ADOTAS

Every year Clickbooth exhibits at ad:tech NY and not only hosts an exclusive party, but brings the industry’s elite together for a great networking opportunity. This year is no different! You can expect to be entertained all night with a performance by old school hip-hop artist Skee-Lo (known for his hit “I Wish”), Maxim’s Hometown Hottie Model Erin McKinnon, DJ Jaam, a fire dancer and an open bar from 10 p.m. to 12 a.m. for VIPs.

Don’t be left out in the cold (literally), be sure to RSVP to get in the door!

What: Clickbooth presents Affiliate Awakening II

Where: Amnesia NYC, 609 W. 29th Street, NY, NY 10001

When: Wednesday, November 9th, 10pm – 3am

RSVP: Here!

DM CONFIDENTIAL

The distinction sounds small, but to those in the performance marketing space it has, in the past, been the equivalent of a nationality. Confusing the two didn’t carry the same weight as mixing up Israel and Palestine, but it was arguably a little worse than assuming someone from South Africa was from Australia. It wasn’t the worst thing, but it came across as a ding against one’s identity.

The reason, at least historically so, is that publishers and arbitragers (the non-affiliates) thought of themselves as more skilled. They felt their ability to drive traffic instead of just send clicks made them a more advanced breed. And, for quite some time I think that was a fair assessment.

Thanks to issues with misrepresentations and low value-add products for consumers, the publisher and arbitrage businesses have lost a little bit of their luster. Affiliate businesses, on the other hand, have started to come into their own. The hardest part for those who typically identified with publishers is re-orienting their frame of reference to think of affiliate businesses as worth pursuing.

Ingrained Vision

With a media-buying mindset, we have certainly been guilty of automatically devaluing the affiliate world. It was the group buying world and the fashion/tech world that had us start to rethink how we thought of the affiliate arena. Even now, we still struggle to see the affiliate world separate from some of the businesses that defined it — “Top 10″ review sites, toolbar-based link hijacking and the countless number of reward sites.

It’s the reward sites that have in many people’s mind given the affiliate world a reputational hurdle. We could, for example, start the DMConfidential shopping portal and offer readers discounts on places they already shop today. If we did so, we’d get flack because the savvy readers would say something to the effect, “Yeah. That’s not so special. You’re not really giving discounts — only applying the affiliate commissions.” And they would be absolutely right.

Perhaps more amazing than the number of such sites, be it those that have been in existence for over a decade to those that are popping up almost daily, is the caliber of some of the companies that operate them — everything from the largest network marketing company, Amway, to one of the most storied consumer packaged goods firms, General Mills.

Fashionable Setups

Perhaps then, it’s time to no longer knock certain affiliate strategies but look for ways to do them a little better. We’ve found quite a few recently that seem to do just that. Some of the more unlikely come from the world of apparel.

One that we like creates a more individualized private sale experience. It learns what type of brands you like then monitors major retailers for sales that occur on the brands you like. When you happen to click on the link to go to the retailer, it just happens to go through an affiliate link. Over time, they will work directly with the merchants, but in the interim, using the affiliate channel has allowed them a potential monetization opportunity with brand name retailers out of the gate.

Another fashion-related startup focuses on a slightly different form of discovery and encourages people to tag styles on sites and clip images that represent their style. They use that data to try and suggest new things, monetizing not surprisingly using affiliate links.

There is even one in the group buying space. This startup focuses on setting up private buying groups for businesses, offering variable discounts based on the members of a group. It is meant so that DMConfidential could work with a technology service provider to create a discount for readers, but again, to get started this company backfills deals we might source with business related deals from the affiliate channel, e.g., Skype, GoDaddy, etc.

Work in Progress

We know we aren’t quite there just yet with the affiliate business model. When you suggest to some of the technology companies that they are just affiliate businesses, there is still a little bit of defensiveness, as if to say, yes, we know we monetize through affiliate channels but don’t think of us that way.

While they are still affiliate businesses, they are helping to at least alter our perspective of what affiliate businesses can be. Instead of viewing affiliate relationships as the monetization choice of last resort, the affiliate channel starts to look like a liquidity channel for commercial intent. It starts to become a more customizable version of AdSense as opposed to what you choose when you don’t know any better.

It will still take many some time to become comfortable with the idea of becoming affiliates, but if we do not, we might just miss out building a really interesting business.

Opening up for NbyN is another veteran rapper, the always amazing Slick Rick, as well as Jonathan Emile and Mike Posner. With around 3,000 people expected to show, you better RSVP now to get on the guest list — doors are at 9, with Slick Rick at 10:15 and NbyN at 11:45.

ADOTAS

Reportedly the largest vendor with a Facebook Ads API integration, AdParlor claims to serve a billion impressions a day for both major brands (such as Sony and Ubisoft) and agencies (OMD and Digitas). In addition, the platform offers dynamic creative and bid optimization services. AdParlor runs full-service management of Facebook advertising campaigns in addition to its recently introduced self-service platform, Pulse, which was aimed at agencies.

AdParlor’s Pulse interface will eventually integrated into Adknowldege’s BidSystem, which allows the network’s 10,000 advertisers to target traffic all across the long tail — cross-channel: display, search, mobile and social — through 60 terabytes of anonymous consumer interest data run through predictive technologies.

AdParlor itself will remain independent, with its 20-person team coming aboard the Adknowledge boat but continuing to operate out of its headquarters in Toronto. Cofounder and CEO Hussein Fazal will retain his position.

“We are excited to provide our existing advertiser community access to the most advanced platform to purchase advertising within Facebook,” said Adknowledge CEO Scott Lynn.  “AdParlor has consistently proven to be the leading company to help large Facebook advertisers more effectively optimize their ad spend.”

This summer, the company announced the completed integration between its AdStation product and the CPA network from acquisition Hydra, making for a combined CPA-CPC interface.

Scott and Halligan’s joint effort is broken down into three sections–appropriately dubbed The Band, The Fans, and The Business–which are further broken down into lessons. The structure is neat. They anecdotally outline a common facet about the Grateful Dead and then punctuate that with a lesson.

For marketers–first-timers or industry veterans looking to become more well-rounded alike–it provides punchy lessons written in layman’s terms, about the types of strategies employed by one rock band that turned them into unintentional marketing superstars.

In the first chapter–The Band–Scott and Halligan write, “The Grateful Dead teaches us that a memorable name can bring success.” And most of us would be hard-pressed to name another band from the same era whose had even a fraction of the lasting power; indeed, the band’s namesake was namesake.

Another thing the Dead did so well according to the duo? Disrupt the marketplace. In this age of social and tech, market disruption is everywhere. But in their heyday, the Dead was disrupting in a variety of ways, including allowing fans to set up their own recording equipment by the mixing boards to bootleg their shows. This same hallmark is later referenced in The Business, under a lesson about how freeing up content can prove to be a marketing machine of its own. Scott and Halligan write:

“Unlike other bands, the Dead encouraged concert-goers to record their live shows, establishing ‘taper sections’ behind the mixing board where fans’ recording gear could be set up for best sound quality.”

How did this disrupt the marketplace? Rather than banning fan recordings and pitching ads in the form of traditionally music videos–produced at the band’s expense–the Dead simply allowed their followers to become their marketing muscle in exchange for hassle-free bootlegs.

This ties in with another lesson Scott and Halligan outline about marketers easing their grip on the message they’re trying to affect. “By loosening up your brand, you allow your company to show its personality–and, by extension, its ability to roll with the punches.”

On the whole, all these lessons seem to underscore the importance of the book’s second chapter: The Followers. By being flexible and looking for new ways to disrupt the market, this band affected the type of marketing legacy rivaled only by titanic consumer-facing brands like McDonald’s: They created generations of followers–and not the type who might go onto iTunes to buy a song for $1 and then forget about them, but the type who follow them from one concert date to the next.

Regardless of industry, that’s exactly the type of customer loyalty that many of us are frequently after.

Cross-published at the Blue Phoenix Network blog.

ADOTAS

Piece of cake, right? Well, no, considering that Skimlinks first had to integrate the tech brought over from the recently acquired AtmaLinks. But the result is a fully automated system that semantically analyzes page content for references to the 20 million products in Skimlinks’ database that stretch across numerous categories –including consumer electronics, fashion, beauty, mothering, automotive and lifestyle.

Without interfering with other publisher advertising efforts, Skimlinks enters relevant affiliate links — the coolest new feature in this edition is real-time in-text price comparison, which will make for stronger offers. Check it out:

“The net result for publishers is a more lucrative monetization solution that is also an informative user tool, helping consumers find the prices and retailers for the products they are reading about,” said Skimlinks CEO Alicia Navarro, who also penned a smart piece for Adotas on the challenges of in-text advertising last year. “Our new version of SkimWords achieves the right balance between high yield for publishers and high utility for consumers.”

Having a head start has made all the difference in the world. The simplest example comes from Google or Facebook. Those early to those platforms made immense amounts of money, and, in the case of Google, those who got in early ended up building moats around their listings for no other reason than account history.

Thinking about the performance marketing space, the potential areas for leverage that come to mind are: access to offers, payouts on the those offers, access to traffic and creatives/optimization. Within each, something seems to have changed or better said continues to change.

For the longest time we didn’t quite understand what it might be. At the heart of the matter was this nagging question, “Why do new verticals seem to have a continuously shorter shelf life?”

The easy answer would be competition, that there are more and more marketers today than before, but we just can’t see competition as the reason why ringtones would have longer staying power than acai. It’s as though each new hot trend has an ever-decreasing half-life. It pops and then more quickly than before finds a less than desirable stasis after being driven to the bottom.

The Ad World Is Flat

While competition plays a piece on the shorter half lives of campaigns, we can’t help but wonder if the answer has nothing to do with specific market dynamics and more to do with our transparent world. If we think back to the “early days,” information about offers, payouts, creatives and traffic didn’t exist. It took a relatively long time before word of someone’s success got out, and it took even longer before specifics of their success became more widely known — where they ran, what page they ran, the ads they ran and even what CPA they received.

Forums have typically discussed many of these pieces, but they have an overall limited reach. That is not the case with the tools that exist today including those that show what offers each network has and at what prices.

There is a new breed of tools out there hastening this transparent world, ones like AdBeat that can do for creatives what keywords do for contextual placements and banners what keyword tools have done for search. The insights provided are significant.

Search tools can shed some insights on keywords run, but ad tools share what ads have run and where they run. It means that someone wanting to do a campaign can build a great media-buying list right away. These tools will do more than just frequency, in the future they will have the ability to show iterations of ads so that a competitor can see not just what runs now but what a company has run. This type of historical view would imply a glimpse into their optimization process.

NYTimes op-ed writer Thomas Friedman has talked about a flat world. This might be the equivalent to the flat world in advertising. It is no longer about easy connectivity of where people are based but ease of connectivity when trying to gain insight to a market. All the pieces are visible.

In this new flat advertising world, we start to see what is running, where it is running, and what aspects of it are working. It’s a trend that will only continue, and its impact on the performance marketing world has already been significant.

Looking Long-Term

Like many things, the early impact might be negative. Now and in the near future, it probably continues to mean pressure on those running offers, that their “secrets” could be discovered faster and their lead taken away more quickly than before. That could accelerate the race to the bottom as people continue to try and squeeze out as much money as possible in the shortest time possible.

In the future, this flat ad world should have a very positive impact. As everyone starts to know everything and we start to operate with greater transparency, it should mean more overall innovation. It will mean more defensible businesses. People will start to scam less (not a bad thing) and build more (also not bad).

If people can’t do bad stuff and must do better stuff, we all win. The industry starts to get away from being a) just piggy banks to help others cover float and b) guardians of traffic trying to combat the bad. We might just get what many have wanted all long, greater separation between companies and more fun doing doing what we love.

In MLM parlance, it meant becoming part of their down line, but they most likely pitched it in a more team-oriented fashion than using a term that if not demeaning feels so limiting. In performance marketing terms, what the couple pitched was to become their affiliate, but there has always been something about MLM, known today as network marketing, that never sat well with us… at least from the standpoint of being an affiliate.

While similar in theory, we argued years ago that a huge fundamental divide exists between performance marketing/traditional affiliate marketing and network marketing. Part of that divide becomes more evident as we think of the latter as network marketing instead of multi-level marketing.

It still does promote a person getting paid on multiple levels (generations) — i.e., if you sign up under us, we get X; when someone signs up under you, we get some percent of X; and so on, often for five levels. Payouts on multiple levels sounds sexy, but anyone in our space can share that trying to pay out past one level quickly becomes an expensive proposition.

If a company can do that, it means that the products have a high amount of margin, be it through high cost or ancillary services that do not trickle down. But a high-margin business is just the enabler. It alone doesn’t explain why we struggle to like the networking marketing businesses. A recent conversation with a person who should have been a arbitrager helped explain why.

Limited Upside

Google created something like 1,000 millionaires. Facebook will create several hundred at the very least, and many of them did not come in that early. Not to call some “just engineers,” but many of the future millionaires will get truly lucky instead of actually being good.

They didn’t have to take a major risk or even a pay cut. They simply joined a company that has grown from $5 million to $100 million to $1 billion to more than $80 billion since inception. If you joined at a time when your options might have come to $100,000 at a $10 billion valuation (a small percentage of the total), they will turn into about $1 million when the company gets sold.

True enterprises experience a rising tide lifts all boats. Network marketing businesses do not. The bigger the network marketing company gets, the bigger only the head gets. Even if you come up with a new trick to help sales, which they will then take and tell others, you receive nothing for the growth you create.

Inequality

MLM businesses are deliberately closed organizations. As mentioned above, they promote a dream and a vision, but they treat those in the business like sheep. There is no upward mobility, no advancement and no room for creativity. How they are run is at odds with what they say a person can achieve.

A minor example that has always rubbed us wrong, little to none of the new member setup tends to benefit the referring affiliate. And, given that almost everyone fails, that long tail of revenue bypasses all of those doing the work.That was our rub from many years ago.

Another discrepancy for us is that they are always presented as chances to be independent business owners. You aren’t a business owner, though. You are a contract salesperson. Business owners run businesses and build assets.

Putting a Price on Friendship

Perhaps the modern-day MLMs should call themselves “social shopping organizations.” Calling them network marketing hits pretty close to home, though, as people are expected to sell to their network of direct relationships.

We spoke to one marketer, and they explained it so well. This person said basically that you are expected to delve into their emotional issues and figure out how you can position the business as a solution to some of their problems.

The conversation ended with the comment, “I cannot believe how many friendships I have seen this business ruin.”

These models want and demand the personal sale. They do not want a person to use more scalable techniques. Those that do can actually run afoul of certain programs’ guidelines.

It’s also why they don’t share the setup costs with the referrer. If you did, then you could create a truly successful online campaign.

It’s a Cult That You Pay to Join

More than anything, network marketers sell a dream, and they sell a dream through a series of ongoing indoctrination. Everything about the network marketing business is based not on reality, but on a buy-in of what could be. It operates like a religion in that they have an answer for everything where all success comes from proper behavior and all failure stems from an individual shortcoming.

These are faith-based organizations with no room to question and little tolerance for true creativity. They need and demand obedience. That they have a disproportionately large percentage of very religious — usually Christian — members is unsurprising. They either come from a branch with direct sales built in or just thrive in that type of environment.

Bright Future?

Network marketing businesses have existed for 50-plus years, but it would seem in the past five years, they have really started to take off (again). Many of the newer versions aren’t going by the traditional network marketing moniker. They call themselves direct sales businesses.

These are the modern day Tupperware parties, where people get together to view “sample sales” where those in attendance will ideally purchase and sign-up. Some of the newest come from known names — the doctors behind Proactiv — while others are even venture backed – Stella and Dot.

Whether the economy or simply that people have started to realize the power and flexibility of the model, network marketing businesses are going through a revitalization, and much to our dismay, we have not figured out how to run one yet; we mean, we have not seen them become that much better for the members yet.

Cross-published at DM Confidential’s blog.

ADOTAS: Sponsormob is an industry leader in the truest sense of the term. Explain your foresight in creating the first affiliate/CPA network for mobile devices. What motivated you to go into mobile?

GLAESER: My business partner Jet [Patel, cofounder and COO] and I have been working for a number of years in online marketing on the advertiser’s side. We worked in many different industries throughout our careers and saw two major trends taking place in digital advertising.

The first was that more businesses were gravitating towards true performance marketing. The second was that mobile Internet usage was skyrocketing. You put these things together and that’s how we decided to start our own mobile Internet Affiliate/CPA network.

How did you pick your team to grow the company to where it is today? Was it organic or did you have an idea who you wanted to work with from the beginning?

It was fully organic. It’s hard because if you want a certain quality of people they are usually employed elsewhere. In Europe you must wait three to six months to leave a job. Because of this you must start looking very far in advance from when you actually need to fill a position.

How has your client base changed since the company has started?

We started out selling games and music for the major mobile entertainment companies in Europe and North America. This took up the bulk of our business efforts until mobile apps came out. Now they’re competing for the same traffic. So our business is shifting towards app publishers.

We run the gamut of advertisers now, both people well established with mobile advertising and many new to mobile, which we’ll get to in a moment. With apps having become so wildly popular there are definitely both pros and cons to using them for your campaign.

The pro for us is that the marketing lifetime on any app is about three months, which inevitably increases our demand. The potential problem with that however, is that in order for a client to be successful they must continue to produce new apps to stay current.

How do you address concerns over privacy with mobile advertising? Everyone expects targeted adds to a certain degree but how do you toe the line between innovation and invasiveness?

The rules are the same as online. Certain content gets paid for. If the content is free to the user than there is revenue to be gained for advertisers. Germany has the strictest laws when it comes to protecting identifiable data.

We don’t use unencrypted device IDs. We can’t keep any raw data for more than 90 days. We don’t record GPS data. IP addresses can only be kept for seven days. We only look at general information on your phone such as country registration, language setting, and day of the week, etc. in order to tailor the advertising experience.

What can you tell me about Host & Post and Click To Call? How will this innovate mobile ads for advertisers?

We’ve learned two things in the past three to six months. A lot of advertisers don’t have a lot of experience in building good mobile landing pages. And there are industries for whom it doesn’t make sense to have lengthy sign ups on the phone – finance, cable, etc.

Those that have lack of experience will highly benefit from Host & Post. This is a platform in which we build the creative material for the advertiser and submit the user information in real-time through a standardized gateway. All we need is a gateway. The benefits are that campaigns start faster with better, more accurate results and inevitably produce higher volume.

With Click To Call, we build a small mobile landing page with a call button where the user can directly call the advertiser. All we need is a phone number. There’s no further integration necessary. This lets us start very quickly.

The validity of the call is defined by its duration. A valid lead is longer time, generally a minute or more. It lends mobile advertising to the entire offline world. We are starting the first campaigns this week.

Where do you see the company a year from now? The industry as a whole?

I believe that Host & Post and Click To Call will be our main focus for the time being. It will help us expand into other countries. Anything that does well will be picked up by other players. I anticipate you will see other versions of these platforms get integrated in other companies’ suites. This will be a key trend in mobile advertising.

The demand for mobile traffic is growing faster than the supply. What that means is the quality advertisers with large budgets will have a big advantage for some time over their competitors. It is time for all advertisers to explore their mobile options.

Then creative and messaging come into play, A/B testing or multivariate testing, and optimizing to get that ever-elusive click, the gold ring of user engagement. And everything up to this point has been the easy part. Mount Everest is still to be climbed, getting to that final step of the funnel — the conversion.

After the conversion has been obtained, the story ends without further reward or continued growth. Marketers can try to get users to continue into another unrelated process but, as far as maximizing ROI for clearly defined objectives, this has been the extent to which marketers can expect to achieve success-until social came along and changed everything by opening a new, self-perpetuating acquisition channel.

With social, the funnel can now be an accordion.  Many companies such as the one I work for, Crowd Factory, are providing marketers with tools to enhance their digital campaigns with a social boost. By tacking on social sharing in-line with user flow, marketers have an entirely new way to drive traffic, in particular high quality traffic. For who is more likely to be your best potential customer than your actual customers’ friends?

Empower new customers with social campaigns such as badging, social offers, referral rewards, ratings and voting to open a new source of traffic from a reliable source. This solution, making your current traffic work harder for you, lowers your eCPA and enables a different opportunity for optimization of new traffic, viewed through a social lens.

In addition, with the correct analytics capturing in place, a social database that sharing provides will give marketers greater insight into the effectiveness of traffic sources. Such a database tied directly to campaign initiatives allows marketers to optimize back up the funnel as well.

The data acquired through social sharing can also be used as a CRM data validation tool, which marketers can use to qualify information captured about new leads on the front-end via matching it to new users’ publicly accessible social demographics and information collected in a social database.

It is utilizing social in this way, boosting current marketing channels by empowering social sharing, rather than thinking of social as a separate channel, that will bring value to marketing initiatives and increase ROI. Social should be a horizontal that lays across all digital channels, providing a rich understanding of top influencers on each network, and facilitating current digital initiatives by making them more effective.