As affiliate marketing matures, newer threats and challenges also evolve. However, the opportunities are still bountiful, and with the right approach a merchant can still succeed marketing their brand and business through a well-built affiliate program.
In 1998 Todd also contributed to the founding team at Commission Junction, where he later served as Vice President for more than seven years.
What are the major challenges with which you see affiliate managers struggle?
Balancing time between revenue generating activities and administrative activities. I think many people get bogged down with the day-to-day administrative tasks and don’t focus enough energy on the revenue generating part of the job. The key takeaway is creating as many efficiencies as possible to minimize the time required for day-to-day stuff so you free up more time to develop incremental revenue opportunities.
What do you view as the main affiliate program growth opportunities?
The affiliate channel is often kept separate from other media and ad distribution channels because of the performance pricing. There’s a significant opportunity to pull other distribution channels into the performance category because of the improvements in tracking and reporting. For example, a lot of companies offering distribution with mobile or through remarketing are willing to do so on a performance-basis. I think there’s a lot of room for growth and expansion with media partners that historically were bucketed in the display or search channels.
In April 2012 an Illinois Circuit Court Judge ruled the affiliate nexus tax unconstitutional. However, more and more states are considering going the route of the "affiliate tax". Is there a good solution to this snowballing affiliate nexus tax situation?
The only real solution is a national Internet sales tax or some kind of tax that applies equally to all advertisers regardless of the media type that drove the conversion.
How can affiliate networks help merchants to continue working in the states with the affiliate nexus tax legislation?
I am not sure that affiliate networks or any other third-party can help solve nexus issues. Technology cannot solve nexus issues. The advertiser is responsible for interpreting and complying with any and all applicable tax laws. It has been my experience that advertisers rely on their legal counsel or CFO for this advice. Beware of technologies that tell you they can solve nexus issues.
What about the "Do Not Track" legislation? Is affiliate marketing industry in danger here? And does Impact Radius have relevant solutions?
I am confident that privacy and marketing can co-exist peacefully. Eventually, websites will not be able to generate revenue if consumers opt out of monetization of content. I believe these sites will restrict access to visitors that do not wish to be tracked. Consumers will have a choice - visit our site and allow us to make money or do not access our content. In the end, I think most consumers will understand this trade off as fair and reasonable and doesn’t compromise their personal information or security.
What are the top 3 things that affiliate managers (and merchants) should be looking at while choosing an affiliate network?
The first distinction I would like to make is that Impact Radius is a technology provider, not a network - this puts us in a unique position to help advertisers and agencies better manage their top relationships - from both a cost perspective and an incremental revenue perspective. The first thing to look for when selecting any technology vendor is how will it solve your problems or allow you to meet your revenue objectives? When choosing a network, you need to know how the technology will support your needs and objectives.
The second consideration is cost. Networks typically charge a fee based on the success of your program - the bigger it gets, the more you pay. If you or your agency are doing all the work of growing the program, does this pricing model make sense for your business? The third consideration is do you even need a network to attract and manage partners? Most advertisers see 90%+ of their volume coming from a handful of top partners. These top partners are generally well known in the industry and easy to contact and recruit - especially if you are a medium to large brand.
Over the next 4 years Forrester predicts a steady growth for affiliate marketing. What are the top 3 areas of opportunity for affiliates these days?
- Content -- Developing unique content that attracts repeat visitors is the single most valuable asset any publisher can invest in.
- Mobile -- I believe in a few more years mobile will surpass online - so the sooner you get there, the sooner you will be successful.
- Media -- Utilizing more accurate and flexible tools to enable and measure more media channels to increase traffic to your site(s). Do not rely solely on search (paid or organic) for your livelihood. Diversification into other media channels reduces your dependence on one channel for the majority of your traffic. If you’re not already testing social, retargeting, email, etc. - it’s time to start!
If you were to leave affiliate managers with just one advice today, what would it be?
Communicate the value of your channel (and your contribution) to internal teams throughout the week, month, quarter and year. Utilize every metric available to you to understand how your channel compares and interacts with other marketing efforts and educate your company on what you’ve learned.