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  1. #1
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    Ad RX Media
    VCLK squeezed out a press release titled: ValueClick Launches Premium Health & Wellness Network. The URL for this new venture is adrxmedia.com.

    adRXMedia.com has a separate login for publishers and advertisers; It appears to me to be yet another diversion from VCLK's core affiliate marketing business.

    BTW: I am not sure what I think of VCLK going into the health marketing industry. Historically, VCLK has been better at spreading parasites than in providing cures.

  2. #2
    OPM and Moderator Chuck Hamrick's Avatar
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    It appears to me to be yet another diversion from VCLK's core affiliate marketing business.
    ValueClick's core business is not affiliate marketing, affiliate marketing is only a portion of their overall business. Check their SEC filings for a list of all verticals.

  3. #3
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    Quote Originally Posted by Chuck Hamrick
    ValueClick's core business is not affiliate marketing, affiliate marketing is only a portion of their overall business. Check their SEC filings for a list of all verticals.
    Gosh, Chuck, I certainly am stupid.

    Thx for pointing that out.

    Where is this SEC filing stuff you are talking about?

    Could it possibly be the web site where I found the press release?

    Truth is, I was really wondering what all of that stuff was. The site has a long series of press release thingies that introduce exciting "vertical markets" and there are these quarterly report thingies that keep showing the income for the company comes from its price comparison engine, affiliate marketing and ad delivering technology.

    Chuck, I agree 100% that VCLK does not think much of its affiliate marketing line. If they did they would be investing in it instead of creating competing products like this adRXMedia.

    BTW, the success CJ's price comparison program and its ad delivery technology are dependent on CJ. Were they to lose CJ, both of their other income sources would collapse soon after.

  4. #4
    ABW Ambassador Joshua's Avatar
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    Quote Originally Posted by yintercept
    BTW, the success CJ's price comparison program and its ad delivery technology are dependent on CJ. Were they to lose CJ, both of their other income sources would collapse soon after.
    Care to elaborate a bit on this? I'm interested in your take. I don't know much about ValueClick as a whole (as I've only done business with CJ, and years ago with WebSponsors), but how do their comparison sites and technology platforms (I assume you mean Mediaplex) rely on CJ? From my understanding they haven't integrated most of their systems yet, and what they will integrate is currently in the development phase.

    To me, their press release seems to infer that this is just a specialized division of ValueClick Media, and nothing that detracts from CJ.

  5. #5
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    Sorry about the facetious reply. As CJ is the leader in Affiliate marketing I believe it is valuable for an affilate board to follow the doings of the corporate as corporate has a great deal of influence on the market.

    VCLK's balance sheets show the company's price comparison engine is its leading source of revenue followed by the affiliate gig. Stepping back. Why is CJ doing better than the dozen other product comparison shops ... well, 'coz of their affiliate program that gives them the inside scoop on all the marketing strategies and detailed data about merchant programs gleened through CJ.

    If it were not for the affiliates, VCLK would have failed with the rest of the dot bombs.

    CJ Affiliates are absolutely nuts to flip over and play submissive and say that we are just one of corporate's vertical channels.

    VCLK's shares are currently in the tank ... so now is a good time for affiliates to yell at them.

  6. #6
    ABW Ambassador Joshua's Avatar
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    I'm not sure how much PriceRunner benefits from CJ's existance. Maybe there are some strategies that it can glean from the top merchants who participate in both, but comparison shopping is a completely different beast than affiliate.

  7. #7
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    Quote Originally Posted by Joshua
    I'm not sure how much PriceRunner benefits from CJ's existance.
    The way to answer this is to ask the simple question: Could Joe affiliate make a price comparison engine that affectively competes with PriceRunner?

    If not, then there is a dependency between the two vertical lines.

    The two challenges for a price comparison engine is getting the product data for the engine and in getting the merchants to pay you. This work was done setting up CJ.

    If VCLk ever lost CJ, then PriceRunner would be just another Joe Affiliate price comparison site and would immediately lose half of its income to whatever affiliate network handled the datafeeds and merchant accounts.

    I think affiliates should demand greater respect from VCLK.

    BTW, VCLK just dropped a press release saying that the affiliate network continues to grow.

  8. #8
    ABW Ambassador Joshua's Avatar
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    Quote Originally Posted by yintercept
    The way to answer this is to ask the simple question: Could Joe affiliate make a price comparison engine that affectively competes with PriceRunner?

    If not, then there is a dependency between the two vertical lines.

    The two challenges for a price comparison engine is getting the product data for the engine and in getting the merchants to pay you. This work was done setting up CJ.
    VLCK acquired PriceRunner in 2004, when it was already well established with merchant relationships. PriceRunner works on a CPC model with merchants to my knowledge, and its datafeed operation is completely separate from CJ. To see what an affiliate comparison site looks like (on a CPS basis), just see Pepperjam's http://www.shogging.com - Not quite a PriceRunner, to say the least.

    PriceRunner is huge. They don't work through affiliate channels - They work with direct deals, or through agencies/technology companies specializing in comparison shopping such as ChannelIntelligence (BestBuy and CircuitCity use this I believe) or ChannelAdvisor.

    Managing a comparison shopping channel is extremely different than affiliate, both on the advertiser end, and on the sales end (getting advertisers for the service).

  9. #9
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    I concede. There is not a symbiotic relation between price comparison engines and affiliate marketing.

    This is interesting. A press release says that VCLK purchased PriceRunner toward the end of 2004 for $28 million dollars. At the time that was considered top dollar for a leading price comparison engine. VCLK's last Quarterly Report claims to have made $33m gross profit from its price comparison engine.

    Just a few years after the purchase, earnings are greater than the selling price of the company. I thought that the explosive growth in PriceRunner was due to a symbiotic relation between the affiliate marketing channel and the PriceRunner channel.


    Joshua proved conclusively that there is no such symbiotic relation. Pricerunner would have had the same explosive growth if it remained a free agent.

    Gosh, the people who sold PriceRunner sure are stupid. If they just sat tight for two more years, they would have made more in profit than they got for selling the company.
    Last edited by yintercept; September 16th, 2008 at 05:35 PM. Reason: the link wasn't closed corectly.

  10. #10
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    "I think affiliates should demand greater respect from VCLK."

    What does that mean. What do you want/expect affiliates to do. What does this have to do with anything.

  11. #11
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    Quote Originally Posted by Trust
    What does that mean?
    In the context of this thread, it questions why VCLK is building adMediaRX as a completely separate entity with a separate login and completely separate infrastructure. Why are they building new things rather than adding onto existing things?

    In the larger scheme, I have read almost all of the quarterly reports and press releases of VCLK. The company has never given its affiliate channel the respect that it deserves.

    The company has a long list of megers, acquisitions, new products and big spam campaigns all designed to diversify away from affiliate marketing, but not much in the way of efforts designed to help affiliates increase their income.

    For example, VCLK has not come up with any new tools to enhance revenue since the BeFree merger. They aren't they making a push to deliver widgets, video links or stuff like that. Why didn't they incorporate that deals database thingy from the BeFree program into its CJ program?

    The only real innovation the company's come up with in recent years is the LMI links ... that innovation was not driven by a desire to help affiliates.

    If VCLK saw its affiliate channel as a primary source of income, they would be doing a lot more to help increase income in the channel. Corporate would be investing in ways to help increse affiliate income. They would not be throwing their effort into ways to distance themselves from their affiliate channel.

  12. #12
    OPM and Moderator Chuck Hamrick's Avatar
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    yintercept, I would think they have separate logins because they aquired them as a new business unit and want to keep them separate. It would make sense to merge the funtionality together to benefit the open market place. LinkShare has hooks for their UK network and lead gen program MediaTracker in the merchant interface.

    Since you are up on the quarterly reports would you mind posting the revenue from the different business units at VCLK? It would be interesting to see the breakdown.

  13. #13
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    There was a link to the 10Q in my post. I list VCLK's vertical lines by revnue:

    Media ($79,319K), Comparison Shopping ($45,439K), Affiliate Marketing ($29,827K)** and Technology ($10,494k).

    What matters most to investors is income. So here are the segments listed by income: Media ($18,365K), Affiliate Marketing ($14,463K), Comparison Shopping ($10,494K), and Technology ($4,487k).

    Viewed in a vacuum, the data seems to suggest that Comparison shopping is a better business than affiliate marketing. However, I repeat my observation that the owners of PriceRunner.com thought their business was worth less than $28M, and that it really is access to the affiliate channel that created the big boost in income.

    The income sheet also indicates that Media is a better line of business than affiliate marketing. Of course there's tens of thousands of firms in internet media. I contend that the CJ channel is the only thing that gives VCLK an edge in this market. VCLK would have dotbombed without the affiliate channel. The media customers are attracted by access to the affiliate network.

    **Breaking out the affiliate marketing line we see:

    29,827k Revenue
    04,527k Cost of revenue
    25,300k Gross profit
    10,837k Operating expenses
    14,463k Segment Income. (actual profit)


    I will show my ignorance here. I don't know which line reflects payments to affiliates! I've assumed that payments to affiliates are not listed on the income sheet. I would really like to know this number. My guess is that total payments to affiliates is not much higher than the $30 million in revenue.

    It is interesting to compare VCLK to GOOG. Google came into the internet ad business about five years after CJ. The big difference between Google and VCLK is that Google's mantra is "do no evil" while VCLK has been a prime mover in the development of every internet nasty from annoying popups and parasiteware to misleading spam.

    In the period that VCLK reported $30M in revenue from its affiliate channel, Google reported $1,352M revenue for "Google Network web sites." I contend that its reputation of being a good network citizen is the prime factor in Google's phenomenal success.

    Yes, I do recognize that my beliefs are beliefs.

    It is possible to read a bunch of different things into VCLK's company data. The most common thing to read into the data is that affiliate marketing was a bad idea from the start. My belief is that affiliate marketing is a good idea, but that the corporate drones at VCLK keep undermining the channel.

    I wish I had access to Share-A-Sale and Avantlink Data. They play fair and I suspect that they will eventually end up being larger than the CJ affiliate line.

  14. #14
    OPM and Moderator Chuck Hamrick's Avatar
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    yintercept, you've out done yourself and I thank you. IMHO your numbers show that media is about 3x and comparison shopping 2x larger than affiliate (rounding up as I tell my kids ten minutes to bed time).

    48% Media
    28% Comparison Shopping
    18% Affiliate Marketing
    06% Technology

    So affiliate marketing makes up less than 205 of revenue and is orphaned by the rest. That is why they don't give it the respect we do.

    SAS and AvantLink are my two favorite networks but are private and not venture or stock backed so I doubt they would disclose.

  15. #15
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    Chuck,

    I agree that you will find an infinite number of interpretations of any data set. This is the nature of mathematics. There is an infinite number of curves through any given set of points.

    My interpretation that the affiliate channel is underdeveloped is supported by the same data set.

    The interpretation you give is dependent on the assumption that there are no cross connection between the different vertical lines of VCLK. Central to your interpretation is the notion that the developers of PriceRunner undersold their product by about $300M.

    The Valueclick web site and most of their literature clearly market their services as bundle. The MediaPlex program advertises its access to the CJ clickstream and impression data as the thing that differentiates itself in the market.

    BTW: I do not consider VCLK a well run company. The market capitalization of VCLK is a pathetic $833M. This is substantially less than the sum of the initial investments of the companies that form the conglomerate. When you consider the grundles of capital tossed into efforts to diversify away from and to undermine the affiliate channel, it is amazing that the channel continues to show up well in the corporate ledgers.

  16. #16
    OPM and Moderator Chuck Hamrick's Avatar
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    Interesting comment on the market capitalization. As a CJ merchant I have yet to be approached with other opportunities. Have attended 2 CJU's (not this one unfortunately) and have yet to be cross sold. So I think some of your observations are understandable but I feel that the bigger revenue stream is for ad serving, shopping and media.

    LMI may have been the best thing that they could have offered to affiliates, to let them know what was converting and to push ads that made money. Too bad they didn't pitch it to affiliates in a win-win scenerio. I would have thought they would have tested it with super affiliates, proven the point then related that to general affiliates.

  17. #17
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    "LMI may have been the best thing that they could have offered to affiliates, to let them know what was converting and to push ads that made money."

    Javascript links as the only type of link available was the best thing for affiliates? What are you talking about. Do you remember all the uproar over that from everybody. If they went ahead with that, it would have ended the network. What they did instead, what most people suggested, is still have the regular links and have the javascript as an option for those that want to use them. So they do have javascript links available.

  18. #18
    OPM and Moderator Chuck Hamrick's Avatar
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    Javascript links as the only type of link available was the best thing for affiliates?
    That is not what I am saying so don't get your panties in a bunch. If Javascript would have moved affiliate marketing light years ahead based on better technology then it would have been a good thing. They never sold it to affiliates but rather forced it down their throats which plays into the comments on this thread that they don't value the affiliate channel.

  19. #19
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    Well that's what LMI was all about in case you forgot, javascript as the only type of link. And javascript is not new and the only thing it would have moved is merchants away from CJ and to LS, GAN etc. There was nothing to sell, you can't sell craziness like that. Again, do you remember the uproar? That was for a reason, because it was a dumb idea. And then because of all of that, they made the right decision, have it as an option. Chuck, there is no selling of an affiliate network where the only type of links that would be available for affiliates are javascript links and you can go back and reread all those threads, the petition for many reasons why, most of them pretty obvious. And I was basing my response on what you said:

    "LMI may have been the best thing that they could have offered to affiliates, to let them know what was converting and to push ads that made money. Too bad they didn't pitch it to affiliates in a win-win scenerio. I would have thought they would have tested it with super affiliates, proven the point then related that to general affiliates."

    There is no win-win scenario no matter how you push it with only 1 option for links.

    As far as the other stuff, about the channel. I don't know. They tried LMI, which was completely off. The had something with new flash ads. I don't use them. But you want stuff like videos etc? Sure why not, SAS has them, some LS merchants, other networks, maybe it's coming who knows. But as an affiliate you can make those on your own. That's part of why we're here, to market, find ways to market etc. And what VC does really has no affect on my everyday business. I login, find merchants I think will work, try them out and try to make money. Same thing as every year.

  20. #20
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    CJU is an event for affiliates. I really am not aware of Valueclick cross selling solutions to regular trailer-park-joe type affiliates. It is possible that they sell advanced tools to super affiliates. I wouldn't know about that. I am still trying to get the antenna adjusted on the doublewide.

    They do the cross selling to merchants. The ValueClick says they sell "customized packages" with a mix of ad serving, affiliate marketing, and comparison shopping. Similar wording is in a ton of corporate press releases. That is clearly cross selling to me.

    The fact that they are selling this stuff to merchants but aren't selling it to affiliates shows that they really aren't thinking of affiliates when they make it.

    BTW, the LMI program didn't give the affiliate any more information or resources that would help affiliates make sales. I ran several hundred thousand LMI ads and simply saw my CPM drop to an untenable rates.

    I believe that if CJ really had its heart in affiliate marketing they would actually be a much more successful company. Affiliates might be quirky, but I think they are great people.

    'nuff said, the wrestling match is coming on and I got to get the antenna adjusted. Maybe I should check into getting the trailer moved to a park with better reception.

  21. #21
    ABW Ambassador Joshua's Avatar
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    Quote Originally Posted by yintercept
    They do the cross selling to merchants. The ValueClick says they sell "customized packages" with a mix of ad serving, affiliate marketing, and comparison shopping. Similar wording is in a ton of corporate press releases. That is clearly cross selling to me.
    Your selective reading is quite amusing, actually. Did you read what Chuck just posted?
    Quote Originally Posted by Chuck Hamrick
    As a CJ merchant I have yet to be approached with other opportunities
    He was clearly not talking from an affiliate's perspective. Also, CJU is not just an affiliate event - Many merchants attend, and it is highly pitched to CJ advertisers.

    From my past experience working on the advertiser end of some CJ programs, the other divisions of ValueClick weren't mentioned or cross-promoted by CJ. Maybe ValueClick's other divisions promote CJ, but there's a large difference, even between how ValueClick Media works CPA deals (including the old WebSponsors/WebClients division) compared with CJ. You'll rarely see synergies between the two CPA/CPS/CPL channels at VCLK, be it in advertisers or technology solutions. If those synergies aren't happening between their commission-based divisions, what makes you think the synergy is there with their PPC shopping division?

  22. #22
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    Quote Originally Posted by Joshua
    Your selective reading is quite amusing, actually. Did you read what Chuck just posted?
    Joshua, you are completely correct. I should be chastised for not addressing Chuck's comments about his experience at CJU in a thread I started about adRXMedia.

    My arguments that ValueClick markets its products in an integrated fashion is based solely on what they say on their home pages and a few hundred press releases like the one they just printed on MediaPlex Path to Conversion product which allows merchants to track conversions through all of their marketing channels. There is no reason to assume that all channels include affiliate marketing (well, other than the fact that they enumerate affiliate marketing, search marketing and their comparison engine).

    Quote Originally Posted by Joshua
    You'll rarely see synergies between the two CPA/CPS/CPL channels at VCLK
    I find the statement that the different divisions doing CPA/CPS/CPL and PPC don't talk to each other. This pushes me back to my argument that ValueClick has been undermining its affiliate channel.

    At the dawn of affiliate marketing both CJ and BeFree offered a rich mix of CPS, CPA and PPC merchants. The networks failed to provide adequate protection from click fraud. They allowed affiliates to put PPC ads in popups, and promoted CPA programs to incentive web sites; thus generating millions of false leads.

    Affiliate marketing simply means that there is an established direct relation between publisher and advertiser. Performance marketing simply means that advertisers use performance metrics to judge the quality of their traffic. There was a really nice mix of different campaigns in the early days of the industry. This all fell to the way side because the networks failed to properly police their products.

    If you look at ABW archives you will find affiliates screaming about the abuses and begging for the networks to take action.

    If the networks had taken the steps to protect their PPC merchants, then there would be a large number of merchants with PPC merchants today. There would be substantially more more money in affiliate marketing and VCLKs income from affiliate marketing would be higher.

    If a network provided the tools to police a PPC program, then we would see such programs.

    BTW, I could see a PPC program using LMI links. I would gladly use LMI links if it could help re-establish PPC programs in affiliate marketing.

  23. #23
    OPM and Moderator Chuck Hamrick's Avatar
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    yintercept and Trust,

    Your one sided debate is best left to the both of you. As affiliates I can understand how you only see things one way. This argument has denigrated to semantic BS. I am out of here, if you want to discuss with me personally send a PM.

  24. #24
    ABW Ambassador Joshua's Avatar
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    Quote Originally Posted by yintercept
    My arguments that ValueClick markets its products in an integrated fashion is based solely on what they say on their home pages and a few hundred press releases like the one they just printed on MediaPlex Path to Conversion product which allows merchants to track conversions through all of their marketing channels. There is no reason to assume that all channels include affiliate marketing (well, other than the fact that they enumerate affiliate marketing, search marketing and their comparison engine).
    Path to Conversion is simply an analytics package similar to that of Google Analytics, that allows an advertiser to track the path of users on their site, including what "path" the user takes to make a "conversion". This is not a feature available in CJ. All this press release does is announce real-time reporting of the system, something which as everyone here is aware, is also not available in CJ.

    ValueClick isn't even close to launching a universal tracking system/pixel/reporting database/version of Path to Conversion for all of their properties combined, and it's something they should have done long ago to provide more value. Your arguments are based on how ValueClick, a publicly traded company, likes to market themselves in press releases and their website. My arguments are based on experience.

    You also mentioned how the success of ValueClick's ad delivery technology is dependent on CJ - No, it's dependent on Mediaplex, their technology platform. If anything, the future of CJ depends on Mediaplex (to bring improvements and such), and not the other way around.

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