Redefining Affiliate Marketing: Q&A With MediaTrust’s Peter Bordes
MediaTrust is working hard to redefine affiliate marketing (now named performance marketing) and bring a consistent standard of integrity and excellence to the industry. CEO Peter Bordes took some time to chat with Adotas more about MediaTrust.
When was MediaTrust established and what inspired the formation of the company?
In April 2004, MediaTrust was formed to create a technologically and cultural innovative affiliate network that was free from the problem of fraud and abuse in performance marketing, and delivered quality tools, traffic and transactions for our advertisers and affiliate publisher partners.
What are the backgrounds of your executives and other team members? What makes them experts in their field?
We come from a diverse background of advertising networks, software firms, and online & traditional media firms. The combination gives us our perspective in the space and our unique platform plus services model.
We recently added a new member to the executive team from Microsoft as our head of product and launched our new site with more details about our platform and team.
Has there been recent controversy in your sector of the industry? How has the company dealt with it?
There’s been industry scrutiny by the FTC over advertiser and publisher fraud and the abuse of continuity and negative option programs marketing. We responded by increasing scrutiny and compliance policies for publishers and advertisers allowed on our platform and removed thousands of untrusted publishers out of the network.
We have also rolled our proprietary fraud prevention tools, an online compliance center to help educate the industry players and we have committed financial and human resources to the Performance Marketing Association (PMA) to help the industry self-regulate.
How have you seen the manifestation of the recession in the industry? Has that affected the company?
The recession has hurt everyone’s marketing budget. We, however, have benefited. People have flocked to performance marketing because of its ROI: you only pay for results.
We believe this is the beginning of significant growth as the industry moves from the impression pricing model towards being 100% performance driven. We’ve enjoyed great growth during this period and have been named ninth fastest growing company in the U.S. by Inc. magazine.
What future trends can you predict based on your observations and business?
Significant budgets, brands and agency dollars will continue to move to the performance marketing segment (online direct response). This movement in our space will accelerate with the advancement of technology, data and analytics, and when the dust settles on regulatory and compliance questions,
However, we expect before the dust settles, more regulation will hit the entire online marketing. This influence will come from the FTC, state attorneys general and corporate legal action. These external forces will bifurcate the industry into two groups: the compliant and the non-compliant.
Tier 1 and 2 advertiser dollars will follow the compliant. The non-compliant players will continue to cannibalize the tier 3 space (non-brand advertisers) where there is little technical innovation, low barrier to entry and a short-term focus on cash versus sustainable growth.
What sets you apart from your competitors?
Our unique technology platform-plus-services model and partnership-centric business culture. Our proprietary tracking tools and fraud tools as well as our industry knowledge/experience. We have a trusted network of publishers, which helps to reduce risk to our partners.
We also pride ourselves on the industry thought leadership we invest in to educate the industry via our blog, “Relevantly Speaking,” podcast and compliance center
Who are your clients? What is their reaction to your services?
Today we focus on partnering with advertisers in sectors like health and personal care, financial services, media and entertainment and education. Our customers are direct response advertisers looking for transaction quality and value on a single performance driven platform.
Our customers love our pay-for-results model. They also benefit from the fact that our platform has diverse distribution via our affiliate marketers and affiliate publishers that specialize in email, search, social media, text link, display and mobile channels.
What are you working on next?
There are two main important initiatives we are executing on right now to get in front of the significant opportunity we are presented with.
Dollars are moving into the performance-marketing channel at an unprecedented rate. As evidence, for the last three quarters straight, performance pricing has grown into the dominant pricing model on the Internet. However, the channel has some issues that we as an industry, and MediaTrust as a company, need to address.
The first initiative we are working on is simple: innovation, innovation, innovation. Our industry segment has been 80% human-driven and 20% technology-driven with little innovation. Having the highest payouts and exclusive campaigns is not a long-term value proposition for affiliate marketers nor is it a sustainable business model for the industry.
Our objective is to deliver a technology platform that enables advertisers and affiliates to become much more productive by leveraging technology.
Our internal mantra is to make the MediaTrust platform the most innovative place to create and manage pay-for-results campaigns.
Our immediate horizon has us focusing on tools, analytics and solutions to enable our publishers and advertisers to maximize ROI, enhance transparency and drive conversion.
We believe the future is about delivering an open, modular and agnostic platform. We are investing heavily for the long-term in our technology, strategic partnerships and industry.
The second issue is industry self-regulation. Internet marketing has a history of being reactive versus being proactive in regards to regulation.
Publisher fraud and advertiser fraud have had a serious impact on the industry. Publishers who produce fake leads and sales as well as advertisers who create faulty products and recurring billing plans have given internet marketing a bad name.
We are currently working with the Performance Marketing Association (PMA) to establish publisher and advertiser behavior guidelines and we are pushing for a consumer bill of rights. We are also working alongside some private partners to create publisher certification programs to remove publisher fraud from the ecosystem.
The performance marketing companies looking towards long-term sustainable value will need to self-regulate and protect the channel if we want to realize our full potential. In many cases this may mean taking a short-term revenue hit to protect the interests of advertisers, publishers and, most important, the consumers.
Great interview Peter. All your coming innovations sound great!
Thank you for the compliment . I am looking forward to 2010 and a very interesting year for all things performance marketing