Session Description: As the affiliate marketing industry grows, it continues to encounter challenges on multiple fronts. One front burner issue for brands and advertisers remains affiliate legislation. From New York to California to Texas, the nuances of tax collection in each state are still being worked out and, in many cases, litigated. With this vital issue still in flux, what are brands and marketers doing to move forward? How can advertisers keep track of the state-by-state laws, and how can they develop strategies for today and for the future? Trademark legislation is also a key issue for affiliate marketing and we’ll explore how brands walk the fine line between protecting their brand and getting wider exposure. Finally, we’ll tackle how affiliate legislation in various states will impact all online retailers.
This session took place Wednesday, April 13, 2011. The speakers:
- Carolyn Tang Kmet, Director of Affiliate Marketing, Groupon (Moderator)
- Angel Djambazov, OPM, KEEN Footwear
- Rebecca Madigan, Executive Director, Performance Marketing Association
- Brian Looney, Senior Director of Business Development, CitizenHawk, Inc.
- Seana Montgomery, Senior Paralegal, McAfee
Impression comment
Bullet Point Review!
- Affiliate marketing has become a legitimate marketing channel.
- Ad Tax, aka Amazon Tax
- Lots of spin going on from the pro side.
- No physical presence – not required to collect sales tax.
- Reality is that there’s no money involved
- What does it mean for merchants?
- If you have an affiliate program in states where this passes, you must now collect sales tax for all purchases made into the state, Or
- Terminate affiliates (obviously the feared option).
- What happens when it passes?
- 25-35% loss of income to affiliates.
- Lay offs, downsizing, some companies may close entirely.
- People move out-of-state.
- Income tax decreases.
- Legislation has been beaten back 25 times.
- Passed in 5 states.
- 8 states in play in 2011.
- Brand Protection is Important.
- Typosquatting relies on typos in URLs.
- Bad spelling is as prevalent as the common cold.
- Typing too fast, fat fingers, old keyboards that stick, small keyboards on mobile devices.
- More than 20% of all Internet traffic is typed in.
- 15-30% of the time the URLs are misspelled.
- Companies often classify this as a legal issue instead of a marketing or traffic issue.
- Defending yourself against a typosquatter is expensive when you get lawyers involved.
- URDP – uniform domain name dispute resolution policy.
- Trademark infringement considered anything confusingly similar. Typos don’t count but content does. $1500 to file a complaint in court.
- You’re not filing against the domain name, you’re filing against the domain owners.
- Turn trademark enforcement into a profit center.
- Laws are international, but more enforceable on .com & .net.
- Marketing channels are business tools. Each should be employed for a specific purpose.
- You’re obligated to police your brand – your trademark can get canceled if you don’t prove you’re actively policing infringements.
- Learning from KEEN Footwear.
- Be sure your affiliates understand what affiliate marketing is.
- Affiliate publisher joined, tried selling his own brand of shoes thinking affiliate meant an endorsement similarly to the definition of “affiliate” in the TV world. Eventually showed up at the corporate offices demanding Keen CEO do more to leverage their partnership in trying to sell is shoe related product.
- Not all publishers understand what the channel is. Educate them.
- Be sure to clearly define all legal aspects.
- 20% of your affiliates are driving the majority of the revenue.
- What can you do to measure impact of amazon tax:
- Monitor legislation in states crucial to your success.
- Join the PMA to help.
- Stay informed through geekcast.fm, ReveNews.com, PMA blog.
- Create a contingency plans with a different payment or advertising model to not loose these valuable partners.
- Garbage can bills popping up including more junk trying to get out-of-state retailers to collect sales tax. Just says “don’t do business in our state”.