I am Kim Raleigh. I am stepping in for Lisa Piccarelli, who was unable to attend, so you
got stuck with me. And our other panelists today are Mike Allen. He started
shopping bargains, dash bargains.com in 1999. I've been in the space just as long.
I was a competitor, started shopping bookmarks at the same time, so Mike and I
go way back, I've known each other a long time. And Dave Nafziger trying to
pronounce his name right? Are they good? Okay. He is the founder and CEO of Brand
Invarity. And so if you all want to follow us on Twitter, there's our Twitter
handles, and then we will tweet out this whole slide deck when we're all done, so
you don't have to take notes if you don't want to. And we'll show this again at the
end in Casey mess it. And I know why I'm saying between you and Mike, this is new to me,
because you guys are competitors, are we competitors? Yes, but we're friendly
competitors. We even have this little nice, funny office clip in here. If I can
figure out how to play it.
It's a real shame, because studies have shown that more information gets passed through
water cooler gossip than through official memos, which puts me at a disadvantage,
because I bring my own water to work. What'd you do to this? I didn't do it. What do you mean?
Oh, the water cooler was brought over here for maintenance. So what do you guys hear?
What's the skittle butt?
I love the office. So nowadays most of us work virtually. We don't actually have a water cooler
to go around. So we have other ways of communicating. We have being newsletters,
there's space group forums, LinkedIn groups, mastermind groups. If you're not familiar with
them, it's actually I'm in one. We meet once a week. There's three of us on a call every Tuesday,
1230. And we just talk about everything. Go keep holding to their accountable. And that's like
our water cooler of the week. I think there's a lot of, a lot of, a lot of operating this industry
can be very lonely. I think there's a lot of folks who are, have started with a site or a
collection of websites. And there's a lot of different support networks to help sort of
hold each other accountable. Yes, or to learn and make sure you're doing the right things.
And I like it just because I work at home. I like interaction with other people once in a
while. Get out of my pajamas. So today we're going to go over eight hot topics and the industry self
measurement, attribution, blogger recruiting, Nexus tax, mobile commerce, regulatory issues,
going global and the changing landscape are the eight hot topics. So we're going to start with number
one, industry self measurement size matters. Well, there has been a lack of measurements of
official studies from many of the big firms, big marketing firms, about performance marketing.
And so we've had to do, as an industry, we've had to do a lot of our own measurements in
own studies. And one of the organizations that's taken the lead in this is the performance marketing
association, the PMA. And it's the industry's only professional association. So you'll see a lot of
data in today's topics under the resources. You'll see a lot of PMA data in here. But one of the
biggest recent pieces of data here was the salary survey. And because it's been difficult to know
how much are people making and what should I pay if I'm hiring someone. So the PMA has
published just recently the salary survey for our industry. And that gives a lot of good
information. It's actually pretty fascinating. Like there's, they go by position, my level,
my type of firm. I think I hadn't quite seen it as crystallized as that. I thought it was
super interesting. And then there's a lot of other data that we'll go through as we get on
further. But there's also some other groups, AFSTAT survey that's more than 2,300 affiliates
have been involved in that and they're surveyed annually. There's affiliate benchmarks and
that's been going on for about eight years and the last survey had over 9,000 respondents in
that. And then in the UK, the internet advertising bureau has done surveys. They did one in
2012 and there was, they determined that for every 11 pounds spent, one pound was spent. I'm sorry
for it. One pound of advertising generated 11 pounds of sales in performance marketing. So
there's been some studies, but most of them have been driven internally by our own industry.
I think the IVU case that is interesting, it was one that the effectively the industry
organization there contracted Pricewaterhouse to go and effectively survey the size of the
industry and produces had a benchmark, which all the participants use in their marketing
collateral and so on. And it's done, I think, a lot to elevate the recognition of the industry
among popular press and so on. And so I know it's something that is hot topic in the PMA. I think
the board had a conversation about it. They've looked at it closely before and I think it remains
relatively high on their priority list to produce. And I'm hopeful there's something like that that
comes out in the US, but I think it could be pretty compelling as well. Next we're going to talk
about attribution. Another very complex topic. And you'll see on the slide there, there are so
many parts to what influences a sale. So many different channels you can look at. There's email,
there's search, social media, affiliate, retargeting, and on and on print catalogs. So
who influenced what? How much did they influence? Who should be paid? All these type of questions.
How do you track it? And if you don't track it properly and reward properly, then you're not
incentivizing affiliates. And it becomes something we have to look at. So obviously more data is
a good thing, but just having more of it doesn't mean we are doing anything right with it.
So we also have to have an understanding of the process and look at it in individual ways,
because one size doesn't fit all on these things for it, particularly with affiliates.
If you have bloggers, you might have a one blogger that drives a lot of traffic that converts very
well. What does her traffic convert at 10% whereas your average program is 6%. So you have to find
out, you know, look into those details. And so it's, you've got to have some tools to analyze it.
And there's some great, if you want just an overview of it, another PMA report that was produced,
you'll see it in the resources below. But it introduces several different
companies that are involved in producing the ability to track attribution. And you'll see
a number of them are here, like Impact Radius, Link Connector, Rakuten,
share a sale of many of these have the tools in their affiliate program already to track the
various channels and to properly reward affiliates based on that. You know, is it first click,
last click? Is this affiliate an influencer or a closer? Then there's the cart influencers,
you know, with price comparison. And so there's all these questions and just a number of great
resources to look at to get more detail on that. I think I've seen pretty consistently that
the, some of the most effective affiliates are also the most confident and comfortable with where
their value comes from. And it's going to differ by program, but there's, there's often a
conversation now. You guys tell me if this is true or not, but I've typically seen there's a
conversation in between the affiliate and the advertiser around what actually drives value for
the advertiser. There might be different things for different advertisers. For somebody, it's a
sign up for somebody, it's the new customer for somebody, it's closing the sale. And trying to
understand where that value comes from as an affiliate helps you direct the things that are
valuable to the advertiser more directly. I think Brian Littlein mentioned at one point.
He's advised for content bloggers.
All right, well. His advice for content bloggers is the first time that you drive a sale to
a merchant, contact the merchant and ask for a commission rate increase. Because the content
blogger is typically seen as higher funnel. It's typically seen as more valuable to a lot of
advertisers. And they're harder to find. They're harder to recruit. They're harder to
hit on our slides. We're going to talk about blogger recruiting next. All right. Anyway, I think
the general point is try and understand where your value is as an affiliate and ask for it.
It doesn't have to be hesitant to ask your partners when you are delivering value.
Yes, we're that brings us to the whole blogger recruitment.
So bloggers, we're trying, we're running it harder and harder. Many bloggers don't know what
affiliate marketing is. They just want to get paid their sponsored posts or they want to get
free stuff and write about it. And so a lot of merchants and OPMs and agencies are trying to
educate the bloggers about affiliate marketing, the long tail value. Like we're not just going
to pay you the $10 to post this. We want you. You're going to make commission ongoing commission.
And you'll see Brian Linton does a great job of that. And as he does a think tank conference
and tries to bring in more bloggers to educate them more on how they can do affiliate marketing.
Yeah, the ink criminal income should have read this first. They affiliate links.
So there was a blogger conference right immediately prior to fail summit this year.
Blogger, yes. And it was sort of an attempt to bring people into the industry. I know I've
met a few people. Oh, the type A conference. I'm sorry. There was actually a blogger conference.
I believe her last last week as well. But it's mostly they were coming in. They wanted the free
stuff. They wanted the post. I believe Brian did have a table though. We're trying to convince them
to sign up for affiliate marketing. I think there are also a few people who ended up meeting at the
meat market that had come through that conference. Okay. Which is kind of nice as well.
There are some bloggers though that do get it. I'm I've met she was at the think tank
think tank last year hip to save. She works for the today show. And if you can get her to post
your affiliate links in your merchant. It's gold. Yeah. It is amazing what bloggers can drive.
As far as sales go. And but they really need a personal relationship and a lot of attention.
Keep up keep in touch with them. You know, develop a relationship with them long term.
And you know, they can just they have that loyal following and they can crank out sales for you.
Our next topic. The Nexus tax.
Luckily, I live in a state that it doesn't exist yet. But so who's familiar here with Nexus
tax curiosity? Most people, some people. If you aren't familiar, you will probably become
familiar as as a law is kind of crop up. And what what the Nexus tax thing is has been a study
pushed by the states to collect sales tax from online merchants. And they've been frequently
using the affiliate channel as a mechanism to say that an online merchant has nexus in that
state because the affiliates are serving as effectively distributed sales reps. And there is
an economic interest in the state and so on. And that has meant that the merchants would have to
collect tax of the consumers when they make purchases there. So the typical response to this when
one of these laws passes is for the merchants to cut their affiliate program in that state.
So if you're in a state that has a sales tax and is not yet a Nexus state, it's something that
really bears watching. The PMA has been pretty actively involved in fighting the Nexus taxes. They
fought in one in Illinois. Some laws that were passed there that sort of brought Nexus in.
Amazon has been pretty involved. eBay has been pretty involved. I think Amazon eBay's roles have
not switched where Amazon isn't fighting in and eBay is. But there's been these rolling
battles effectively in a state-by-state case. And well to put it happen when a state proposes
Nexus tax laws, there'll be a mobilization effort where organizations like the PMA or folks like
eBay try and yet represent it as of the state to go testify in front of the not testify. Go speak
in front of the state legislatures about the impact of the Nexus tax on their business.
It doesn't seem like it's ending anytime soon. Every few months we hear about another
state that's considering legislation or has something in the works. Sometimes there's notice,
sometimes there's not. The industry's position has generally been to support something called
the Marketplace Fairness Act, which in theory has had bipartisan support. It hasn't yet
made it out of Congress. But that's I think the thing that is meant to produce a more equitable
outcome. It would sort of put a flat tax on all purchases online so it doesn't necessarily
advantage or disadvantage one organization over the other. But it is a very complicated issue.
When you think about it from a merchant's perspective, they've got to have a shopping cart that
could look at 45 different states to collect sales tax. And then there's 38 of those states
that have local sales tax options. And so there might be a school tax, a water district tax.
Municipal tax that's added on top of the sales tax. So you can end up with 5,000 plus
taxing jurisdictions within the country. So it becomes a complex tax burden and then it has to
be distributed out. So that's one of the appeals within the Industry for Marketplace Fairness Act
to level the field. But that's going to be complicated to get through and some states may end
up with less money under Marketplace Fairness Act. So it's like Dave said probably not he was
all very soon. I can't wait to hear. Next step we're going to talk about mobile commerce.
On the go is the new normal. It's interesting to see mobile how much has changed in the US.
But I think we were slower than much of the world as far as adopting mobile like we have.
If you look at some of the data, Brazil right now is currently the leader with e-commerce
on mobile. 40% of the e-commerce sales are on a mobile device in Brazil.
But we're seeing in the US that consumer behavior is shifting. We have in-app purchases. We have
mobile payment. I mean go to Starbucks and use your app and pay. You can get rewards
through your mobile device with a local merchant. So mobile is changing here as well.
But globally mobile commerce is expected to equal half of e-commerce by 2018,
which is quite impressive. If you want to think about this from Google's perspective,
I think we'll see these numbers probably grow quickly. On April 21st of this year,
there was an event that was called MobileGadden where Google started ranking sites differently
on mobile queries. So if the website was mobile friendly, so if it rendered well on a mobile
device, then they were given priority over other sites. And that has accelerated the push
to make everyone's website mobile friendly, but it also means that consumers are going to be
expecting a better mobile experience. So that in the long run, well, probably the short run actually
will increase mobile sales. Now, my sites didn't personally get hit Google-wise by it, but I did
get notices from Google that some of them were not mobile friendly, but they haven't affected
the ranking. I'm working on fixing them in my spare time. What I find interesting is though,
I think the network should be held liable to make sure that the cookies are placed on the mobile
site as well as the regular site. And I was talking with some affiliates last night that were saying
a lot of them, they don't. They just put it on their website and so they aren't getting paid for
the mobile traffic. And the network, because I won't say which network it is, it's not one in this
room, shoots. But the network isn't going after them, because the merchant will just say,
well, we'll go to a different network then, and the network doesn't want to lose them, which is
sad. But I know some- If you're going to fill it, how do you sort of watch out for this?
Because certainly, that's probably not a merchant that you want to be actively promoting,
because it'll leave the second happen. So, how do you look at that or how do you track that?
It's hard to track. Unless you can add your own appendage, it's hard to track, but you kind of know
that you're getting them this much traffic and the percentage. And so like, we go to the site and
open up HTTP Fox or something and see if the cookie drops or- I do test sales all the time.
Yeah. I look at the source code and say, let's see what's going on.
If you don't see the network cookie, then you can probably be confident that they're not tracking
ourselves. Right. Next up, regulatory issues. Why should everybody comply?
So, there has been increasing sort of regulation and engagement from a handful of regulatory
bodies. At the moment, most of the things we've seen folks at the FTC do have been really on
extreme outliers, folks like creating fake news sites to promote dietary supplements that
aren't real or some combination of that. And while the actions have been limited to extreme
cases, the guidelines that the FTC has been putting out there have really been specifically
targeted at this industry in general. So there's now much crisper guidelines on what affiliate
marketers are supposed to do when they tweet and affiliate link, when they post a blog post.
And it's reasonable to expect that in the somewhat near future. Things that aren't extreme cases
receive some sort of action or interest by the FTC, the State Attorney's General. So the
PMA has a great resource that talks about guidelines for bloggers, guidelines for content
for owners around FTC disclosures, which I highly highly recommend that folks take a look at
if you're producing content. But it's not just FTC and the State of Territory Generals.
In 2009, Congress created the Consumer Financial Protection Bureau. And if you are doing
anything with consumer finance, you'll probably offer the acronym CFPB. You'll probably have
heard requests from your advertising partners, whether it be credit card companies or loan providers
to ensure compliant content. And increasingly we're seeing every advertiser, every agency that's
dealing with consumer finance product and services, taking a very steady, very consistent,
very manual approach to monitoring the content that their affiliates are producing. So
you'll have a different expectation, different relationship expectation from somebody who
is subject to regulate oversight by the CFPB then from a traditional program. And
what we've typically seen is that the programs remain very small in terms of affiliates because
the regulatory burden, the risk requires super responsive and super engaged affiliates. So if you're
in that space, trying to be one of those super responsive super engaged and accurate affiliates and
that likely yield dividends as these programs grow. And if you're just a blogger and that was
over your head. Trisha Meyer, she's not, she's an affiliate marketer, she's also a lawyer and
she's wrote a bunch of posts about how you should disclose on your website, how the FD,
the schools should be above the content. And then on your tweets, you should have ads. And so
she would be a good one to follow for that, which I haven't, it's like hashtag ads, I think it's like
the emerging standard for how to tweet affiliate links. But if you notice a lot of celebrities don't
do that, they haven't, they haven't seem to ask them yet. Watch the like the fantasy football,
you've got like a lot of active football players tweeting about the like the daily
fantasy ball games that there's no, that's going to change it. That's mine, that's my next year.
And we're going to be going global. International is definitely where it's at.
I've met so many people in the last year I would say about going global. I was just telling them
yesterday, is it DOAM and deal moon all of these coupon code sites that are targeting the Chinese
Americans. And so they make create sites in Chinese, so they're targeting that, but then they're
also targeting the merchants that'll ship to China. And there's just these separate niches for
all these different ethnicities to go after.
Interesting. Right now we talk about cross border and global. Asia Pacific is leading the growth
in consuming right now. But the US market is still the leader in selling. And the in emerging
markets like Brazil, Asia, India, they're made in USA label is often a very compelling thing. So
it's viewed as a symbol of quality. So from an American retailer, online retailer perspective,
if you ship overseas, you may want to designate your products that are made in USA,
give them some prominence that way as well to lift your international outreach and international
sales. But it's expected that cross border transactions will exceed a trillion dollars by 2020.
So we're already seeing rapid growth. And if you look at the numbers, just think India alone,
500 million internet users by 2017 with over half of them, over 300 million of them mobile users.
And these are mobile commerce users. We're not just talking about having a cell phone. We're
talking about commerce enabled users. So there is tremendous opportunity and just looking at
population trends. And I was thinking, okay, you've got India and China. You've got nearly 3
billion people. US 300 million. So you've got 10 times the market in just those two locations.
Just think about pairs of shoes or toothbrushes. I mean, just little things like that. It's massive.
The opportunity that exists. So global is something that is tremendous opportunity for us.
From an affiliate perspective, it's really interesting as well. Affiliate marketing has
really gone global as well. It's very common to have, if you're a managing program to have
affiliates in Europe or in Asia that are reaching the US market. Or they're having localized
landing pages. They can serve the Dutch market or the French market. And they can convert it so
well because they know it's local. And sometimes it's a little difficult to communicate with them
and to outreach. But it's definitely worth the time because the conversion rates can be just
amazing and really lift the program. Who from this room is based outside the US?
I'll say I was particularly noticed in the meat market yesterday. There has been an absolute
spike in interest. And the conversations I had, many of them were folks who are coming from
from outside the US, particularly from Europe, conversations from Uruguay, from Kazakhstan.
There's a much broader poll even at this conference. And then in our business,
in something that we were talking about beforehand, we've seen a tremendous surge in just from
Brazil. And we see a number of the major networks opening offices in Brazil. And
increasingly, that appears to be, I mean, I'm not really telling anything new, but it's surprisingly
dynamic market that I think is engaging with affiliate marketing in a way that is notable
vis-à-vis other countries in some way. One other thing about geo-targeting, a lot more sites are
doing geo-targeting where the browser will look at the referral and deliver a localized landing
page for them in their language. And you'll see this particularly strong with software vendors.
So, you know, if you come from France, you'll get a French landing page. The product will be priced
appropriately for that market. And only the French language version will be offered.
And so, those kind of things are significantly improved as far as convergence goes. So,
anything that we can do to make the experience more local, the better it is for the consumer and
better for the bottom line for the retailer. I think a few years ago, programs like iTunes
had, it seems kind of silly, they'd have different networks for different countries. And a lot of
these promotional partners would see visitors from all countries. And so, there was even a service,
I think, was started by somebody who used to work in Apple that would auto-direct based upon the
country of the user to the right affiliate network where they could get paid based upon the thing.
And of course, iTunes has gotten smart about that. And there's now sort of a single
tracking platform that manages it all. But I think you'll see increasingly a lot of that as well,
where some of the silly things that people used to do before around geography borders goes away
and gets amplified. That brings it to our last topic, last but not least, the changing the landscape.
Don't blink or you'll miss it.
And I think we're not going to walk through all these both. There are a couple of things that,
I think we each wanted to highlight a little bit. Who has heard of Jet.com?
And if you heard, I mean, guess you've heard in the news around some of their use of cashback
programs to send goods to their customers. So, yeah, a customer will come to their site and they'll
purchase something, I don't know, a pair of shoes or something that they don't actually have.
What they'll do and have been doing is they've been going out to other retailers and purchasing
and shipping direct to the consumer through affiliate links. Through affiliate links. If they
have affiliate program that provides cashback, they absolutely use it and take the, you know,
sort of 5% or whatever. And it's create a lot of interesting discussions around the industry
around, well, what do you do about that? It's not your customer, it's their customer.
We're going to give them cashback, probably, yeah. And it's interesting how to think about that.
I think the general perspective is this is sort of a short term thing, but I think it creates lots
of long-term questions around customer ownership and sort of how you'll want to, you know,
how you want to interact and engage with those customers with yours or not.
Well, thinking about affiliate agreements, you know, just looking at the legal side of it
five or so years ago, affiliate agreement, it was seldom that you would see an affiliate agreement
that mentioned social media. A few years before that, you didn't see very many that mentioned paid
search. So over time, affiliate agreements have had to get tighter and tighter to govern
the behavior of affiliates. But then thinking about the technology with attribution, you know,
Google did a study in 2012 that said it was over 10, and their analysis, there were over 10
different touch points before any sale occurred. So 10 different channels or affiliates in it.
A number of our affiliate networks have done studies and have went with their attribution side,
I know one that from link connector, I think they said there was 11% of sales had more than one
affiliate involved in the process, in the funnel. So when you look at this from an affiliate
agreement perspective, who do you pay, how do you pay, and then you factor in social media and
the absence of affiliate links so you can't set a cookie. So what do you do about that? So you have
to have new technology like coupon tracking. And we're seeing that emerge. We have impact radius,
link connector, and doing coupon tracking. So no affiliate click, no affiliate cookie,
but yet an affiliate can still get credit. It can be get the coupon can be embedded in an image
on the Pinterest and you still get credit. So the model can change and affiliate marketing can
reach markets that we're not possible even before. But sometimes those agreements have to change
and we have to be able from the legal perspective to to change with those as well.
And then we have even more hot topics that we need to watch for in the future. And these are
always going to be changing. I mean we're always going to be talking about the best practices
and the legal developments and the risk mitigation and the international environment.
Yeah. I think the point here is that there's or not the point but the point I wanted to make here.
It was I think particularly the legal framework that we're all operating within is a moving
target. There is a case recently where I think the link is a couple of slides back where
you have to see how the advertiser responsible for the affiliate misrepresentations. And it seems
pretty clear that that will be the case that sort of I don't think that's going away and that's
probably the right set of actions. I think actually they help the network of libel as well.
So everyone up and down the chain were a couple of responsible. And it's our collective
responsibility to ensure that the pool that we're playing here remains clean or gets cleaner depending
on perspective. And in a number of the conversations that the PMA has had with the FTC, it seems
pretty clear that the FTC prefers self-enforcement or industry self-enforcement. And I don't think
we've really figured out what that means yet and how to put that together. But I wouldn't be
surprised down the road either we'll see a more active FTC or we'll see the industry beginning
to figure out how to police itself. And that brings us to the end of our slides. Like I said,
if you want to follow us all on Twitter, we will send a link out to all of our slides. But now we
do have time for questions. If anyone would want to ask us any questions.
And even before questions, I'll say there's this nice little feedback thing. If you could take a look
and select rate the session, I know that it's something that the planners use pretty sensibly to
figure out how to improve the content. And that comes back to us and helps us figure out how to
do a better job or a different job next time around. And plus you're eligible to win a networking
pass for the next affiliate summit in Las Vegas if you fill it out.
Any questions? Yes.
I thought she was going to ask you for your source.
That source was from multi-channel merchant.com. And I'm trying to remember what the US
level was. Brazil was first, I had some notes here, China was 75% of residents had smartphones.
But 46% made purchases on them. India was right behind that, with 72% owning smartphones and 40%.
As far as the US market, I don't remember any data on that right at the moment. I'm sorry.
I'll have to look that up. I know there's been pretty very different stats by the type of merchant.
I think Zoolily drives over 50% of the traffic via mobile devices or 50% sales. It's probably
closer to the high water mark than many other merchants. But it does vary pretty demands
really by the company. I can't say exactly global is, but it's certainly like if you're in a
affiliate working in the space, you should be asking your merchants where they get their sales from,
because it would be silly to build an extensive internet presence when it's really a desktop
presence when, you know, it's someone that really depends on if it's on mobile.
Any other questions?
All right. You can all tweet at Lisa P, who is supposed to be on the panel. If you were unimpressed
and told her she'd been here instead of me. Lisa, what did you do? Yeah. But thank you all for coming.
Especially first thing on Monday. And we'll be up here for questions if anyone wants.
Thank you.