Affiliate Marketing
Affiliates May Be a Tax Liability! Amazon Sues New York…
The New York Times is reporting on Amazon’s lawsuit contesting the recently enacted New York state law which requires online retail outlets to collect sales tax on items sold to the state’s residents.
Slashdot sums up the new tax law:
“…based on a novel definition of what constitutes a presence in the state: It includes any Web site based in the state that earns a referral fee for sending customers to an online retailer. Amazon has hundreds of thousands of affiliates–from big publishers to tiny blogs–that feature links to its products.”
We should all support Amazon in their fight. This could affect all of us who buy online in the future — at least in the United States. Let’s all buy something from Amazon today to show our support of their fight.
P.S. - If you need a suggestion on what to buy, you can always pre-order our next book, Always Be Testing.
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Written by:Bryan Eisenberg
What Price Will You Pay for Action at Google?
Barry Schwartz reports that Google has just launched Pay-Per-Action ads.
According to Schwartz:
Google Pay Per Action will allow advertisers to create ads that cost only when a desired action is triggered. The advertiser sets the price per action; for example, an advertiser can decide to pay $5 per lead acquisition, as opposed to paying per click or per impression.
The New York Times ran an article on the subject entitled “Google Tests an Ad Idea: Pay Only for Results.”
Says Times reporter Miguel Helft:
Many advertisers find cost-per-action appealing, as it greatly reduces their risk, since they are not charged for ads that are ineffective. The model has long been used online by “affiliate marketing” companies like ValueClick, which have created networks of hundreds or thousands of Web sites that display small ads for e-commerce sites. The publishers are paid when they refer a user who makes a purchase.
But many other companies are using cost-per-action ads in different ways. They include the search-engine start-up Snap, which displays cost-per-action ads next to search results, and Turn, a network that matches advertisers and publishers interested in cost-per-action ads.
We think it is a model that all the large players in search will be embracing over time,” said Tom McGovern, the chief executive of Snap.
For the time being, Google is not putting cost-per-action ads next to search results, limiting them to publishers’ Web sites and essentially creating its own affiliate marketing network. Industry insiders said Google’s entry into the market was likely to accelerate its growth.
Insightful as always, Scott Karp asks on his Publishing 2.0 blog “Can Google Transform The Entire Web Into A Direct Marketing Machine?”
Google’s contextual advertising revolution has already transformed the structure of the web, leading to the creation of millions of web pages with no other real purpose than to serve AdSense ads. The content on these pages is purely a vehicle for advertising — the traditional Chinese Wall between editorial and advertising has been obliterated. And it has force many publishers who follow a more traditional editorial path to start poking holes in the wall. Content has always been a marketing vehicle, but never at such a granular, easy-to-manipulate level.
With its CPA program,” Karp continues, “Google will drive this phenomenon to the next level. 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.
Google must know that most CPA (Cost Per Acquisition) deals waste publishers’ time because they aren’t very often effective and haven’t actually been optimized. Traditionally, instead of offering an optimized offer, people mash-up an ad and a landing page, then try to convince publishers to risk the deal. Publishers pay with their time and inventory. Since Google’s CPA deal is automated, it won’t waste time but could waste inventory.
I’ve always found that it’s more effective for an advertiser to spend the time developing an optimized offer–often using cheap CPA or very cheap CPM inventory–to maximize conversions. Once you establish your baseline cost-per-action, go ahead and buy CPM inventory at about 10-20% the cost of baseline. However, the optimization cycle must come first! Google offering CPA advertising will most likely bring around a new batch of lame and lazy advertisers, the mediocre ones that currently are avoiding their own risk by not even paying for traffic on a CPM basis today.
Will Google enforce a minimum conversion expectation? And, if so, how? What will the minimum be?
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Written by:Bryan Eisenberg
Below the Tip of the Iceberg
It’s not easy being married to a consultant and an author who travels as frequently as I do, so this Valentine’s Day I wanted to knock one out of the park. I decided to romance my lovely wife with a no-brainer: a pair of diamond earrings.
I started as any modern, connected man would; I searched on Google for “diamond earrings.” I then visited the big-brand diamond sites. After a handful of clicks, I didn’t find what I was looking for. But I did find something else: a diamond mine of e-tailing opportunities.
It should come as no surprise that I’m squarely in the uniformed category when it comes to diamond earrings. So I continued my search, clumsily clicking through category page after category page, site after site. Sooner or later I was bound to find the earrings I’d envisioned dangling from my wife’s ears. I felt trapped in my own ignorance.
I decided to expand my search with more descriptive terms. I began to lose patience. Just as I was losing hope, I found a site with the handle I needed. The style of earrings I was looking for are called drop earrings.
This cycle of ignorant buying repeats itself hundreds of thousands of times a day, in thousands of different product and service categories. Sometimes the e-tailer wins, sometimes the offline seller wins. Sometimes, nobody wins and credit cards remain sheathed in wallets. Just because prospects don’t know how to search the way you hope and expect them to doesn’t mean they aren’t qualified and ready to buy.
Continue reading my column on ClickZ…
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Written by:Bryan Eisenberg
