Robert Rose’s recent “predictions for e-marketing in 2006” piece is worth a read in its entirety but a few jump off the page as being remarkably insightful. 

Rose suggests…

“You have to develop a trusted relationship by providing value to the relationship before they’ve bought from you.  In 2006, savvy marketers will begin to create programs that establish that relationship.  This is primarily going to come in the form of content.  Whether it’s a how-to on using products you sell, or creating affinity based content that relates to your customer base, it will be up to the digital marketer to create independent, high-value content for their customers.”

If word-of-mouth (WOM) marketing Kingpin, Brian Clark were here he would suggest, “duh!”

My angle is to follow this brilliant prediction (which is rooted in many early signs of market shift from professional associations to mega brands active investment in WOM marketing) with a question:  “Isn’t this a big opportunity for what the world knows as ‘affiliate marketing?’ Moreover, will affiliate marketing be trumped by WOM campaigns that quite literally reach beyond the Web and take to the streets, television, radio and multi-channel marketing venues?”

Perhaps they can co-exist?  If “We’re all publishers” as Rose suggests will affiliate marketing be—just as WOM marketing is—challenged to be more transparent and less filled with tomfoolery, media arbitrage?

Rose also predicts…

“Look for turnkey and specialized suites of technology solutions to emerge for marketers to make, distribute and generate leads from this content—whether it’s content publishing systems, podcasting or webcasting.”

This suggests that current frameworks/technology platforms may be either outdated or threatened.... and ties loosely with his prediction that Google will lose market share in the contextual ad space as well as move aggressively into competing with CPM/image ad networks DoubleClick and 24/7.

In February, the CMO Council published a joint study with the Promotional Marketing Association that proclaimed a majority of marketers admit that they, themselves, do not have a “very good” level of understanding when it comes to e-marketing.  Combine this with the CMO Council’s new report suggesting that a majority of those surveyed are not “well regarded and respected.” In fact, only 10% report being viewed by executive peers as “highly influential and strategic.”

“This study confirms marketers need to move from a tactical orientation to a more analytic and strategic approach that will enable them to realign marketing initiatives with the overall corporate mission,” said Donovan Neale-May, executive director of the CMO Council.

MarketingVOX reports two-thirds of CEOs (polled in a separate survey by Chief Executive magazine) said their marketing groups are “mission critical” for creating top-line growth.  Duh!  Outside of sales and marketing who’s left?

What has the power to change such perceptions and why do technology marketers care to know so little about tech-based marketing?  What will shame them into action or will the “can’t live with ‘em, can’t live without ‘em” attitude CEO’s possess simply provide them with an insurance policy on remaining employed?

Tivo… the supposed ad-killer… now aims to become the advertisement helper.  Let’s face it, ads can be helpful to consumers when they’re actually interested in being influenced, pitched to, etc.  This is a large appeal of search marketing - consumers can find what products they want.  So… Tivo doesn’t want to stop at helping consumers tune out commercials; now they want to help TV watchers tune into relevant ads when they want them. 

Sounds like a Google-killer to me.  Hu?  Think about it: Does the Almighty Google.com (in its current state) help you or hinder you in your search for relevant ads or commercial information?  I tend to find its user interface cumbersome and riddled with garbage (i.e. type in just about any irrelevant word and receive “Looking for ______?  Find exactly what you want today.  eBay.com").  I’ll skip the “thanks to affiliate marketing programs” rant on this one.

Could Tivo beat Google to the punch by offering a better way for consumers to tune INTO advertisements?  Could Tivo give consumers complete control over advertisements and, thereby, become a more useful and popular utility?

*** THIS JUST IN *** December 2, 2005
MarketingVOX reports Tivo is stepping up the pace and getting into e-commerce.  Subscribers can now search local movie listings, purchase tickets, download music and exchange photos via Yahoo.

As you may know, eComxpo lives on for those of you who were able to snag a 90 day pass.  Myself, I couldn’t help but notice some of the outstanding information the conference continues to provide our industry. 

This year, Shawn Collins of ShawnCollins Consulting (and, of course, The Affiliate Summit) asked the following questions to his session attendees:

How do you recruit most of your affiliates?

To my continued amazement, nobody has taken Collins up on his dynamite best practice - that of using direct mail to recruit affiliates.  That stated, getting an actual mailing address on these characters can prove to be difficult… but perhaps not if given the right tools.  That stated, in today’s day and age, affiliates who hide (do not provide their contact details with Whois registrars and/or use Domains By Proxy to evade detection) should probably earn less consideration by marketers.  After all, what’s to hide when doing business together? 

Of course, I also know a place where you can find 200 top producing affiliates complete with names, address, email addresses and most of the time phone numbers… all of them eager to hear from potential marketing partners.

Which affiliate directories list your program?

Once a popular way to promote your affiliate program, directories have fallen out of fashion… probably given that there is no clear leading index and the data within them goes stale pretty quickly.  Combine this with the fact that affiliates know where to find marketers with affiliate programs—inside affiliate networks—and its no wonder directories have collected so much dust.

What is the strongest affiliate vertical for your program?

Here’s a great question that doesn’t focus on recruitment and responses are all over the board but, once again, look at how search stands out as the leader.  Is it any wonder?  Not to me as I just got done reading MarketingSherpa’s Search Benchmarking Guide book. 

What are affiliates suggesting is the biggest challenge for them looking forward?  Nearly SIXTY percent report their inability to control the search environment (paid and natural/algorithmic) as their biggest headache. 

eComxpo is already promoting its 2006 event and with 5200 registrants this October (and a solid line of sponsors) they’ve got a serious head of steam. 

It’s rare for me to quote others verbosely but this time I must as there’s so much value in Kevin Lee’s words.  If you find yourself wondering how to invest in performance marketing companies and/or networks or where to assign Web marketing budget dollars in 2006 listen up.

“One thing to remember: even with the VC money flying, industry players (marketing/advertising networks, services, vendors) are in it for the money. When you choose to shift the media success risk onto a publisher or network, that publisher or network works to maximize return on a limited number of search (or contextual) impressions. Even the pay-per-click search networks (e.g. Google), which bill on a cost-per-click basis, determine whether and where to run your ads (i.e. your ad position), based on their profit level from your ad versus that of other marketers participating in the marketplace.

The same organizations that were considered publishers two years ago now offer agency services.  Other publishers have become ad networks; they barely own any of their inventory but instead offer other publishers’ revenue share.  Agencies are spinning off publishing or network divisions, tempted by the high revenues that come with counting media as revenue (not just their fee billings).  Ad-serving and targeting technology providers are building their own publisher networks.  It’s a jungle out there.”

So says Kevin Lee, co-founder and executive chairman of Did-it.com, LLC.  Last week, Lee, who is also the Chairman on SEMPO), made these stunningly honest and insightful comments via his ClickZ column. 

Lee calls the environment a jungle.  Indeed, as it involves companies are positioning themselves for a variety of reasons ranging from courting venture capitalists to positioning in the public market… an increasingly confused one wherein fund managers, private and institutional investors still have a difficult time understanding how Google makes money in cost-per-click (CPC) advertising.

Lee’s advice? 

“I recommend you step back from all the sizzle and think about your business fundamentals. Where do you want your business to be in the next quarter? Six months? Next year? Often, choices require you to trade off growth or market share against short-term profitability. Which are more important to you and your executive team? If profitability is a factor, make sure you know what your most profitable customer’s profile looks like. If you know that, you can have informed, intelligent discussions with the multitude of agencies, publishers, networks, and technology companies to help determine the best way to move your business forward.”

Lee hits nail firmly on head and is clearly in touch with what I view as a serious problem among many retailers and Web marketers - trading long-standing, often branding oriented (consumer facing) long term concerns for short term gains.  The words “search marketing” come to mind as do “affiliate search arbitrage” wherein marketers engage in search marketing via a virtual free-for-all stemming from a “well… I just don’t have time to figure it out so I’ll entrust it to someone else and hope-for-the-best” attitude.

What Lee signals here (and he’s not coy) is that there will likely be big winners and, perhaps, some big losers in a world that is comprised of networked, service-based businesses that are racing forward… yet have very little idea of what they’re going to be when they grow up.  The risks have never been higher for buyers of media and/or performance marketing services. 

Where will Performics end up given that DoubleClick is back private again?  What conflicts-of-interest might arise as companies like ValueClick and aQuantive race forward gobbling up networks, publisher Web sites, shopping comparison properties and marketers themselves?  At what point might customers, as an example, not like to compete head-to-head with their vendors?  If I was CarrotInk I’d be thinking in these terms.

And what about Linkshare’s recent acquisition by Rakuten?  Although you can bet Linkshare and ValueClick will be choosy about what businesses they’ll be getting into this is a concern.  So far they’ve gone straight to the fat margin businesses (i.e. inkjet cartridges) where they can sell very cheaply via networks of publishers that they, of course, own.  Nothing like free media to enhance margins!

Lee concludes with…

“With all the new players, emerging marketers have a difficult market to navigate. The sales pitches all sound great (if astoundingly similar). The booths look snazzy, and the salespeople are willing to entertain at the nicest restaurants where drinks flow freely…

Five years ago, the industry woke up from a period of excessive sizzle with a major hangover.  Let’s hope this time, solid business fundamentals keep the industry humming along on a strong growth patch with no major bumps.”

Indeed but what this industry needs is less hype and spin… not more.  We need more honest dialog about what’s really going on here.  Only then can investors and marketers themselves make educated decisions.  Kudos to Kevin for giving us some.

Meet Greg Shepard.  Greg is CEO of managed affiliate solution provider, NetTraction.com and he’s pitching a new approach called “Cost-Plus-Performance.” Well, it’s not really new of course but when viewed through a more “traditional” marketing lens it’s clearly out-of-the-box. 

Why the new model?
Shepard and his team are, likely, onto the increasing (read: pent up) demand coming from advertisers who engage in old-style affiliate marketing strategies.  Specifically, they want to work in more creative ways with affiliates.  Why?  Affiliates that command unique audiences are demanding it.  The “virtual sales force” is asking for a base salary.

As Shepard says…

“... now there is a way for merchants to now offer a win-win, where both merchants and affiliates have a vested interest. Improving technologies now make it possible for the formerly CPS, CPA, CPL performance programs and the CPM, CPC and flat advertising models to unify creating a new hybrid that I call the Cost-Plus-Performance model.”

What new technologies? 
Well… probably not those of Linkshare, Performics, Commission Junction and the more well-known affiliate marketing networks who seem forever locked into stagnated, in-flexible platforms.  Indeed, such networks have partnered with the likes of Omniture and other Web analytics solutions but this offers little help to advertisers that yearn for flexible payment arrangements with affiliates like FatWallet.com and other powerhouses who have more to offer advertisers… or who are not satisfied with a “pure CPA” relationship.  Currently, if an advertiser works with an affiliate solution provider that only facilitates tracking and reporting on “pure CPA” relationships, a solution must be cobbled together… a situation that the folks at Mercent seem to have their eyes on as well.

So… what does NetTraction have to offer and what about more flexible solution providers like Kowabunga?