets read more than email
-Go the extra mile by sending company branded “gear” or a product sample

Provide Training

Have a recommended list of books, websites, blogs and forums for new affiliates

Provide industry insight and training
-    Keywords
-    Site messaging
-    Target Demographic
-    Best Sellers
-    Customer Behavior

Blueprint for Profitability

Book developed by CJ & Jeremy Palmer – available from within CJ

Allow Test Purchases

Customers make the best affiliates
Get feedback regarding landing page and checkout process
Affiliates can identify potential leaks in the sales pipe

Educate Yourself

Good affiliate managers understand:
SEM/SEO Basics
Various affiliate business models
Basic traffic, and conversion strategies
Network with industry professionals – RMAMA, BAAM

Recruiting New Affilliates

Go where the affiliates are

Industry conferences – CJU, Affiliate Summit, Webmaster World
Announce your arrival in advance, setup appointments
Attend all networking functions
Have business cards and program handouts
Follow up 2 days – 1 week after the conference has ended

Recruiting on the Web

Review paid and natural search listings for your keywords – look for potential affiliates.

Use Web site contact form or DomainTools.com to find contact information
Never use a template or canned email to reach out to new affiliates

Using Forums

Participate in forums, don’t actively recruit
Register with your name or abbreviation – keeps future options open
Use a promotional signature, but don’t overdo it
Never spam the board

More ways to advertise

Paid Search
Directories
AffiliatePrograms.com

Reaching out to Merchants

Get on their radar early

Develop a portfolio/resume website

Examples:

IMWave

Clicks2Customers (no kidding – he mentioned us!)

Apply to the program when you’re ready to take action

After You’ve Applied

Send a quick email with introductions, ask for a time to follow up over the phone

Do a test purchase

Subscribe to their customer newsletter

Read their corporate blog

Subscribe to news alerts

Understand their business and industry by signing up for news alerts for the companies that you market for
Communication is Key

Create an affiliate web site for your program
-eBay Affiliates
-Buy.com Affiliates
Affiliate program blog
Newsletter
Collect contact details

Initial Follow-up Call

Share your promotion strategy

Gather details about their program

-    Customer demographics, top converting products, keywords, conversion strategies, Datafeed, SEM/Trademark policy
-    If possible, ask for a product/service sample
-    Exchange contact details
-    Request access to tools you need – Datafeed, RSS, API
-    Set realistic expectations for launch
-    Schedule a follow up call for 1 month later
Negotiating Terms

Sales volume speaks louder than empty promises

Track your sales closely – evaluate month-to-month trends and identify growth

Schedule a call after you’ve been driving measurable volume for a month (or more)

Follow up Call:

1. Know your metrics: sales, costs, ROI
2. Project future earnings
3. Emphasize dedication to program
4. Understand the merchant’s margins
5. Show your value – review promotion strategy, explain future opportunities
6. Get a clear definition of the payout ceiling and steps in between
7. Set clear expectations about scaling sales volume
8. Schedule a review call for 1 month later

Maintain the Relationship

Keep communication channels open

Express gratitude

• Send occasional “thank you” card (no email)
• Recognize important company events, promotions, etc.
• Offer a program testimonial

Meet up at conferencesMake affiliate manager aware of the trends you’re seeing

Strive to be a “value added reseller”

I will be blogging almost every session that I attend here at CJU on this blog in realtime, and Jenna, Joanne & Charlene (from the Clicks2Customers team) will be blogging on the Clicks2Customers blog.   If you’re at CJU and you would like to meet up, please email me (vlingham -at- gmail.com) and let me know!