Last week, I wrote a piece for Adotas about the evolution the performance marketing industry is undergoing. The point of the article was that in order to continue to attract deeper-pocketed brand advertisers, the Industry needs to be focused on the longer-term — both as networks/platforms and as individual publishers.

This is an adjustment any maturing industry needs to undertake to sustain its future viability. We need to stop chasing the quick buck/high payout offers that will be gone in a few months and focus instead on working with real brands that have products that truly solve consumer problems.

The black eye the Tech and Performance Marketing industries got from the scamville episode was unfortunate, but it illustrates why and what we need to do to improve. The actions Zynga took to try to eliminate the scammy offers was an example of how to take some short-term pain (reducing revenue by weeding out) to look out for the end user and their brand. Some of the good networks supplying these offers also took steps to weed out the bad apples. Those that did not are in worse shape today.

The Performance Marketing Schism

For some of the networks, Scamville presented a similar conundrum for the Networks running these offers: Do I cut out the scammy stuff and take a hit on the bottom line or keep going until someone sends me papers? Unfortunately for the Performance Marketing industry, some of the players kept at it. Others stopped it. For the industry’s sake, more of the latter needs to happen. The result of the decisions that Networks make on issues such as these will inevitably lead to the bifurcation of the performance marketing industry.

In one corner there will be a few “white glove” brand-friendly places for the smarter money to flow to…places where brands know they are getting quality distribution and quality results with brand protection. The other corner will be dominated by the “get me rich quick” guys that chase any offer. These greedy folks may be able to get some short-term results, but they will inevitably end up hurting their advertisers brands and abuse the end consumer.

The net to the Performance Marketing industry will be similar to the bifurcation that happened to the financial services industry years ago. Today there are only a few very well regarded banks (Morgan Stanley, etc) and the boiler room JT Marlins of the world that struggled for relevance and revenue were shut down or went bankrupt.

Like in the movie, the Truth always comes out for the JT Marlins of the world. The same will happen to our industry. Just watch…

http://ftc.gov/opa/2010/07/tsr.shtm

Last Thursday the FTC announced a new set of rules surrounding debt related services that will affect the way affiliate marketers do business.  As a network, we have already seen the results of such changes as our partners are trying to figure out how to adapt to changes in the market.

The FTC is labeling this “The Final Rule,” which was aimed directly at the telemarketing industry but broadened out to cover online marketing as well.  The biggest changes being made address when fee’s can be collected from a consumer and the information companies are required to present to the consumer before the consumer purchases.

The intention is to add a level of protection to the consumer by not allowing them to get further into debt without having a debt settlement plan in place. “Too many of these companies pick the last dollar out of consumers’ pockets – and far from leaving them better off, push them deeper into debt, even bankruptcy.” Said FTC Chairman Jon Leibowitz

What do affiliates and advertisers need to know?

“The Final Rule” – Fee’s for debt relief services cannot be collected until:

• The consumer’s debt has been successfully renegotiated or settled
• Written documentation of the settlement has been agreed upon by the consumer and creditor
• The consumer has made at least 1 payment towards the new debt relief agreement/plan

And:

• Fees to the consumer must be in proportion to the debt amount settled
• The advertiser must disclose the total cost of service and negative consequences to debt relief services (credit ranking)

How will Affiliate Marketers be affected?

• Marketers that charge a consumer prior to the rules above will need to change their business model, website messaging, and back end profitability models.
• Affiliates that focus primarily on debt related services will need to find new and improved ways to monetize debt related traffic and e-mail data as advertisers will have a tougher time collecting fees from consumers, thus lowering affiliate commissions.
• Tracking success in the debt services industry will be difficult and time consuming in the near future.

This crackdown is a flash back to the similar changes that were made to continuity business models earlier in the year.  The FTC appears to be targeting online marketing as an area that needs to be cleaned up and they seem to be just getting started.  One thing is for sure, it’s not the first or last change they are going to make.

I would recommend that affiliates looking to diversify out of debt services take a look at Identity Protection campaigns.  Identity Protection is something that all consumers should have and the performance metrics are proven for affiliates.  Our top campaign is IdentityEdge and it’s a great campaign from a trusted advertiser.

…and why the obvious imperative for online marketers is optimizing conversion.

Based on the continuing data trends we are seeing for the online segment of advertising, the majority of online media is priced on a pay-for-results model — not an impression (CPM) model. Some of the reasons:

REASON ONE: Online advertising’s job is to generate leads and drive sales. Period. Most online advertisers buying impressions back into a Cost-Per-Acquistion (CPA ) metric anyway. Ask any of your marketing friends how they calculate ROI, and I’ll bet it eventually comes down how much they spent versus how many new leads or customers a campaign acquired.

REASON TWO: The web is truly a direct response medium. It is more measurable, agile and cost-effective than other media forms because it can be updated and measured in real-time. Marketers can test and tweak more easily to get the results they want…leads and sales.

REASON THREE: Impression formats (banners of all sizes) are perceived to be limiting to brand awareness advertisers because they maintain that end users are “banner blind”. Add to that brand advertisers discontent with current digital creative failing to “tell compelling stories”, and the picture for brand awareness/impression marketing is not as rosy as we all thought. (see IAB/Bain research here)

REASON FOUR: Average pricing for impressions will trend to zero over time. The web is growing each day with each new application, tweet, status update, blog post, or picture upload. As this occurs, inventory supply increases, thus pitting every web publisher in competition for the only scarce resource on the web…user attention. Logically, advertisers can get similar reach and perhaps more frequency with lower priced inventory present on smaller sites or networks. Hence, the large portion of impression inventory will see a price decrease (more supply means lower pricing). Look at the battle traditional impression models like newspapers are fighting…more sources of news means traditional outlets are the less obvious choice for news, and thus their pricing suffers. (caveat: premium impressions will always have high value due to their scarcity…there are only so many front pages)

So what does this mean for those of us that make a living with online media?

ONE: We still need to embrace the impression…its the front of the online conversion funnel. Impressions are a necessary part of an online campaign, but they are only worth their ability to get a user to take action. More and more marketers today are using impressions with the end in mind…they are looking at the impression as the first step in their funnel to attain a direct response. Conclusion: Brand awareness is a benefit of a well executed online direct response campaign. Less and less is the impression the reason for the campaign.

TWO: Impression media creative needs to be designed to be immediately engaging and have a clear call to action and benefit. The impression drives the result, so you need to make a “good first impression”.

THREE: Traffic is our fuel. We need to find ways to maximize the yield we get from the traffic we do manage to drive to our sites. The current model looks like this:

The optimized funnel should look like this:

The optimized funnel can be achieved by:

• Making sure the site conversion funnel/path on your site is optimized (landing page optimization and rigorous analytics measurement). A good example of the extreme of this philosophy can be seen here. Carbonite leaves no choice but a conversion if the user  wants to learn about the service or get a free trial.
• Making sure every site has the tools necessary to reduce abandons and increase returns to the site (re-marketing tools, integrated email marketing)
• Learning to make intelligent use of content and community marketing to create other inbound interest to our offerings through valuable content associated with your brand. Chest beating aside, at MediaTrust we use our blog as a resource of industry information that suggests to users that we are a source of knowledge and potentially someone to work with. Trust me when I tell you, this generates the lions share of our inbound leads for both advertising and publishing partners.
• Like it or not, all marketers need to socialize their marketing by leveraging the power of social media to drive new and return visits, recommendations, fans, and awareness of your content and community efforts.

FOUR: With online media, start with the goal or outcome in mind (duh!): the lead or sale, or if your are confident in your site conversion funnel: site visits/traffic. Marketers should look at these goals as the starting point to allocating their spend across the web and judging each spend against these outcomes. Its clear that with the new landscape of abundance that we can look at a much broader and cheaper portfolio of impression inventory to kickstart the conversion funnel.

FIVE: More publishers should consider offering and running more pure performance campaigns with their inventory. They might find out (as many already have) that their effective CPM is higher running pure CPA and Revshare campaigns than it is with their CPM models. Today, the MediaTrust platform has several traditional CPM publishers monetizing some of their off-premium inventory.

SIX: All marketers should be running a pay-for-performance campaign. Period. The value of performance marking online is the fact that you only pay for results. This insures that all those that you work with to achieve your desired result are optimizing their contribution. The publishers, agencies, or networks you use on these campaigns only get compensated when your result is attained. The beauty here is…wait for it…the impression is free to the advertiser so the advertiser is in effect getting free brand awareness as he seeks the desired result. Performance marketing campaigns such as these can easily be setup and run with a knowledgeable team (shameless plug: like MediaTrust !).

While there are other larger issues to work out for impression media:

1. Why hasn’t Madison avenue brought to bear its creative muscle to find a more efficient solution for the people that pay them?
2. How does the realtime web change our ecosystem and effect the impression model?
3. Will the explosion of the mobile web go direct response or brand awareness? (Steve Jobs might say both)

We have plenty to talk about with this issue. I look forward to the dialog. Post comments below or Twitter: trip_foster

MediaTrust named #3 on mThink online advertising bluebook Top 20 Performance Marketing Networks and Exchanges

On April 17th, mThink came out with their first performance marketing network rankings of 2010. Needless to say, we’re excited that we’re in the top three.

We have a lot going on that should help us win  the number 1 spot. Along with winning the business of more exclusive tier 1 and tier 2 brand advertisers and agencies, we are continuing to introduce new technologies for advertisers and publishers, as well as fine tune our processes to make sure all of the partners in the MediaTrust ecosystem are safeguarded from a compliance perspective.

By the way, stay tuned: We’ll have some exiting news soon that should get the market talking!

As far as details on the award:

“In March, 2010, Revenue Performance surveyed over 1,000 publishers, advertisers, agencies and networks. The factors identified by the vast majority of respondents reflect the value placed on trust and reputation right now. Over 80% of respondents picked tracking accuracy and trust as the most important factors when choosing a network partner, with fraud prevention running a close third.”

In my best Bob Dylan voice, here goes:

“Come gather ’round people
Wherever you roam
And admit that the waters
Around you have grown…”

…you may know the rest – and you may even know the odd network that has sunk like a stone. In Bob’s words I guess they didn’t start “swimmin’” early enough in today’s ever-changing affiliate waters.
On a serious note, as much as I like to get my rant on about specific subjects within affiliate marketing or online advertising in general, no subject is as important as this today: Change…and the great opportunities it presents.

Never have I ever seen so much change in the online advertising industry– both positive and negative. Even when the Dotcom Bubble burst in 2000 and everyone joked about going B2B (Back-to-Banks) we didn’t see this much change so quickly. As drastic as the changes were back then (last one out turn off the lights), it rolled out slowly and there were positives that came out of bad situations in the following months. (In my case, after there was a reduction at a growing stock site that was looking to go public, I had the opportunity to buy the office fridge for $80 and find a new Sales seat in a big purple Yahoo chair. The chair wasn’t that comfy but the fridge still works. Plenty of folks found new positions elsewhere and one even got the company pinball machine on the cheap.) But I digress…

The last 6 months have seen an overwhelming amount of change within the performance marketing industry. Hot companies of yesterday are struggling today and leaders are merging with other leaders to be even stronger. Pulling a Noah (moving to higher ground) is what we used to call it. If you have ever gone through (choose one) merger, buy-out, re-structuring, re-tooling, downsizing, optimization, etc. you can testify that it’s a whirlpool of feelings for everyone involved. Eventually weeks or months later (or when the worm is eaten) the consistent feeling in these necessary business cycles is excitement. Albeit nervous excitement – but excitement nonetheless! When one chapter ends, a new one begins.

The key to succeeding in these evolving times is to sort through the changes and embrace the opportunity that Change presents. For Affiliates, the evolution means the opportunity of not having to worry about getting paid. Did I hear a Hallelujah brother Mike? For the companies themselves it means a greater focus on bringing on quality clients and strengthening relationships with quality affiliates. For any of my colleagues in the industry who also have a new fridge I leave you with this nice story.

I recently saw my favorite hockey team – the Maple Leafs – trade Lee Stempniak. He wasn’t a star but he definitely contributed night in and night out. When he first got traded he didn’t even know which team he was going to. Talk about a request to get the salt and lemon out! Since landing in Phoenix, he has scored 15 points in 12 games and he’s being called the best deadline day acquisition! As you can probably imagine he was shocked by change, nervous about his future, yet he has seized the opportunity that was presented to him and thrived.

Moving forward we are likely to see more change, evolution and opportunity to thrive in our industry. I hope that for our industry’s sake that we embrace this evolution we are undergoing and we are able to pull a Stempniak and succeed like we never did before.

Continuing our efforts to create an industry-leading platform, MediaTrust is proud to announce the release of our automated landing page optimizer.

Through regular updates and improvements to our technology, we are committed to providing our publishers with simple and effective tools that will help them increase their earnings.  Our Landing Page Rotator is an optimization tool, which is already available on a number of campaigns, with the list continuing to grow.  Just check the tracking section of your favorite campaigns and look for the “Optimize Landing Pages” check box.

The Landing Page Rotator is designed to ensure the traffic you generate is reaching the landing page that converts best for your type of traffic, automatically optimizing the results.  When activated, the tool performs a test on all incoming traffic in an effort to determine accurate conversion rates.  As conversion rates can vary greatly for each traffic source, the tests are performed on individual traffic sources rather than on network traffic as a whole.  The landing page with the highest conversion rate for each source is then served increasingly often.

Additionally, the tool continues to perform tests on a small subset of the traffic.  If any traffic source changes, with a resulting change in conversion rates, the optimizer will begin serving the page that performs best under the new conditions.  There is no need for any manual intervention.

The landing page report we recently released will help you monitor all of these changes.  Conversion rates and commission statistics are available for each landing page, making it very easy to track the lift provided by the landing page optimizer.  Simply monitor the landing page report on a regular basis, noting the conversion rates for each page and the total.  Over time the total conversion rate will increase, and you will clearly notice the larger amounts of traffic going to your top page.

In the competitive world of online marketing, optimization is becoming increasingly important and MediaTrust is pleased to be at the forefront.  Do not hesitate to contact your publisher manager if you have any questions.

Q+A with MediaTrust’s Mike Stocker About the New conversionChat Services

We had a chance to catch up with Mike Stocker, the mind behind the conversionChat offering MediaTrust Labs just released. He shared some insights with us about the product that help frame up its place in the performance marketing ecosystem.

Q: Why do you feel the conversionChat product is especially relevant in today’s marketing environment?
A: In today’s expensive and challenging online marketing environment, advertisers are looking to get the most from their existing website traffic. ConversionChat allows advertisers to re-engage their site visitors one last time before they exit a site — giving them that opportunity to turn that visitor into a customer or lead submit.

Q: How do you see this product dovetailing with the rest of the Conversion Solutions offerings? With the MediaTrust platform?
A: conversionChat is a natural fit into the current Conversion Solutions lineup of conversion and ROI improving services because it too can be used to increase site conversions and ROI. The goal with MediaTrust Conversion Solutions was to provide a one-stop toolset for advertisers seeking more from their existing traffic. Now advertisers can choose to follow up, re-market, and reengage their visitors via three marketing tools- Email, Phone and Exit Chat. Conversion Solutions truly gives the advertiser a choice of tools, and the site visitors a choice in how they choose to re-interact with the sites they visit.

The Conversion Solutions suite of products is a natural fit on the MediaTrust platform because it provides MediaTrust advertisers with these complementary tools via minimum effort and potential for up to 20% lift on sales. In a marketplace where networks need to differentiate themselves to stand apart from the crowd, MediaTrust has decided to bring great technology tools to help their advertiser partners make more from the traffic they generate via campaigns.

Q: Ultimately, how do you see this product in the marketplace a year from now?
A: conversionChat will continue to mature as we work to meet client needs for the product. I envision it will be even more deeply integrated into the Conversion Solutions suite as it is fully tied in to the Email and Phone based conversion tools to provide the optimal lift in conversion for MediaTrust advertisers. I’m also hopeful that conversionChat will gain more ubiquitous popularity for marketers of all sizes  as they seek to continue to improve on the ability to personalize and customize 1:1 messaging for each consumer. As we all know, this is critical in the coming months and years to provide the most effective marketing to savvy customers. Frankly, someday I’d like to see conversionChat on every commerce or lead-oriented site on the web!

Today we announced a very innovative campaign that redefines performance marketing as we know it.

In cooperation with our partners, NASCAR driver Joe Nemechek of NEMCO Motorsports and Global Media Minds, we launched a new website, www.frontrowjoe.com. With this partnership, Joe has wrapped his #87 car with the www.frontrowjoe.com URL to promote the website during the Daytona 500 this weekend. The website has several of our advertisers (QuoteWizard, MagicJack, JupiterJack, Force Factor, AbCircle, Autos.com, FlexBelt and ResumeBucket) listed on it.

In this program, Joe’s car will give new meaning to the concept of driving traffic! When fans go to www.frontrowjoe.com and click on offers, a portion of each lead or sale goes to supporting Joe’s NEMCO motorsports 2010 NASCAR campaign. This convergent marketing program is the first of its kind. We are integrating a traditional offline channel (car sponsorship) with performance marketing, PR, and social media marketing to deliver value to advertisers, drivers (publishers!) and fans (consumers).

We have leveraged PR, twitter, blogging and facebook to begin the awareness generation for the car and www.frontrowjoe.com. Over the next few days, NASCAR fans will be exposed to this innovative program via press, additional social marketing and the NEMCO team’s cars (Joe’s car is #87, and his other car is #97) speeding around the track for time trials and practice races.  However, the real results will come as fans are exposed to the URL over the race weekend. We estimate that 16-17 million people will view the race this year, giving us a lot of impressions for our URL on Joe’s Cars — which should result in more traffic to www.frontrowjoe.com than the road into the Daytona tailgate on Sunday morning.

We are thrilled to bring this type of innovative thinking to our industry. As you may have been reminded earlier this week, MediaTrust is committed to innovating with our technology, business relationships, and campaign execution. This partnership with Joe Nemechek and Global Media Minds is another example of our commitment to bringing fresh thinking to our industry so advertisers and publishers can leverage our pay-for-performance channel to get real results.

To follow the world’s fastest performance marketer this weekend, follow frontrowjoe87 on twitter, visit  Joe’s facebook page or check out his blog.

I just got off the phone with Mark Roth, the CEO of OfferVault and AffiliCert. I asked him to pen a guest post to bring us all up to speed on AffiliCert’s progress. As most of you know, AffiliCert is attacking the problem of publisher fraud from the private sector. They hope that their efforts will lead to an industry of certified and verified publishers. Mark’s overview is below:

For those not familiar, Affilicert is an affiliate certification program, dedicated to combating fraud committed by affiliates in the CPA/Performance Marketing industry, and to facilitating the approval process for legitimate affiliates. We do this by providing the community of networks with a stream of legitimate affiliates who have been through our rigorous screening process.

STATUS

We are now in the final stages of development on the AffiliCert platform and expect to go live on February 22^nd. We have partnered with Payoneer a registered MasterCard Merchant Service Provider, which allows us to provide the most rigorous screening procedure in the Industry, including KYC (Know Your Customer), BSA (Bank Secrecy Act), AML (Anti-Money Laundering) and OFAC (Office of Foreign Assets Control) and many other stringent checks to assure that only legitimate affiliates obtain an AffiliCert Certification. Additional checks include, phone verification, email and physical address verification, website verifications and many other checks. With the extensive and sophisticated fraud identification procedures we are employing, we are able to certify both US based and international affiliates.

Participating networks (there are over 50 networks so far) will receive an AffiliCert network login and gain access to certification data on our approved affiliates. Networks will be able to look up affiliates by name or ID# to check certification status and will also have access to daily/weekly lists of newly certified affiliates. This list may be used as a prospecting pool from which to recruit new affiliates

OUR VALUE

As the situation exists now, each network spends an enormous amount of time screening affiliate applications, only to turn away the vast majority as potentially fraudulent and not worth the risk to do business with. Affiliate managers’ time would be far better spent helping their existing affiliates to become more successful, therefore increasing the income of all parties involved.

AffiliCert aims to take the burden of screening largely off the hands of the networks, thus freeing up the affiliate managers time for more valuable tasks.

From the legitimate affiliates’ perspective, there are great benefits as well. Any affiliate getting started in the business knows all too well the frustrations of having their applications denied by one network after another. It’s really not their fault, but they are getting caught in the cross fire, collateral damage in the fight against fraud. Now with the emergence of AffiliCert, the legitimate affiliate will have a much easier time getting approved into any of our participating networks. There will be a nominal application fee, and of course they must pass the screening process, but once issued an AffiliCert ID, it will be smooth sailing. As an added benefit, each affiliate that becomes certified, will receive an AffiliateCert debit card, issued by Payoneer. If affiliates choose to recieve commission payments this way, the CPA networks can issue payments directly to their Affilicert debit card which can be used as a credit card or to take out cash at ATM’s at thousands of locations worldwide. US residents can even transfer their funds from their card, directly into their bank account. For international affiliates, this is hands down the quickest and easiest method to get paid.

Among the many networks participating in the AffiliCert program are MediaTrust, Unique Leads, Market Leverage, Neverblue, Rextopia, Revenue Street, Elite Clicks Media, Affiliateer and Affiliate venture Group.

We are excited to be launching on February 22^nd when we will begin taking affiliate applications. Fraudsters need not apply.