Performance Marketing Leadership Summit
On April 19th, the day before ad:tech SF 2010, OfferVault presented their Performance Marketing Leadership Summit, a half-day event featuring discussions on compliance, fraud, and transparency. This was one in a series of events presented by OfferVault focusing on improving the performance marketing industry. Big thanks to Jim Lilig and the folks at OfferValut for putting this event on for free, allowing anyone interested in joining the discussion to attend. This event was also co-sponsored by AffCon, OfferMobi, and DirectTrack.
I headed over to the city to go, and I’m glad I did. The afternoon was divided between two singular speakers and two panel discussions, end capped by lunch to start, drinks to end, and a break in the middle. Here are some highlights of information I took from the day’s thought leaders:
E.J Hilbert
President of Online Intelligence, Epic Advertising
- Compliance is a dirty word, some people think it always equals loss. Truth is, there is no true definition.
- Compliant traffic is actually a 15% increase in profit in the long run.
- Margins decrease initially because of the bad traffic.
- Whether or not we see what we do as spam, the rest of the world does – it’s due to a lack of understanding.
- Remember, to the general public, we’re guilty by association.
- Compliance seems to be a catch-all, referring to legal, network, advertiser, corporate, affiliates, etc. Perhaps it should just be legal and corporate and we can call everything else fraud.
- More traffic = more money.
- The most profitable cybercrime is spam.
- We can’t because they don’t – there’s not enough enforcement in the industry. We need to crack down.
- Many top media outlets are developing their own advertising platforms they can trust instead of utilizing the existing platforms we use.
- Partner with the advertisers, that’s where the money is, not with super affiliate A or B.
- There are 4 ways to deal with fraud: accept it, insure against it, mitigate against it, not accept it at all. We should not accept it at all.
- Top advertisers are the ones calling the shots, because they have the money.
- Watchdog groups are paying attention. If we don’t do something soon, others will. We don’t want that.
- Online advertising is mainstream.
- Sometimes the way we have to go isn’t the popular way, but it’s the right way.
Panel 1: What We Need To Do to Combat Fraud
Jason Spievak (RingRevenue), Brandon McDonald (Product2Web), Chris Graham (Atrinsic), Tom Cohn (Venable), & Carrie Birkner (Lashback)
- How often does a company do something when one of these outside agencies tells them about a problem? Fairly often, actually. They gets lots of flack from publishers if they don’t take action.
- A lot of the responsibility in combating fraud comes from the technologies, the networks.
- Many networks and managers are now taking the stance that if an affiliate isn’t going to be forthright about their methods, they’re out.
- In the industry, we don’t trust each other.
- Product2Web stops fraud at the cart level. Networks should force their advertisers to utilize this kind of tool.
- Longevity planning should be the new term for compliance.
- Most affiliates live in this world of cloak & dagger, so where’s the incentive to be transparent? They incentive should be in taking the high road.
- Part of a network or merchants positioning & branding should be that they watch things & enforce their guidelines.
- Affiliates are black hat or gray hat because it works. They’re looking at the short term money makers, not long term business planning.
Peter Borders
Founder & CEO, MediaTrust
- We have the chance to seize a tremendous long-term opportunity.
- Affiliate marketing harnesses the best of the best, and we continue to harness new channels.
- Direct response television (infomercial) industry is trying to get into affiliate marketing.
- Evolution from Mass Media to Me Media. The consumer used to be at the bottom of the funnel, and now they’re at the top.
- Consumer is king, and we need to empower them. The market should be driven by quality and lifetime value.
- Right now there is little innovation, minimal brand presence, and an “all for me, more for me” mentality. We need to evolve.
- What do we need to do? Share information and data, innovate, move up-market, and collaborate.
- We have to think holistically for the sake of the industry.
- We should help each other to set standards.
- We have to be an industry of problem solvers.
- If the whole industry goes up-market, we ALL win.
- It’s time to build collaboration and trust, and support agents of change.
Panel 2: The Road to Tier 1 Advertisers
Rebecca Madigan (Performance Marketing Association), Todd Crawford (Impact Radius), Theresa Farmer (UnsubCentral), Peter Klein (MediaWhiz), & Liz Wasserman (Mate 1)
- Big advertising agencies still don’t understand affiliate marketing.
- What do we need to do for tier 1? Educate – be transparent.
- Big brands, this should be sales. Agencies can’t guarantee the spend of budget in terms of performance marketing.
- It’s a much longer sales cycle with large agencies.
- People want stability and consistency, which is tricky with performance marketing.
- Is it possible, technologically’? There’s efficiencies when you automate that always allow you to make more money.
- Big brands don’t understand that with “performance” you’re getting branding for free.
- Brand reputation is a concern for big brands, so performance seems scary. But it goes both ways, you can also build a brand using performance marketing like Mate 1 did.
- We need to do a better job explaining the metrics to agencies. They need to understand that there’s two types of advertising – performance and branding. And often there is some overlap.
- There’s a kind of lethal nihilism. Outside impressions of the industry is that we’re “a little shady & quasi criminal” and people don’t want to get involved (great quote by Liz there!)
- This gets perpetuated by smaller, CPA type folks that are looking for short term gains and give the rest of us a bad rap.
- Self-regulating isn’t going to work because there’s always a few folks willing to break the rules for a quick buck.
- Advertisers worry about negative brand impact and are worried about consumer respect.
- We don’t bring the consumer into the equation enough.
- Merchants need to focus on moving up-stream.
- It should be a goal to really be able to understand the lifetime value of a customer.
ASE09 Session: Hot Topics in Marketing Compliance and Enforcement
Session Description: Hear from regulators and industry insiders on critical legal issues facing affiliate marketers today, including advertising practices, affiliate liability, and enforcement priorities. The panel consisted of:
- Jeffrey Greenbaum, Partner, Frankfurt Kurnit Klein & Selz PC (Twitter @jeffgreenbaum) (Moderator)
- Leonard Gordon, Director, Northeast Region, Federal Trade Commission
- David Graff, General Counsel and Sr. Vice-President, Corporate Development, Epic Advertising
- Peter Marinello, Director, Electronic Retailing Self Regulation Program, Council of Better Business Bureaus
With all the talk about disclosure going on lately, I thought this session would be a great chance to learn more about how the FTC expects to enforce the over-zealous disclosure they’re now talking about requiring. I was disappointed that there was no mention of it until the end of the session and that no one asked about it before I had to leave. The session went long and I had to run to get to GeekCast Live. It was definitely a wealth of information; I just wish Jeffrey hadn’t talked and gone through his slides so fast!
Bullet Point Review!
- Affiliates need to be careful about the types of endorsements they use.
- Affiliates can get into trouble using celebrity pictures and trademarks.
- Epic Advertising does their research to make sure testimonials used are legitimate and documented.
- There’s no silver bullet.
- Noncompliance is more lack of attention to detail than maliciousness.
- Even if a celebrity endorsement is true, you need their explicit consent to use it.
- What is Advertising?
- Traditional Media
- Company Sites
- Public Relations
- Spokespeople
- Branded Content
- Viral Videos
- Product Placement
- Review Sites
- Facebook Pages
- Blogs
- Tweets
- What Rules Apply?
- Federal
- State
- Local
- Deception
- Tell the truth and don’t mislead.
- Keep your promises.
- You’re responsible for express and implied claims.
- You must have prior substantiation to back up your claims.
- FTCv. CVS Pharmacy Case
- Accused of misrepresenting how they were protecting customer privacy.
- Found that discarded customer information was thrown into dumpsters behind the stores that were accessible by anyone.
- Held accountable.
- Disclosures
- Is qualifying information necessary to prevent a claim from being misleading?
- Disclosure must be “clear and conspicuous”.
- Mouse type probably won’t do the truck.
- Is the disclosure in close proximity to the claim?
- Disclosures are judged by a performance standard.
- No pre-checked boxes.
- Disclosures must be separate from terms and conditions.
- Endorsements
- Must be real.
- Honest, unbiased opinions.
- Accurately reflect performance.
- You can’t use an endorser to make a claim that you couldn’t make yourself.
- Subject to FTCreview.
- “Results Not Typical”
- Unfairness is about harm, not about deception.
- ERSP is a self-regulating body.
- No real punitive damages; can only recommend changes to be made.
- Clinically proven claims have to be reliable and competent evidence.
- Clinical Testing Data
- Independently conducted (double blind study, placebo controlled).
- Adequate sample size.
- Conducted over a reasonable period of time.
- Statistically significant results (95% confidence level).
- Claims = data.
- Affiliate has the responsibility to confirm that the claims are true.
- There are some obviously questionable categories of offers that should always be questions before run, like nutritional supplements, weight loss, etc.
- You as an affiliate can be held individually liable for damaged in a lawsuit.
- FTC has two responsibilities – consumer protection and anti-trust.
- The Obama administration has put pressure on the FTC to look to protect consumers heavily affected by the economic downturn.
- Extra scrutiny of loans, mortgage, jobs, debt consolidation advertising.
- Be careful when marketing to children as the rules are becoming more strict.
- Is it okay to collect data when a consumer consents?
- Consumers don’t understand terms and conditions – the FTC thinks it’s borderline absurd to think that they do.
- Disclaimers should be written with the same panache as the ads themselves.
- Terms need to be crystal clear.
- Consumers don’t understand how online ads work.
- FTC doing more research of “green” ads and hope to publish more guidelines soon regarding claim standards.
- FTC is expecting to be partnering with the FDA more to regulate health and safety advertising.
I talked to another attendee of the session, Rebecca Madigan from the PMA, who said the session went on for about another 15 minutes after I just had to leave to get to my next speaking engagement on time. I hope she posts more about the session somewhere! Jeffrey, Peter, and David all had their own presentations, but the only one on SlideShare is Peter’s. Here’s the presentation:
