onlinemarketing

EMS.com welcomes NY Affiliates

With the current NY state tax law coming into effect June 1st, many companies with online stores are starting to drop their NY state Affiliates, instead of finding ways to work with them. We feel this is a very poor decision as these companies are:

•  Severing a relationship with people who were actively supporting and promoting their products and brands.
•  Allowing competitors to jump in and help show why they have a better product or service.
• Weakening your current Affiliate channel and strengthening your competitions.
• ·Not seeing the long-term value in taking a small financial cost now.

Today we got wind that REI has decided to kick out all of their NY state Affiliates, which is unfortunate. The good news is that Eastern Mountain Sports is happy to offer NY State Affiliates the opportunity to partner with a 41 year-old outdoor equipment retailer icon.

It was our absolute pleasure this afternoon to get to announce on Abestweb.com that Eastern Mountain Sports will be continuing to work with NY state Affiliate marketers, and in fact, we are rewarding new Affiliates from NY who join the Eastern Mountain Sports program on Performics, with a $3 cash activation bonus (please read the posting on ABestWeb for more details about how you can earn your bonus).

We find it hard to believe that some companies would not see the value in keeping their relationships with their Affiliates strong. On the upside though, you still have many companies out there who do value these relationships and we are proud to be able to represent some of these companies like Eastern Mountain Sports.

We would also like to give a large thank you to all of the support of people within the blogosphere like:

http://72kilowatts.com/2008/05/23/big-shout-out-to-eastern-mountain-sports/

for their kind words to Eastern Mountain Sports and Downtown Ecommerce Partners.

Affiliates are under attack - New York ones first out

New York State has launched a frontal attack on ecommerce recently by initiating a tax by passing legislation that would require Merchants with Affiliates in New York to be sales tax. Amazon is fighting the law tooth and nail as those Merchants with the most to lose are the online pureplays who enjoy the not having nexus (a taxable presence) in many states.

Overstock.com has decided to fire all their affiliates based in New York. The letter below, dated May 13, 2008,  just went out to their Affiliates. This is simple math for Overstock.com - New York is probably a good chunk of their business and why risk hurting sales in New York by having to charge sales tax to people who live in New York City. Overstock has decided to throw their long standing Affiliates under the bus as opposed to standing by them.

The conversation has already started over at ABestWeb.

Affiliates Beware - You may be next

The Affiliate Marketing Industry has long been an industry of positive friction. Traditionally, there have been three hands in the pie - the Affiliate, the Affiliate Network and the Merchant. Recent months have shown the Affiliate Networks beginning to go direct and cutting out the Affiliates. Many a Merchant, as well as the big 3 affiliate networks (Linkshare, Commission Junction and DoubleClick Performics) have built their businesses with the blood and sweat of the affiliate marketer. However, the Affiliate Networks insatiable need for more top line revenue is forcing them to look to, or around, their Affiliate "Partners". The networks as they exist today will be not be recognizable in the years to come as they own more and more of their distribution.

For sake of this discussion, I will use our company as the case study but you can begin to see the Affiliate Network wanting to own the affiliate distribution channel. In the "cutting out" scenario, those Affiliates that are particularly vulnerable are the small-to-medium ones. Big ones, will get bought and that is a great exit, but if you, the Affiliate, don't get big enough, fast enough - then look out.

Quick Case Study

Background - In November of 2006, Bargainbetty.com struck a deal to provide coupons to MSN Shopping. We were fortunate enough to win this relationship with our industry expertise and network. We undertook a compressed development timeline and were able to provide the fully functioning feed in time to capture the Christmas 2006 selling season.

Fast forward to Shawn Collin's July 27, 2007 post sharing the email from Linkshare announcing their "new" relationship with MSN for coupons. Ok, so Bargainbetty was cut out - big deal, we will have to find more distribution partners.

The negative impact to our business is not the point. What is more relevant to the Affiliate Marketing Industry is the dynamic of the traditionally three way relationship. This dynamic is changing and Affiliates and Merchants will have to choose their partners wisely. The former "three-way" pie is rapidly consolidating to just two hands - the Affiliate Network (soon to be renamed as simple a "Network") and the Merchant. I tell you what - if I were in charge of Business Development for Affiliate Network upstart Avantlink or Share-A-Sale, I would use this as a major selling point to further consolidate their position with the thousands of small to medium sized Affiliates. Where the Affiliates go, the Merchants will follow. This is a classic case where a fragmented market and some dilution of the power held by the "big 3" would be good for business - at least for the Affiliate and arguably for the Merchant.

Dirty Little Devils

I have had a couple merchants come to me lately who caught some of their affiliates in some not so good stuff.

Let me the set the stage:

- Major national brand retailers
- Strong affiliate programs
- Actively managed by programs in the major networks
- No Trademark Term bidding policy for search in both cases

(Note: I know there is an ongoing debate about whether or not to allow affiliates to bid on branded terms, for me it boils down to economics - pay 8 - 10% of your revenue to the affiliate and the network or pay 1% of revenue to Google - shouldn't take long to make a decision.)

A savvy and unscrupulous affiliate who shall remain nameless finds out where this particular retailer is - in this case Denver, Colorado. The affiliate proceeds to buy geo targeted Google Adsense everywhere else except Colorado. Well, the Internet world is small and as usual the Retailer eventually finds out. Affiliate is dealt with. These type of affiliates are who give the industry a bad name. I applaud the scrappiness and the creativity of said affiliate, however I am disgusted by the sneakiness and back-door approach.

Another merchant found the same shadiness going on but with time of day. This same person recommended a solution I wanted to review before posting a thumbs up or thumbs down on them. Stay tuned for the solution.

In the meantime - here is a document provided to me by my friends (thanks DL!) at Google. This localizing search query provides a great way to see what is going on with keywords important to you in other countries, regions, cities, US postal/zip codes, US DMAs, or my favorite - latitude and longitude. (Go geocachers!) (This is actually very interesting for the future of Google, Google Earch and online/offline integration.) The display URL was the merchants as well as the ad copy and the click on the ad went directly to the merchant's site without stopping at the Affiliates. Until all affiliates start playing clean, the industry will remain suspect and the recent rash of "Googles Continued Affiliate Assault" posts will fall on deaf ears at Google.

On to looking in to see if you have a problem in your program - to perform a localized search query, enter a query on Google.  Then, on the search results page, append a code to the URL in the address/navigation bar of your browser. 

Localized Search Query

Each parameter requires a value.  For example, to see ads as they appear to users in the Los Angeles Designated Market Area, append ‘&gm=803’ to the URL.  To use more than one parameter, include an ‘&’ between each parameter.

Country
Parameter: gl   
Target country: United States
Name-value Pair: gl=US
Example: http://www.google.com/search?hl=en&q=buy.com&

btnG=Google+Search&gl=US

Latitude & Longitude
Parameter: gll
Name-value Pair: gll=37304332,-121393872
Example: http://www.google.com/search?hl=en&q=buy.com&

btnG=Google+Search&gll=34304332,-101393872

Region
Parameter: gr
Name-value Pair: gr=GB-ENG
Example: http://www.google.com/search?hl=en&q=buy.com&

btnG=Google+Search&gr=GB-ENG

City
Parameter: gcs  (to use this parameter, ‘gr’ must be set to the corresponding region as the city)
Name value pair: gr=New York
Example: http://www.google.com/search?hl=en&q=buy.com&

btnG=Google+Search&gr=New York

Postal/Zip code
Parameter: gpc    (US only) Target Postal Code (to use this parameter, ‘gl’ must be set to the United States (e.g. ‘gl=US’)
Name-value Pair: gpc=94549
Example: http://www.google.com/search?hl=en&q=buy.com&

btnG=Google+Search&gl=US&gpc=94549

US Designated Market Areas (DMA)
Parameter: gm
Name-value Pair: gm=506 Boston MA-Manchester
Example: http://www.google.com/search?hl=en&q=buy.com&

btnG=Google+Search&gm=506