I’ve been a long-time proponent of web analytics, requiring all of my clients to implement analytics, writing articles in trade magazines, and staying abreast of changes in the industry.  But yesterday’s announcement by Google of providing the Urchin services for FREE really blew me away. 

I’ve looked over their offering, and it seems quite robust.  It appears to offer about 95% of the features offered by competitors costing $1,000 per month or more. 

On the down side, I’m reading in several places (DM News, Web Analytics Forum, etc.) that there should be some concern about privacy issues, and Google using the data collected “against you.” From what I’ve seen of Google, these concerns may not be entirely off-base.  You can be sure that Google will use the collective and individual intelligence they glean from the web data gathered from this “free” program.  Yes, they will probably use it to set and negotiate pricing for current and future advertising mechanisms.  That may be bad.  However, they may also use it to find new ways to maximize the collective advertising dollars of everyone that plays.  Let’s face it, Google is a significant source of revenue for many companies.  If Google uses the collected data to continue to improve their offerings, and thus improve the revenues and profits of thousands of businesses, is that really a bad exchange for letting them peek at your data?

Sound off with your views…

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. 

When first announced, I recall a lot of head scratching inside the performance marketing community and online advertising in general. 

Tom Taulli of Forbes.com has done a fantastic job of presenting some interesting perspectives on what he calls the New Skype-eBay Ecosystem.  Says Taulli,

“Simply put, Skype-eBay wants to break the mold of the traditional telecom industry. Revenue won’t be generated from per-minute charges; rather, it will come from providing premium services. And, no doubt, Skype-eBay wants to be the de facto platform for this new communication system.”

In his interview with Saul Klein, the VP of Marketing for Skype, we learn that “New types of services are possible,” according to Klein.  He uses this example:

Suppose a San Francisco businessman needs to conduct a call with a potential client in Rio. He can search for Portuguese translators on eBay and get a list of them, their location, their rates and their ratings by other users. He selects one and can then instantly conduct a three-way conference call via Skype and pay for the translation service via PayPal.

Further, Klein outlined four areas where other companies will benefit from the Skype-eBay combination: hardware, software applications, voice services and personalized Skype content.

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.

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.