My Valueclick (VCLK) acquisition checklist for MediaWhiz Holdings, Inc. is rounded out:

1) Former DoubleClick executive in place as CEO (and former DoubleClickPerformics founder, James Crouthamel recently appointed to ValueClick’s board)

2) A text link-based (TextLinkAds) ad platform in place at MediaWhiz—ready to duke it out with Google’s (GOOG) forthcoming PPA text link network

3) Commission Junction eBay (EBAY) revenues declining due to search being taken in house (would be great to buy a bunch of FULLY AUTOMATED auction publishers at this point)

4) Today AuctionAds is being brought into the highly diversified MediaWhiz family

Okay… so how is ValueClick going to lay off of this one?  As I see it, they’ll pick up MediaWhiz before the end of 2007.  If they don’t someone else will (namely, a privately held lead generation company looking to further diversify in hopes of an IPO… a company like QuinStreet or AllStarDirectories or perhaps Infilearn).  Or they’ll be rolled up just as Venture Direct was this week via Plattform Holdings.

Besides, it’s rather trendy to buy up your own distribution lately (Linkshare + Traffic Strategies, ValueClick + Mezimedia, heck even Google + Doubleclick!) and it makes sense from that perspective too.  Why continue to do business with MediaWhiz when you can just own ‘em?  Just like ValueClick acquired FastClick, WebClients, etc. etc. they’ll acquire MediaWhiz.  They are forced to, in fact.  MediaWhiz is simply too diversified.  They’re a perfect target and there will be competition for them as the online ad industry continues to roll itself up. 

Says lead generation insider and Weekly Insight audio program regular Lee Gientke, “With the Internet land-grab in full swing—Microsoft (MSFT) grabbing Aquantive, ValueClick grabbing MeziMeida, Google grabbing DoubleClick—there has been a deafening silence from eBay.”

According to Gientke, a business development pro over at online lead marketplace Leadpoint.com, revenues at eBay have been slowing and yet there has been a remarkable silence from that side of the Valley.  He ponders (and I can’t help but do the same) if they will wake up and make a grab for MediaWhiz themselves… for at its heart is a customer acquisition company that has the potential to spruce up some of eBay’s earnings.

Gientke seems to believe that they may also be interested in owning the distribution—to pump up eBay’s auction numbers but also to bolster eBay’s other investments.  Color me riveted!

As I see it, if Valueclick acquires Mediawhiz it can take back a lot of that revenue lost to eBay taking search affiliates out of its Commission Junction unit’s hands and into their own.  As I see it, Valueclick can also accomplish something it has failed to accomplish in the recent past—add scale to its affiliate marketing platform.  It can do so with the technology created by AuctionAds.  To what extent could Valueclick leverage this technology?  They could push Commission Junction advertiser offers (most of them) out to that publisher base (AuctionAds’) in a highly controlled environment.  This is exactly what Valueclick failed to accomplish with its recent CJ Unit’s “Link Management Initiative” which was rebuked by publishers.

Tragically, Valueclick (like so many other large, technically stagnant / backward affiliate marketing companies) will innovate through yet another instance of buying out a relatively small business—in this case a rather crude affiliate publisher, Jeremy Shoemaker) with a cult-like following of ”get rich quick and overnight“ affiliate-marketing wannabes. 

What do you think?  Is Experian going to sit this one out?

On how Google is leveraging its network of AdSense publishers to slowly-but-surely wean itself off of the same affiliates who fed them by setting up to compete…

“Instead of doing the obvious, such as inserting CPA ads on properties that would seem to cost them nothing, like Google.com, they use their publishers. Using the publishers, they gather data across disparate data points, with an indeterminate opportunity cost, as opposed to their main page that provides only one data point and has a much larger cost.

Once they figure out the metrics then, if they want to, they can move up the chain. This small test might seem like just another publisher release, but this could truly end up being the smallest big step towards the future of CPA and Google.”

Editor, DMConfidential

I had the good fortune of sitting down with intellectual property attorney, David Fish.  Together, we discussed a handful of intellectual property challenges presented by the Internet and online advertising. 

What is IP?  In simple terms ideas, literary works (copyrights), trademarks… all kinds of things. 

As consumers have quickly moved onto the Web marketers have given chase—largely through a variety of third parties (i.e. pay per click advertising, CPA affiliate marketing, search optimized pages, etc.).  Often these parties push the limits of the law in the name of profit.  It’s the digital Wild Wild West out there.  What should publishers and marketers each be aware of, in fear of and actively defending?  Tune in to find out.

RUNNING TIME: 28 minutes

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“With cost-per-click ads, spammers create bogus pages where confused consumers click on ads in an effort to escape.

But with CPA ads, clicking is not enough. The game is now to manipulate consumers not only to click, but to take some further action. And I don’t use the word ‘manipulate’ arbitrarily.

This is about turning the web into one big pile of junk mail, aimed at getting you to sign up, buy, or commit to something that you hadn’t necessarily wanted.”

Scott Karp
Publishing 2.0

Learn more about Google’s move into Cost Per Action advertising by tuning into Weekly Insight.  This week’s show can be streamed or downloaded below.

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By now you’ve likely heard of Google’s Pay-Per-Action Beta announcement wherein advertising is sold on “a new pricing model that allows you (the advertiser) to pay only for completed actions that you define, such as a lead, a sale, or a pageview, after a user has clicked on your ad on a publisher’s site.”

What you’ve likely not heard are brilliant observations from respected industry experts.  I’ve collected them for your consideration.

Peter Caputa IV
(via TechCrunch)

“... what if Google manages the risk for the publisher? It wouldn’t take much for them to compare an eCPM from different CPA, CPC and CPM offers and choose the right ad to run to maximize conversions and profit for them and the publisher.

The real reason that CJ, LinkShare, Amazon’s programs haven’t scaled is because they don’t have liquid markets:

1) Most small businesses can’s participate because of specialized knowledge, resources and investment required.
2) Most publishers can’t manage the risk, especially if they can sell high value ads f2f or phone2phone on a CPM basis.

Google COULD bring liquidity into the market by lowering the barrier to entry for advertisers to participate in CPA/PPA advertising and for publishers by choosing the ad that pays them the most, whether it’s CPA, CPM or CPC. We’ll see.”

Alan Rimm-Kaufman
(via TechCrunch)

“... the beta is only for content sites—eg the adsense network. That’s an important issue—that’s where all the fraud is. Another angle not discussed here in any depth yet is trust—some retailers reluctant to share conversion data w/ G.”

Aaron Mentele
(via TechCrunch)

“The text ad links will be something the advertiser chooses whether or not to support. Most of our clients wouldn’t support them for a few simple reasons. The first and most important is that they’re accountable for all messages marketing their products. If a publisher writes 0.0% APR, or guaranteed weight loss, it’s the advertiser that gets stung. Google doesn’t have a good way to allow advertisers to keep track of all the instances and the context surrounding them (’apply now’ text ad links.) Most of the big advertisers just won’t allow it.”

Pat McCarthy

Will this hurt lead generation or affiliate arbitrage?

I’m not sure I care. Businesses need to provide value, and if Google just made it more efficient so that it’s harder to arbitrage stuff, so be it. I’m not necessarily against arbitrage, but you can’t expect companies to leave things inefficient. Arbitrageurs are always looking for an edge, and most likely they’ll still find one somehow and somewhere.”

Sam Harrelson
In reaction to a statement I made questioning the strength of the Google Economy relative to the quality of visitors they’ll be able to deliver, Sam asks us to consider Google’s move as one that recognizes the predicted Attention Economy and throw away our old school thinking!

“‘Quality’ is as dead as (Web) links.
It’s not about quality (or quantity) anymore. This revolution happened in other industries and in the Academy almost 20 years ago and we’re just now getting it in the marketing world.

Advertisers are paying for attention, not quality leads or quality actions. That attention can be evaluated based on a certain number of metrics but our antiquated notions of ‘quantity’ are not one of those canons, or yardsticks, that will be used to measure.”

Put that in your pipe and smoke it for a moment.

Myself, I think it’s important to first note that, so far, Google is restricting the CPA option to its syndication network… indeed.  This has many implications as does the company’s suggesting it will enter into a familiar realm… text link ads.  Overall Google is taking aim at the fastest growing part of the Web: what most are calling social media.  The question is, will they open up a new realm to be gamed by their affiliates?  It seems highly likely based on history that the manipulating of consumers to take actions that they don’t really want to take is imminent.

On a brighter note, the opportunity exists for Google to

A) lower the (cost and complexity) bar for entry on CPA advertising while offering up their most valued (by advertiser) asset—scale

B) manage risk for publishers by calculating an eCPM and serving up the most profitable ad based on its secret sauce relevance algorithm

This entire move plays beautifully on advertisers’ love affair with scale AND relative disdain for actually doing the work—targeting and optimization that serves their better financial and customer-based interests. 

Bryan Eisenberg provides excellent perspective (from a higher level) at Conversionrater.com when he says…

“... most sites still struggle with converting visitors. Once you get good enough at converting visitors it is almost always more effective to buy CPM based on a lower price to your normalized cost per action. CPM are much easier to negotiate and like you said less risk to the publisher. There are not many publisher that are fond of risk.”

“Brands still matter on the Internet.  Most of your profits come from buying your own brand name.”

It is a “profound mistake by all of us to think we’ve figured out how to measure ROI on search.  We’re in stage one.”

Jeffrey Glueck
Chief Marketing Officer
Travelocity.com