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  1. #1
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    Affiliates take some heat at IRCE 2008
    I quick report from day 1 at the Internet Retailer Conference and Expo 2008 in Chicago.

    I was attending the day one workshop at IRCE 2008 today and was slightly taken back by the last session titled: Affiliate Marketing: Why You Can't Set It and Forget It.

    The title is perfect. As an affiliate manager myself (although still new and learning) I think it is very important to be actively involved with your affiliate campaign. Anyways... to the point.

    The session felt like it was a "bash on affiliates" night. When George Michie, from RKG hops up and starts his presentation, "I'd like to talk about those Rascals we call affiliates," I knew it was not going to be very positive.

    He shared an analogy of a fishing fleet and how affiliates are like a fleet of boats that come and take your fish, repackage it and give some back to you, sell some to your competitor, and throw some back in the water all for a little commission.

    He next went on to mention that there are some good affiliates, those that have their own traffic, and those that generate incremental sales. (Isn't that what most if not all affiliates that are legit are trying to do?? Take the traffic they generate and get sales for your advertiser?) He mentioned that another class of good affiliates is user benefit sites like upromise, schoolpop, and ebates. I don't know much about these three but it seems like there has been some discussion about using software on computers as not being a very "good" thing for the affiliate space.

    The other "Good Type" of affiliate is one that is a keyword domain affiliate... he gave the example of plasmatvs.com

    The rest of the presentation is about what George calls "the bad guys."

    The traffic interceptors (affiliates that steal traffic that was already headed for your domain) Such as:
    * PPC Fiends (those that are trademark bidding don't follow rules, advertise at night, etc.) I agree that these would be bad affiliates if the TOC states that you can't do these things but the presentation made it sound like this is always a bad thing and that in general affiliates doing PPC are bad!

    * Organic Competitors (they come up under your domain in the SERPS on trademark searches) Presented as if you should be able to control what shows up in the SERPS when your trademark term is searched. I believe that search engines use their algorithms to determine which content is most relevant to a search term for users (on that note Jason Calacanis at affiliate summit west cautioned affiliatea not to poison the internet with spam pages)
    * Coupon sites are bad too according to George. Once again I think this depends on the advertiser.
    * Domain squatters are bad as well. (I would agree on this one to some degree. I'm not sure how ethical it is to get mispellings of a brand domain and profit from the traffic that accidentally goes there because someone is looking for another brand... but that's another discussion)

    The overall impression I was left with is that affiliate marketing is bad and all affiliates are trying to do is steal your hard earned traffic and profit on it at your expense.

    Is this really the case? I do know that there tends to be a general conception with those I talk with that this is true. I do believe that there are affiliates out there that give the space a bad rep but I also know there are some great affiliates out there that create legitimate sales and traffic.

    During the question and answer period I waited for an affiliate to jump up and say something... to put things straight. I eventually got up and shared a few of my own thoughts that I really don't think these statements accurately reflect the affiliate space and we had some discussion about good uses of these channels by affiliates and what the real point is... that affiliate managers need to be clear in their programs what the expectations of affiliates are and what the TOC is. Are there really that many affiliates out there that break the TOCs outlined by advertisers?

    Anyways. Just thought I'd share the experience.

    All the best

    Mike

  2. #2
    ABW Ambassador danay's Avatar
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    there are alot of affiliates that break TOCs, however, there are a ton of good ones too. I guess some merchants think that they could generate the same sales on their own, internally. They are highly mistaken. All it takes is one very good ppc affiliate to generate a ton of volume for a program that didn't have it before. And if there is no aff program, the traffic and sales just go to the competition who IS running a successful program.

    IMO, an aff program is essential to an online merchant's business, and whether or not they like the idea, it is a sales channel that has proven itself tenfold. How else could you generate that kind of volume these days? Internal online marketing staff can realistically only do so much.
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  3. #3
    ABW Ambassador Rehan's Avatar
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    Wow, it sounds like it ended up being very different from the workshop description, part of which reads:
    This workshop will examine such important areas as how to streamline the connection process so affiliates can easily link to a retail site and get the latest product and promotional data; how to reward affiliates so that top producers get a higher incentive and how those tiered rewards have changed in the past year; and how to make sure you are competitive with other marketers using your affiliates. In addition, retailers can undertake behind-the-scenes initiatives that help affiliates do a better job, such as providing affiliates with a daily stream of user reviews, which allows pages to be fresh every day to maximize search engine indexing; color swatching, which makes an affiliate site more engaging for a viewer; and links to similar products, which affords an affiliate the opportunity to earn more commissions.
    Too bad they didn't stick to that agenda. It would've been a more balanced and more worthwhile workshop that way.

    Yes, there are plenty of "bad guys" in affiliate marketing...but you shouldn't throw out the baby with the bathwater.
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  4. #4
    Outsourced Program Manager kgarcia's Avatar
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    Hi Mike,

    I wanted to catch you after the presentation, but I was doing a bit of damage control with those sitting around me. I too was unhappily surprised at the negative picture that Barbara Hurd ( Harry & David ), Vicki Updike ( Miles Kimball ), and George Michie ( Rimm-Kaufman Group ) painted of affiliate marketing today.

    The official show guide used this as the synopsis for their presentation:
    Affiliate marketing is often the quiet one of the major online marketing methods. As a result, many retailers don't know the nuances of affiliate marketing well enough to use their affiliate programs most effectively. This workshop will examine such important areas as how to streamline the connection process so affiliates can easily get the latest product and promotional data; why top affiliates should get higher incentives and what those incentive are; how to make sure you are competitive with other marketers using your affiliates; behind-the-scenes initiatives to help affiliates do a better job, such as providing a stream of user reviews, which allows pages to be fresh every day to maximize search engine indexing; and links to similar products, so affiliate can earn more commissions.
    (bad grammar/typos are not mine...this is verbatim from the guide)

    I can honestly say that with the exception of the product feed, NONE of these topics were even remotely discussed and when an audience member brought up the feed, Mr. Michie discouraged them from pushing their product feed to affiliates as in his opinion, all affiliates would do is push it into comparison shopping engines which the merchant could do themselves for free.

    Barbara Hurd's presentation seemed mostly to focus on the belief that affiliates no longer bring any additional value to the table as affiliate marketing is now a business and gone are the days when there was no aggressive marketing by affiliates. It seemed to me that her view of affiliates was that they were direct competitors that needed to be sat upon regularly. She mentioned that Harry & David is scaling back their program to invite only and that they now have a QA specialist in house whose job it is to do nothing but police their brand and make sure that their company name is not being utilized in metas, alt tags etc. As they are an older brand, and if their ToCs contain these as prohibited actions, I completely understand their desire to enforce them, but I couldn't help but think that she was a bit too gleeful at involving lawyers.

    The section by Vicki Updike was a little better in that she attempted to back up her statements with data. My main concern with her data is that she wasn't clear about how she reclassified customers from her matchback process. Working for a catalog/internet merchant for many years, I know that the catalog division is always looking to reclassify customers into their bucket as catalogs are terribly expensive to design, print and distribute and this reclassification helps justify continued catalog production. As any merchant knows, the more touch points a merchant has with a customer, the more likely they are to be familiar with the brand and actually purchase. A customer can receive a catalog many times and never make a purchase, but if an affiliate link is what finally pushes them to buy, why should their orders be classified as catalog driven when that's not entirely the case?

    As for George Michie's presentation...where to begin? I was disappointed at the name calling to start. I found it very unprofessional and unneccessary, especially since it happened several times throughout his presentation and the question session afterwards. I found his praises of BHO laden affiliates to be short-sighted and his classification of PPC affiliates as "Fiends" and negative comments about coupon sites to be downright off the mark and rude. His final slide comparing the affiliate marketing industry to a smelly skunk really was the final blow. I went up and talked to him briefly after the presentation (and several merchants as well) and asked him to contact me so Wade Tonkin and I can interview him on our podcast and have him defend and explain some of the claims he made this afternoon. I sincerely hope he accepts.

    Some of the points they brought up individually were valid. There are a few affiliates that bend and break the rules and do things that they shouldn't. (Note, I said a -few-, not ALL as all three seemed to imply.) That's where a good affiliate manager comes into play...whether it's someone in house or outsourced, it's their job to run a clean program and police their ToCs. I was very surprised to find that it seemed that none of them had taken the time to really read the new New York tax law however...Vicki took a stab at the audience question on the topic, but her response seemed rather odd as their current plan is to just keep affiliate sales from New York affiliates under the threshold so they don't have to deal with it.

    My biggest disappointment was that there were so many, many merchants in the room that wanted to -learn- how to be better affiliate managers, but all they got was a lesson in why they should close their programs down. I managed to talk to a handful, but there were at least 400+ people in the room.

    Very disheartening.
    Karen Garcia
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    Are you a content creator? A serial entrepreneur? New to the space or a long time player? We'd love to work with you!
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  5. #5
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    "He mentioned that another class of good affiliates is user benefit sites like upromise, schoolpop, and ebates."

    "Coupon sites are bad too according to George."

    The guy is very ignorant. Nothing really more to say.

  6. #6
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    kgarcia - I too was unhappily surprised at the negative picture that Barbara Hurd ( Harry & David ), Vicki Updike ( Miles Kimball ), and George Michie ( Rimm-Kaufman Group ) painted of affiliate marketing today.
    That's funny that some of the worse affiliate programs are run by "Harry & David" and "Miles Kimball"
    I caught Harry & David not reporting, Miles Kimball redirecting the traffic to their call center and eBates popping on my sites for both of them. I quit working with these two losers around 2002 but I guess they are still using their old tricks. Well, they have the affiliates they deserve. If they are not happy, it's too bad for them.
    Miles Kimball can't stop sending me private offers. I wonder why?
    http://forum.abestweb.com/showthread.php?t=32501
    http://forum.abestweb.com/showthread.php?t=92024

    From what I'm seeing there are really many affiliates out there that break the TOCs outlined by advertisers, lots of them. These merchants are helping the bad affiliates to succeed. They are the ones to blame for giving a bad reputation to affiliate marketing. Affiliates are just using the loopholes. Merchants don't enforce their TOS, they don't kick out bad affiliates, they pay crooked networks to run their programs and hire AMs paid on commissions. No wonder it doesn't work.

  7. #7
    2005 Linkshare Golden Link Award Winner  ecomcity's Avatar
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    Quote Originally Posted by Zeus
    That's funny that some of the worse affiliate programs are run by "Harry & David" and "Miles Kimball"
    I caught Harry & David not reporting, Miles Kimball redirecting the traffic to their call center and eBates popping on my sites for both of them. I quit working with these two losers around 2002 but I guess they are still using their old tricks. Well, they have the affiliates they deserve. If they are not happy, it's too bad for them.
    Miles Kimball can't stop sending me private offers. I wonder why?
    http://forum.abestweb.com/showthread.php?t=32501
    http://forum.abestweb.com/showthread.php?t=92024

    From what I'm seeing there are really many affiliates out there that break the TOCs outlined by advertisers, lots of them. These merchants are helping the bad affiliates to succeed. They are the ones to blame for giving a bad reputation to affiliate marketing. Affiliates are just using the loopholes. Merchants don't enforce their TOS, they don't kick out bad affiliates, they pay crooked networks to run their programs and hire AMs paid on commissions. No wonder it doesn't work.
    Correct observation Zeus. The reason for allowing the "affiliate bashing" session, in front of 400 merchants, is no one running the show & tell could come up with anyone in their affiliate top 20 earners who weren't TOS breakers, Trademark poachers and Cart interlopers. The group has no idea whatsoever how to redistribute commissions so they flow towards 100 % legit affiliates driving new ecatalog business. Those 400 merchants allowed affiliates to run wild as affiliate managers just devised ways to pad the sales credit figures towards their herd of cats. Afterall... they originally were fighting for budget normally going to traditional advertising.
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  8. #8
    Lite On The Do, Heavy On The Nuts Donuts's Avatar
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    Quote Originally Posted by Trust
    The guy is very ignorant. Nothing really more to say.
    I concur. I was going to point out some other things proving that's the case, but what's the point really, once someone shows glaring misunderstanding, time to dismiss and move on to my next task for the day.

  9. #9
    Comfortably Numb John Powell's Avatar
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    Quote Originally Posted by mblyman
    I quick report from day 1 at the Internet Retailer Conference and Expo 2008 in Chicago.
    Thanks for a good report on the conference Mike.


  10. #10
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    Thank you mblyman for such an informative post. It's interesting who the IRCE chose to speak and present merchants. I still promote Harry and David - something I'll be thinking about today, looking at sales etc. Miles Kimball came off my site ages ago, when all the bruhaha broke out here at ABW.

    It was interesting to hear just what these types want us to do though.

    mblyman if you have time to give us anymore updates, they would be greatly appreciated.

    Lily

  11. #11
    ABW Founder Haiko de Poel, Jr.'s Avatar
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    Wow, isn't it great that so many of the EX-CJ people who not only lied to but also marginalized small affs, and steered / help steer merchants to the parasites are now heading up the new iteration of the industry association?

    There isn't one person in that group who hasn't supported or directly dealt with a parasite in one way or another, besides our very own Rexanne.

    But fear not, now we have them to save affiliate marketing, oh sorry they can't since it's the performance marketing association ... AM is only a small portion of performance marketing so attention has to be directed to protecting the greater profit centers of the industry like loyaltyware (their nice word for parasiteware) and email marketing. Don't believe it, look at what's been happening and who has been winning CJ horizon and LS awards, it's only going to get worse.

    This industry is going to continue going down the damn toilet and misinformation like what was reported will only continue and only get worse as affiliates' interests aren't being protected nor defended - there are two sides to a story and quite frankly our story has been and is still being silenced.

    [/END Association Public Service Announcement ]
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  12. #12
    Moderator bibby's Avatar
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    There's no doubt that there are some bad affiliates out there but they are the minority. We provide a service to merchants. We generate traffic/sales for a fraction of what it would cost a sales team. We do the marketing and the leg work. We sweat our guts out for the dream, the hope of making a sale and we even dish out our own money to make that happen.

    It's up to guys like that misinformed bozo to police their programs. Don't just let anyone into your program. They have 100% control of their affiliate program and if they let junk in, they must be prepared for the junk they receive.

  13. #13
    ABW Ambassador 2busy's Avatar
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    it seems to be a common theme from the so called marketing 'leaders' that all affiliates are parasites, while real parasites are 'great partners'. I read one article when I was checking out the other article at ReveNews the other day and I thought it was supposed to be a parody, but no, it is one screwed up view of the AM world.

  14. #14
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    Thank you Mike for starting this thread. As a new affiliate manager I'm trying to learn as much as I can about the industry, including it's struggles.

    From my understanding it seems like AM is facing some negative PR. What is the best way to combat this?

  15. #15
    OPM and Moderator Chuck Hamrick's Avatar
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    Mike, this boils my blood because it is the very example of the other side of online marketing. This is the brand that bashes everything they can't control.

    I can tell you specifically that Barbara Hurd ( Harry & David ) destroyed the original affiliate program a friend of mine started. She also drove out most of their marketing department. They felt that 10% commission wasn't necessary because everyone knew their brand so they killed the original program.

    Folks, this is the battle that we need to fight, against brand managers who discredit affiliate marketing so they can justify their jobs. So if it drives them to private programs its better for the rest of us who work in an open channel.

    I have been trying for a year to speak with someone at IRCE but they choose who they work with.

  16. #16
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    That's it Harry and David are off my site.

  17. #17
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    Interesting thread.

    I also attended this presentation at IRCE. I wondered to myself right away if this would offend some in the audience.

    As someone who is about to embark on a larger scale affiliate program as a merchant, I know exactly what he is talking about. I also know why affiliates might be angry about this.

    If you are a merchant, there is a line between what is acceptable to you and what is not. We signed on with a "smaller" affiliate network last fall, and received an education quickly. More than one affiliate, despite our written contract, chose to use Adwords on our domain. This is traffic we would have received regardless. We disallowed the sale three times- and they STILL kept doing it. Eventually they figured it out when we banned them from the program- but you can see why this might be frustrating for a merchant. Our domain and/or brand is well known in it's field, and I didn't feel that we should pay someone trying to use that domain as a way to make money.

    On the flip side, if you bring us traffic that we didn't have- and get a sale, I'm comfortable with the idea that we should pay you. It's as simple as that. AdWords and Y! Marketing are more expensive.
    As we embark on our new affiliate program, can you tell me what to look for? What can be done to watch out for those truly honest affiliates?

    I felt the presenter at IRCE was a little harsh. For those that were there, is it just me, or did it seem that the presenters were VERY self-promoting? My last attendance was in 2006, and I felt that there was much less of that then. IRCE will need to watch this, or the conference will get too big for it's britches.

    Oh, and BTW, I had several merchants tell me that the IRCE 500 was not that accurate. They compiled stats for those merchants that WANTED to participate...if they didn't, they weren't in.

  18. #18
    2005 Linkshare Golden Link Award Winner  elalpo's Avatar
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    A very interesting post.

    And I actually wanted to attend the conference (couldn't due to family emergency).
    I have removed Miles from my site and never joined Harry & David and obviously won't.

    All presenters really remind me "old schoolers" - why have choices, why not monopolize? Really feels like Communism.. Lol

    Isn't it great that there are all those choices!

    Merchants. Choice to promote your products and co-exist - whether it's old-fashioned methods (TV, Radio, magazine) or something new (affiliates, mobile, etc)!
    Customers. Choice to buy from TV, retail, online, mobile, etc...

    Affiliates have choices to advertise merchants they want.
    And merchants to pick affiliates they want to work with.

    I guess the presenters were simply telling their own opinion - so let's feel sorry for them. Not many share that opinion. I just wish there were more presenters with other opinions on the affiliate industry.

    .

  19. #19
    Influencer Marketing GravityFed's Avatar
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    Wade (from GTO) and I had a long talk about this yesterday. What a shame that Internet Retailer would appoint people with this kind of ill perception on the value of the channel. Maybe they (the organizers of the event) didn't realize how off the mark these folks were...

    Fact is, if they had handled their programs responsibly in the first place, then they would have a VERY different opinion of Affiliates.

    From Mike's entry post:
    He mentioned that another class of good affiliates is user benefit sites like upromise, schoolpop, and ebates.
    And Karen's post #4:
    Mr. Michie discouraged them from pushing their product feed to affiliates as in his opinion, all affiliates would do is push it into comparison shopping engines which the merchant could do themselves for free.
    Really? Is that the extent of what Affiliates can do with datafeeds?

    I probably should have taken the path of Trust and Donuts on this thread but I couldn't resist commenting further.

  20. #20
    Moderator bibby's Avatar
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    This whole thing is completely stupid and moronic. Blaming affiliates because a merchant had no clue on affiliate marketing and how to run a respectable, profitable and ethical program is like blaming every merhcnat in America and calling them crooks because a few companies like Enron were cooked the books, is insane.

  21. #21
    OPM and Moderator Chuck Hamrick's Avatar
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    bibby, this is a reality and when you sit on this side of the fence you hear it all the time. I am glad everytime a big name brand folds their affiliate program as it give the new merchants a chance to compete without the huge budget. It also drives the parasites out as the big brands just love them.

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