Given the title, I’m sure many of you are aware the direction I’m going in this post. Being active in the performance marketing industry for many years it took me a while before I fully understood why it was so important to begin retaining assets and always build businesses for the long term from the beginning. Back in the late 90s we really never had a choice. It was slow and steady wins the race; making money online was looked like as a marathon rather than a sprint. Many of my earlier properties relied on type in traffic, word of mouth, and external links from other websites. Search engines such as Yahoo sent some traffic but no where near to the extent that Google does today.
When Google released Adwords in 2000 many new opportunities opened up over night. A couple hundred advertisers hopped right on board and began knocking down some very solid profits. Following a tremendous overhaul in 2002, I began promoting my web hosting company on Adwords. Using their different types of keyword targeting I was able to send qualified traffic to my site and increase my overall marketing budget ROI by >200%. I personally realized the potential but still had no clue the performance marketing industry would grow to where it is today.
As Adwords continued to evolve a “new breed” of advertisers came on board. This new breed considered themselves “affiliate marketers” and simply created bridge pages for CPA offers and garnered a competitive advantage but outbidding the person in the placement above them. Following the sale of my hosting company I also became an “affiliate marketer” as I found it quite interesting that I was able to link out to another product and get paid $8 – $15 per conversion. It was really easy. I just had to make the bridge page and didn’t have to worry about the back-end monetization process or customer support issues (always a pain in the rear). Everything went well for several months until complaints started rolling in from subscribers who had no idea how to unsubscribe. People had agreed to enter the pin number in for a monthly billing fee, but afterwards were unable to cancel. Some of the more aggressive affiliates decided to use “free” on their landing pages when the service was in fact paid for. A year or two passed and finally Google Adwords and similar pay-per-click platforms issued new regulations on how mobile subscriptions can be promoted. This ended a lot of affiliates big campaigns. The cat got the mouse.
Following the ringtone bubble, advertisers that were familiar with the reoccurring revenue model, started coming up with new continuity programs this time in the weight loss, skin care, and teeth whitening verticals. Having ordered many of these products myself to test the overall customer experience, the products were not that bad, but the aggressive billing tactics were unreal. Advertisers were able to offer affiliate marketers $35+ a conversion on an offer that pays <$2 because the rebill hit in 7-14 days at a much high price anywhere from $88 – $100+. Given these were physical products rather than a ringtone subscriptions some “newbies” quickly found themselves enriched simply by ripping another affiliate’s landing page and throwing some traffic at it. Just as affiliates used the word “free” back in the ringtone days, they did the same thing here, but took it a step further using many deceptive (and sometimes fabricated stories) and even fake celebrity endorsements. Record profits, revenues, and traffic distribution numbers went through the roof as did the complaints and federal government pressure. Many traffic sources will no longer traffick these ads and over the last year we’ve seen the Federal Trade Commission step in and take out many affiliates and advertisers (take out meaning take all the money, homes, and cars). What’s the fun of making all that money if you can lose it at the drop of a hat? The cat got the mouse.
As we see the mobile marketing industry explode many affiliates are already on board with their un-compliant landing pages and sneaky pin submits. They’ll knock down some solid numbers for a while but basing off the track record above I think anyone with an IQ > 0 can see where the trend is heading. A couple of former “big time” Affiliate Networks that supplied the “offers” to the affiliate marketers have now went out of business either from poor business decisions leaving little to no cash flow or because of the Federal Trade Commission stepping in and seizing all ill-gotten assets. While we’re still a long way from a shortage of affiliate networks, the ones that remain complaint and take a pro-active approach as to how publishers are generating revenue will be around. Ones that still allow the sneaky and deceptive practices will eventually go out – rather from payment issues or Government pressure. The cat and mouse are currently running around each other in the mobile space.
I don’t proclaim to be a rocket scientist, but looking at the performance marketing industry over the last couple of years, it’s time to clean up. Affiliates should be focused on working with Affiliate Networks that can bring on long-term advertisers where mutually beneficial relationships should exist. If an Affiliate quits running the Affiliate Network shouldn’t immediately give out their campaign to other publishers to pick up the slack. In 2012 Affiliates need to take MORE control over their business and leave it less in the hands of an Affiliate Network or Advertiser. Rather than building an entire campaign around an offer or two, Affiliates should be building their own long-term websites where they can use multiple channels for traffic distribution and can easily replace an offer if one goes down. The smart ones will eventually take over their own billing process, cut out the middleman, and make a lot of money for years to come (that’s what were doing).
Playing the cat and mouse game is no way to run a business. This last week Ruck posted inside our Community some threads from another website where the titles were all on how people could cloak, get new Facebook accounts, and overall become more deceptive for higher conversion rates. It’s these type of people that are going to make it harder on the guys who want to be around for a long time and form mutually beneficial relationships with companies for years to come.
I challenge you all out there reading this to consider your business promotion techniques. Answer some of these questions in your head: Am I offering a product or service of value? Am I being completely open and honest with my billing practices? Would I want my own mother, father, grandmother, grandfather, etc. to sign up for my product using my landing page? Is my business compliant?
In my senior year of college the professor in one of my final Business Management classes teared up and said, “I want every one of you student to remember this one thing. The only thing each of you have and NO one can take away from you is your integrity. Don’t sacrifice your integrity for the quick dollar.” The entire performance marketing industry needs to start thinking about their integrity and rather how much money they can stack, how long term can they go. It takes a different type of person to want a career where they rip people off all day long. Rather CEOs and executives should be looking at enhancing the Internet, adding value to the performance marketing industry, and satisfying customers.
Ryan Gray is the founder and CEO of NameHero, one of the fastest growing independent web hosts in the United States. Ryan has been working online since 1998 and has over two-decades experience in Internet Entrepreneurship.