Tag: performance marketing association

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Peter Bordes Leads the Industry

Peter Bordes is not shy for words. He’s become one of the most outspoken members of the Performance Marketing Industry, and has made it clear to anyone who is listening that he wants to clean up the industry. As the CEO of MediaTrust, he’s taken the industry to new levels, and has introduced the first performance marketing exchange of its kind. Most recently he was elected as the new President of the Performance Marketing Association and plans to use the PMA to make changes in the industry, make it more professional and help combat fraud.

First of all, how did you get into this interesting industry?
I was running Empire Media in NYC, post Internet bubble. We were incubating and acquiring assets from companies that survived the crash. My two co-founders, Jivan Manhas and Matt Wise, whom were at Azoogle, approached me about incubating an affiliate network.  I did some research and was very intrigued with what I found. This emerging industry segment was growing very rapidly and was like the wild-west with a hint of boiler room. It was marked with incredible growth rates with very little technology and business culture; high turn, high volume traffic in, high volume traffic out, and no brands. There were many problems to be solved, big and small. Most importantly, it was a logical place to focus on building a business and brand. The CPM business had just tanked and Adsense and CPC, which was the beginning of performance marketing, were taking off. There was one stop before “free” which was transactional performance driven advertising. This, therefore, seemed like a logical place to invest in building an enterprise. The market would eventually move deeper into performance marketing models.

MediaTrust came out of nowhere after being launched as AdValiant in 2005(?) What was the key to MediaTrust’s success?
MediaTrust’s key to success was its solid foundation. Our brand and business culture’s foundation was built around trusted long-term and deep partnerships, all driven by technology. We found that the industry was so high volume and transactional driven that its culture was built upon an “all for me, more for me” mentality. This created a significant amount of paranoia and lack of trust between affiliates, advertisers and networks. No one was doing any kind of financial modeling or thinking about building long-term enterprise value. It was high- turn “make as much money as fast as you can because who knows what will happen tomorrow” type of mentality that plagued the industry. We felt that there was a need for a brand whose foundation emphasized a proactive collaborative partner-centric organizational culture, supported by great technology. “The better our partners and industry do, the better we do” was, and still is, the base of our core values. That kind of ethics and integrity are what drive trusted and long-term partnerships.

Regarding the transition from AdValiant to MediaTrust, we decided that AdValiant was the name of a network; we felt the future was about platforms. MediaTrust reflected the vision of what we wanted to build and where we thought the industry could head. We were very fortunate to create the brand MediaTrust and that the two words that were not synonymous with each other in digital media and marketing can now stand true.

You’ve been one of the most outspoken members of the community when it comes to compliance: what do you see one of the biggest issues regarding compliance now?
If we wish to become a significant segment of the Internet marketing industry, we have to become more proactive and work together. We have a legacy of always being reactive and moving from one high volume campaign to another, like hamsters on a hamster wheel. This is just not sustainable. In order to gain enough critical mass and create a single unified voice, we have to break this cycle of short-term thinking and move away from being a highly-fragmented black box. This is how industries are made or not. We are so under the radar screen that it makes it next to impossible to have any research or meaningful data about how large performance affiliate marketing really is, and it’s very large. Regulation is inevitable. The FTC has left a 12 lane super highway of grey for marketers to run around in, which is starting to change rapidly.  The consumer is now behind the driver’s seat; the consumer is king. Compliance, standards and regulation are critical. We need to take control of our own destiny by proactively driving compliance standards and guidelines. This is the key to our future, and the biggest challenge for affiliate performance marketing. We can either make it happen ourselves and make sure it makes sense, or have someone make it happen for us who doesn’t understand our industry. I personally don’t want to have legislators who don’t understand us do it for us. It can be catastrophic if not done correctly as evidenced by the Nexus Tax, which has proven to be is a serious threat if not managed properly with the right knowledge.

How do you see this industry changing? Is it less about “affiliates” and more about relationships? Do you use the word affiliate marketing, or is it more “performance marketing?”
We think it’s about “performance marketing.”Affiliate marketing is now becoming one of the channels in the “performance marketing industry”. As we move from being network-centric to platforms that are open modular and agnostic,  its all about relationships. Understanding and building great relationships are part of the foundation of any great business and industry. The legacy of affiliate marketing is about being advertiser or affiliate centric, and never the consumer. The future is about being agnostic and holistic about triangulating the relationship between consumer, advertiser and publisher/affiliate and creating value by driving quality relationships. That “relationship” between them is the future of ALL Internet marketing. We are in the middle of a significant shift from the age of “MASS marketing & media” to “ME marketing & media”. The consumer no longer sits at the bottom of the pyramid being told what and how they will consume. They are at the top and know what they want, = and how they want to interact. By empowering that relationship with tools and technology, we create a much higher ROI for all 3 constituencies.  Web 3.0 is not the semantic web. It’s the relevant web, and relevance is driven by understanding these relationships.

What is your opinion on incentive based marketing? Is there any room for content-portals (ie, places that reward you for filling out forms etc) or is it just a bad idea? “Garbage in … garbage out” that’s my view point of incent paths. Its mass marketing that tricks the consumer into giving up as much info as possible with the promise of getting something “FREE”. Free is the killer of all good marketing and has been beyond abused, as well as used, to destroy great business models like the “continuity” marketing model. Free iPod, free ring tone, free trial, free $1000 Home Depot card. This is just another easy money low hanging fruit channel that basically produces low level data and garbage results for most advertisers. Its noise vs quality, and one of the biggest problems here is that most advertisers don’t measure life-time value. So, they keep buying because they can’t measure how effective this form of marketing really impacts them (this is changing rapidly as advertisers are getting smarter in measuring life-time value). There are other forms of incent marketing such as the portals that offer rebates and shopping points that are valuable assets because they care about building a brand and relationship with the consumer based on value. This is completely different from paths which don’t care about brand and users returning as a destination. These one hit wonders will have to evolve or will become relegated to the low end dregs of the industry. I don’t know of any single shining star example of great success for advertisers in incent path marketing. Its turn and burn.

What is MediaTrust’s main push revenue wise for 2011?
We have moved our entire business model from the MediaTrust performance marketing platform to the PerformanceExchange. The MTPX is the future of performance marketing as we push to innovate into being a highly scalable technology & quality driven company for direct response marketing.

Tell me a bit about the MT Performance Exchange? The PerformanceExchange is the next generation of highly scalable real-time platforms that’s focused on “connecting quality clicks to conversions” for the performance marketing industry. It’s a hybrid CPC bid platform /ad-exchange that empowers direct response marketers, advertiser and publishers with the best tools and technology to maximize their inventory yield and campaign conversion ROI. Similar to the concept of the eBay’s quality clicks program which is still CPA marketing, but paying in a CPC currency based on the quality of the click to conversion and life time value. The MTPX creates tremendous “right price” efficiency by connecting the value chain together from the click to the conversion in real-time (to the minute). All traffic and all clicks are not created equal and have a value when driving conversions. It’s not black and white in that there is only good traffic and bad traffic. The MTPX allows publishers who generate low volume high quality traffic to get the right value for their inventory as well as the high volume lower converting traffic sources. What we have found is that all traffic has a value based on the transactions it drives, and that performance marketing pricing in a pure CPA/CPL model isn’t dynamic enough to be able to give traffic sources the appropriate value based on quality. The MTPX lets partners trade CPC currency (and in the future CPM) in different markets such as email and contentvs lumping all the traffic sources into one single channel. Think of it like a Bloomberg financial markets trading terminal for direct response marketing. Its core tenants solve many small and larger problems in the performance marketing industry by being a transparent environment that drives consistent value based pricing driven by quality. Transparency creates great efficiency that enables our partners by empowering them with knowledge to better understand their markets and get more out of them. Performance marketing has a history of being a black box and we feel that needs to change if we are going to evolve and grow as an industry. Especially with the new compliance and regulation that’s beginning to happen across the entire digital marketing ecosystem.

We have not even gotten started yet and we are already seeing tremendous results due to all the proprietary performance algorithms we have developed into the MTPX with 7to 13.7 % conversion rates in the email channel with little to no fraud. We are launching the “content channel” soon and have a ton of tools and technology in our product pipeline that is game changing for our partners and industry. We have flipped the switch from being 80% service/20% tech (industry standard) to 80% tech/20% service which is the future of all things direct response. We must become a product/tech centric driven industry in order to grow and work with all the brands, agencies and publishers that want to participate in performance driven marketing.

Why is MediaTrust starting to move to a PPC/CPC model, when Google founder of PPC just got into the CPA model?
Instead of opening a new channel, what we have done is merged them together. We are focused more than ever on CPA/CPL marketing. We have only evolved the model and changed the currency to paying in CPC to create greater pricing efficiency based on quality. Think of it as an auto arbitrage exchange platform that is built from the view point of a performance marketer from the back of the conversion funnel out vs from the impression or click back. It’s the same thing. Google is connecting the value chain together into an ecosystem of solutions the same way we are. We are approaching it from different points of view, relative to direct response marketing. The future of all things digital is about platform driven ecosystems that speak to each other and are driven by data.

Some people would say that MediaTrust embracing this model means that you don’t trust the performance model anymore, thoughts?
Absolutely not. We are passionate believers and advocates for the performance model and industry. We think that there is a very large opportunity as more and more brands and agencies move to more accountable metrics driven advertising. The PerformanceExchange is the future of performance marketing as a highly evolved technology driven platform that will allow them to begin to participate in performance marketing. The industry must start delivering more transparency, data and analytics that are required for more sophisticated partners to feel safe and confident that they can hit their metrics and maintain their brand integrity and compliance needs.

Some people accuse you and MediaTrust as being “above” what is really happening in the affiliate community, that you personally aren’t in the “ditches”. What is your response to that?
That’s interesting to hear and something I have not heard. I have actually heard the opposite in that I “personally” am very involved in being present at every trade show, on the floor, in the booth talking to everyone about what’s working or not vs staying in the CEO tower. You can’t innovate and evolve what you don’t understand and embrace. We have always strived to understand the ditches so we can stay on the leading edge of the industry. If we don’t evolve the industry then no one wins and we all stay stagnant or contract. I would say we understand the industry extremely well and that’s what has allowed us to move from a network to a performance platform and now to a performance exchange. We have been pushing for regulation, compliance, technology innovation, helped form the first industry association, and have been very vocal advocates for the growth of performance marketing. You can’t do any of that unless you have a strong fundamental understand of every aspect of the industry.

If you could dictate any changes for the industry to make in 2011, what would it be?
That every person in the industry come together as a unified voice and get behind the Performance Marketing Association so we can become a strong, unified and viable segment of the internet marketing industry. We must evolve in order to move away from the past “red headed step child “ legacy reputation of affiliate marketing. We need to stop being a fragmented black box and move from being reactive and always running to the next fast money thing. To being a unified proactive group that solves problems and takes issues such as standards, compliance and regulation head on. This is how we build industry value and enterprise value for our companies and business partners vs. making another fast buck and moving on. Aren’t people tired of being hamsters on a hamster wheel going in circles by playing a constant game of musical chairs? The FTC and new technologies are not going to allow this behavior to continue. There will be a divide between the compliant and the non-compliant. We are not an industry until we have an Association to represent and help make sure the right laws, taxes and more are created to help us flourish. Not contract. Now we have an association and its essential everyone participate so we can take control in shaping the future of our industry vs running around in the shadows trying not to get caught.

What’s going to happen with email marketing? Are spammers still going to “Control” parts of the industry?
There will always be the dark dirty side of every segment in the market. But it will start to become smaller and less predominant based on better technologies and systems to prevent it. There are very good systems now that create significant transparency in email. Email done right is a very effective channel that can drive meaningful value to the consumer, advertiser and email publisher. In order to do that mailers need to think about how to create better one on one relationship with consumers. We are in a meaningful shift from “mass marketing” to “me marketing”. Mailers who are evolving are seeing tremendous results from their data. That being said there will always be the noise of spam in the inbox. Its just going to become a smaller segment of the consumer experience.

What does MediaTrust look for in (affiliate) partners to work with? We look for publishers who want to build a long term proactive and collaborative partnership who share the same core values that are based on the success of our partners “first”. We want to work with partners who believe that transparency creates greater efficiency in a partnership which creates greater trust. This is how you grow serious long term and stable business partnerships and value.

How do you see the industry contracting in 2011? What type of companies do you see succeeding, and what type of companies do you see disappearing? We are at a critical inflection point in the performance marketing industry. One segment of the industry is already contracting which is the non-compliant companies who keep doing the same next hot thing get rich quick schemes and run around in the shadows. The companies that are embracing regulation and compliance will be the ones who are able to evolve and build significant businesses while the rest cannibalize the lower end of the market with no name fast money low margin business. That’s just not sustainable or scalable. The consumer is becoming so much smarter and companies need to understand its about creating products and campaigns that create value for the consumer. Not trick them into buying something that’s based on a breakage model or misrepresents the word “free”. Those who realize and embrace that concept will thrive.

You’ve been very active in the Performance Marketing Association, what is the reason? Don’t we already have the IAB and the DMA, why have another, less-funded association? Aren’t we just dividing our ability to work together? I would be very curious to know how many of your readers are members of the IAB or DMA. They are not the same and are not associations that have been created to specifically represent the affiliate performance marketing industry. The IAB has a leadgen committee. Do you think that properly represents us? I certainly don’t. As a matter of fact we used to be IAB members and when the tax issue came up I spoke to them about this being a great opportunity to become champions of the industry for affiliates and they said “we have a leadgen committee and we don’t think of affiliates as real publishers”. So in a nut shell they think of affiliate marketing as a dirty illegitimate industry segment. The DMA is primarily representing traditional direct response marketers and also doesn’t understand or represent affiliate performance marketing. The IAB & DMA are very good organizations. But they have not demonstrated that they understand or are champions of our industry. They have literally done literally “0” when it comes to the Nexus Tax or regulation or FTC issues in relation to performance marketing. So do you or anyone else reading this want or consider these organizations people they want representing performance marketing? We are not even considered an industry until we have an association that specifically represents us. For all the reasons I outlined in the other question. We MUST take control of our destiny as a group with a single voice that is proactively taking on issues and stop being a fragmented black box that’s reactive and running to the next best thing. The grey area is going to get smaller and smaller and smaller. Its essential that we all participate and get behind the PMA and help them to help us, and that goes for everyone in every part of the affiliate marketing ecosystem no matter how big or small. We are an enormous segment of the online advertising industry. But no one knows that because there is “0” data or research that’s meaningful enough to show how vast performance marketing is and all the areas of digital marketing we touch. As an example of this when the PMA was fighting the Nexus Tax it became very evident that none of the states had any idea what affiliate marketing was or how big it is. We tried to pull enough information together and found almost nothing. Why? Because there has never been an entity driving the need for this kind of research. We ended up creating a mash up of the LinkShare affiliate base in CA with a Google map and it was incredibly eye opening to all. Affiliate marketing in CA is gigantic, and the state legislators all of a sudden understood what they were dealing with. Colorado was the same thing. I led a panel and the legislator flat out said “we were just following NY State and had no idea how big affiliate marketing was in Colorado”. That says it all. We MUST have proper representation and data in order to be a viable and relevant segment of the online marketing industry. Neither the IAB or DMA stood up or had that info. It was the little old PMA fighting on all our behalf.

 If you could pitch Disneyland/Disneyworld on a performance marketing plan, how would you do it? How would you like becoming significantly more efficient with how you spend you advertising budget by only paying for users who sign up for your service or buy your product. If they don’t you don’t pay by leveraging 100% accountable transactional data driven advertising in a transparent trusted environment. Stop flushing you money down the toilet.

What is your dream car? 1987 Aston Martin DB8 Vantage.

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PeerFly has few Peers.

Recently PeerFly was awarded the #2 Network in our Annual Survey of Networks. Their CEO Chad French was pretty damn happy about that, considering he only opened the doors in 2008. We decided that it was about time we sat down with him again and see what he is doing with himself, and what we can expect from his network.

We spoke to you a few months ago; you seemed really excited about the future. How does it feel that half a year later your network has blown up and you’re one of the top CPA networks in the world? It’s been an awesome experience.  When I started building the platform for PeerFly in 2008, I had no idea we’d be one of the top networks in less than 3 years time. I attribute our phenomenal growth to my team and the long hours we put in every day to make sure we’re the best we can be.  We’re never content with where we are at any given moment so we continue to push ourselves to the next level. If there isn’t a next level, we create one. We’ve done so much in 3 years… watch what we do within the next 3!

What do you think that you are offering that other CPA Networks can’t provide? I believe the advantages we have over other CPA networks are two things: creativity, and in-house development. We have a list a mile long of ideas that we want to implement into PeerFly and future assets that are not found elsewhere. We are extremely inventive and think outside of the boxes box! Myself, and two others on my team, have web-based programming backgrounds with varying levels of skill. So, when we come together and conjure up something super creative, we’re able to easily implement those ideas within our system. We’ve never relied on a 3rd party to provide value to our affiliates/clients.

Other things we provide that others don’t are several payment schedules based on revenue, several payment methods, daily payments (over a year now), over 1,300 offers in many different verticals, live chat support, a rewards program, and a lifetime 5% referral program.

As you know, fraud is a serious issue. What is PeerFly doing to combat fraud? What types of fraud are you seeing personally? We have been described as one of the most strict and rigorous in terms of fraud and compliance. To begin, our compliance department is composed of two different segments: approvals and traffic. Among other things, all applicants have to verify their phone number using our pin verification system as well as upload a government issued photo ID. If verification passes, they still have to pass another additional 20+ internal points of assessment.  If an applicant is approved and becomes an affiliate, our dedicated traffic manager audits their traffic closely and works proactively with our clients to ensure quality is where it needs to be.

We don’t really see “fraud” like we used to when we first started. Rather, we see non-compliant traffic. IE; traffic that may be legitimate but is not an accepted method or type as described on the offer page. Some affiliates just don’t know how to follow directions. However, most of the time we’re able to catch it before it becomes an issue and steer that publisher in the right direction.

We’ve talked about those networks that don’t pay their bills. What is your philosophy about this? Paying our affiliates on time is something else that sets us apart as well. It shouldn’t even be an advantage because that’s CPA network predicate 101! But, unfortunately for this industry, it is. For the first two years we were in business, we had an extremely low overhead that allowed us to save, save, save. It wasn’t until the beginning of this year that we actually got an office. Even with the office, only a couple of us work there – one being part time. We have had no investors and we’ve bootstrapped everything. Our savings has allowed us to continue to pay everyone on time even when our clients are several weeks or months late on their payment. We’ve been fortunate enough to float money without issues and I attribute that to our non-flashy, low budget, saving mentality style.

For networks that have trouble keeping up with payments and are starting to build a reputation of bad payment issues, you need to step back and reassess what you are doing in this business. The #1 priority we’ve had since day one is paying people what they earned, on time. We will make sure our affiliates are paid on time before our own pockets are paid on time. With the power of the Internet, it’s super easy for a handful of affiliates to take your business down because of your bad financial decisions. I’ve seen it time and time again. Always make sure your output is never more than your input or else you will see failure.

What do you think the biggest mistakes most affiliates are making right now? Giving up. Unfortunately, a lot of people equate this industry with a “get-rich-quick” scheme. They get into it looking to make an easy dollar and then give up when they discover it’s a lot harder than they perceived. I believe there is nothing “hard” about this business. You just have to know what you are doing so you can formulate a strategy. The only thing that separates new affiliates from super affiliates is information. That’s it. You don’t need to have any money, special talent, skills, or degrees. We have affiliates who make $20k a day and it’s not because of their good looks! They understand how to take an offer, formulate an action plan and know whom to target.

Are you offering training for affiliates? Why or why not? What specifically? We’re currently developing a whole new interface and website layout. With the launch of the new design we will also be introducing a “Training & Resource Center” which will focus on providing the information our affiliates need to succeed.  We want to start doing live Q&A sessions, video walkthroughs, a dynamic FAQ system, message board and more. We don’t think our affiliates should be paying hundreds or even thousands of dollars on coaching programs when we can provide all of it plus more for free.

Where do you think affiliates need to go to learn how to be super-affiliates? I believe our upcoming resource center will prove to be a valuable asset and will be able to take our affiliates from “newbie” to “super” in a short time. Other places to frequent for free guidance in this business are forums like: WarriorForum (http://warriorforum.com), DigitalPoint (http://forums.digitalpoint.com) and reading all the latest industry related blog posts at AffDaily (http://affdaily.com) where lots of industry bloggers provide valuable insights and information.

Do you recommend that affiliates try many networks, or stick with a few proven networks? Why or why not? Stick with the proven networks. There should be no need for you to go out looking for or working with new networks that don’t have any history. If anything, let them prove themselves first. If they seem attractive because of payout claims on a certain offer or the types of offers they have, simply ask the current proven network you’re with if they can get those offers or match those payouts. Nine times out of 10, not only will they be able to get that offer but also beat the payout on it as well. The proven networks have a lot more clout and can negotiate better payouts with advertisers. Not to mention – if you work with an unproven or unheard of network, they are more than likely brokering the offer from a bigger, proven network anyway.

What is your opinion of all the FTC lawsuits? How are you guys protecting yourselves from legal actions by the government, and what do you recommend for affiliates? Our industry obviously needs regulation. I want to help build an industry of value, integrity, and sustainability. Not scams, lies, and falsehoods. Advertising powers the Internet so we really have a bright future ahead of us just as long as we can stay accepted and compliant! I applaud the efforts of groups like the Performance Marketing Association, the Executive Council of Performance Marketing and even the Federal Trade Commission for creating standards and keeping both sides straight.

As for us, we work with our attorney to ensure our practices stay within FTC guidelines. We have absolutely no intentions of going outside the realm of veracity and standards this industry relies upon to grow.

Check out Peerfly here

 

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Rebecca Madigan of the PMA leads her Army of Affiliates

For as long as I remember the affiliate and performance marketing industry has been attempting to create a trade organization to represent the industry. Every time they tried, it failed miserably without exception — until the Performance Marketing Association came along. At first most of the industry universally panned the idea of another organization, thinking it would be no more than a loose fraternity that allowed a few CPA network owners to drink scotch together once a year. However, with the leadership of Rebecca Madigan, the Executive Director of the PMA, the organization has become a force in the industry, fighting for the industry as a whole and providing much needed leadership. If you ask anyone who is involved with the PMA, they will tell you that one of the main reasons for its success is Rebecca and without her the industry might already just be a footnote. I sat down with her this week and asked her some difficult questions about the PMA, industry as a whole and learned that she dreams of jet planes.

How did you get involved with this industry initially? I joined CJ in early 2005 in product management. I have extensive background in product management for technology products, including broadband, telecom and wireless/mobile. I was the product manager for the first ‘voip’ product called Web Talk, a browser based Internet phone (back in 1994). When I was in wireless and mobile, I was really involved in industry and standards organizations (founding member of the Bluetooth SIG, for example), and saw first hand the benefits of a unified voice dealing with public policy (buying of spectrum) and standards (wireless LAN, GSM, CDMA, etc). It struck me as odd and limiting, along with many people, that the affiliate space didn’t have any industry organization.

Why do you think the industry needs a separate organization for “Performance Marketing?” The industry needs AN organization for performance marketing, there is no other organization serving this business model. We tried to get others like the IAB, ERA and DMA to pay more attention to performance marketing, but those groups aren’t chartered to do so, and haven’t had an interest.

What would you say to those who argue that separating ourselves from the IAB just hurts us? Why not join the IAB? The IAB has been disinterested in performance marketing, in the US anyway. In the UK they do have an affiliate group, but nowhere else. And the IAB is structured for very large companies, or that was the case when the PMA formed. There wasn’t a long tail membership until recently. But most importantly, they aren’t chartered around the performance business model, nor do they even embrace affiliate marketing. We’re still the ‘red headed stepchild’ to them.

As we’ve talked before, the PMA represents both networks and merchants. Isn’t this combining two different groups with different goals? How can they really work together? Actually, the PMA represents the entire ecosystem of performance marketing. We have more affiliates as members than any other segment (>25%), and advertisers are represented the least (14%). We also represent networks, solution providers, agencies, and investors. The way for this industry to mature is for us ALL to work together to drive growth, change, innovation, and trust. I would argue the thing that has held this industry back is the fragmented nature, business segments unable or uninterested in sitting down together to solve problems.

Isn’t having Dell, Amazon, Google and other major players dilutes the influence and ability of smaller players and networks to make changes? As I mentioned, we have more affiliates as members than any other segment, including our top level, platinum. Publishers like FatWallet, Offers.com, RetailMeNot, and Fabulous Savings, are platinum members.

Additionally, the way we’re structured is to allow for smaller companies, specifically affiliates, to be involved, participate in working groups, take leadership roles, vote on initiatives, etc. We all feel very strongly that this industry is only as strong as the entire ecosystem, and in particular, we all need affiliates to thrive for everyone else to thrive.

Lastly, though, I’ll add that we’re an organization that is chartered with doing a lot of things. Our biggest activity to date has been fighting the affiliate nexus legislation, which directly targets affiliates. We’re also developing standards and best practices to improve quality and effectiveness, and stimulate growth (let’s make it easier where we can so companies can spend more time on the important things). All these things take enormous time, resources and money. Where does that money come from to fund these initiatives? Membership dues. The PMA is non-profit and we’re only as strong as our members and our ability to raise money.

What do you think about the growing trend of “gurus” in the industry? My main concern is that they perpetuate the concept of ‘get rich quick’, which doesn’t help our industry. Being successful takes a lot of time, patience, perseverance, talent and a little luck. We believe the way to grow this industry is to focus on long-term growth, not the quick buck.

Affiliate Summit was highly attended but there was almost no mainstream media coverage for some reason. What are we doing wrong in getting that coverage? Good question. It’s an event for industry insiders, the topics of discussion assume a certain level of knowledge (you won’t learn about what performance marketing is at the show). You might ask Missy and Shawn about that, did they invite the press?

Are we the affiliate marketing industry, or the performance marketing industry? Is there a difference? We opted to use the broader term ‘performance marketing’ for a couple of reasons. First of all, the performance model (ads being paid based on results) is bigger than just online. It has been around on television and radio for a long time. We see tremendous growth and opportunity in looking at where experts in the performance model can take it into new channels, like mobile for example. And ‘affiliate’ means something different in those channels, like a TV station or wireless carrier partner.

Secondly, for right or wrong, ‘affiliate marketing’ has a reputation burdened with lack of trust, the ‘wild west’, if you will. We’re an industry maturing into one with very professional companies, and we don’t’ want to be held back by an old reputation.

Thirdly, on the legislative front, the term ‘affiliate’ has come to mean agent or distributor or subsidiary, causing laws to be created that damage our industry. Our ‘affiliates’ are simply websites that earn revenue from advertising, they have no other relationship or level of ownership by merchants.

What is happening on the Affiliate Tax Front?  Does this really affect the “average” affiliate or just the large companies like Amazon? The unfortunate thing about this legislation is that it’s been called the Amazon tax and people think it impacts only them. The affiliates, large or small, are the unintended victims in this. The law basically says that if an out-of-state merchant has an affiliate in the state, the out-of-state merchant must then collect sales tax. So merchants simply terminate their affiliates to avoid collecting sales tax. Not only have Amazon and Overstock terminated, but hundreds of other merchants. It’s passed in NY, NC and RI, but we’ve prevented it from being passed in 15 other states. The way we’ve stopped it is through affiliate involvement – putting faces and success stories behind the name.

This is going to be a bad year, it’s already shown up in more states than this time last year (IL, SC, MS, CT, CA). States are still desperate for budget dollars and they think this is a quick fix. So we go to every state, recruit affiliates to help, and we slowly but surely convince legislators it’s a bad idea.

Aren’t you just pissing off the people in power by filling suits against the state and making the performance marketing industry look greedy? We haven’t filed a single suite against any state. What are you talking about? (BTW, we’re way too small of an association to file a suit of any kind, even if a reason arose – which it hasn’t).

What can we do as individuals to stop this trend of states taxing affiliate sales? Get involved when it hits your state. We have up-to-date information on our website.
Get to know your personal legislators. They’re very approachable and really want to learn about their constituents. If they learn about you now, and understand what you do and how this will impact you, you can build support to block progress. We’ve had this happen with affiliates in VA, IL, CA, CT, GA, TX and PA just this year. These affiliates are learning more than the lobbyists!

What is the PMA’s position on the FTC as a whole? Do you think the FTC recognizes that unique status of affiliate marketers as being different from $100M companies? What do you think the FTC will do in 2011 that might affect our industry negatively or positively? The FTC has a charter of protecting consumers from false or misleading advertising – and we support that charter completely. It’s a tricky balance between having an effective government-run regulatory agency and letting an industry self-regulate. This industry has done an awful job self-regulating, and it’s no suprise the FTC is stepping up its scope and authority.

The FTC recently published a proposal nicknamed the “Do Not Track” proposal, essentially suggesting consumers should have more say and control over how their Internet activity is tracked, and how and where personally identifiable information is used. In theory that seems fine but as we know in our industry, tracking of a user is extremely complex but also delivers the great targeted online experiences consumers come to expect.

There’s been some speculation as to why the FTC put out this proposal. My belief, and I’m not alone, is that it is a challenge to all advertising industries to step up the game in self-regulation. And we completely support that goal.

The PMA is preparing our own response to the FTC, so that we’re sure the unique perspectives of our industry are heard. The submission deadline is February 18th, and we have a volunteer member group crafting the response.

What is your dream car? I work at home and travel a lot. I no longer dream of cars but I could really use a private jet, like a G4.

Read Another Great Interview Mike Krongel of COPEAC