Affiliate Marketing Blog - a Traffic Junction Blog

In a detailed interview with e-Consultancy, ValueClick Europe CEO Carl White speaks on a number of topics including the current consolidation in the online markting industry, the Google threat and their own plans for the UK. His answer to the expected question about the Google threat, particularly with the latter’s entry into the CPA market, was also along expected lines [how could he answer it any differently?]: that Google’s entry only reinforces the CPA model. He also tried to project the “strengths” of Commission Junction as a “high touch” model, instead of it being completely automated. Well, I’d be surprised if that response wasn’t solely for the media– because Google has shown an uncanny ability to successfully automate processes that we once thought could never be completely devoid of intervention by support staff. While we can’t argue with his assertion that Google’s entry reinforces the model, if ValueClick/ Commission Junction (or for that matter, any of the networks) don’t see it as a challenge, it wouldn’t be smart at all.

The other highlight of the interview [and this has more bearing on affiliates] is ValueClick’s plans to be a publisher– there are apparently a large number of domains that are in their portfolio that they intend to roll out including the relaunch of classifieds.co.uk and the development of local.co.uk. ValueClick already has the shopping portal shopping.net. When a network is a media agency and is also a publisher, there is always the apparent conflict of interest; but this looks like a fairly common (and acceptable) scenario in the online media world.

Not for the first time, we are hearing of results of a survey that higlights the lack of adquate attention to customer service amongst online retailers. Whether it be lack of prompt response to e-mail or telephonic calls from customers or prospects, impersonal / indifferent communication with customers, the complaints always remain the same. Is it that online retailers have become too complacent and indifferent considering the continuous boom in e-commerce? One would think that in an era of ‘activist’ users, user-generated content, viral / word-of-mouth marketing and online reputation management, companies would be more cautious and diligent about raising their levels of customer service. At least on the surface, the consequences of not doing so would seem disastrous.

As an affiliate, such a situation is worrying. Merchants are extremely alert and quick (rightfully so, I might add) to monitor the performance of affilaites– the traffic and the results they generate as well as the methods they employ to achieve the results they do. They would be a lot better off if they could spend a little bit more time on setting their house in order and improving the things only they can control– such as ensuring their website is fully functional, the content is informative and the quality of customer service is great. Affiliates don’t control these aspects other than passing on this feedback to the concerned merchant. The only other option an affiliate has is to walk out on the merchant; but if you are a large affiliate publisher with an established user base, you may be doing your own reputation some serous damage and risk alienating customers. Betterl not to get into a relationship with a such a merchant beforehand rather than let your users educate you.

On the topic of complacence amongst online retailers, they might better be forewarned — for the first time, seems that entertainment sites in the UK are attracting more traffic than online shopping sites. Hopefully, this was an aberration and that online shopping would be back to its rising best sooner rather than later, but retailers should ignore any of these exceptions at their own peril.

Soon after Linkshare set up operations in the UK, it looks like Linkshare’s parent company, Rakuten plans to tap into the UK’s booming market for online shopping. The Japanese internet giant plans to set up a ‘virtual shopping’ along the lines of what it has in Japan[news courtesy: The Independent, e-consultancy.co.uk], though it is not clear if it will follow the same business model in the UK [a membership fee for merchants + a percentage cut of all transactions].

A few affiliate networks have launched recently in the UK– adding to the many established players. There are a couple of blogs asking these related questions: do we need more affiliate networks in the UK and whether new networks will be able to attract affiliates?

As to the first question, I think the answer really depends on who you ask. At the rate at which online shopping is growing, may be there is space for some networks that operate in their own niches [whether it be in terms of vertical segments or size of advertisers/ merchants or the type of rewards programs they run]. As long as they are able to identify and create a strong niche for themselves, I suppose there will be takers for these networks and they will survive. I think the answer to the second question also lies in the above sentence- affiliates will join networks provided they find good programs to promote with considerable potential, the compensation offered is good and the network can deliver on service and support and affiliates can believe that they can trust the network.

It is also likely that the recent spurt in new networks entering the market is driven by some of the M&A activity going on in the online advertising space and the large sums of money involved. I just hope that networks are not launching with the end goal of being part of an acquisition and hope to enjoy the inevitable ‘consolidation’…

I know it is the era of social networking, community participation and user generated content…while I quite like the democratic nature of the web with active involvement of everyone concerned, I can’t help but be apprehensive of certain aspects. These are not new issues by any means; nor do I have any ready solution to the same [which is the unfortunate part], but I had to write these down anyway.

A new study commissioned by American Express and reported on Netimperative states that Brits are increasingly swayed by online reviews. In a nutshell, it seems that almost half of those who researched hotels online did not book a particular hotel because of a negative review. The question is, how legitimate is that kind of influence?

The same article points to a small proportion of users who actually bother to write these reviews– which potentially skews the reviews all the more. There are two distinct groups that have a vested interest in manipulating such reviews and opinions: marketers who would like to get a favorable opinion out and competitors who’d like to use such ‘user generated content’ to their own advantage. Can the end user who is being swayed by these opinions really be sure that they are not being manipulated?

I just hope there will be greater checks and balances that will enhance the credibility of these reviews/ratings so that they really serve the purpose they were designed for.

Affiliate marketing network, Linkshare, has acquired a US-based ‘lead generation’ company, TrafficStrategies.com with plans to incorporate the latter’s expertise into its own lead generation offerings. In many ways, it looks the acquisition is akin to a major network acquiring the capabilities of an ‘affiliate’/publisher, which is what many of the independent lead generation companies are. Not entirely surprising considering that top performing affiliates seem to be equipped with better skills and proprietary systems than some of the companies and networks they generate leads and sales for.

While the above news might be welcomed by merchants/ advertisers that could leverage the ‘complementary’ strenghts of the two companies, earlier this week week Linkshare announced something of interest to affiliates.The company introduced a new web services offering for affiliates, called Automated LinkGenerator. According to the announcement, “this new tool does not replace Merchandiser (LinkShare’s datafeed), but will be helpful for getting direct links from merchants that do not offer Merchandiser feeds.”

The M&A activity in the online advertising space has likely peaked for the immediate future (though a question about the future of ValueClick or Commission Junction is never far away)— the intense activity of the past two months is going to be tough to beat anyway. The next few months may see some more consolidation, but I suspect the focus will now shift on product and service enhancements targeted at end users rather than market capitalisation and P/E.