Marketing Pilgrim

It appears as though Amazon’s email to affiliates regarding North Carolina’s pending taxes was not a bluff. I just received a follow-up email from the company saying it has decided to shut down its affiliate program in the state, as of today.

We are writing from the Amazon Associates Program to notify you that your Associates account has been closed as of June 26, 2009. This is a direct result of the unconstitutional tax collection scheme expected to be passed any day now by the North Carolina state legislature (the General Assembly) and signed by the governor. As a result, we will no longer pay any referral fees for customers referred to Amazon.com or Endless.com after June 26. We were forced to take this unfortunate action in anticipation of actual enactment because of uncertainties surrounding the legislation’s effective date.

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It appears the Federal Trade Commission is continuing its sloth-like race to enact new standards for bloggers that don’t currently disclose compensated endorsements.

The AP does its best to make bloggers out to be "quite different" from the "journalists" that work for mainstream media–and therefore must all be on the up-and-up, right? So, I’ll spare you the fluff and cut to the chase:

New guidelines, expected to be approved late this summer with possible modifications, would clarify that the agency can go after bloggers — as well as the companies that compensate them — for any false claims or failure to disclose conflicts of interest.

It would be the first time the FTC tries to patrol systematically what bloggers say and do online. The common practice of posting a graphical ad or a link to an online retailer — and getting commissions for any sales from it — would be enough to trigger oversight.

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It appears that North Carolina is about to follow New York’s lead and implement a tax collection scheme that will see Amazon.com shut down its Associates affiliate program in the state. Today, all Amazon Associates in NC received this gloomy email from the online retailer:

We regret to inform you that the North Carolina state legislature (the General Assembly) appears ready to enact an unconstitutional tax collection scheme that would leave Amazon.com little choice but to end its relationships with North Carolina-based Associates. You are receiving this e-mail because our records indicate that you are an Amazon Associate and resident of North Carolina.

Please note that this is not an immediate termination notice and you are still a valued participant in the Associates Program. All referral fees earned on qualified traffic will continue to be paid as planned.

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Maybe I’m not the best qualified to make assumptions about why Amazon Associates–the online retailers affiliate program–just pulled the plug on allowing affiliates to send referrals via paid search, but that doesn’t stop me from making an educated guess.

PPC Arbitrage.

I suspect that Amazon finally realized that it could do its own keyword bidding and cut out the middle-man–those bidding pennies on long-tail keywords and making dollars in affiliate commissions. Here’s the email that Amazon just sent out to its affiliates:

Dear Amazon Associate:

We’re writing to let you know about a change to the Amazon Associates Program. After careful review of how we are investing our advertising resources, we have made the decision to no longer pay referral fees to Associates who send users to www.amazon.com, www.amazon.ca, or www.endless.com through keyword bidding and other paid search on Google, Yahoo, MSN, and other search engines, and their extended search networks. If you’re not sure if this change affects you, please visit this page for FAQs.

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Amazon had a great fourth quarter as reported today in the WSJ. Sales were up 18% and profits rose 9%. Those numbers are pretty strong when things are going well but in today’s economy these are outrageous results.

Here’s a few more numbers to drool over. Earnings of $225 million for the quarter ended Dec 31st. This is compared to earnings of $207 million for the same period a year earlier. What’s that you ask a company that’s experiencing growth year over year in this environment? Yup, that’s right. Oh and the $6.7 billion (with a “b”) revenue number for the quarter is very impressive indeed.

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Whether you’re a merchant with an affiliate program, or an affiliate marketer, you won’t want to miss Affiliate Summit West. The event takes place Jan 11-13 at the Rio All-Suite Hotel & Casino in Las Vegas and is your chance to learn from expert speakers and network with fellow marketers.

Group rates are available, as are sponsorship packages, but you’d better register early–paying on site will cost you an extra $500!

I’m moderating and speaking on the panel "Managing Your Brand"–providing advice for both merchants and affiliates–and, if you can stay an extra day, I still have some space for my Online Reputation Management Workshop.

I hope to see you there!

You guys remember LIFE magazine, right? Known as a scion of glossy photojournalism, Life was published in one form or another until last year (with a few gaps, of course). And like any publication, Life had a good amount of material that it was never able to use. But now Life’s parent company, Time, has found the perfect use for its photo archives—digitizing them with Google Image Search.

Google announces today the LIFE collection in Google Image Search. Google will be digitizing all 10 million of the archived photos, drawings and etchings over the next few months, with 20% of the collection already available.

Although Life was originally founded in 1883, its photo archive includes images dating back to the 1750s, some of which have been donated to the Life archive. The Google digital archive is searchable, but the results are also “blended” into Image and other Google Search results. Older results, of course, are most likely in the public domain, as Google Blogoscoped notes.

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Affiliate marketers in New York have reason to follow politics – and it’s not the presidential race. Instead it’s a new law (pdf of law) that has retailers collect taxes for sales through affiliate marketers based in New York. The law applies to all online transactions for companies that have no physical presence in New York. It starts June 1, 2008.

The bad idea started with Governor Spitzer, and was recently signed into law by New York’s new governor David Paterson. They figured it would be an easy way for them to collect more taxes. Affiliates make money by referring people to products and services online. They get a commission when someone makes a purchase.

To avoid the tax, affiliate programs have started kicking out affiliates who live in New York. Otherwise, the merchant will have to charge sales tax on those orders. Affiliates are outraged, and so are many of the merchants they promote.

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When Google decided to buy DoubleClick, it sent some shock through the search marketing industry. DoubleClick has owned Performics, the third largest affiliate network, since 2004. Performics not only provided affiliate marketing services, but also search-engine marketing (SEM) and search-engine optimization (SEO) services.

Suddenly it looked like agencies would be competing against Google – a serious conflict of interest. Agencies were suddenly worried that Google would give away the services that they sold to clients. And Performics may get unfair advantages, such as insight into Google’s algorithms (more details from InfoWorld).

Clients of SEM and SEO companies likely wouldn’t like the conflict of interest either. Clients want to save money, Google wants those same clients to spend it on more advertising.

This afternoon Google announced that they split Performics into two divisions and are selling the search marketing piece. The Google blog explains:

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I don’t know if this had anything to do with Shoemoney’s cajoling but eBay is going solo and bringing their affiliate program in-house. They’re calling it the eBay Partner Network and launched a new blog about it.

As of April 1, 2008 the program will be dropped from the largest affiliate network – Commission Junction. They handle the reporting and pay affiliates in behalf of customers like Yahoo!, Home Depot, and Buy.com. Commission Junction is owned by ValueClick (which recently had some bad news of its own).

eBay started their affiliate program in 2001 and it has more than 100,000 affiliates globally. For those unfamiliar, an affiliate marketer is a person or business who promotes eBay’s products on their web site, blog, or forum and makes money each time they refer a sale.

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Affiliate Summit, a conference for affiliate marketers and affiliate managers, just ended in Las Vegas. I usually attend but I didn’t go this year. Gary Marcoccia at AvantLink told me about a new affiliate tool that debuted at the Summit, that I wish every affiliate network had. AvantLink is a smaller network of affiliate programs.

The tool is called the Affiliate Link Encoder (ALE) and it makes the process of adding affiliate links automatic. Any time you link to a product or service with a merchant in Avant Link’s network, a piece of javascript automatically changes the links redirects it to an affiliate link. As an affiliate this would make my job much easier, because it’s so tedious to change your links one by one.

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Microsoft has launched a new affiliate program for paid search ads (Microsoft adCenter) and their security and PC backup service Windows Live OneCare.

There are two ways Affiliates can earn cash.
1. Each time someone signs up for a free trial of Windows Live OneCare.
2. The Microsoft adCenter program – which I can’t find details about – but you can earn cash each time someone you refer from your site signs up for paid search ads.

They are launching Microsoft adCenter with a $50 ad credit for your visitors (Andy ought to sign up Marketing Pilgrim!).

Microsoft will provide the banners to put on your blog or web site. I can’t find figures on their payouts.

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