Posts Tagged "NY Affiliate Tax"

CJU Course: Exploring Affiliate Marketing Opportunities

Posted on Oct 1, 2008 in Affiliate Marketing, Conferences & Networking | 1 comment

I promised more from CJU, and more I shall deliver!  This was an informative session, mostly featuring a lot of analytic and numbers supplied by Jupiter Research. The speaker was:

• Patti Freeman-Evans, Research Director & Senior Analyst, Jupiter Research.

Kind of dry, but had some good information.

Bullet Point Review!

• Affiliate marketing will have to change and adapt with the general economic conditions.
• Weak dollar, housing value declining, tighter credit markets, rising retail prices, possible inflation.
• It’s a slow process for consumers to come back.
• Online retailing up 15% in 2008 (estimated).
• Online retail has been doing well, but starting to slow from economic down turn.
• Online buyer much more affluent than offline shopper.
• Online still going up because people don’t want to drive.
• 30% of consumers believe that they can get a better deal online.
• 36% of offline sales are influenced by online research.
  • Expected to raise to 50% by 2012.
• 2008 – 6% of total US retail sales made online.
• More people looking for financial services online.
• Online retail sales reached $39 billion for 2007 holidays.
• Many CEO’s of multichannel retailers looking for growth.
  • Expect a lot of free shipping offers, discounts, coupons, etc.
• Increase in number of people looking for free shipping online.
  • Worth looking at ROI, but doesn’t necessarily create incremental sales.
  • Harder to turn that free shipping/discount customer into a full price customer later on.
• Online ad spend is 1/10 of total ad spend.
• Printed ads are lagging in performance and are expensive.
• Merchants are looking for cost-effective alternatives in advertising.
• The pace of display ad growth is faster than, but no bigger than, search.
  • Mostly due to advancements in targeting.
  • Better value for the money.
• Seeing growth in new media experimentation.
• Advertisers prepare for rich media & video, less static banners & text.
• Affiliates are the ones taking the risk on the sale.
• 13% compound annual growth rate – $2.1 billion.
• Affiliate industry is growing at ~9%.
• Publishers need to be relevant!
• Never underestimate the ignorance of the government regarding the internet.
• Other states are looking at the NY Tax issue and to the online area for taxation over the next 18 months.
• By 2012, 51% of online shoppers will be female.
• By 2012, 56% will be over the age of 35.
• By 2012, 41% will have an annual income of $75k+.
• By 2012, 69% will be Caucasian.
• Now – online shoppers are affluent & Caucasian, split evenly between male and female.
• Don’t concern yourself too much about other languages now as most online shopping is done by English speaking individuals.
• Consumers are making fewer decisions before getting online to buy.
• Only 31% known the item they want before hand.
• Search in research process has grown.
• Fundamentally, social media is influencing decisions by way of reviews, but otherwise not having a large effect.
• Consumers are more likely to start the buying process at the retail site they want to purchase from.
• Over time there could be a paradigm shift to social media.
• Online buyers go to three sites on average during the buying process.
• Google increases solidifies it’s dominant position as top traffic source for most retail sites.
• Why do people go to other sites?
  • 71% : To see other prices
  • 41%: Like to shop around
  • 29%: Looking for free shipping
  • 29%: Looking for more product information
  • 23%: To get a sense of what other people said about the product
  • 23%: To check other sites offers
  • 23%: To see expert reviews
  • 21%: To validate product information already found
• Put what the people are searching for on your site so they don’t have to leave (i.e. include reviews, comparison pricing, product info, etc).
• Consumers trust reviews, spend more on those products, and become loyal.
  • 69%: Impulse buyers
  • 60%: Brand advocates
  • 60%: Loyalist
  • 52%: Directed buyers
  • 48%: Overall online users
• Learn from reviews to create communication strategy.
• On average consumers come back to the site 2.5 times.
• About 20% of online retailers include “Recently viewed products” to try to cross sell other things the consumer already looked at (Amazon is the best example).
• Loyalists are not as profitable as customers (they’re just as likely to abandon in favor of a lower price).
• Use direct customer input to set achievable buyer expectations.
• About 60% of online retailers have persistent carts (i.e. when you leave the site & come back, the items are still in your cart or gives you the option to save items for a later purchase).
• The sooner you can give the customer information on incidental feels (shipping, handling, processing, etc) the better.

There was no time for any questions from the audience because it was so JAM PACKED with data and information.  Every slide Patti shared had great graphics, which was kind of hard to concentrate on, but great for any data and analytic nuts that want to see concrete research represented in lovely chart format.  I know this definitely inspired me to learn more about perfecting charts within Excel!  Great stuff overall for affiliate managers and online marketers alike.

Affsum Session: Performance Marketing Association Q&A

Posted on Aug 18, 2008 in Affiliate Marketing, Conferences & Networking | 2 comments

Well, I think many people attending this session were expecting the topic to be heated, but l’m not sure they were expecting some of the venom that seemed to be in the room.  Speaking for myself, I certainly didn’t.  Originally there was only supposed to be one panelist fielding questions, but since 4 out of 5 working group leaders were in attendance, they were also recruited to speak.  So ultimately the panel consisted of:

• Rebecca Madigan, Performance Marketing Association
• Sam Harrelson, Publisher, Cost Per News
• Brook Schaaf, Schaaf Consulting
• Brad Waller, VP Business Development, AdJungle.com
• Peter Bordes, CEO, MediaTrust

Guns were slinging!  Unfortunately there’s not many bullet points to be had, but here you go.

Bullet Point Review!

• PMA is in germination phase – not a real entity yet.
• Why start now?
  • Misinformation & lack of representation.
  • Legislation.
  • Lack of transparency.
  • Maturity of industry.
• Formation process still underway.
  • Interviewed over 60 industry leaders, Formation Advisory Board voted in by 100 peers.
  • Working groups of 45 volunteers.
  • Working groups make recommendations on formation.
  • FAB 11 ratifies formation proposals (click here to see members).
• The working group committees are Scope/Objectives (headed by Sam Harrelson), Governance (Brook Schaaf), Fundraising (Peter Bordes), Membership (Durk Price), and Operations (Brad Waller).

Points (or other observations in this case) brought up during the Q&A

• Right off the bat the questions were hostile.  There’s animosity about the PMA using the NY Tax situation as a launching point for formation despite the fact that they can’t do anything to help.
  • Essentially there’s nothing the PMA can do since they’re NOT a fully formed organization, no matter how much they want to help.
• Rebecca acted as moderator and moved the conversation on after almost 20 minutes of hostile banter.
• The PMA blog as been quiet because the people in working groups have had their heads down working on things without much to report at this point.
• The term “Performance” has been used over “affiliate” because it is more inclusive of the larger base of members within the industry.  Inclusive of a lot more relationships than just the affiliate – merchant relation.
• The PMA has a very similar model as a chamber of commerce but the scope is still being set up.  They are looking at the chamber model in forming things.  Mostly they want to improve visibility & credibility.
• Rebecca was questioned as to why she didn’t attend the meetings in Albany that the NY affiliates had since she’s actually the only paid member.  It was decided that there was no reason because it would have been redundant and she can’t represent an organization that isn’t formed and doesn’t officially exist.
• They were asked why they divorced themselves from ABestWeb after the controversy, to which they responded that they didn’t divorce from it BUT once a particular few threads got ugly and became increasingly unprofessional they just stopped participating in those threads.
• There’s no conspiracy regarding Rebecca’s involvement – Anik Singal of Affiliate Classroom generously donated her salary for a year and she’s just being paid to “corral cats” and help form the organization.  Her comment was that if she weren’t paid for this she’d have bailed long ago based on the assumptions about her involvement and what she’s had to deal with.
• An affiliate asked how they can be assured that the PMA won’t be overtaken by large company sponsorhips and forget the little affiliate?  The affiliate industry is it’s own little ecosystem and the heart of it is the average affiliate.  They’ve been very hypersensitive to the issue to ensure that affiliates are included.

It seems that there’s lots of confusion about the organization – or lack thereof – and hopefully the Q&A has taken things in the right direction.  Perhaps Q&A wasn’t the right moniker.  Maybe Suggestion Session or Feedback Forum might have worked better.  It was disappointing to see one of the most vocal critics of the PMA – ABestWeb founder Haiko de Poel Jr – leave the session half way through in apparently disgust.  I hope that future discussions going forward will be a bit more productive than the session in Boston.

Affsum Session: NY Tax Laws – Issues & Solutions

Posted on Aug 10, 2008 in Affiliate Marketing, Conferences & Networking | 2 comments

Unfortunately I was a bit late to this session today, but I got a lot of good info in the 40 minutes I did attend. The panel consisted of:

• Adam Riemer, Director of Marketing & Client Relations, Downtown Ecommerce Partners (Moderator)
• Chris Henger, Group Product Manager, Google Affiliate Network
• Kim Rodgers, Affiliate Manager, 4Checks.com
• Melanie Seery, Affiliate, NY Affiliate Voice
• Clarke D. Walton, Internet Lawyer, Walton Law Firm, P.C.

First I do have to comment on the panelists – I had the pleasure of hearing a session at ASW08 where Clarke spoke on internet taxes in relation to affiliates and I have to tell you – this is the kind of lawyer you want in your Rolodex.  He’s extremely internet and tech savvy, which is always good when you’re talking about internet law.  He has experience doing affiliate marketing himself, so he can totally relate to your issues.  And he clearly knows his stuff.

Speaking of really knowing their stuff, Kim Rodgers is the ace affiliate manager who really knows what she’s doing, and has built her program up SO much it’s phenomenal.  I had the pleasure of sitting with her last night at the Affiliate Dinner (more on that later) and she really is a great AM and has the unique experience of being in the position of a company that initially culled their NY affiliates and now, after some changes internally, are able to welcome them back and have to regain their business (not to mention their trust).

So, the bullet point review of the panel:

• Networks can’t really give any advice to affiliates legally, so they’ve pretty much had to stay out of it.
• Early in July, California explored the NY law and determined that affiliates don’t prove nexus, hence pretty much saying the opposite of what NY is.  Hopefully for those of us in California this means that they’ve gotten it out of their heads to try to mimic this.
• Late in July the NY state senate approved a motion to repeal the tax, so while there’s not much news about this yet it’s a step in the right direction in terms of a repeal.
• It’s important for affiliates to be willing to comply and work with their merchants to get through this and maintain a good relationship.
• Affiliates in NY will have to give up a little privacy (like their NY address) in an effort to comply.
• Merchants can simply add a small paragraph into their terms of service that NY based affiliates need to agree to specifically to comply with laws.
• Affiliate managers need to follow up with the NY affiliates to make sure they’ve read the modified TOS and agree.
• Merchants who kicked NY affiliates right away probably have a better chance of wooing them back than merchants who waited until the middle of June and then deactivated the NY affiliates retroactive to May 31st.  Melanie’s opinion?  “They don’t have a prayer.”

Some take-home answers from the open Q&A:

• The law applies to merchants based in Canada as well  (unfortunately I couldn’t hear if they said it applied to international merchants too).
• The law is not clear if nexus is established when a merchant has affiliates who make $10,000 per year aggregate or per affiliate.
• Affiliate managers should not encourage their affiliates to incorporate their businesses in other states.  This is a poor work around (it’s not a solution) since, well, what if that state’s next to adopt a similar law?  You can’t keep reincorporating and it’s basically fraudulent anyway.
• The state of Washington has come close with a similar law affecting internet sales and taxes.  Formerly, the tax rate on an internet sale was calculated based on where the merchant is located.  Now, it’s calculated based on where the order is shipping to.  This only applies within the state – for now.  (As an aside, I know that the California law is already like this and bases tax assessment on the shipping address, being that PsPrint is based in California).
• The federal government is also looking into these laws since we are talking about interstate commerce and may make a move soon, but it’s hard to say in what direction that move will be.

If you caught anything I didn’t (ahem 11|15 Media’s Michael Buechele), please share with the rest of us!

Now Published! Affiliate Manager Communication Strategies

Posted on Aug 6, 2008 in Career, Conferences & Networking, Rambles |

Issue 2 of FeedFront Magazine is hitting mailboxes as we speak, and will be distributed at Affiliate Summit East next week.  I’m happy to say that an article I wrote has been published!  Now you can read all about a great strategy to keep in contact with your affiliates as a manager.  Check out my article on page 12 of the magazine.

If you can’t wait for your hard copy (as I couldn’t) you can download just my article here.  Or, if you actually want to read the whole issue, you can get it here.  There are a lot of other great articles this time around, including a look at ABestWeb.com founder Haiko de Poel Jr, coupon code woes, and avoiding NY state tax nexus.

I hope to write another article for FeedFront soon, I just need to rack my brain for some ideas :).  If you’ll be going to Affiliate Summit East, we’re sure to have a blast.  Remember to take lots of pictures – the gang at FeedFront is holding a contest and YOUR picture (or mine!) can win the coveted cover position for the 3rd issue of FeedFront.  Not only does the winner get the bragging rights of having their photo on the cover of the magazine, but you also win a full conference pass to Affiliate Summit West 2009 happening in Las Vegas January 11th – 13th.

Cafepress Shows No Mercy to NY Affiliates

Posted on Jun 23, 2008 in Affiliate Marketing |

Yet another merchant has washed their hands of NY based affiliates.  I just received an e-mail from Cafepress:

As you may know, the State of New York recently enacted new legislation that addresses tax registration, collection and remittance, which challenges the CafePress affiliate business model.

Due to mounting uncertainly over these new laws we will no longer be able to support affiliates residing in the State of New York, effective July 1, 2008.

While CafePress has no tax nexus in any states other than California, Nevada and Kentucky we feel it wise to discontinue our affiliate business in New York State at this time.

Regrettably, our hand was forced into making this difficult business decision, and we openly acknowledge the loss of income this means for our New York affiliate partners. Should circumstances around this law change we will eagerly reconsider this decision.

Effective July 1, 2008 CafePress affiliate agreements with all New York residents will be terminated.

Please let me know if you have any questions.

Of course I’m not affected, but in an effort to stand tall with my NY brothers and sisters, I’m seriously considering not promoting this program anymore.  Truth be told, I’ve never shown any sales with it as it’s just on some secondary web properties, and I do love their services.  I haven’t reached a personal decision yet.  So this makes me sad that they’ve gone this route.  Alas, poor Cafepress, I knew them well.

Affiliate Classroom Live! August 9th

Posted on Jun 19, 2008 in Affiliate Marketing, Conferences & Networking, Social Media | 2 comments

Part of advancing your career is continuing your education, so its important to learn what you can, when you can.  Continuing doing their part for the affiliate community and affiliate managers, Affiliate Classroom is offering another Affiliate Classroom Live training session for Affiliate Managers the day before Affiliate Summit East in Boston this August.

I attended their full day session last February and I have to tell you – it was a completely invaluable experience.  I learned so much… it was worth devoting an entire day to.  I also recapped my impressions of the various sessions via this very blog.  The only bummer to the whole day was the length of time in grossly uncomfortable chairs with no tables to write on.  Incidentally, I spent most the time sitting on the floor using the chair as a platform – I’m just not a lap writer.

They’re at it again, this time taking in the feedback they received and cutting it down to a half day of mostly round table discussions lead by experts – and me.

That’s right, yours truly will be leading a round table discussion at this summit’s event titled: Virtual Social Butterflies: Online Networking & Its Importance for Affiliate Managers

Successfully managing an affiliate program relies heavily on being an approachable manager, developing good relationships with your affiliates.  It’s equally important to develop good working relationships with your peers in the industry.  We’ll talk about the blog community, social networks, social bookmarks, Twitter, and how they can benefit the affiliate manager.

Besides me, since I’m hardly an “expert” in this field, discussions will be lead by Sam Harrelson on web 2.0, Lisa Riolo on pitching your affiliate program internally, Brad Waller on the NY Affiliate Tax implications, a presentation by Heather Paulson on effective strategies, and some other well known industry leaders.  So come on out and let’s talk!  Register for the event now at AffiliateClassroomLive.com!

Thanks to Affiliate Classroom’s Rachel Honoway for extending the invite to me!