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  1. #1
    lurk
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    March 25th, 2005
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    Primary Ads/DirectTrack/Kawabunga Predicament
    Here is an article I was reading this morning that I found very interesting....



    In response to a lawsuit filed against them last week by Primary Ads, DirectResponse has now begun an advertising and PR blitz to reveal what they see as the paradox in Primary's suit. The campaign—which takes on Primary's attempt to force DR to continue to power their ad network—takes aim at the fact that DR's largest competitor (Kowabunga, owned by ThinkPartnership—the same parent company that owns Primary) is using the DirectTrack system to power their own CPA network. According to Jason Wolfe, CEO of DirectResponse, his company plans to cut power to the PrimaryAds system on June 7th, when their current contract expires—leaving hundreds of affiliates to wonder where to take their business. When asked for comment, industry expert and co-founder of Affiliate Summit, Shawn Collins, offered, "It's not a matter of PrimaryAds choosing DirectTrack over KowaBunga's MYAP. There simply isn't a platform through KowaBunga to run a CPA network." And Andrew Moskowitz of Icon Advertising Solutions agrees that the situation is a difficult one. "ThinkPartnership has a problem in so much that they must use DirecTrack for at least a while for their CPA network," Moskowitz suggested, "but then they are basically admitting that their own internal system can't compete with their competition." As for DR, they claim they did their best to try to stave off the sort of disaster that could come to pass on June 7th. "We attempted a business solution that allowed THK/PrimaryAds to remain a DirectTrack customer for the long term [if they would] agree to not create a competitive solution with Kowabunga to compete with DirectTrack." Jason Wolfe told us. "They declined and we gave them notice (sixty days – thirty days beyond our contractual obligation) to transition off of DirectTrack. They have since brought on a lawsuit in an attempt to force us to continue to provide them service." Doh! And the guys at Primary still aren't talking…

    I was talking to a Kawabunga rep about 2 weeks ago and they are developing software to handle an affiliate network but wont be ready for about a month... DirectTrack will only renew the license if PrimaryAds signs it for a long time. That sucks.

  2. #2
    ABW Ambassador
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    imho
    PA wants their cake and eat it too.

  3. #3
    Lite On The Do, Heavy On The Nuts Donuts's Avatar
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    Have it. Eat it. And smear some on their face. Seems they want it 3 ways. Dividing it into that many pieces usually means you don't quite feel full afterwards - usually need some more food - maybe some humble pie...

    How do you win, without also losing, when you arm wrestle yourself... in public?

  4. #4
    lurk
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    March 25th, 2005
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    Wow... I guess the gloves are off. In today issue of AdBumb DirectTrack purchased an ad (which runs anywhere from 2k to 5k to buy) with one guy looking over another guys shoulder and the ad says "DirectTrack, so good even our competitors use us" and it links to the press release explaining the situation.

  5. #5
    ABW Ambassador
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    Nice site for some thoughts on PA...

  6. #6
    Lite On The Do, Heavy On The Nuts Donuts's Avatar
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    the arm wrestling match has blossomed into a full-fledged hockey game then...

    let the bodies hit the floor.

  7. #7
    Eternal Optimist Look4's Avatar
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    Of course, I haven't seen the contracts in question, but my guess is that DR is exercising an "early out" clause of the contract - something common in many contracts. The fact that they speak about giving 60 day (instead of 30) indicates that the actual contract isn't expiring, but that DR has chosen to kill the existing contract.

    I personally think this says a lot about the kind of company DR is.

    Imagine you are a sucessful merchant, who built up their business with AM using one of the networks. You've built up a good online catalog and order entry system, you are now big enough that you figure it doesn't make sense to keep shelling out flat fees and percentages to a network for the AM part - you have the resources to build your own AM tracking system. In fact, you plan to build something flexible enough that you could even offer it to other merchants in the future.
    But before you get it finished, your existing network says they are exercising their early termination clause. They tell you that you either sign up to use their service long term, or they'll cut you off in 30 (60) days. So until you get your AM piece finished, you have no way to track affiliate sales. Your affiliates are furious at YOU, not the network, your sales plummet, and your reputation gets trashed. All because the network decided to pull the plug early and undermine your plans ot become more efficient in your product chain.

    Maybe DR has other reasons, but it seems as though they are attempting to undermine PA before PA has a chance to get their new system in place and therefore create complete havoc for all of PA's existing clients - pushing many of them to leave PA. That's dirty pool. That's intentional interferance with business. And the current DR advertising based on the action is in incredibly poor taste.

    Again, I don't know all the particulars - I'm sure it's much more complicated than it appears. But on the face of it, I wouldn't trust DR as a business partner if they would do this to one of their largest customers, regardless of that customer's intentions to enter their market.
    Last edited by Look4; May 30th, 2005 at 05:19 AM.
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