I had the pleasure and pain of driving up to Sacramento yesterday to sit in on the hearing for AB 178, which I’ve talked about before putting California affiliates in jeopardy.  Lisa Picarille and I hopped into my car and made the drive up, and about 10 minutes away from our destination, we get the news that the hearing had been postponed.  The bill has been changed to a two year bill.  What does this mean, exactly?

Believe it or not, I couldn’t find a sufficient actual definition for what a two year bill is online, so I can only pass on what I was told in basic layman’s terms, which may be better anyway.  Basically what this means is that the hearing has been postponed until January, when it will be up again to be heard in hearings.  We were told by several seasoned lobbyists that if it’s not heard in January, this bill in this current incarnation will be dead.  However, the issue won’t necessarily go away.  We will need to keep an eye out for other bills to make sure language isn’t shoehorned into other bills that could affect affiliate livelihood and tax nexus, and we also have to pay attention in June when budgeting starts to make sure no strange budget items that could affect nexus show up.

This is a small victory and California affiliates can certainly breath easier for awhile, but it’s not over yet.  We’ve won the battle but the war rages on.  Of course, there’s a lot of blog coverage on the happenings of yesterday, so check out their points of view as well:

• Mr. Lewis Goes to Sacramento – David Lewis
• Calif. AB 178 on Hold for Now – Lisa Picarille
• California Hearing Postponed – that’s a good thing! – Rebecca Madigan
• No Hearing for California AB 178 – Shawn Collins
• Commission Junction’s Internet Retail Tax News

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Date: Monday, January 12th, 2009.  Session 4c, 11:30am.
Session Description:  This session outlines how to best manage affiliate relationships to reach major revenue goals without additional budget. Tactics focus on non-monetary incentives to increase affiliate performance. The panel consisted of:

• Chris Kramer, Co-Founder & Media Director, NETexponent (Moderator)
• Darren Eilers, Founder & CEO, DME Media, LLC
• David Lewis, CEO & Founder, Cashbaq
• Kevin Smith, Affiliate Marketing and Business Development Manager, Brown Shoe Co. – Shoes.com

OK, this session wasn’t what I expected it to be.  It seemed more like a session on how to treat or work well with super affiliates, which I’ve attended before and got kind of the same tips from.  Maybe I perceived this wrong, but I expected some tactics on how to creatively promote affiliate programs without money, but it turned out to be how to fire up your top affiliates, and still mentioned money.

Bullet Point Review!

• The majority of affiliates say they make most their money from less than 5% of the merchants they promote.
• David says: compensation does matter.  We’re willing to promote products and brands with zero compensation up front.
• David says: if you know our business, we’ll talk to you.  Without knowing that basic fact, all of the other things you can say don’t matter.
• Darren says, to managers: relationships matter.  Keep in mind that everyone does things differently.  They do expect a better relationship than any other affiliate.
• Darren says, to fellow affiliates: You can’t expect a merchant to call you back unless they have an incentive to.  So the affiliate has to sell you on themselves.  Pitch you.
• David says: the compensation has to sometimes be different for loyalty sites.  Get datafeeds cleaned up.  Better sales will come from that and the creativity affiliates use with datafeeds.
• Darren acknowledges: we know that it’s sometimes an uphill battle for merchants to get the datafeeds fixed by their IT departments, but if the affiliate doesn’t get the datafeed that’s clean, they have to go with someone else.
• David notes that he’s personally working hard to create a standard taxonomy that everyone uses for datafeeds to make that portion of the industry more uniform.
• The key is keeping it updated.
• Chris noted that the number 1 thing affiliates wanted from them are custom landing pages.  The second was product feeds, third promotions and incentives, and fourth was coupon code offers.
• Kevin wants affiliates to know that they can get help when they need it.  The more information we as merchants can give the affiliate, the more money they make, more sales for us.
• David warns that the conversions really have to be solid.  It’s better for the merchant and the affiliate.
• Kevin includes information about the products and company in their newsletter.  He tosses out as much information as he can that will help the affiliates.
• It’s hit & miss in terms of the merchant giving information to the affiliate in terms of what they’ll use.
• A lot of the money they make is reinvested.
• David uses an analogy of a bobsled team for the merchant.  They’re the head of the team and just need the push from the merchant to get rolling down the track.
• Darren advises that you take your top affiliates and let them help you test landing pages.  He’s usually willing to work with merchants that ask for that kind of help since he’ll ultimately receive the benefit.
• Chris warns though that a lot of affiliates don’t want to be guinea pigs and how often are you willing to take the risk?  Darren responded that it depended on how long he’s worked with and trusts the merchant.  He doesn’t mind being a guinea pig if it means he can make more money.
• David warned against merchants making knee-jerk reactions.  Use the data and make decisions based on that.
• Darren says if you know them and spend the time to get to know their business and form a partnership, merchants are usually more willing to give them inside data to help them out.
• Are there three different teams compensated separately?  Many merchants have the SEO team, SEM team, and Affiliate team.  If the program is run correctly the affiliates help all three teams.  it’s all of our sales, not my sales or your sales.
• Kevin says more affiliates looking at CPM than CPA – with the economy there’s not as much money out there for CPA offers anymore since they don’t return like sales do.
• David relayed something he read that said 73,000 stores will close in the US this year (estimate).  If someone comes to them and says they’re cutting their commissions, it’s a mistake but OK, they’ll look at your competitors more.  Someone has something similar and will boldly raise their commissions to stand out.
• Darren warns that before you lower commissions across the board, take a look at your top affiliates.  Weed them out and tier your structure.  Maybe increase compensation for the top affiliates and lower it for the others.
• David says to reward those meeting your goals.
• Kevin notes that they did that and it worked great.
• Kevin adds not to be knee-jerk reactionary.  Try to look at a monthly picture.  For them the 2nd Saturday of every month is their big Saturday Sale, and affiliates know that.  Being transparent helps them stand out.  Allow them to lean on the merchant.  Brand equity is very important.
• Kevin has seen more volume with coupons and loyalty sites.
• Chris shares more poll results amongst affiliates: What matters most before joining?  1. Commissions 2. Product being sold 3. Brand 4. Tracking platform 5. Terms and conditions 6. EPC 7. Affiliate manager/outsourced program managers 8. Return days 9. Action occurrences
• Darren says to look at your affiliate manager very closely to analyze the relationship.  When the AM gets to know what the affiliate does, they can customize incentives specifically for them.
• Darren also says to give your top affiliates your true top performing keywords.
• Chris asks if a big brand can get away with paying less commissions.  Darren says they can if their conversion rates are higher.
• Chris asks how much competitive research do you do?  Darren says they know what the published commission rate is.  They also look at the EPC but that doesn’t really tell them too much.
• David notes that they’re big and kind of already have the big brands, so they ask different questions before they join a new program.  Are you making our life easy?  Do you have an 88×31 non-animated gif?  Do you link to the homepage or deep link?  Is it something we think our members will see as quality?  Does it look like it’ll convert?
• Darren says he’ll try to get a hold of the affiliate manager to work with them to improve their site, but there’s only so much they can do so sometimes it’s hard to do that.
• Kevin creates banners on a daily basis.  They’ll accommodate different sizes if asked.
• Although David says he doesn’t look at banners.  Darren advises that they have to meet the challenges of Google changing, so they need to change.  Banners have been around so long and they’re surprised that there’s still so much emphasis on banners. They do their own creative because it’s faster and they know what will work with their visitors.  If the merchant won’t allow that, it’ll hurt them.  They’ll work within their guidelines for sure.

There was a lot of good information and wasn’t much time for a Q&A session, so there was none.  Despite it not being what I was going in for, it was still a good session and dropped some handy tips from some top affiliates.  There was also some good data points in the slides, so here they are for your viewing pleasure as well:

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his is the last of my notes, finally!  This panel promised to deliver real live examples from advertisers and publishers who have faced the best practices issues and discovered the resolutions that helped both sides continue a successful working relationship. The panel consisted of:

• Brian Conchuratt, Sr. Sales Manager, Commission Junction (Moderator)
• Matt Earls, Sr. Marketing Manager, Yahoo!
• David M. Lewis, CEO & Founder, Cashbaq
• Kurt Lohse, CEO & Founder, Keycode.com
• Maggie Tucker, Manager of Performance Marketing, Intercontinental Hotels Group

I didn’t get many notes from this session, but it was some good stuff.

Bullet Point Review!

• 2009 is the year of the data feeds.
• CJ is listening to publisher complaints about data feed accuracy and uniformity.
• Threshold of quality needs to be raised on CJ so advertisers can take advantage of IT resources effectively when asking for the creation of data feeds.
• Utilizing data feeds is top priority for the top publishers.
• Advertisers wonder if anyone’s listening?  Always looking for better ways to speak to publishers.
• Understand what your core publishers need.  Give them exactly what they want.
• Lead time is good to make it easy.
• Don’t mark offers urgent if they’re not – publishers need to appropriate their time wisely.
• Understand how your publishers want to communicate, whether it’s IM, email, phone, etc.
• It’s difficult to write one email for all publishers.
• -> Don’t worry about flashy templates, data is the most important aspect.
• -> Segment to different publisher groups and address their needs.
• Keycodes white labels their syndicated content.
• Publishers should tell the advertisers straight out if they develop a new promotional method.
• The higher the trust level, the more aggressive you can be with payouts.
• Look at click-through URLs, conversion rate, cancellation rates.
• -> Not looking for secret recipe, but just a general idea of what the publisher is doing.
• Good publishers are looking to be transparent and will let you know when they’re experimenting.
• Violation of T&Cs us more of an opportunity to start a conversation than to punish.
• Affiliates are direct marketers.
• Run the numbers before you go to publishers with unappealing offers or news to prove it’s necessary.

There was no time for Q&A on this panel, but there are definitely some good take away tidbits.  This concludes all my notes from CJU!  Until next year…

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