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Monday
Feb012010

Marketing War: Affiliate World vs. Brand World, who will win? Missy Ward Knows!

  If you’ve never heard of Missy Ward, then join the club. Most people in agencies have never heard of her, despite her being one of the most influential people in the world in one of the fastest growing segments of interactive advertising: Affiliate Marketing.  She’s also the owner of Affiliate Summit, which has become the largest conference in the world for affiliate marketing and is the must-attend place for anyone in the industry to go. It’s grown so large, so fast that one major player in the told me that probably within a year or two it would overtake ADTECH as the largest conference in the industry--  a claim which is hard to believe until you see the list of exhibitors which include everyone from EBAY to AMAZON, companies that don’t exhibit at ADTECH.

   Yet, as mentioned, most of the interactive advertising industry hasn’t heard of Missy. They better shape up and start paying attention however to what she is saying. For some reason the interactive advertising industry has grown into two huge parts:  the brand world and the Affiliate Marketing world. While many people call the Affiliate Marketing world the Direct Response world, the industry itself thinks of itself more and more as “Affiliate” or “Performance” marketing. These two worlds exist side by side, but for some reason there are very few people who cross the line and work in both – or very few that admit it. While more and more agencies are adopting CPA and performance marketing models, and hiring employees from companies like Affiliate.com, Azoogle and Commission junction, they are trying to keep this push somewhat secret.

    However if you look at the attendance at Affiliate Summit, you’d never guess the two worlds are at odds. Over 30% of the attendeeship is from agencies, including the major agencies that only push the brand play. They aren’t willing to admit it, but they are to some degree desperate to understand this part of the industry, which often seems like a weird mix of word of mouth marketing , search and display.  One agency head told me that it was not that they didn’t understand affiliate marketing, but that they didn’t know how to make it fit with their existing clients – which didn’t seem quite right. Amazon.com, one of the leading web properties in the world was one of the earlier adopters of Affiliate marketing, and still to this day has an active, vibrant affiliate marketing program that produces the majority of their new advertising traffic.  If you sign up to any major affiliate marketing company, you will see a list of major brand companies including Dell and Microsoft.

  I sincerely believe that brands actually do want to learn about affiliate marketing, that they are interested in having a conversation, but there are agencies out there that are scared of doing anything that changes their current dynamic. They’ve argued so long that brand marketing is only about eyeballs, that they can’t see that the two worlds don’t actually clash – that there are programs that can pay on a performance but also drive eyeballs and reach the audiences they want. Then again, just ten years ago there were brick-and-mortar ad houses that were arguing that interactive advertising would never provide the brand opportunities that television had, and that television networks would always dominate the advertising space. 

 Affiliate marketers, as a group are innovators. They are often seen by the brand media as no more than “get rich quick” people, despite long term, successful businesses.  Yes, there are those segments in the affiliate marketing industry, just like the industry at a whole that is composed of adware scammers, get-rich DVD pushers, and the same – but even in this segment there are those who are engaged in innovative processes to gain attention to their clients. It’s too easy to group everyone together and ignore the real processes that occur in the affiliate marketing world, which includes the real ability of affiliate marketers to connect to consumers – to get them to listen and pay attention.

 Another common excuse I hear is that brands are scared because they are worried about protecting their brand. This might have been an excuse during the start of the affiliate marketing world, but so much technology and fraud measures have been created in the last few years that any worry of rogue affiliates is less possible than ever. Affiliate companies live off of production and the reputable ones have compliance and monitoring teams working full time to discover even the slightest deviation from the norm in reporting. In fact, I would argue that the technology developed to detect fraud in the affiliate marketing industry far outweighs what most display ad networks and agencies have, and many display networks need to learn about policing from the affiliate industry.  Having been involved in both discovering and helping prosecute impression fraudsters, I can tell you that the affiliate marketing industry examines their relationships considerably more than any display network I’ve ever seen. At Affiliate.com, for our affiliates to be able run some of the more sensitive brand and mobile programs, we require affiliates to be on a phone call with our compliance and legal team to go over the laws and compliance issues. We then heavily monitor their production and track every single sale or signup for products and examine any deviation from the norm in performance. While I would argue obviously that our team is the best in the industry, there are many other major affiliate companies with similar programs. We pride ourselves not as a technology company, but as a relationship company where we work with our clients and affiliates to best provide them long term relationships with their consumers.

  Agencies need to take a better look at the Missy and listen to what she is talking about.  I promise if they don’t they will slowly find more and more of their clients leaving and going to those companies that actually know who she is. 



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Reader Comments (4)

DR always had this problem of being the bastard child of marketing - especially DRTV. Now the same goes for all the direct methods online - but if you look at the ROI figures - Search, Email, Affiliates are the highest.

February 1, 2010 | Unregistered Commenterjoseph mcelroy

I don't think direct is going anywhere. There will always be more than enough room and business for both...

February 1, 2010 | Unregistered CommenterKen Cauley

Great Post, for the following Reasons:

As you said, affiliate Market is a new concept that involves word of mouth, SEO and some technology and indeed classic agencies are having a hard time understanding that. I agree, and what it is sweet is that after all, the bottom line is the one who dictates policies. Money talks. Eventually agencies and brands will learn to like it.

February 2, 2010 | Unregistered CommenterAvraham Saltoun

Excellent article! Agencies need to understand performance based marketing and innovators like Missy are helping that evolve at a rapid rate. Today's economy calls for innovative marketing that is measurable against results with full brand protection. A key point is that affiliate marketing allows you to reach thousands of new partners on a pay for performance model so cost and risk is low.

February 3, 2010 | Unregistered CommenterMichael Vorel

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