Affiliate Marketing Blog - a Traffic Junction Blog

For the past one and half years, we have been expecting to see more such M&A news– most industry folks kind of knew that Linkshare’s acquisition by Rakuten was probably only the beginning. So, when news of TradeDoubler being acquired by AOL came out yesterday, it wasn’t totally unexpected. Yet, what did suprise me a bit is that the M&A seems to have happened the other way around; my feeling was that the European companies (Zanox & Tradedoubler were the main suspects) would try to acquire some of the US companies to expand their reach– particularly after the international forays these companies had made last year.

While the stated goal of the proposed acquisition is for AOL / Advertising.com to expand their European online advertising business, Advertising.com might want to bring Tradedoubler’s technology and advertiser network to the US.

Tradedoubler, which listed on the Stockholm Exchange last year, has made some rapid strides — its stock reportedly appreciated 15% on this news, even though the acquisition is not official/ approved. How the other ad networks in Europe react to this development will be interesting to watch— there’s bound to be some more interesting developments in this area pretty soon.

Even if there aren’t too many other M&As of this scale, we can certainly expect the other players to be put under much greater competitive pressures, which can always be deemed good for both advertisers and publishers (though their interests are not always in sync).

In 2006, there was a lot of smoke and fire about click fraud, the class action lawsuits and the settlements by Google & Yahoo. I have increasingly gotten the impression that this issue is being accepted by marketers as an unavoidable evil — an extra cost item that will just need to be factored in during budgeting / projections & ROI evaluations.

However, it looks like the issue has turned on venture capitalists who are putting their money in start-ups in this greenfield sector. Venturebeat reports that a new company Fraudwall has just received millions of dollars in VC funding to “stop advertising fraud online”.

According to the company website, “Fraudwall Technologies provides advertising networks and advertisers with a pioneering solution for identifying click fraud. Fraudwall combines cutting edge science with the aggregation of data and characteristics from networks, search engines, and advertisers into one complete scalable solution.”

On the face of it, the market for click fraud protection could be huge, even if we assume that search engines operating on the PPC model get only about 2% in fraudulent clicks. However, what is the value to the advertisers? Will the solutions offered by these new breed of companies prevent fraudulent clicks (which might be outrageously optimistic)? Or if they help detect fraudulent clicks, will the PPC networks accept those and refund the advertiser? What kind of advertisers can truly benefit from the tools & systems these companies develop?

We’d be watching the developments in this area with quite some interest (as would other high-volume affiliate marketers who use paid search advertisng extensively, I reckon).

It seems like some of the projections regarding a bumper Christmas shopping season have turned out to be true.. According to IMRG, online shopping in the UK during this past Christmas was over 50% higher than what it was last year. This growth has come at the expense of high street retailers who have reportedly recorded a drop in their Christmas sales.

As per a news report on e-consultancy, the biggest beneficiaries were Tesco & Amazon.com, with the latter recording an astounding 4 million orders on December 11. IMRG is predicting that online sales during the 4 weeks leading up to Christmas would have been about £3.7 billion.

All these figures are undoubtedly interesting for affiliates; better still, online sales now account for almost 10% of all retail sales in the country. I’ve viewed all increases in online sales as an opportunity for affiliates; yet, it is not as straight forward as that. The challenge is most certainly whether affiliates can continue to increase or even maintain their share of the pie?

One of the many challenges that affiliates will have to face upto is Web 2.0 /increasing ’socialization’ of the web (I’ve taken liberties with the use of that term). I’ve written previously that social networking is an opportunity that affiliates need to take cognizance of — I still retain that view; however, they also need to view it as a challenge that needs to be overcome. Here’s why — it is likely that in this era of Web2.0, merchants/ marketers are increasingly going to depend on end users to provide recommendations and market their products by the online ‘word of mouth’. In return these users will likely be compensated as well for their recommendations if it results in a paid transaction. uSuggest has a comparison shopping site along those lines, and I foresee the emergence of several others along these lines. In a sense, sites such as these are cutting down traditional affiliate marketers, who in many ways do the job of providing recommendations to their target users. Of course, affiliate marketers can still play a role by being active participants in sites such as these; I believe we may not have too much of a choice if we are to capitalize on the exciting numbers on online sales that we are seeing.