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.