Call it wasteful spending or marketing partnerships gone bad ("how was I supposed to know our affiliates were cheating?!") you’d better look out, Mr. Marketer.

Increasingly, CFOs are poking noses into Web marketing.  Why?  With all the buzz generated by Elliot Spitzer, adware, spyware, P2P downloads, affiliate cookie-stuffing and such bean counters have taken notice… and everyone from affiliate managers to CMOs are on the front lines of defending their practices.  As marketers continue to struggle with e-commerce fraud (to the tune of $2.8 billion this year, says Internet Retailer) they’re realizing that fraud comes in a variety of flavors… some more controllable than others.  Specifically, CFOs are finding that fraud emanating from their marketing department is an easy target given today’s hot-button issue: Trademark usage. 

As the “traditional” affiliate networks slowly open up (own up) to confessing what the true composition of their network really looks like, marketing departments find themselves in treacherous waters.  As Connie Berg, owner of Flamingoworld.com and Revenews blogger recently pointed out, marketers that have habitually approached affiliate marketing without paying much attention to how affiliates generate sales are in for rough times ahead.

Indeed, Berg is not the only one suggesting that affiliate marketing is in need of some very basic attention.  She is, however, one of a few affiliates who are taking her bold message to the streets… in fact, to lackadaisical marketers themselves.  She joins Anycoupons.com and Cashbaq.com’s David Lewis in preaching the benefits of working more intimately with a handful of trusted affiliates.  Of course, this is something that affiliate networks have not been able to execute well at… given that their original design (based on partnering with the teaming millions) conflicts with today’s reality (the 80/20 rule looks more like 98/2 wherein a minority of affiliates churn out the majority of results).

Says Berg in her comments at Revenews, “... when I come across blatant violations by affiliates that have already been known to be doing other things, I turn them in. Funny how some merchants won’t dump someone because of what I consider a major issue but will do something when their company trademark is involved.”

So it seems affiliates themselves hold interest in tidying up an increasingly tarnished industry.  I’ll be returning to the theme of CFOs interest in Web marketing again soon as it’s an increasing phenomenon. 

NBC and CBS are no longer thinking about crossing the road, they’re dodging traffic by embracing core concepts of the Cluetrain Manifesto.  To what degree?  For a buck or two fans of “Lost” and “Desperate Housewives” will be able to download commercial-free episodes for playback on their PC or other digital video device. 

As broadband continues to penetrate widely this is bound to lead to some kind of set-top integration I’m betting.  Even though, PCs are not only strategically located they’re simultaneously used (with other media) and with increasing regularity.  Thus, I suggest that downloading direct to a set-top device for easy playback makes sense.  Consider users like myself who use cable TV for entertainment and broadband Web access.  Then again, don’t expect the broadcast networks to get too cozy with cable companies… but what about other ISPs?  Whoops… many of them are, also, getting into the “content” game too. 

It would seem that ISPs are positioned fairly well in this regard but NBC and CBS are finally dipping toes in the pool.  Has the Tivoization of a nation forced their hand?  I’ve got to think so.

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?

The National Retail Federation’s Shop.org is increasing its offerings at the regional level thanks to volunteer members who are organizing successful events for e-retailers.  Known for offering outstanding networking and programming at the national level throughout the year, the e-retailing association is giving members the opportunity to engage each other more frequently at the local level.  The afternoon and early-evening events… featuring cocktails and a well-prepared yet casual dinner… are being organized in Dallas, New York, Chicago and San Francisco. 

“Shop.org regional events give our members an opportunity to gather with local fellow retailers in between national events, thus increasing the frequency of information sharing opportunities and without the travel costs,” Scott Silverman recently told me.

Members are coming together to network and gain insights on important industry issues and practices such as search, affiliate marketing, click fraud/PPC advertising and emerging technologies like RSS.  As usual, Shop.org’s popular (read: successful) retailer-only roundtables are back and feature open and honest dialogue between members.  Essentially, it’s “retailers helping retailers” and from what I have experienced it’s not surprising that members enjoy this feature. 

As an example, the San Francisco event focused one of its roundtables on eHoliday merchandising and marketing.  Here in Chicago, Crate & Barrel provided our group with fantastic facilities (including a tour).  Thanks go out to C&B’s fearless e-commerce leader, John Seebeck and Gordon Segal, CEO and Co-Founder of the company.

If you have ANYTHING to do with affiliate marketing, you need to hurry and register for Affiliate Summit 2006.  I’m actually speaking at this event, but when I look at the roster of top speakers, I’m not sure why!  Brilliant people such as Anne Holland from MarketingSherpa and Declan Dunn from Dunn Direct will be sharing their wisdom from the stage.  Other companies slated to present information include Amazon.com, Carat, Payless Shoesource, Endai Worldwide, and more.  I’ve not yet attended an Affiliate Summit, but I’ve heard the conferences are an amazing opportunity to learn and network.  I’m really excited to be attending, and hope you will check it out.  You can learn more about it by clicking here. 

If you do attend, be sure and let me know so we can meet up!

(The last Affiliate Summit SOLD OUT before the conference even started, so if you want to go, don’t wait to register!)

Should we be surprised that those comfortable (myself included) with Web-based shopping are more likely to serve themselves at a grocery or retail store?  Probably not but I have to admit that the words “Unexpected item in bagging area… remove unexpected item...” have left me, more than once, abandoning the “convenience” this seemingly retarded technology offers (so far).

Reports Internet Retailer Magazine...

“Forrester found that a web buyer is 28% more likely than a non-web buyer to use a self-checkout system. This year, 61% of all North American consumers have used self-checkout, compared with 71% of online consumers and 80% of web buyers.”