On Monday, August 8, Pace Lattin of Performance Marketing Insider has drawn the industry’s attention to a lawsuit filed by Reese Richman LLP, the subject of which is “questionable and possibly illegal behavior … by hijacking search queries.” Pace wrote:

Using a technology by Paxfire, supposedly DNS redirects from searches on Bing, Yahoo and Google would lead consumers directly to the page of certain brand and credit the ISP’s affiliate account with any possible commissions. [more here]

ZDNet picked up the story and elaborated on the problem:

Paxfire proudly proclaims itself to be the “proven industry leader in monetizing Address Bar Search and DNS Error traffic for Network Operators. Through our carrier-grade technology, we generate millions of dollars a month in new advertising revenue for our partners by enabling them to participate in the booming $20 billion a year search advertising market.”

In other words, what Paxfire does is it intercepts your searches. Then, if their proxy servers find a match in their advertising databases, they’ll send you top search results from their affiliate marketing programs rather than what your search engine would give you as the best results. [source]

Apparently, the four International Computer Science Institute (Berkely, CA) researchers — whose study reveled that around a dozen of ISPs were using the technology — have put together a blog post on the subject where they’ve mentioned the major affiliate networks that were affected (Commission Junction, LinkShare, and Google Affiliate Network), as well as two tools that affiliates should find of help in spotting traffic hijacking threats:

Why do they do this?

In short, the purpose appears to be monetization of users’ searches. ICSI Networking’s investigation has revealed that Paxfire’s HTTP proxies selectively siphon search requests out of the proxied traffic flows and redirect them through one or more affiliate marketing programs, presumably resulting in commission payments to Paxfire and the ISPs involved. The affiliate programs involved include Commission Junction, the Google Affiliate Network, LinkShare, and Ask.com. When looking up brand names such as “apple”, “dell”, “groupon”, and “wsj”, the affiliate programs direct the queries to the corresponding brands’ websites or to search assistance pages instead of providing the intended search engine results page.

What can I do about it?

If you want to know if the network you’re currently on is subject to this type of traffic redirection, you can run a Netalyzr test. And the best protection against the privacy and security risks created by this type of hijacking is to visit sites using HTTPS rather than HTTP, which can easily be achieved using EFF’s HTTPS Everywhere Firefox extension. [more here]

Yesterday (August 9) Commission Junction suspended Paxfire from the network explaining to ClickZ:

We had no knowledge of this reported activity until last week. At the time, Paxfire was in fact a publisher in the CJ network. We have taken immediate action — Paxfire has been deactivated pending further investigation, and we are continuing our investigation of this matter. [source]

Well, Paxfire is “deactivated”, but there are other similar players — and we’ve discussed this in comments under this 2009 post of mine — who cooperate with ISPs on very similar terms; and who are still active on major affiliate networks (e.g.: working with ISPs “replacing DNS and HTTP errors with relevant advertising” [source]). This has been going on for years… Of course, the problem with Paxfire is different in the fact that they also have “an optional, unadvertised, and more alarming feature that drastically expands Paxfire’s window into users’ traffic” whereby “instead of activating only upon error, this product redirects the customers’ entire web search traffic destined for Yahoo!, Bing, and sometimes Google, to a small number of separate web traffic proxies.” [more here] Either way, whether another affiliate’s cookie gets overwritten in the process or not, together with the traffic affiliate commissions get “hijacked” as well.

Meanwhile, the above-quoted class-action lawsuit (against an ISP and Paxfire itself) is already filed; and we’ll keep monitoring the situation for you.

Yesterday LinkShare announced its 2011 Golden Link Award Finalists, and I was both surprised, and humbled to learn that I made the list too:

Out of all categories on the list the “Performance Marketing’s Most Vocal Advocate” seems to be one of the most fundamental, and altogether most humbling ones. LinkShare itself defines it as the category for those who “have influenced change within the performance marketing industry”. I am truly honored to be included, especially in the fine company of Shawn Collins (co-founder of Affiliate Summit), Lisa Picarile (former editor-in-chief of Revenue Magazine, faculty member of the University of San Francisco Online, co-host of Affiliate Thing), and Rebecca Madigan (Executive Director of the Performance Marketing Association).

Congratulations to all the other finalists, and thanks for the nod, LinkShare (and, of course, to whoever it was who nominated me).

This will be LinkShare’s 9th annual Golden Link Awards ceremony, and it is scheduled to take place on June 28, 2011 at Waldorf Asoria in New York, NY. So, we should find out the winners in less than three weeks.

Earlier this morning a new RingRevenue press release has hit the wire. It covers how financial services marketers are benefiting from call performance marketing, and also introduces a white paper case study on financial services. The white paper is an interesting read, discussing the challenges facing financial services marketers today and detailing how Progrexion Marketing increased Lexington Law‘s affiliate program performance, improving their distribution and increasing sales with call performance marketing.

RingRevenue provides their pay per call solution for nearly every major affiliate network out there (Commission Junction, LinkShare, Google Affiliate Network, ShareASale, to name but a few). The above-quoted press release quoted LinkShare’s Vice President of Lead Generation:

“Financial Services is one of the top performing verticals that we specialize in,” said Russ Pechman VP Lead Generation at LinkShare. “Fully integrated campaigns that combine online lead generation with the ability to let consumers connect live through a phone call far outperform those that only provide consumers one option. This combination gives advertisers the opportunity to really impact their bottom line revenue with incremental sales.”

So, we reached out to Russ to ask him a few questions about call performance marketing in general, as well as its adoption by the financial services industry in particular. Below you may find the interview (where “GP” stands for “Geno Prussakov”, while “RP” for “Russ Pechman”):

GP: First off, how is the LinkShare Lead Advantage network different from the main LinkShare network?

RP: LinkShare Lead Advantage focuses on high-quality customer acquisition, typically for verticals like financial services and education (CPA or CPL). Our platform is multi-channel, and we manage our lead quality closely. The main LinkShare network is open to all affiliates, and lends itself to a rev share of sale commission structure. So, Lead Advantage might promote an offer like Allstate, while the main network would run Macy’s.

GP: Call Performance Marketing is certainly gaining momentum in the affiliate space.  What trends are you seeing around the adoption of pay-per-call?

RP: We’re seeing a more Publishers now that are educated about ppcall than say, a year ago. We spend less time introducing the concept, which I  think is due to the efforts of the affiliate networks and Ring Revenue in getting the word out.  So the rate of application by Publishers into ppcall programs has been growing rapidly. Same goes with the Advertiser side. It’s an easier sell now.

GP: Does the LinkShare Pay-Per-Call publisher base differ from the traditional LinkShare publisher base? If so, how?

RP: We’ve seen a new type of Publisher that promotes Advertisers through new channels. I wouldn’t be surprised if the biggest use of mobile by affiliates right now is with pay-per-call campaigns. But we’re also now seeing more of the “traditional” Publisher, who realizes they can use the same types of banners or text links but will see improved conversions because the call adds a new action.

GP: How does call performance marketing or pay-per-call improve or compliment a financial services firm’s existing online lead generation activities?

RP: One is tracking — an Advertiser can now better identify which inbound calls came from which online sources. So they’ve got transparency into their online sources. It also creates efficiency. Online lead gen used to be mainly about outbound calls and everything that’s entailed with it — lead scrubbing, calling, trying again… But inbound calls typically convert higher and eliminates the resource drain of the outbound process. Plus, conversions are typically higher on inbound.

GP: What types of financial services firms are starting to leverage inbound calls and seeing results?

RP: We’re seeing it across several types — insurance and lending are the two biggies right now. But credit cards and other credit services are also looking at it.

GP: Thank you for your time, Russ.

Less than a week ago in an intro to this post, I blogged how pleasing to my (and I’m sure every affiliate marketer’s) eye it is to see new developments at different affiliate networks. Now, in addition to ShareASale, Google Affiliate Network and LinkShare, we have AvantLink with their February news!

Yesterday they announced their very own (and a very robust one too) WordPress plugin. So immediately I have reached out to them to get a better idea of how it works, and how bloggers can/will benefit from this launch. This is how this post was born…

The AvantLink plugin for WordPress basically allows quick and simple integration with a number of the network’s integrated Affiliate tools & scripts. Once the plugin is installed and activated, there are several things to note within your WordPress admin panel.

1. Plugin users will see a “AvantLink WP” link in the admin sidebar, under the “Settings” section. Clicking that link opens the “AvantLink WP Plugin Settings” page, which includes four tabs that allow the configuration of several functions, including a product search engine via the AvantLink API (see image below).

2. Plugin users will see an AvantLink icon in their post editor’s kitchen sink. Clicking the icon will open a dialog box that allows affiliates to select any pre-configured ad type/unit (banner, text, video, etc.), from any merchant the affiliate is active with. It will also allow affiliates to create custom tracking links to any merchant URL they choose (see the two screengrabs below)

3. Plugin users will notice several new AvantLink WP widgets in the “Appearance” area of their WordPress admin. These include

• • AvantLink Product Ad Widget – Easy integration of any AvantLink Product Ad Widget (PAW) subscription that has been configured and saved.
  • AvantLink Product Search Form – Quickly enable an on site product search engine, using data from AvantLink merchants.
  • AvantLink Related Products – Display related products from AvantLink merchants driven by custom keyword searches.

It’s important to note that once the AvantLink WP plugin is installed and activated, an Affiliate Link Encoder (ALE) subscription is enabled by default on a site-wide basis. The ALE uses JavaScript to convert direct-to-merchant links to affiliate-tracking links on the fly, and within the end user’s browser. This of course can be deactivated via the settings page, if that’s preferred.

Several integrated tools and scripts from AvantLink offer unique and exclusive functionality free of charge to qualified affiliates, and now WordPress CMS affiliates can easily utilize these ad tools and subscriptions with simple, easy to configure widgets. Very nice development!

It’s great to see affiliate networks developing. Last week ShareASale launched their new merchant interface. A couple days after that Google Affiliate Network announced product APIs for affiliates. Yesterday Shawn Collins wrote about buy.at‘s new product search feature for affiliates. Today I’d like to bring to you another network-related news — LinkShare has just launched a mobile dashboard for affiliates (or “publishers” as they call them).

This morning I’ve had a chance to have a look at their new mobile dashboard. It is not an app, but an actual mobile website, which, as they themselves wrote to me, “allows LinkShare publishers to search, get, and promote links all from a mobile device” (via email, Twitter, Facebook, or Tumblr).

Here’s how it works:

1. Copy and paste a token

2. Choose an advertiser

3. Search for a product or coupons from that advertiser

4. Share via email, Twitter, Facebook, or Tumblr

Once again it’s a mobile website, and not an app. So basically you can use the same URL on different mobile devices.

There has been much talk and worry about the ‘Do Not Track’ legislation proposed by Federal Trade Commission in early December 2010, and now that Google’s Chrome and Mozilla’s Firefox both have plugins/features to block certain types of third party cookies (and we also know that Internet Explorer 9 is gonna have it too) the worry has built up even more.

Over the past two days I’ve spoken with folks in nearly every major affiliate network (namely Commission Junction, LinkShare, Google Affiliate Network, and AvantLink), and none of them could confirm that such brower plugins will have a negative affect on affiliate tracking. The major reason being is that the focus of the ‘Do Not Track’ proposal is actually on very particular type of tracking. Reading the original FTC’s proposal we see that they are looking to establish “a uniform choice mechanism for online behavioral advertising” which would make the practice of personalized behavioral advertising visible and transparent to consumers who are being tracked to be served “targeted advertisements” (pp. 12-13). With this in mind, they propose that consumers should be able to “control the collection and use of their online browsing data”, considered specifically in light of “targeted advertisements” and “behavioral advertising” (p. 14) [underlining mine]. Page 16 continues:

…the Commission supports a more uniform and comprehensive consumer choice mechanism for online behavioral advertising, sometimes referred to as “Do Not Track.” The most practical method of providing uniform choice for online behavioral advertising would likely involve placing a setting similar to a persistent cookie on a consumer’s browser, and conveying that setting to sites that the browser visits, to signal whether or not the consumer wants to be tracked or receive targeted advertisements. [again, emphasis added by me]

In discussing Firefox’s newest “Do Not Track” plugin AvantLink‘s CTO David Clark has confirmed to me that it should not affect their tracking in any way. The focus of the mechanism is just different. It is not affiliate cookies that they’re concerned with, but the behavioral targeting type tracking; and while some affiliate networks do set behavioral type cookies, affiliate tracking isn’t tied to them.

In December of 2010 Lucas Brown of HasOffers wrote:

I don’t think the FTC is really targeting the affiliate marketing industry specifically.  Rather, they are interested in preventing those that control some of the largest distribution channels from mining data and selling it as behavioral user data… The FTC is really more concerned about the abuse of behavioral advertising…

Today an affiliate marketing industry’s veteran, one of the original founders of Commission Junction, and a co-founder of Impact Radius, Todd Crawford told me:

Personally, I am confident that performance advertising will not be impacted by this type of legislation because the companies doing the tracking can limit the data they capture to ensure that they are in compliance.

What do you think?

Coincidentally or not, but 3 of the 6 major US affiliate networks — and here I imply Commission Junction, LinkShare, buy.at, ShareASale, Google Affiliate Network and AvantLink — announced holiday deals and offers of their merchants on November 17, 2010. These are:

LinkShare affiliate network (in a blog post):

ShareASale affiliate network (internally through affiliate interface):
[Edit of 1:14 pm: ShareASale has just announced it in a blog post too]

and AvantLink affiliate network (in a blog post):

I haven’t seen Commission Junction announce anything like this. Neither have buy.at or Google Affiliate Network blogged about  anything similar. If they have, and I’ve missed it, please correct me. I know that individual merchants have been sending out notifications of their deals via email, but I haven’t seen those deals bring aggregated anywhere in one place on the latter three networks.

———————————

Edit of 11/20/2010: Commission Junction has just added a visible link to their Holiday Success Center (seen by every affiliate upon logging into their account now):

———————————

Edit of 11/22/2010: buy.at has also just posted a blog entry with Black Friday & Cyber Monday deals available at its merchants:

On Tuesday (November 2, 2010) LinkShare affiliate network announced its Q3 2010 progress and highlights:

LinkShare in Q3 2010

…more than 110 new advertisers joined the LinkShare Network in the third quarter of 2010, an increase of 25 percent compared to the same quarter in 2009. More than 1,000 advertisers are now part of the LinkShare performance marketing network as the company continues to outpace e-commerce growth. Sales in the LinkShare Network were up more than 30 percent in the third quarter of 2010 compared to overall e-commerce growth of nine percent. [source; underlining mine]

Yesterday (November 4, 2010) ValueClick Inc, owner of Commission Junction affiliate network (LinkShare’s main competitor), has had data on its Q3 results published as well:

ValueClick & Commission Junction in Q3 2010

ValueClick Inc. reported $106.8 million in total revenue for the third quarter, up 1.5% from a year ago, when revenue was $105.2 million. Revenue for its owned and operated web sites, however, declined 13.5% year over year to $35.9 million.

…The company’s affiliate marketing segment, which includes Commission Junction fared better. Affiliate marketing revenue was up 13.3% from $26.3 million a year ago and contributed $29.8 million to total revenue during the third quarter. [source; underlining mine]

Three main points stand out for me:

1. Close to one-third of ValueClick’s Q3 revenue came from its “affiliate marketing segment”
2. While ValueClick saw a third quarter decline in revenue from “its owned and operated web sites”, the decline didn’t affect Commission Junction, which, on the contrary, grew.
3. While LinkShare hasn’t disclosed the actual revenue numbers, it’s quarter-on-quarter Q3 2010 growth seems to be considerably more impressive than that of Commission Junction (~30% vs 13.3%)

Related post:

• LinkShare vs ValueClick in Second Quarter 2010 Results

One would think that it is common sense to have a separate section prohibiting parasitic affiliate behaviors in your affiliate program and your program agreement. However, even larger online merchants sometimes do not do so. First of all, this makes them significantly more vulnerable to rogue affiliates. Secondly, it makes it harder to fight such behaviors. After all, if it hasn’t been prohibited in the first place, how do you enforce it?

Earlier today all Walmart’s affiliates have received a notification of an update to Walmart.com’s Affiliate Terms & Conditions. The core of the message read:

You May NOT:

• employ, use or place any web browser add-ons, toolbars or pop-ups on your website.
• engage in any direct or indirect relationships with ISPs and/or mobile carriers that results in the delivery or act of address bar keyword and URL error trafficking (e.g., a user mistypes a web address in the ISP’s address bar or search bar, and, as a result, is redirected to a web page that contains a Qualifying Link that directs the user to sites like Walmart.com).
• without the prior written approval of Walmart.com, use any Trademark, or any Licensed Material in an advertisement that is not created or provided by Walmart.com in any way that might suggest or imply or mislead or is likely to mislead a visitor to your website into believing that Walmart.com, Wal-Mart Stores or any related entity was the creator or sponsor of such advertisement.
• employ, use, or receive any direct or indirect benefit from, any “cookie stuffing” methods (e.g., use of “cookie stuffing” to cause LinkShare’s tracking systems to conclude that a user has clicked through a Qualifying Link — and to pay commissions accordingly — even if the user has not actually clicked through any such link).

Way to go, Wal-Mart! I believe that every merchant should mimic Walmart.com in prohibiting the above-quoted activities. Do you prohibit these in your affiliate program agreement already?

Related articles of mine (the comments under them are quite informative too):

• Toolbars in Affiliate Marketing
• Adware Affiliate Interferes with Other Channels (video)
• Toolbars, Pop-ups & Parasites in Affiliate Marketing
• What is Cookie Stuffing?
• Since When Has Typosquatting Become Acceptable?

I have conducted an experiment, and applied to 107 advertiser/merchant affiliate programs which are listed in LinkShare‘s “Premium Advertisers” section:

The results were quite interesting: 18 merchants auto-approved me into their affiliate programs right away (i.e. without even seeing my website), 10 automatically declined my application (again, without even reviewing my website), and the rest of applications went into “Pending” status, which, I suppose, means that they will be manually reviewed. So, here’s the breakdown we have with LinkShare’s top advertisers:

• automatic approvals – 16.8%
• automatic declines – 9.3%
• manual mode – 73.9%

As discussed elsewhere, both automatic approvals (“open door” policy) and automatic declines (lost opportunities) are dangerous. It is certainly good to see that close to three-quarters of LinkShare’s Premium Advertisers have an actual person (and not automatic account settings) control the affiliate applications consideration process. However, the number of those that automatically approve or decline (over 26%) is still pretty high. Don’t you think so?