“Affiliate marketing programs are commonly used by large and small companies as a low-risk means of obtaining new customers. However, some affiliate marketers have been plaguing search engine marketers for years....

When your ad is competing against an affiliate ad, the one with the higher quality score wins, so a bidding war begins for visibility. As a result, costs per click increase and the advertiser is the loser....

Do not be afraid of affiliate programs. Enact an Affiliate Rules of Engagement that prohibits using paid search as a channel.”

Janel Landis
SendTec Inc.

“Engagement is not a metric that anyone understands and even when used it rarely drives the action / improvement on the website. Why?  Because it is not really a metric, it is an excuse.  An excuse for an unwillingness to sit down and identify why a site exists.  An excuse for a unwillingness to identify real metrics that measure if your web presence is productive.  An excuse for taking a short cut with clickstream data rather than apply a true Web Analytics 2.0 approach to measure success.”

Avinash Kaushik
Analytics Evangelist
Google Inc.

“I think you’re crazy if you try to use the Internet to brand something… branding only works for a few really big, mature companies. Let me put it to you this way: As someone marketing products, I think branding is a fool’s notion. But as someone who sells ads, I think it’s a gift from heaven.”

Brian Shuster
“Porn’s Prince of Pop-ups”

“We’re not in the business of keeping the media companies alive. We’re in the business of connecting with consumers.”

Trevor Edwards
Vice President, Global Brand & Category Management
Nike

Via The New York Times

Upon being named CEO…

“The whole idea of a siloed e-mail provider as a business moving forward is limiting. I think there is a tremendous opportunity to combine e-mail marketing with other interactive services.”

Al DiGuido
CEO
Zustek
(Via Direct Magazine’s Ken Magill)

Yup.  Take a look at J.L. Halsey Corp.—they understand as much and posted record quarterly revenue.

It seems that few understand what’s really going on behind Microsoft’s (MSFT) acquisition of Jellyfish.com.  Analysts are poo-pooing it as “not a ‘game changer’” as Microsoft’s Steve Ballmer suggested the company would be offering up.  Not so fast, David Hallerman of eMarketer.  Google understands the game is about to change and is moving.  MSFT is paying attention and is locking up intellectual property in this move—one that combines multiple, successful and innovative digital shopping models.

According to Sam Harrelson (CostPerNews.com, Revenews.com), he sees

“... the Jellyfish.com acquisition as another sign that Microsoft is aiming more for the merchant/retail segment of online advertising rather than the shotgun approach of Google (GOOG) with AdSense and Yahoo’s (YHOO) with its publisher network.  Instead of focusing on context, they seem to be coming at the online advertising space from a very ‘vertical-minded’ approach.”

I agree.  As well, they’re attacking in a very deliberate manner with a fundamentally different approach to Web advertising and media. 

MSFT’s approach is and will continue to be much different than GOOG’s or YHOO’s—who have relied for too long on highly “open” and, in fact, vulnerable (to systematic gaming by third party affiliates) advertising platforms.  Of course, this has enriched each company—wildly so—but for how long? The writing is all over the wall (i.e. FTC probing VCLK’s use of incentivized marketing, mounting class action lawsuits aimed at GOOG and YHOO’s traffic ‘quality’ claims as compared to what they deliver).

What’s next for Web advertising?  NOT what we’ve seen and MSFT is all over this notion.  They’re bring more structure to the table—less chaos wherein third party affiliates feed them. Web advertising is becoming more deliberate… it’s being tamed and reigned in.

Advertisers have been slow to wake up to the “slop” that passes for ROI and return on ad spend. They’re beginning to measure and what they’re seeing is not pretty.

The “it’s not a game changer” conclusion relies on things not changing much in terms of how the Web gets monetized.  Even Google understands what’s coming next—a slow-down in pay-per-click ad model spending.

Proof’s in the puddin: Look no further than Google’s:

1) Launching a cost-per-action ("pay-per-action") ad model
2) Launching a tool allowing advertisers to manage (automate placement of) pay-per-click ads against a pre-defined cost-per-action

Google understands the game is about to change and is moving.  Is anyone paying attention?  MSFT is and they’re locking up intellectual property in this move—one that combines multiple, successful and innovative digital shopping models.

Jellyfish takes a best of breed approach and “mashes them up” to the amusement of consumers: Ebates + Woot.com and on the advertiser-side, eBay’s Shopping.com + Google’s AdWords auction environment + Commission Junction’s (VCLK) performance-based cost model (cost-per-action) with a twist of Google (auctioning off ads).

It all ads up to valuable IP that Google, in theory, cannot access.