Affiliate Marketing Blog by Geno Prussakov « Geno talks about affiliate marketing, leadership, etc
Geno Prussakov on July 30th, 2014

Earlier this month The Wall Street Journal published an interesting article where Miriam Gottfried drew an analogy between a coupon affiliate and a sandwich shop assistant compensated on performance basis. Here’s how the reporter’s illustration went:

Imagine you own a sandwich shop and want to bring in new customers. You recruit five assistants and give them coupons to distribute, promising to give each credit for sales they generate. Four patrol the neighborhood, distributing coupons door to door. The fifth sits right outside the store, handing them to customers as they walk in.

Predicting who will get the most sales isn’t rocket science. But how much value is that fifth assistant actually providing?

The article then went on into analyzing RetailMeNot, a famous coupon affiliate who went public on July 18 2013 “at $21 per share” and “in its first day of trading its stock gained 32%” [source]. On February 27-28 2013 the price was at its peak ~$47 a share. In early July 2014, however, RMN’s share prices dropped to its lowest point in 12 months [details here]. Hence, the WSJ’s look into the company, and what may have affected the drop.

You may read the full article here, but in my today’s post I’d like to touch upon a few important areas brought up in this article.

Last Click Rule / Attribution

The article described RetailMeNot as an affiliate that “generates the vast majority of its sales from commissions on online transactions on which it receives ‘last-click attribution’” which is “when its site is the last place a shopper clicks before making a purchase.” They are right on the money here.

The “last-click” model which is currently the prevalent rule around the industry is indeed a foundational element which allows coupon affiliates to take advantage of the “last minute coupon search” customer behavior. However, it is important to understand that advertisers do not have to have their affiliate program structured in a way where they would just pay any affiliate that drives that last click. To avoid the above-referenced last-minute coupon search problem, merchants can set attribution rules of their own, whereby affiliates who drive the customer “back” to the shopping cart after he/she has gone to a search engine to look for a coupon, do not get credit (or get only a portion of the full commission, whereas the rest goes to affiliate who originally influenced the buying decision, or introduced the customer to the brand). If you are not familiar with how this works, take a couple of minutes to view ShareASale’s video on their “Tags & Rules” solution which allows advertisers to tie affiliate commissions to time-frames as well as click behaviors and patterns (pay special attention to the “1 Minute Rule” described there).

Other Solutions

Many of the larger (and smaller but sophisticated) advertisers with affiliate programs are already also employing other technologies to avoid the “assistant outside the store handing coupons to customers as they walk in” situation described by The Wall Street Journal.

Some suppress the coupon/promo code field altogether (unless the customer originated from a site like RetailMeNot and other coupon affiliate), others display coupons right on their own site (like Macy’s does), others also create dedicated “coupons” pages to outrank coupon affiliates on “TM + coupon” type of search phrases (see JCPenney’s example below), yet others offer no coupons altogether, and/or keep coupon affiliates out of their affiliate programs.

JCPenney coupons

There are also some merchants that would drop coupon affiliates’ commission three- or four-fold. However, this does not really resolve the problem of the last-minute coupon search, as similarly to this situation the affiliate cookie still gets set. And while there may/will be financial benefits for the merchant, it will hurt other affiliates — those who may have influenced the purchaser earlier in the clickstream.

Shopping Cart Abandonment

Finally, I cannot omit this important area which is brought up towards the end of the Wall Street Journal article in question. The “so-called shopping-cart abandonment” is a serious problem faced by every single online merchant. According to today’s Fireclick Index data it exceeds 69% (see the below chart) which matches Vibetrace’s estimates which say that in 2014 the shopping cart abandonment rate reaches 69.50% [source].

Shopping cart abandonment rates

This phenomenon is, actually, much more complex than consumers simply giving up “on purchases once they see the total.” Beyond the totals as well as shipping costs and/or taxes, some are comparison shopping, others get uncomfortable with the checkout process, the website’s navigation, or face payment-related difficulties, and then there are also those who find the delivery options unsuitable, or are influenced by one (or several) of the 14 factors ranked on the below-displayed Statistia’s chart:

Reasons for shopping cart abandonment

If and when a coupon affiliate, or a retargeting affiliate, or a remarketing affiliate brings back that customer hours or days later (with a help of a coupon, banner ad, email, or something else), there frequently is value in that, and they are worth compensating.

Conclusion

To make the most of your affiliate program and the different types of affiliates in it, manage it!! Don’t let it fly on its own relying on the last-click-wins or some other preset/default rule. Measure it and manage it. Only then it will yield incremental fruit. If you need external help with it, email me.

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Geno Prussakov on July 22nd, 2014

So… the time has come for me to announce the winners of the contest for Affiliate Summit East 2014 passes.

We’ve received really thoughtful comments from every entrant (for which I sincerely thank every one of those who took the time to submit them) and instead of picking the winners myself, I simply had no other choice but use a list randomizer instead.

So, I entered the names of all 5 entrants in there:

Affiliate Summit East 2014 Passes Draw

Hit the button, and got:

Affiliate Summit East 2014 Tickets Draw

Once again, huge thanks to all of you for your comments; and congratulations to the winners (who will receive my emails shortly). In case any one of the three winners cannot take advantage of their free Affiliate Summit pass, it will go to the next in line (as shown above).

Geno Prussakov on July 21st, 2014

This morning as I was reviewing affiliate applications in our clients‘ programs, I had to dig into one specific affiliate’s feedback (it was a ShareASale-based affiliate program, and they equip their advertisers with this great feature). It was their negative score that raised a red flag.

This affiliate positioned himself as a coupon-oriented affiliate, but their simplistic website (with nonexistent Quantcast and Compete.com data, and Alexa rank of 7,371,262) was just a mask for what they really were all about — of course, paid search violations or “trademark bidding” (a very common situation, by the way).

However, as I drilled down into the feedback left for them by other merchants and affiliate managers, I noticed one record (you may see it marked with an arrow on the below screenshot) that prompted me to write this blog post.

Zero affiliate commissions problem

Whether the affiliate violator is bidding on your trademarks (or other prohibited terms), harvests the coupons you email to clients, engages in cybersquatting/typosquatting, or any other prohibited behavior, lowering their commissions to zero (or any other low) percentage is not a solution to the problem. Banning them from the affiliate program is a much better route to go in these contexts.

Since most affiliate programs and platforms currently operate on the “last click wins” model, when the violator’s link is clicked – the cookie still gets set (frequently overwriting the previous affiliate referrer’s cookie). And yes, while you will save money on the violator’s “referrals,” you will often hurt the other (good!) affiliates in the process (preventing them from earning their well-deserved full commissions).

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Geno Prussakov on July 9th, 2014

You may remember me announcing that these lessons were coming… Well, time flies, and after many hours put in by many people, my two-and-a-half-hours’ video course for aspiring affiliates is now live on Lynda.com!

Affiliate Marketing Video Lessons

This video tutorial is split into 27 easily-digestible videos covering four major areas:

(i) Introductory remarks and the fundamental affiliate marketing principles,

(ii) Preparatory considerations,

(iii) Movies on how to roll out your affiliate efforts,

(iv) Videos on how to handle the day-to-day work, interweaving various types of online marketing with(in) your affiliate campaigns.

To get a taste of the tutorial (4 video lessons of which are available for your viewing absolutely free of charge), and/or to view the entire course, click here.

Sit back, relax, and enjoy it! Oh, and don’t forget to leave a review of the course, if you feel like it.

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Have you seen Affiliate Summit‘s Tweet yesterday? In case you’ve missed it, it read:

Affiliate Summit is affiliate marketing industry’s largest affiliate conference which is a must-attend due to many benefits, including the amazing networking and educational content it provides. Speaking of the latter, I personally highly enjoy presenting at Affiliate Summits, and it is also the conference where I spoke for the largest number of times.  The upcoming Affiliate Summit East 2014 (to be held in New York City on August 10-12) will be my 11th time speaking there.

At the New York conference in August I will be speaking on the 5 Foundational Pillars of Affiliate Program’s Success, covering the five key processes which every affiliate (program) manager must devote their time to: affiliate recruitment, activation, policing, communication, and optimization [see also the video here].

5 Pillars of Affiliate Program Management

I also have 3 Networking Plus Passes (currently valued at $549.00 each, and giving you access to exhibit hall, Meet Market, keynotes, sessions 1, 5, 9, and all sessions’ videos after the show) to give away.

The idea behind the giveaway is simple — contribute a tip (or case study), and get a chance to be featured in my presentation and/or win one of the Affiliate Summit East 2014 passes that I have.

So…

Task: Share a great example or a brief case study of effective (affiliate manager’s) work in any of the above-quoted 5 areas.

Prizes: 3 Networking Plus Passes and/or visibility in/through my presentation.

Important: To allow the time for your travel/lodging arrangements, the deadline to submit your comment is Monday, July 21 (of course, you’re most welcome to comment after this date too, but those “submissions” won’t qualify you for the prize(s)). I will announce the winners no later than July 22, 2012.

Many thanks in advance for your participation, and looking forward to reading your comments!

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Geno Prussakov on June 30th, 2014

Affiliate recruitment may be split into two main types: active and passive recruitment. Simply put, active recruitment is when affiliates find out about your program through your outreach, whereas passive recruitment is when they find you by themselves.

Affiliate recruitment

Twenty days ago we “turned off” all active recruitment for a (non-paying) client, but, naturally, affiliates were still finding out about their affiliate program (through a sign-up link on their website, our past announcements, affiliate program directories, and the affiliate network’s own directory of programs run on it). The (past) client wasn’t reviewing them, and feeling bad for these affiliates (the program is still active, operating smoothly on an “auto deposit,” and affiliates can still make money on it) I went in to analyze their applications and approve those who should be approved.

Two pieces of (non-sensitive) info/data I’d like to share with you today:

Volume: roughly 1 application per day.

Distribution of Affiliate Types:

  • Coupons/Deals – 53%
  • Content affiliates – 17%
  • Directories – 12%
  • Social – 12%
  • Cashback – 6%

So… if you rely on passive affiliate recruitment only, be prepared for the above numbers. I’ve noticed very similar situations in other affiliate programs in the past as well. While the volume may/will differ, the distribution of affiliate types will be very similar to the above.

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As many in the marketing industry know, affiliate marketing is one of the most cost-effective techniques for monetizing web site traffic and driving sales. New technologies such as mobile advertising and telemarketing are challenging the established methods. Telemarketing to users of mobile phone via “robocalls” or text messages is just the newest trick in the affiliate marketer’s arsenal.

Summary

The Telephone Consumer Protection Act (“Act”) was passed in 1991. The Federal Communications Commission’s (FCC) rules and regulations implementing the Act makes it unlawful to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system or an artificial or prerecorded voice to any telephone number assigned to a cellular telephone service, or any service for which the called party is charged for the call. Recent decisions provide guidance on how affiliate marketers can use text-message marketing without violating the TCPA.

Discussion

The Act makes it unlawful to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system or an artificial or prerecorded voice … to any telephone number assigned to a … cellular telephone service … or any service for which the called party is charged for the call. [47 U.S.C. § 227(b)(1)(A)(iii)]  The prohibition on calls to cell phones applies to text messaging. [Buslepp v. Improve Miami, Inc., No. 60171-CIVCOHN/ SELTZER, 2012 U.S. Dist. LEXIS 148527 (S.D. Fla. Oct. 16, 2012) (citing Satterfield v. Simon & Schuster, Inc., 569 F. 3d 946, 952-53 (9th Cir. 2009). ]

The cases that have interpreted application of the Act have primarily focused on the issue of whether the recipient of the call had given express consent to receive the call. In addition, the majority of the cases addressing the issue have focused on calls made by a debt collector on behalf of a creditor when the creditor had obtained the cell phone number from debtor as part of the transaction creating the debt.

What does this mean for affiliate marketers that wish to use text-messaging to engage specific consumers? Two things. First, regardless of the purpose, consumers must give priorexpress consent to receive text messages. Second, affiliate marketers can respond to via text messages to consumers who have provided cell phone numbers as means of contact.

The FCC has stated that “persons who knowingly release their phone numbers have in effect given their invitation or permission to be called at the number which they have given, absent instructions to the contrary.” [1992 TCPA Order ¶ 31]

Although it is unclear whether there a court has dealt directly with the issue of responding via text message to a cell phone number provided on a web site as a means to contact that cell phone subscriber, two recent cases in other similar contexts, have reiterated that “a consumer who voluntarily provides a cell phone number in the course of a transaction has given “prior express consent” under the Act to receive text messages from the entity to which the number was given.

In Baird v. Sabre, Inc., et al. [U.S. Dist. Ct. For So. Dist. CA, Case No. CV 13-999 SVW], the plaintiff had provided her cell phone number to an airline in booking a flight on the airline’s website. Subsequently, she received a text message from the defendant, the airline’s vendor, offering flight notification services. In Murphy v. DCI Biologicals Orlando, LLC, et al.[U.S. Dist. Ct. For Mid. Dist. FL, Case No. 12-cv-1459-Orl-36KRS], the plaintiff had provided his cell phone number to a blood collection center on a donor information sheet in connection with making a paid blood donation. He later received an initial text message from the defendant, a company with a controlling ownership interest in the center, notifying him that unless he replied to stop them, he would receive further text messages. After the plaintiff allegedly failed to reply, he received a second text message offering him a payment for another blood donation.

Both plaintiffs alleged that the text messages they received violated the TCPA provision that makes it unlawful to make autodialed or prerecorded non-emergency calls to a cell phone number unless the call is made with “the prior express consent of the called party.” In a 1992 order, the Federal Communications Commission (FCC) ruled that “persons who knowingly release their phone numbers have in effect given their invitation or permission to be called at the number which they have given, absent instructions to the contrary.” (emphasis added)

In ruling that the text messages did not violate the TCPA, both the California federal court in Baird and the Florida federal court in Murphy deferred to the FCC’s interpretation.

Both courts held that by voluntarily providing their cell phone numbers, the plaintiffs had given “express consent” to be contacted by the defendants on their cell phones. While the court in Baird observed that the defendant who sent the text message was a different company from the airline, it stated that “no reasonable consumer” could believe that consenting to be contacted by an airline about flight-related information did not extend such permission to a vendor for the airline.

In Murphy, the court also rejected the plaintiff’s claim that the defendants had violated the TCPA’s time-of-day and other restrictions on “telephone solicitations.” According to the court, because the text messages sought to buy something from the plaintiff rather than sell something to him, they did not constitute “solicitations” under the TCPA.

Since the text message at issue in Murphy was sent in July 2012, it was not subject to the change in the FCC’s rules that became effective on October 16, 2013, and requires prior express written consent for autodialed or prerecorded telemarketing calls to cell phone numbers. Such consent must be in an agreement that satisfies specified FCC requirements. Although the text message at issue in Baird also would not have been subject to the new FCC rules because it  was sent in January 2013,  the rules change does not affect autodialed or prerecorded  “informational” non-sales calls to cell phone numbers such as the Baird text message. Such calls can still be made with only the consumer’s “prior express consent,” which can be written or oral.

Conclusion

The Act was written to place certain restrictions on telemarketing calls and text messages. The Act exempts telemarketing calls and text messages placed to wireless phones using an automatic telephone dialing system (ATDS) and for artificial or prerecorded voice messages where the recipient has given “prior express consent.” Two recent cases have also held that where text messages are sent to recipients for purposes of buying something form, rather than selling something to the recipient, such text messages are not “solicitations” restricted by the Act.

Before conducting an Internet or mobile marketing campaign, make sure to talk to an experienced Internet marketing lawyer. Adler Law Group is here to help.

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If you are following my blog, you know that I don’t do such posts often, but now I could really use 1 second of your precious time.

Affiliate Marketing GuideAs you may have heard, my latest book “Quick Start Guide to Affiliate Marketing” was nominated for a recognition in the Marketing category of 2014 Small Business Book Awards.

The final selection will be based on a public online voting which is now underway (and ends on May 28, 2014) and decisions of a judging panel. The details of how it works may be found here.

My book is currently in the Top 40 according to the votes already cast. However, in its own category (Marketing) it is now #7, while in previous years only the first 5 were making the final list.

I would, therefore, highly appreciate your support here. If you feel like it, you may vote here or by clicking the image below:

2014 Small Business Book awards

Clicking the “Vote” button won’t take longer than a second of your time, I promise.

My book is the only affiliate marketing book among all nominated ones.

Many thanks in advance for your support.

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Geno Prussakov on April 28th, 2014

My Washington, DC – Los Angeles plane takes off just a few hours from now. Tomorrow Prussakov on videoI am starting to record a video course aimed at aspiring affiliate marketers.

The training material will be comprised of more than 20 videos and the course will be offered through Lynda.com.

If you are not familiar with this amazing brand, here is what they are/do:

lynda.com is an online learning company that helps anyone learn software, design, and business skills to achieve their personal and professional goals. …We carefully select the world’s top experts who are the best in their field, passionate about their subject matter, and know how to teach. [source]

Needless to spend time describing how honored I am to have been invited to compile and teach this video course.

Here’s a sneak peek at what you can expect from this soon-to-be-released video series:

Working Title: Affiliate Marketing Fundamentals

Tentative Video Titles:

  • Introduction to affiliate marketing
  • Setting the right expectations
  • Understanding payment models
  • Understanding core concepts
  • Types of affiliates
  • Tracking and reporting
  • Freedoms and limitations
  • Understanding affiliate agreements
  • Before building a website
  • Affiliate disclosures
  • Opening affiliate accounts
  • Selecting affiliate programs
  • Enemies of future earnings
  • Ensuring you are adding value
  • Applying into affiliate programs
  • Monetizing blogs with affiliate marketing
  • Using affiliate data feeds
  • Using affiliate coupons and deals
  • Leveraging mobile and social
  • Adding email to the mix
  • Advanced affiliate creatives
  • Pay-per-call marketing
  • Next steps, further resources, conclusion

I’ll keep you posted on the progress. Off to the airport now…

Geno Prussakov on April 21st, 2014

When opening up Affiliate Management Days San Francisco 2014 I said: “It seems like it Affiliate Management Days San Francisco 2013was only yesterday that I said ‘Welcome to the first-ever Affiliate Management Days conference!’ but time flies, and I’m excited to welcome you to our fifth show already!!”

The fifth AM Days conference has come and gone last month, but the memories remain [by the way, 500+ photos from it may be found here].

It was our busiest and most fruitful show ever, and you don’t have to take my word for it. Featuring a quick quote from each, today I’d like to highlight a few of AM Days SF 2014 recap posts from its speakers, attendees, and sponsors:

It shocks me to this day that every affiliate manager on the planet is not flocking to Affiliate Management Days first chance they get. Some of the worlds biggest brands and most brilliant minds come together to share their expertise, network in an intimate setting and grow their skill sets together from an affiliate management and growth standpoint.

…In my opinion, this was the best show yet, and if you’re an affiliate manager or marketing manager responsible for your affiliates, do not miss another show.

The food was great, the people even better, and the content was bang on… [more in Sarah Bundy's Affiliate Management Days 2014 A Huge Success post]

Schaaf-PartnerCentric’s post reads:

Affiliate Management Days was two days of great, though-provoking sessions covering hot topics…

It was a good show that highlighted once again the importance of implementing affiliate attribution tracking to ensure affiliate managers have the ability to review sales data and use that data to adjust individual commissions whenever possible.

LinkConnector, the show’s Gold Sponsor, wrote:

This two-day conference is a true gem for Affiliate Marketers on point to accelerate their programs with specific, proven, up-to-the-minute approaches and techniques. The food was great—the people top notch. An intimate setting of 200 or less attendees, AM Days goers network with marketing and program managers for Fortune 500 companies, marketing and technology experts, and some of the founding fathers of the Affiliate Marketing industry.

The homerun quality is clear in both session material and attendees. We cannot recommend this show highly enough for those responsible for and serious about taking their Affiliate Marketing programs to the next level.

BrandVerity’s Mason Smith pinpointed that for him the show stood out for three key things: (i) its “informative content,” (ii) “a focus on education,” and (iii) “meaningful conversations.”

Finally, Acceleration Partners summarized:

The event featured a great mix of industry veterans and new players looking to learn the ins and outs of affiliate marketing.

The content and contributions of everyone at the conference were really strong. Thanks to Geno Prussakov and the rest of the team for a great event that always manages to bring the right people together. AP is already looking forward to participating again in London this May.

Stay tuned for a video montage of the event too!

And yes, as AP have mentioned, Affiliate Management Days London 2014 is just around the corner — coming up in only 3 weeks! Use code GENOSFRIEND while registering here to get your 2-day pass at £545 or 50% of full onsite price. I hope to see you in London on May 13-14, 2014.

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