Affiliate marketing Goliath eBay recently pulled the plug on its existing affiliate program tracking—centralized at ValueClick’s (VCLK) Commission Junction (CJ) network—and is unveiling what it calls Project Rover (via Jangro.com).  Notably, reporting will remain centralized at CJ.  According to eBay:

Project Rover has been designed to work seamlessly with the Commission Junction interface, increase the effectiveness of our affiliate’s marketing campaigns, and will be rolled out to all countries.

The benefits for affiliates/publishers?  Says eBay:

- Reduced ad / cookie blocking (reference)
- Fewer URL / server redirects
- Global tracking

In short, eBay is taking its tracking out of a network and into its own control.  Why?

Asks long-time CJ affiliate and former employee Scott Jangro, “Is CJ being disintermediated? This move at least puts CJ in a very weak position as they can be switched out in a flash once the program is humming along on the new links.”

Sounds familiar.

I spoke with David Lewis (winner of this year’s CJ Horizon award for innovation) this morning about the situation and he speculates that the allure of (my words) “CJ as a source of great publishers” remains a strong one; hence, eBay is not willing to walk away.  After all eBay is more than capable of providing a reporting interface considering its technology prowess.  Why keep the CJ reporting tool in place?

My perspective remains a confused one as search-based affiliates have become an endangered species in recent months… and CJ seems to be best at providing eBay with a means to meet such affiliates.  Point being eBay is likely meeting fewer and fewer search affiliates through CJ as time goes on.

A new report on “Which Anti-Spyware Programs Delete Which Cookies?” has been released.  Underwritten in part by Incubeta and executed by leading spyware/adware expert Ben Edelman, the research attempts to zero in on which advertising (pay-per-click, cost-per-acquisition/"affiliate") networks are being targeted by which anti-virus (AV) and anti-spyware/adware application providers. 

Why Another Cookie Study? 
In the case of cost-per-acquisition (CPA) networks like Commission Junction, Performics and Linkshare (the full list of networks studied appears at right) affiliates and publishers want to know if privacy-concerned users (shoppers) are using AV or anti-spyware/adware software to zap cookies that control their commissions.  No cookies, no dinero amigo!

Obviously networks (who’s compensation is tied to the affiliates’/publishers’) want to know too.  They appear to get a freebie on this one given how Incubeta and Edelman are making the study public. 

What’s New?
I asked Edelman to give Thoughtshapers readers the skinny. 

“Affiliate networks’ tracking systems—and hence their abilities to add value and to get paid—rely directly on cooperation by users and their PCs,” Edelman says. 

“With a factory-fresh computer and a cooperative user, tracking will work as affiliate networks intended.  But if a user becomes suspicious of tracking that’s perceived as privacy-invasive, the user can delete the cookies by which tracking occurs. And if a user installs security software cookies can be blocked or removed.  Either way, the affiliate and affiliate network don’t get paid.  This research indicates that such blocking remains widespread—that such blocking is performed by mainstream, widely-used anti-spyware programs. 

Consumers In Control
All of these cookie-zappers indicate that their customers are in firm control of who gets targeted for deletion and who does not.  Relating to Edelman’s above statement… in my viewpoint the affiliate networks are targeted by widely-used anti-spyware/adware programs; however, these applications are used among a relatively smaller, more “privacy-concerned” user group that differ from a wider set of consumers using AV software.  How?  Those who uncrate their shiny new PC and Macs (having pre-installed AV software loaded on them) are using a more blunt instrument against affiliate network cookies (they’re more concerned with virus protection).  How blunt?  According to this research AV software (the big players) doesn’t much damage affiliate network cookies at all.

The AV and security software vendors are absolutely rushing into the market to protect users against spyware and adware but it’s not an overnight process and today they offer less sophisticated detection and deletion capabilities on the spyware/adware front (as compared to more specialized tools like AdAware, Webroot, Xblock and Zonealarm).

In short, McAfee and Symantec’s Norton have larger user bases that are less sophisticated and less hyper-focused on Web privacy tools.  The affiliate networks have, with them, been let off the hook.

As I mentioned to ClickZ’s Kate Kay recently, I do think that if privacy concerns continue to escalate, and users respond by choosing (currently lesser-used) applications over the larger anti-virus players, the affiliate networks will need to figure out a way to get ‘un-targeted’ by the smaller, niche anti-spyware and adware firms.”

Edelman’s research also yielded an interesting and related fact. 

“It seems big ad networks and affiliate networks are disproportionately targeted by anti-spyware programs, while smaller networks are allowed to operate unimpeded,” said Edelman.

His research also indicated that Google’s cookie distribution methodology may have earned them a pass (among anti-spyware/adware applications) as well.  Edelman noted that Yahoo! Search is not as lucky and is being targeted.

In a world where marketers are increasingly concerned with how brand name and trademarks are used in the realm of search we find various legal “best
practices” emerging… for both Web publisher/affiliate partners and marketers.  Caught in the middle of the “typosquatting" issue—and so far avoiding legal troubles yet looking mighty foolish—are the affiliate networks (this time allowing typosquatting affiliates to send $190,000 in sales to Lands’ End, an act that violates its own rules aside from Lands’ End’s).

In the past I’ve taken note of typosquatting-affiliate cases in the European sphere where Web affiliates have prevailed over retail powerhouses like Tesco—proving that if the marketer and its affiliate network understand and, therefore, endorse what was going on they cannot change their viewpoint (on shady practices targeting consumer mis-spells of their domain name) with the wind and recover commissions from affiliate networks and/or Web affiliates.  In short, if you willingly let affiliates, under the watch of uncaring affiliate networks, do “the nasty” to you over a significant period of time they’re entitled to commissions.

In the latest case of typosquatting (thanks, Ben Edelman, for bringing it to my attention) we find Lands’ End attempting to use the Lanham Act (Trademark law) and Wisconsin State law to do battle with an affiliate who acquired lnadsend.com, klandsend.com, andsende.com, landdend.com (among many others) so as to place affiliate-referral cookies on consumers’ browsers that resulted in an illegitimate commission being issued through its provider, Linkshare Corporation. 

Why Is This Important?
This case demonstrates that while typosquatting may not be “false advertising” in the eyes of a judge, typosquatters can still end up in hot water.  The court is clearly concerned that affiliates profit through keeping their activities secret, while leveraging the marketer’s famous trademark.  The Anticybersquatting Act provides for substantially statutory damages, and if Lands’ End can prove direct harm, it could receive contract damages as well.  All in all, it’s a bad outcome for cybersquatters.

The Best Practice for Retailers
The Lanham Act failed to provide protection to Lands End (as “consumers were not in any relevant sense confused by the relationship between Lands’ End and the affiliate“ nor was the affiliate attempting to use the domains to profit through selling goods); hence, the best way to move forward against naughty affiliates is through breach of contract and fraud claims.  Details on the Lands’ End v. Remy affiliate typosquatting lawsuit provide further insight.

I have a very difficult time seeing how Lands End will love its affiliate marketing channel so much that it’s willing to let things like this go on moving forward—with any similar vendor let alone Linkshare.  Then again I’m proven wrong each day when I rise for my morning coffee and trench-level marketers continue to bury heads in sand and protect what they know is not a perfect marketing channel (rather than fix it).

Lost revenue from eBay was greater than expected over at Valueclick and its Commission Junction unit may be losing another large customer according to the rumormill, LowerMyBills.com.

eBay

“The decrease in eBay (revenue) was larger than we expected...”

This according to Valueclick (NASDAQ: VCLK) and from its second quarter earnings call.  That stated, the company decided to remove eBay’s numbers completely when reporting its affiliate marketing numbers, up 16% overall worldwide.  One can only conclude that this was done to prevent either a loss or a remarkably small gain. 

..."the remaining 1500 clients in affiliate marketing were growing quite nicely,” according to the company which puts affiliate marketing growth at somewhere just below 20% this year (target 2006). 

But how nicely?  That remains a mystery but in revealing its eBay surprise it needed to do some ‘splainin’.  What’s interesting here is that Valueclick’s admission (the key trend behind it) extends beyond eBay and into retail affiliate marketing, a revenue segment that it seems to be caring less and less about.  According to Valueclick…

“The three primary reasons for the eBay reduction were lower negotiated prices effective in January, different payouts to publishers, which are now being paid for performance post-sign-up, and eBay’s decision to buy more of their own keywords themselves versus through our affiliates.”

Source: Shop.org / National Retail Federation (2006)

Like retailers, eBay has decided to take back search.  Big deal?  Indeed, big deal… we’re talking about eBay here—a company that has historically boasted about the big checks it cuts to search-based affiliates.

Valueclick CEO, James Zarley additionally put all the speculation to rest with regard to Commission Junction’s Link Management Initiative.  Why?  Zarley states it plainly, as I have…

“What we have started to do is try and get our publishers to move their tags over to their JavaScript, because we believe that over time that it is going to be demanded more and more on the advertiser side.”

Zarley goes on to recognize that “more data for us” disguised as “advertisers want more control” isn’t a big winner with publishers so far…

“We got a response loud and clear from our publisher that they are not willing to do this on a wholesale basis, but we believe that over time, maybe it takes a year or two, that this will be the way that the market will go. So we are going to be patient with it. Right now, we are just working with our publisher on a one-to-one basis, and eventually I would anticipate that we will get there over time.”

Switching gears, Valueclick seems to be probing new territory—search services expansion (interesting in that advertisers are switching off of affiliates and onto agencies, Valueclick wants to be one of those agencies) among other agency-like products.

“We expanded our search engine marketing services department based on our own proprietary technology, and believe that it will produce additional revenue growth for us in the second-half of the year. We are also adding services in the area of website development and creative services bureau-related products, which in the past has been referred to outside vendors.”

News to me.  I wonder how Pepperjam Management and netExponent feel about these services.

LowerMyBills.com
Although the company’s affiliate manager job listing is still posted live at Monster.com the job may go un-filled.  According to my sources, the company’s largest lenders are fed up with LMB’s generating leads through affiliate marketing techniques.  Why I’m not sure but if I had to bet my life I’d bet lead quality has something to do with it.  Alternatively (or in addition) the high cost for media is only driven upward by affiliates when a lender is dealing with multiple sources for leads.  Translation: The more media cost associated in generating leads the more expensive the leads are—no matter who’s brokering them.

Keep an eye on ventures like Seth Goldstein’s Root.net and marketplaces or “lead exchanges” like LeadPoint.com (founded by Commission Junction’s founding CTO, Per Pettersen).  Don’t miss Seth’s brilliant Gesture Economy rants at his blog, TransparentBundles.  These companies are looking to revolutionize lead generation in some interesting ways.

John Grosshandler of eComXpo reports that the show has secured Linkshare CEO Steve Denton and a yet-to-be disclosed Google executive to keynote the virtual trade show’s next event et for October 24-26.  Google, a first-time presenter at the event, will use the event to make a special product announcement according to Grosshandler.

Platinum sponsorships are sold out with Google, MSN, Yahoo Search, Linkshare, Performics, Digital River and IMLive nabbing the slots. 

Says Grosshandler, “The full speaker roster won’t be announced for about a month but we’ll have about 40 presenters and it’s all free to consume for those who register at www.ecomxpo.com."

The company recently partnered with Fusionquest (Affiliate Summit’s choice as well) to run its affiliate program.

Tired of conferences promising professional education and delivering full blown sales pitches one after another?  How about those that keep repeating the same tired “best practices” (a.k.a. common sense from 3 years ago)?  AdTech blogger Carlen Lea Lesser isn’t tired of such sessions at conferences nor is she too ashamed to admit who really calls the shots when it comes to what gets discussed at Ad-Tech—sponsors.  While it’s common practice for sponsors to get stroked, issue strokes it’s another thing to have Sponsor Nazi’s (who’s business models are threatened by the real-life change sometimes discussed in sessions) stomping out valuable dialog.

None the less, Lesser wants more of that pat, dry drivel that you’ve come to expect from trade shows.  You know… the filler in between the parties and networking.  What’s more Lesser’s behavior (does she speak for AdTech??) would suggest the conference would rather run away from discussing the sometimes ugly and chaotic issues driving real change in online advertising. 

Lesser makes no attempt to hide the fact that her rebellious blog comments were inspired by an AdTech sponsor who was disappointed to hear a panel discussing so much gloom and doom (a.k.a. realities of a chaotic marketplace called online advertising; news flash, it can get ugly if you choose to actually discuss the real issues).  Nor does Lesser mention that the panel held every single audience member (with the exception of 2 clients of mine who needed to run for a flight) at the END of AdTech’s conference.

Rather than letting the audience cast its own vote on quality of discussion offered by panels at AdTech’s Chicago conference Lesser pummels away with her own take, setting aside the fact that AdTech puts speakers through a tedious, complicated, excruciating qualification processes.  Panel moderators are forced to repeatedly meet with panelists ahead of time and pre-qualify virtually every ounce of information they’re willing to share—thus ensuring a stellar session, right?  Wrong according to Lesser—time to pass the buck and hang the entire panel without review of attendee evaluation forms.

Not only does Lesser want to distance AdTech from its own responsibilities (insuring quality sessions) she goes further and calls for less reality-based discussion.  Quoting panelists loosely (and incorrectly quoting me) Lesser downplays serious issues by speaking cavalierly to them, ignores other critical issues discussed altogether and demonstrates shocking ignorance to the realities of the affiliate marketing industry. 

Says Lesser,

“In listening to what they were describing, it seems in that affiliate marketers are having problems with Google’s attempts to weed out trash like spam-blogs. And based on much of the conversation, it’s possible that many of the spam-blogs are affiliates.”

Spinning an issue into a “complaint” (that the panel dared express its opinion on) Lesser suggests that, “Apparently what’s bad for affiliate marketing is good for the rest of us.”

Lesser doesn’t stop there.  She goes on to belittle shock-waves made by Google in recent weeks—some of the biggest news to hit affiliate marketing, if not online advertising itself, in years (Google’s landing page quality announcement) and directs one of the smartest, most experienced (hello! she advises search engines) women I know in our industry (Amanda Watlington, phD) to MarketingSherpa for a brush-up.  What Ms. Lesser doesn’t realize is that Dr. Watlington is a source for MarketingSherpa.

Perhaps AdTech’s real mistake was inviting panelists who live and breathe the real world to speak on a panel that has “bring a pillow” written all over it.