To answer this question, I decided to pick up the phone and fire up my email to reach out to a few successful affiliate marketers to get their thoughts on the reality of the affiliate dream.

Nick Reese

Nick Reese is the author of “How to Turn Traffic and Trust into Sales” and has been promoting affiliate offers since 2007. Nick is a powerful force in affiliate marketing and has made a ton of money promoting affiliate offers across a wide range of industries.

When I asked Nick if he thought the affiliate dream is real, he replied “This really depends on how the affiliate dream is defined. Replacing your income through affiliate marketing is definitely a reality however most people fail because they try replicate what other people are doing.”

Nick’s take is to be creative and find your own niche. If you’re just copying what other people are doing, you’re going to have a hard time quitting your day job.

Nick’s own journey to quitting his “day job” (an email marketing company he founded) took him 2 years. 2 years is far from “get rich quick” and Nick is a pretty sharp guy. When you’re ready to dip your toes into affiliate marketing, be prepared for a long hard fight.

To help you with this fight, Nick addressed what he felt was the biggest mistake affiliate marketers make “In a word. FEAR. Each of us has our own issues we have to overcome. Mine was fear of learning to code, fear of trying out new things, fear of failure, and fear to spend money to test an idea”.

Adam Riemer

Adam Riemer is an online marketer and the President of Adam Riemer Marketing, LLC. Adam has over 10 years of experience in running and managing affiliate campaigns and online marketing campaigns. Adam is a conference speaker on affiliate marketing at Pubcon and Affiliate Summit, among others.

Adam feels the affiliate dream is real commenting “Yes, they (affiliates) just have to be willing to learn, work hard and be realistic. Just because the site or ad is theirs does not mean it is the best. Listen to criticism and learn from it. Then put in years of hard work and learn from your failures.”

Adam is pointing out that to succeed, you must first fail. Failure helps you learn lessons and identify opportunities. Learning from these failures will help you adapt as you promote offers and grow your website.

Adam has some killer tips for avoiding pitfalls with your affiliate marketing campaigns. Adam warned against “Impatience and unrealistic expectations. Many of them (affiliates) throw up a banner farm and think it is value adding. Others will write 5 articles and wait for the money to come rolling in. A final common mistake is buying traffic and visitors through exchanges which is not real or targeted traffic. None of them realize how hard it is to build a site, build traffic and then work on your conversion rates until they give up and claim it doesn’t work”.

In short, Adam wants you to focus on the sale by targeting visitors with a high purchase intent. By building quality traffic, affiliates can get a better picture of the true ability of their offers to convert. Don’t be lulled by easy traffic at a cheap price. Focus on qualified traffic and optimize your offer pages from there.

Mike Kolb

Mike is a full time affiliate marketer and founder of Sellmoo.com a competitive shopping website.

Mike took an interesting road to promoting affiliate offers full time. Mike says “I actually started out as an advertiser which opened the door to affiliate marketing for me. As I started to promote my own product more and more myself, I took the experience, knowledge and relationships I gained and became an affiliate for other offers as well”.

Promoting a product through affiliate marketing for yourself or your employer is a great way to see inside the world of affiliate marketing and learn what works and what doesn’t. Gaining firsthand experience from the advertiser perspective can also give affiliates an edge up on their competition.

Mike was able to become a full time affiliate marketer just this year. When I asked Mike how he accomplished this feat, he responded “I would attribute my success to what makes majority of people successful…drive. There was a time I had a full time job, a small side business and at night I would work on affiliate marketing. This went on for over a year before I finally started to see some results”.

Seeing results involved overcoming his greatest challenge which he described as “Trial and error, it can be frustrating to continually build campaigns and never see results, it’s very easy to lose confidence and focus”.

When I asked what Mike thought about the reality of the affiliate dream for most people he cautioned “I wouldn’t say it’s possible for most people, there is only a certain amount of people that will make the sacrifice it takes to become successful in anything, including affiliate marketing. If you are one of
those few people, then it is absolutely a possibility”.

As with anything in life Mike learned that to be successful you must make sacrifices and work hard. If you can’t do either when promoting your affiliate offers, you’re going to limit your success.

So to answer the question, is the affiliate dream real?

Yes, it is. Nick, Adam and Mike all make nice livings off of their affiliate income. For them the dream is real every day.

For thousands of others the dream is not real. For them, the dream died on forgotten WordPress sites and lists of domain names registered after a “great idea for a website” briefly entertains their fancy.

In the end, the reality of the affiliate dream is relative to the size of your affiliate checks and the effort you put in to get there.

While the actual experience was more like an earthquake I didn’t feel and a hurricane I narrowly missed, I am glad to have survived ASE to bring you these highlights.

1. Coupon Poaching

A merchant’s pain and an affiliate’s worst nightmare is coupon poaching. Basically, a visitor lands on your checkout page staring at a coupon code field mocking them with the promise of additional discounts.

Whipping out Google faster than a New York hot dog vendor can ask for your order, these already converted visitors search for your brand name plus the word “coupon code”.

Low and behold, the sites that rank for those phrases are affiliates for your brand. When a visitor clicks on links from these sites, merchants can end up paying twice for the same visitor (e.g. traffic from PPC) and affiliates may lose out on commissions they have earned.

Adam Riemer suggested merchants try inserting specific coupon offers next to coupon fields. Why search on Google for a coupon when there’s one right there?

Adam also recommended merchants should consider only displaying the coupon field if the visitor has come from a link which is promoting a coupon. No field, no problem.

Additionally, I like to set a cookie when a visitor comes through a coupon link which automatically inserts the coupon in the coupon field on the checkout page. This way you can ensure the right affiliate gets credit for the sale and you don’t pay twice for the same visitor.

2. What’s important with Facebook ads?

Speaker Dave Cupples shared that the number one factor influencing Facebook ad click through rates is the ad’s image.

Using a gallery of pictures on his Power Point slide, Dave asked the audience to guess which pictures created the highest CTR.

There were about 20 or so images and after a few thoughtful, yet wrong guesses from the audience, Dave revealed that the winning image was the one of a scantily clad woman.

While not surprising or very useful to respectable brands, the exercise does illustrate an important point. Images in Facebook ads have great power to capture attention and drive clicks.

Dave recommended using images of people with high color saturation and contrast. The result is images which are more engaging and dramatic to the eye. More eyes equals more clicks.

3. What’s the best social bookmark plugin for WordPress?

While the conversion obsessed part of me always thinks twice about social bookmark links, there are plenty of situations where you want your website visitors to share your content on a variety of social networks.

The WordPress community has created a dizzying array of plugins to support social bookmarking, but which one is best?

According to several speakers, their favorite social bookmark plugin for WordPress is Sharebar. Sharebar shows a nice little row of share buttons on the side of your site, leaving your content plenty of room to shine.

4. Conversion Page Optimization

When I need a shot of inspiration, one of my favorite activities is optimizing and testing conversion pages. There is nothing more satisfying than generating new sales out of existing traffic.

One great tip I picked up at ASE was the use of a unique value proposition (UVP) on conversion pages. A UVP is a single benefit or feature which addresses the majority of visitors on your website.

Gap.com does a great job of this with their “Everyday Free Shipping” offer at the top of their web pages. This UVP illustrates the top concern that Gap has identified for their website visitors, free shipping.

The UVP remains with the visitor throughout the site, always enforcing the message that the cost of buying from Gap.com may be no more expensive than buying in the store.

Creating your own UVP is a great thing to test on your conversion pages. Not only in terms of using a UVP or not, but which UVP works best.

5. Build a Brand

Speaker and non-violent twitter vigilante, Nick Reese gave a rousing account of what publishers should do when building their affiliate sites.

Nick urged publishers to think of their sites as small businesses and not tricks to generate automatic income.

His point was that by building brands instead of arbitrage sites, affiliates can enjoy long term reliable income not as vulnerable to search algorithm changes or merchant policy updates.

He suggested that affiliates ask themselves what value they are providing to society at large. If you can answer that question, then you have the basis of a brand. If you can’t, then you should probably rethink your business model.

6. Yahoo Answers / Answer Sites for Link Building

I’m sure you’re aware by now that any links you include in Yahoo Answers or other answer sites are nofollow. Despite your thoughts on follow vs. nofollow ratios in link building, there are some very good reasons to reply to questions on answers sites with links to your content.

First of all, the person asking the question needs an answer. This is a real opportunity to post a link and maybe win at least one customer. Secondly, answer pages tend to rank well for certain queries in and of themselves, which could mean big clicks for the link in your answer.

All that being said, there were some good rules shared for posting on these sites. Only provide direct and helpful answers. If you’re going to post a link, make sure it is relevant to the asker’s question. Answer sites are not your personal spam bots, so act responsibly.

7. Best Incentives for Social / Email Lists

My local ice cream shop provides free ice cream if you check in 5 times in a row on Facebook. While that’s awesome for ice cream shops, what can the rest of us offer as incentives to get people to subscribe to our email lists or join us on social networks?

Dave Cupples recommended videos, ebooks and most of all new website features. Dave referenced several examples of A/B tests where the offer of free features was very effective at getting people to share information on social networks.

He also mentioned that you could buy pre-made ebooks to give away as incentives for your list subscriptions. Obviously pick something beneficial for your subscribers and don’t cheap out too much on your incentive.

8. Call Performance Marketing

Dan Sweeny, head of Call Performance Marketing at Commission Junction, mentioned how affiliates benefit from call based tracking by capturing more leads than they would normally get through web based conversions.

Having a working phone number at the top of a landing page is great for conversion rates, but not so good for traditional web based affiliates. Now there are more options than ever for affiliates to get credit for the leads that they’re generating through phone calls.

Dan indicated that it was pretty common for merchants to provide multiple phone numbers to publishers to allow for testing with a variety of landing pages and traffic sources.

What does all this mean for publishers? Commissions don’t have to stop at the call.

9. Email Courses

It was good to see some discussion of the use of email courses as a mechanism to build email lists.

Sure, offering someone a free ebook to join your list might seem like a really awesome deal for your visitor, but in reality they want the ebook and not your emails.

Offering email courses designed to educate your subscribers through a progressive series of emails, allows visitors to become engaged with your email list and excited about seeing your name in the from line.

10. The name of the guy in the question mark suit is Matthew Lesko

Okay, so maybe this last point is only appealing to those who stayed up too late watching TV in the mid 90’s, but I was lucky enough to meet the guy in the question mark suit from the “get money from the government” commercials.

As I covertly darted my eyes to his name tag, I fully expected to see “Question Mark Suit Guy” proudly displayed in the name field, but to my surprise he actually has a real name and it’s Matthew Lesko. Now you know.

I hope you enjoyed my top 10 things I learned at Affiliate Summit East. If you have anything else cool that you picked up, please leave a note in the comments. The next Affiliate Summit ASW2012 is being held in January.

Affiliate Summit East is just around the corner (August 21-23) in New York and there’s no time like the present to plan your conference strategy. Who better to give you tips on getting the most out of Affiliate Summit than co-founder and conference organizer, Shawn Collins?

Shawn agreed to answer a few of my questions about how to maximize your time at ASE so I could share them with you, our awesome Marketing Pilgrim readers. Enjoy

1. What’s the best way to keep up to speed on all the Affiliate Summit parties?

We will post a comprehensive list on the Affiliate Summit East 2011 blog as we get closer. Few companies share party details until a week or two before the conference. After we post the list, we’ll continually update it as we get closer to the conference.

2. What networking opportunities are available?

Lots of people get things started in advance on our forum. Our magazine, FeedFront, includes the conference agenda, speakers, list of speaker Twitter names, etc. This is a good guide to find which speakers will be when and where. And when people get to Affiliate Summit, networking opportunities include the Meet Market, Exhibit Hall, meals, and Ask the Experts roundtables.

Also, we have a list of speakers on Twitter and will be publishing an interactive scheduling tool shortly, where attendees can see which events and sessions are being attended by other people.

3. What’s your number one tip for getting the most out of Affiliate Summit?

Stay out of your hotel room. There are thousands of affiliate marketers getting together for three days, so eat, drink, and live with them for the time before, during and after the conference to meet as many people as possible to learn and cut deals.

4. The Diamond pass comes with DVDs of Affiliate Summit sessions. How long after AS does it take for the DVDs to be delivered?

It’s typically about 6 weeks for the DVDs, but they are only for folks who get the Diamond pass.

5. What’s the number one mistake you think people make when coming to Affiliate Summit?

Staying at a hotel other than the one where the conference is taking place. It’s far more convenient to have your room right upstairs, and there are so many extra opportunities in the elevators, lobby, bars, and restaurants of the Hilton New York to meet fellow attendees.

6. Why should publishers attend Affiliate Summit?

They can meet with all of the networks and affiliate programs face to face to find out which products and offers are best to promote right now, and to negotiate better payouts, as well as meeting with fellow affiliates/publishers to exchange tips and strategies.

7. Why should merchants attend Affiliate Summit?

They can reinforce relationships with affiliates/publishers, as well as establishing many new relationships. Plus, they can learn about the latest best practices from leaders in the industry.

8. There is an SEO Training course available the day before the conference. What makes this training course unique?

The course is being run by Rae Hoffman, who has been one of the most popular Affiliate Summit speakers for years, as well as a very respected leader in both search and affiliate marketing. This is a chance to learn from her in person in a small group.

9. Do you recommend registering early when attendees arrive?

Definitely – we started opening up the check-in booths on Saturday evening (4pm to 8pm) a couple years ago to alleviate lines on Sunday. Attendees can get in and out with their badge and other materials in a couple minutes, rather than spending valuable time in line the next
day.

10. What are the top 3 sessions you’re looking forward to at this year’s ASE?

Unfortunately, I don’t get to see entire sessions during the conference, since there are 4 running at a time, and I have to keep an eye on all of them and the rest of the operations of the conference. I only see most (sometimes all) of the keynotes, and I am really excited
about all four of those.

***

While Shawn might be too busy to see the sessions, there are a ton of opportunities for you to get valuable information from some really smart people. Couple this with tremendous networking opportunities and chances are your head will be spinning with ideas by the end of the conference.

If you plan on going to Affiliate summit, keep an eye out for me. I’ll be one with my head buried in my iPad updating Pilgrim readers on juicy bits from the conference. If you haven’t registered yet, it’s not too late!

The meetups are currently held in Orlando, San Francisco, Chicago, New York, Denver, Baltimore, Melbourne, Indianapolis, Salt Lake City and my home-town, Austin. The Austin meetup, featured a presentation by Shawn Collins (@affiliatetip) entitled “Affiliate Marketing for Newbies”. In the presentation Shawn laid out seven things you should focus on when building a new affiliate website.

Picking a Topic

Shawn recommended that you pick a topic you’re passionate about. He warned that picking “Flavor of the Day” topics for your site in response to Internet trends can lead to a faltering commitment on your part. Stick with things you’re passionate about and you’ll be more likely to dedicate the time and energy you’ll need to in order to be successful.

Find Your Voice

When picking your writing style, Shawn advised to use your own voice. Don’t try to be an award winning journalist. You’re you, write like it. He also advocated the use of editorial calendars so you’ll have a clear plan about the type of content you’re going to create. This can avoid time wasted on aimlessly wondering about what you’re going to write about next.

Choosing a Domain Name

So you’ve been pouring over your domain tool for days with your thesaurus frayed at the edges trying to come up with the perfect domain. Oops. According to Shawn, you should be spending no more than 20 minutes picking the domain name. With Matt Cutts coming out and saying that keywords in the domain will be “less helpful” in the future, this advice holds some weight.

I personally like to do a US trademark search when I’m picking a domain name, just to see if I can avoid any trademark entanglements down the road.

Hosting

Shawn gave a plug for his favorite shared hosting provider BlueHost and his favorite dedicated server host Liquid Web. Everyone has their favorite hosts, but I’m sure Shawn has some interesting battle stories that led him to these recommendations.

Email Service

Driving customers to his websites isn’t good enough for Shawn. He’s a fan of promoting and sending out newsletters to website visitors. His service-of-choice for automatically generating newsletters from website content is Aweber.

Patience

Affiliate marketing can be a bit of a waiting game, which is why Shawn stressed this point most of all. He reminded everyone to build content first and not focus on monetizing right away.

When picking ads, pick the ads that are most relevant and not the most lucrative. If you have a site about German Sheppards you probably don’t need that weight loss offer do you?

In addition to picking the right offers to run on your site, Shawn said to test, test test and not to expect to earn money from your site for months. As with most things in life, being successful at affiliate marketing takes hard work and patience.

Where to Find Affiliate Programs

Shawn’s main advice here was to Google the keywords covering the topic of your site and add the word “affiliate program”. In addition to this, publishers often use affiliate network listings, directories, conferences and a whole host of other methods to find affiliate offers in their niche.

About the Austin Meetup

The crowd at the Austin meetup was a healthy mix of affiliate marketers, affiliate advertisers and all around online marketing geeks. Brett Tabke was in attendance and even jumped in to help shed some light on a few SEO questions from the audience.

With such a vibrant meetup community in Austin, the bar was high for Affiliate Summit’s first Meetup Day, but the organization was good and the audience was smart and interactive.

How about you? Did you go to Affiliate Summit Meetup Day in another city? Comment below and let me know how it went

Google has a brand new system that will allow online content producers to sell subscriptions.

Is that a coincidence? Coming only a few days apart, it does seem that Google is trying to one-up Apple especially since Apple is taking nothing but flack from producers in regard to their offer.

Here are Apple’s rules. Any content producer that wishes to sell a subscription can do so through the iTune’s app system which provides one-touching (think impulse) buying. That’s great. If a person clicks and buys, Apple get’s 30%. Not so great for content producers. Where it really gets sticky is in this next bit.

“All we require is that, if a publisher is making a subscription offer outside of the app, the same (or better) offer be made inside the app, so that customers can easily subscribe with one-click right in the app. We believe that this innovative subscription service will provide publishers with a brand new opportunity to expand digital access to their content onto the iPad, iPod touch and iPhone, delighting both new and existing subscribers.”

Which means a consumer must be offered a choice, go out to the website and pay for the item or stay here and pay with one click. Since studies have shown that people prefer apps that don’t take them out to a browser, it’s pretty obvious which choice they’ll pick.

Content producers are crying foul, saying they can’t afford to take a 30% hit. Apple says it’s worth it because more people will see and buy into their subscription packages. 30% is a little steep, but I’ve got to agree with Apple. If I have to go to a browser and fill out all my credit card info, I’m going to think twice. Single button and it comes out of my iTunes account? I’m in.

Google’s counter offer is Google One Pass. Here, customers set up a one pass account and from there they can subscribe to content, manage subscriptions and read the content on PC, iPad, iPhone, mobile skywriting. . . however you want. Cost to the publisher? Around 10%. Quite a difference from Apple and without all of the rules.

The downside? Google has to get people and publishers to sign up for One Pass. Apple already has an audience on iTunes.

So, big, built-in audience for 30% or up and coming network for 10% — if I was a publisher, I’d be looking seriously at Apple.

What do you think? Is it worth giving up 30% of your revenue for a shot at Apple’s audience?

Two months ago, Ebert signed up for an Amazon affiliate account and began sending out two or three Twitter Tweets a day promoting various products. Generally he points out really good deals on great movies, but has been known to promote other items like coconut water (yuck).

A reporter for ClickZ noticed the Tweets and felt that they needed explaining. ClickZ, I love ya, but why? Even though, as they say in the article, celebrity Twitter endorsements are quite common, the reporter thought this particular event was unusual and wanted to know more. So he wrote an email to Ebert asking about the arrangement. The questions asked, which you can read here along with Ebert’s answers, seem to imply some kind of hidden business relationship between Ebert and Amazon. The reporter also asks about the “financial terms of the deal.”

Terms of the deal? He has an Amazon affiliate account, just like a million other mommy bloggers, DVD and music review sites, and pretty much anyone who runs a website.

And it’s not just ClickZ. A scan of Ebert’s Twitter feed and Twitter search will show that followers are complaining about his new attempt to make a dollar. Why? When you look at the volume of information he provides, these few Tweets can hardly be called spamming. The trouble seems to lie in the fact that he’s seen as a celebrity. If your Aunt Sally sent you a link to a cheap Alfred Hitchcock box set, you’d click it without complaint.

I came up through the affiliate marketing game and I know that people have this innate desire not to click affiliate links. They’ll go out of their way to avoid doing it, going straight to Amazon and typing in the name of the product to keep from giving anyone that fifty cent kickback, as if the money was coming out of their own pockets.

As for Roger Ebert, he says he hopes the affiliate money will help pay for his website expenses. I’m sure there are people who think that this is unnecessary, that a man of his status must be financially stable or rich even, so he doesn’t deserve those extra dollars.

I say, times are tough all over and with newspapers and magazines folding left and right, journalism doesn’t pay what it used to. But even if Ebert were the richest man on the planet, he should still be allowed to take advantage of Amazon’s affiliate program just like the rest of us.

Keep linking Mr. Ebert and I’ll happily click through and buy as a thank you for your many years of providing entertaining movie reviews.

While this list is by no means comprehensive of all the challenges you’ll face in your campaigns, it’s a good place to start and might help you avoid some headaches along the way.

Also, check out my companion post The Top 6 Pitfalls of Affiliate Marketing for Advertisers.

1. Canceled transactions

Making money on your affiliate offers has a lot to do with the volume of traffic to your website. To crank up your earnings you might venture into purchasing traffic through PPC or some other medium. Before starting your new campaign you need to be aware that some of your “conversions” may be canceled before you get your first check.

Advertisers often have the ability to cancel transactions several days or more following the end the month. If you start dumping a bunch of PPC money into driving traffic to your site based on ROI derived from estimated commissions, be warned that many of your transactions could be canceled leaving your monetization model worthless. Be cautious and watch canceled transaction rates very closely during the first few months so you’ll know your PPC investments will net a return.

2. Fake EPC

EPC refers to earnings per 100 clicks and is a metric used by many affiliate networks to help differentiate between advertiser offers.

Before you go out and start promoting offers with the highest EPC, you should take note of a few points.

If the offer is new, the advertiser may just have a hand full of affiliates with good conversion rates resulting in a high EPC.

Additionally, if many of the advertisers’ affiliates are running sites where the product or service is discussed in detail, the visitor is much more likely to make a purchase than if they had visited through a traditional banner ad. Try to find examples of affiliates promoting the offer in the wild before making your decision.

On the more nefarious side of things, and as @affiliatetip pointed out to me Tuesday night, advertisers can also use PPC campaigns with high converting keywords to send traffic to their own affiliate program and drive up their EPC. To be fair, advertisers may also just have a high number of (or a few high volume) affiliates who send PPC traffic from high converting keywords, thus inflating the aggregate EPC.

While EPC may be a guide for the profitability of offers, just keep in mind there are a lot of factors that can influence it. Try to stick to picking offers you think will convert with your visitors. Let everyone else worry about their own results.

3. Many programs want traffic now

If you’re new to affiliate marketing and you want to start building a website around a specific offer, you should do your research on the offer ahead of time. Many top affiliate programs will require you to have an existing website and can even include traffic minimums. Do your research on offers and requirements before spending a lot of time on your website and strategy. There’s nothing more frustrating than building a campaign around a specific offer only to realize you don’t meet the traffic requirements. You might need a few backup plans to your target offer as you ramp up your traffic.

4. Impatience

This was a big theme of Austin’s @imarketingparty on December 14th as emphasized by @affiliatetip of Affiliate Summit and @DushR of ClickBank. Just because your campaigns are not working initially, does not mean it’s time to give up.

To quote Texas oil tycoon Ross Perot “Most people give up just when they’re about to achieve success. They quit on the one yard line. They give up at the last minute of the game, one foot from a winning touchdown.”

Before you declare a specific campaign a failure or affiliate marketing in general a waste of time, think to yourself, did I really do all I can do to make this a success? Is there something I could try differently or test to improve my profitability? How much time did I spend on the couch when I could have been working on my campaigns?

While the 2 hour work week sounds good, most people find success after a lot of hard work, a good measure of pain and a whole lot of patience.

5. Not picking a relevant offer.

As we discussed already, picking an offer is a lot more than just picking the offer with the highest EPC. When you’re on your hunt for the perfect affiliate offer, make sure to find offers that are relevant or at least complimentary to your site.

Just because the Plasma TV site pays 50% commissions does not mean this is the best offer for you. Evaluate your site and make sure to pick offers that fits the mindset of your visitors.

As always, test a variety of offers to find the one that generates the highest EPC for you.

6. Laziness

Just because your campaigns are up and running, you’re generating profits and you’re cruising around the Caribbean in a 100 foot yacht, this is no time to rest on your laurels. You could be cruising around in a 150 yacht if only you’d spend a little more time on your site.

Don’t forget, that what works today may not work tomorrow. Watch all your campaigns closely. Become intimate with your ads and your advertisers. Join advertisers’ press release feeds, ask about new products, update pricing data as needed and make suggestions. If the advertiser has a seasonal offer or one that expires, make sure to set a reminder to update your ads after the offer is over.

Nothing will drop your EPC faster than running the wrong offer on your site.

7. Not shopping around.

So you’ve found an offer that works, now what? More golf?

Actually, it’s time to shop your traffic around.

Start by running your current advertiser(s) in even rotation with competing advertisers. Identify the EPC of each. Contact all advertisers and request bids for increased commissions. When the bids come in, calculate the revised commissions into your EPC formula and presto-chango you should have your winner.

Keep good relationships with your old advertisers. You never know when you might want to run their offer again. It’s also a good idea to run competing advertisers in a lighter rotation than your highest EPC advertisers, but keep in mind you might pay the price of exclusivity for higher commissions.

As always, factor in payment schedules and affiliate support into your decisions on offers. When something goes wrong (and something will), you want a partner who will pick up the phone and make things right.

****************

So what about you? What pitfalls have you encountered with your affiliate marketing campaigns?

Don’t forget to check out my companion post The Top 6 Pitfalls of Affiliate Marketing for Advertisers.

While this list is by no means comprehensive of all the challenges you’ll face in your campaigns, it’s a good place to start and might help you avoid some headaches along the way.

1. Double Commissions

When you run your campaign you might decide to promote your offer on multiple affiliate platforms (networks, home grown, etc.), but be warned! Affiliates can register for your offer on multiple platforms and with a little cookie stuffing, earn commissions from both platforms for the same order. Yikes!

Use order number tracking in your conversion code so you can cross reference each of your platforms for duplicate orders.

Check with your platform’s support group for their policy on cancelling double commission orders, but keep in mind you can always kick the offending affiliate off one of your platforms for a temporary fix. There are more complex methods for tracking and cancelling double commissions that are a bit too involved for this post, but just check with your platform’s support for guidance.

2. Cookie Stuffing

Cookie Stuffing refers to the practice of forcing an affiliate cookie into a visitor’s browser even if they have not clicked on an affiliate link. Imagine you have a site with a ton of traffic and you force your Amazon affiliate cookie on every visitor to your site. Now, any time your visitors buy something from Amazon you’ll get a commission. Pretty nifty huh?

Well, as an advertiser this can be a total nightmare. You’re not paying affiliates commissions for sales from people who happened to have visited the affiliate’s website. You’re paying affiliates to promote your website and refer customers.

Keep an eye out for higher than usual conversion rates and visit your affiliate’s website to check to see what cookies are set when you visit. If you see your affiliate cookie and you haven’t clicked on the website’s affiliate link, it’s time to kick this guy out.

3. Branded Search Campaigns

You spent a lot of money on that Super Bowl ad where no one could tell what you do and now tons of people are flocking to Google and searching for your company name. Low and behold there’s a paid ad that says “Your Company Name” linking to your website through an affiliate link. Uh….. what?

That’s right, if you don’t restrict branded terms from your affiliates’ search campaigns, you can end up paying someone a commission for traffic generated for your brand via another advertising medium. Make sure to consider restricting branded search terms in your Affiliate Terms and Conditions. Check periodically for violators and make sure to enforce your policy.

Also, you may consider restricting specific keywords if you’re worried about your affiliates driving up your own PPC costs.

4. Pay Per Lead (PPL)

From time to time, you may want to pay commissions on leads (insurance quotes, free trials, etc.); however, if you don’t monetize those leads until another event happens (purchase) then you need to be extra diligent.

First, make sure you have an excellent handle on your lead to purchase conversion rate for every affiliate. Certain affiliates may fake leads or just naturally have a lower than normal lead to purchase conversion rate. If so, this affiliate is less profitable and may need to have their commissions adjusted. Additionally, if the affiliate offers an incentive to visitors for generating a lead (virtual currency, real currency, etc.) you could have even bigger problems on your hands. Keep an eye on your profitability per affiliate and adjust your PPL rates accordingly.

5. Lazy Affiliate Managers

The key to any good affiliate campaign is relationships, relationships, relationships. Your affiliate managers should be a friend and a resource to your top affiliates. Affiliate managers should frequently visit your affiliates’ websites and make sure they’re running the right banners in the right location with the most visibility.

Use Customer Relationship Management (CRM) software to keep track of your affiliates. Set reminders to check in on performance and to review the affiliate’s website for out of date banners, old pricing and opportunities for improvements. Run activity reports through your CRM to make sure your affiliate managers are staying on top of things.

If an affiliate has to choose between offers, he might just choose the offer from the guy who helps him with his campaign and is a resource he can rely on.

6. Focusing too much on graphic banners

Did you know that many advertisers derive a significant portion of their conversions through text ads, product feeds and coupons? That’s right, there’s more to affiliate marketing than graphic banners. As you design your ad inventory, make sure to include a wide variety of graphic ads, text ads, product feeds and coupons. A little spaghetti marketing (throw it up and see what sticks) might surprise you.

Also, don’t forget to update your ads as your product changes or seasonally if appropriate. There’s nothing like a well timed ad to help drive sales.

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So what about you? What pitfalls have you encountered with your affiliate marketing campaigns?

Be sure to check back on Monday for my follow-up post: The Top 7 Pitfalls of Affiliate Marketing for Publishers.

That is except for the state government and their attempts to collect taxes on online purchases made from Amazon. They have already pushed Amazon far enough that the online retailing giant ended its affiliate programs with North Carolina residents in 2009 thus depriving residents of the chance to bring money into the state that would be spent in the state and would give some ailing jobless folks a chance at survival. Nice move!

Apparently, Big Brother is alive and well in the Tar Heel state as well since the state government has been trying to get detailed purchase information from Amazon which would include names and addresses of those making purchases from 2003 to 2010. Fortunately, a federal judge has called the state on its draconian efforts and handed them a major setback in federal court yesterday. cnet reports:

In a victory for the free speech and privacy rights of Amazon.com customers, a federal judge ruled today that the company would not have to turn over detailed records on nearly 50 million purchases to North Carolina tax collectors.

The state had demanded sensitive information including names and addresses of North Carolina customers–and information about exactly what they had purchased between 2003 and 2010.

U.S. District Judge Marsha Pechman in Washington state said that request went too far and “runs afoul of the First Amendment.” She granted Amazon summary judgment.

The Tar Heel State’s tax collectors have “no legitimate need” for details about the literary, music, and film habits of so many Amazon customers,” Pechman wrote. “In spite of this, (North Carolina) refuses to give up the detailed information about Amazon’s customers’ purchases, while at the same time requesting the identities of the customers and, arguably, detailed records of their purchases, including the expressive content.”

With privacy victories coming too few and far between these days at least we can feel like someone is paying attention and not letting the government run rough shod over privacy while squashing commerce in the process.

I suspect that the state feels they have good reasons for doing what they are doing. They will say that the taxes they want to collect will help the state. Pardon my cynicism, but if the affiliate money that was once coming onto the hands of the residents were turned back on that would REALLY help the state.

At the heart of this ruling though is privacy.

In addition, the ACLU intervened in the lawsuit asking for an even broader injunction against the tax collectors. They wanted Amazon to be prohibited from disclosing customer purchases without a subpoena, which the court did not grant.

In general, as Amazon stressed in its lawsuit, purchases of books, DVDs, Blu-Ray discs, and other media enjoy special privacy protections.

So what is the North Carolina government trying to do here? At the core, it’s trying to collect taxes from both Amazon and its citizens because of online purchases. In the process, it is killing an avenue for commerce in the state and appearing as if it wants more data on its residents in a time when that is not considered such a good thing. I don’t get it.

In the end the state is only hurting itself though because as people learn about these attempts they will maybe stop short of saying they will set up a business in the Tar Heel state for fear of too much government intrusion. Sadly, no one wins in that scenario.

What’s your take on the idea of taxing online purchases? It’s an old story but one that will likely get more attention in these days of scarce money. Have you been impacted by rulings like this in any other states? What’s worse, more taxes or invasion of privacy to collect them?

Sounds like an influential CEO confessing to an elicit affair, but it’s really VigLink CEO Oliver Roup talking about how his company happened to acquire rival DrivingRevenue this past Friday. It began with an email from Revenue’s Raymond Lyle and Jack Bafia saying they should talk. That was in May, so it was quite a rush to the alter. Says Roup;

“We’re very excited to be joining forces. Ray is going to lead the sales and merchant relationship team and run our Chicago office. Jack will be moving to San Francisco to assume leadership of the product team. Everyone else is keeping their job as well.  They’ve all made a big bet on the future of the combined business. They are doubling down, not cashing out.”

Sounds like one big happy family, doesn’t it? VigLink has plenty of reasons to be happy. Back in January, the company, which works as an affiliate middleman between bloggers and merchants, got $800,000 in funding from Google Ventures and First Round Capital. Now, in the wake of the merger, Roup says the investors have doubled their initial offers.

What’s DrivingRevenue bringing to the table? Not cash, but the know-how. They’ve been at this for two years and have amassed a strong group of partners that will put them way ahead of their remaining competitor, Skimlinks.

We wish the lucky couple all the happiness in the world.

Commission Junction also scored 64% of the top 100 online retailers and lead in every sub category. The combination of all these points clearly indicates that Commission Junction is the affiliate network to beat.

As both a publisher and an advertiser, I am not surprised to read about CJ’s dominating presence with online retailers. While networks like Sharasale, Google and others offer compelling affiliate offers, there is no questioning CJ’s brand awareness and ability to snag advertisers.

From the publishing perspective, a good affiliate monetization strategy should include evaluating offers from large networks, small networks, and direct advertisers. As most publishers know, running a variety of offers will help keep clickthrough rates high and commissions rolling in.

Since offer variety is such a huge part of a good monetization strategy, CJ’s 63% penetration into the top 500 online retailers means they are a natural choice for almost any affiliate monetization campaign.

From an advertising perspective, I think you could interpret this a couple of different ways. First, if CJ is being selected by so many top online retailers, they must be doing something right. Conversely, you have to wonder with such high adoption rates, will my offer be lost in the noise?

I’ve found that regardless of the network you choose, the ability to profit from your affiliate campaigns is driven by carefully selecting advertisers or publishers and testing, testing, testing. Just like no search marketing campaign should exclude Google, your affiliate network strategy should probably not exclude CJ.

Of course, in the end, making the offers profitable is up to you!

——————
Funny side note: When searching for the URL to Google’s affiliate network (linked above) I saw an Adwords ad for Google’s Affiliate network with the display URL www.google.com/ads/affiliate. What a short and sweet URL I thought, until I discovered it returns a 404 page. I guess nobody’s perfect

We’re used to hearing about the two companies as “frenemies” in the emerging eBook market—but hey, if cooperation makes things easier for users (and make the users and Amazon a buck), it’s definitely a good thing, right?

You’ve always been able to use Amazon Associates “manually” in a Blogger blog, but now there are options to make it fast and easy to use from right inside Blogger. (And I’m pretty jealous.) The above screen shows the default. Once you set up or enter your Associates ID, you’re given the option to add the Amazon Product Finder to the Edit and Compose New Post pages. The finder not only locates products within the Amazon store:

but also inserts the kind of link you want into your blog post:

Though I”m not sure what pushed them to do this, this is a good move for Google, but the clear winners here are Blogger users—and Amazon.

What do you think? Why did Google and Amazon partner like this? What’s Google getting out of the deal?

Okay, at first it doesn’t sound so appealing: pay everybody and his dog for taking pictures of themselves with your products sounds like a good way to bankrupt yourself. But naturally, these people aren’t pulling in the same endorsement fees the big stars are.

But the real genius of the system isn’t from paying people to be pictured with your product—it’s the implementation. Udorse automatically uses Facebook photos for images with tagged products. Join the system and tag the product, and you’re taken to a short endorsement form to fill out.

Even better, the system isn’t just a flat-fee-for-photo rate—it’s more like affiliate marketing. When your friends take an action associated with the brand/product you endorse (presumably through your photo/tag/profile), then you get paid (via PayPal). Presumably, Udorse also takes a portion of that sale.

Facebook users (and they’re working on this with MySpace and LinkedIn, too) can also search for endorsements by topic.

Because they’re tapping the power of social networks, in some ways this is better than celebrity endorsements. Are you more likely to read a book recommended by a celebrity (yes, even Oprah) or one of your friends? On the other hand, we just said that affiliate marketing via social networks is, and I quote, “craptastic.”

If you’ll excuse me, I’m off to go take pictures of myself with . . . every brand I have in the house.

What do you think? Can this system work? Will Udorse be able to get enough brands and members to make it work—and will they get enough of a cut to make it worth their while?

However, if you’re hoping Facebook, Twitter, and others social networks will be your secret to success, you may wish to think again.

Sixty-two percent of US online buyers use social networking sites like Facebook or MySpace.com for communicating and keeping up with friends. Only 2% of US online buyers have purchased products through social networking sites. Affiliate sites get paid based on transactions they drive, not simply click-throughs. Thus, affiliate sites currently experimenting with social networks may be getting traffic from these sites, but they are sending very few qualified leads to marketers. Little money will therefore change hands in this scenario.

In fact, Forrester says that we shouldn’t rely on social networks to drive purchases anytime in the next five years! It says it will take at least that long for consumers to change their shopping habits and social networks to offer better shopping tools.

Anyone want to dispute this? Are you having great success with affiliate marketing with social networks?

If ever a cause was near & dear to me, this is definitely one of them. As an affiliate manager, affiliate marketing is my livelihood.  Over the last year, several states have introduced legislation defining affiliates as tax nexus for businesses.  This means that if a merchant has affiliates in a state with this kind of law, they are required to charge sales tax for all online orders made to customers in that state. 

This started in May 2008 with New York, and quickly spread to California, Minnesota, Rhode Island, North Carolina, Hawaii, and other states.  Affiliate marketing advocates were successful in stopping the laws from passing in most states, however Rhode Island and North Carolina have passed similar laws to New York. 

Just this week, the Performance Marketing Alliance joined Amazon and Overstock in an amicus brief to ask the New York state appellate court to reverse the law enacted last summer.  Writes MediaPost:

Amazon and other opponents to the law argue that a 1992 U.S. Supreme Court decision prohibits state governments from requiring retailers to collect sales tax unless they have a physical presence in the state, like a brick-and-mortar store. The challengers say that online affiliate marketers — including other Web publishers that garner referral fees because they have placed links to Amazon on their sites — don’t constitute a sufficient presence in New York to justify the tax.

Repercussions of the actions taken in New York have been felt around the country, in case you haven’t taken notice.  Some New York state affiliate marketers lost upwards of 80% of their income. Amazon has been forced to sever ties with affiliates in North Carolina and Rhode Island in order to avoid charging sales tax to consumers in those states.  This is because many online merchants running affiliate programs do not already have tax nexus in these states, and do not have the resources to alter the back end of their systems and take on the legal and financial responsibilities of charging tax in additional states.

A streamlined nation-wide online sales tax is years from reality, so in the meantime many of us have been working on the issue grassroots style: writing letters, going to our state capitol to make our voices heard.  A more generalized moniker, the Advertising Tax, has been adopted by many to help legislators realize that this is bigger than just Amazon.  Many affiliate marketing organizations have sprung from this issue to try to help the industry convince legislators that affiliate  marketing is advertising, not a sales force, and should not be subject to nexus laws as such.

I, for one, hope that New York takes this brief under serious advisement and considers reversing last year’s laws.  States should realize that, while the tax income this may generate is tempting, in the end they will lose money from all the affiliates previously paying income tax that are decimated by these laws.  You can also do your part—if you hear of legislation being introduced in your state, take the time to organize fellow affiliate marketers to make visits to assembly members or state senators who have influence on the bill.  Send letters to your district representatives requesting that they oppose the bills.  Many resources can be found online to assist you at PerformanceMarketingAlliance.com, AffiliateVoiceLLC.com, and NYAffiliateVoice.com

Trisha Lyn Fawver manages affiliate programs, blogs, and explores the world of social media, all at TrishaLyn.com.

Let’s start with the good news. Both California and Hawaii look set eject the planned affiliate nexus, with vetoes from their respective governors.

CA’s Arnold Schwarzenegger stated:

"After passing the largest tax increase in California history, it makes absolutely no sense to go back to the taxpayers to solve the current shortfall – that’s why yesterday I vetoed the majority vote tax increase passed by the legislature."

Meanwhile HI’s Governor Linda Lingle says:

“I am vetoing this bill immediately to help ensure Hawai‘i is not economically hurt by legislation that was not well thought-out and would have negative consequences for non-profits such as the University of Hawai‘i bookstore, and businesses throughout our State”

Both actions were enough for Overstock.com to announce the reinstatement of affiliate programs in both California and Hawaii. There’s no news on a reversal from Amazon, but I suspect it will happen this week.

On to the bad news.

North Carolina still seems set to pass its Amazon Tax legislation and Rhode Island looks to be the next state to make the blunderhead move.

So, what exactly is the Amazon Tax? It’s not that these states plan to add new taxes for those affiliates earning income from these online retailers–they already pay their income taxes. Nope. The Amazon Tax effectively claims that, by having affiliates in a state, the retailer has an obligation to collect sales tax on all its online purchases from that state.

When you consider that an affiliate isn’t even close to being a contractor–which employers are not obliged to collect income tax–let alone an employee, you see why this legislation is nothing but a desperate money-raising effort by states that over-spend and can’t otherwise balance their budgets.

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.

Please be assured that all qualifying referral fees earned prior to June 26, 2009 will be processed and paid in full in accordance with our regular referral fee schedule. Based on your account closure date of June 26, 2009, any final payments will be paid by September 1, 2009.

In the event that North Carolina repeals this tax collection scheme, we would certainly be happy to re-open our Associates program to North Carolina residents.

The North Carolina General Assembly’s website is http://www.ncleg.net/, and additional information may be obtained from the Performance Marketing Alliance at http://www.performancemarketingalliance.com/.

We have enjoyed working with you and other North Carolina-based participants in the Amazon Associates Program, and wish you all the best in your future.

Best Regards,

The Amazon Associates Team

It’s interesting that Amazon has shut the program down before the legislation passes. Could it be that the NC lawmakers thought Amazon was bluffing too? Did Amazon close the program early so that affiliates would still have time to ramp up their complaints to the General Assembly.

Of course, there are plenty of other companies that will keep their affiliate programs running in NC–though Commission Junction doesn’t appear to be one of them–but will there be enough actual affiliate revenue to tax after this?

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.

Honestly, 99% of bloggers have nothing to worry about. If you forget to disclose that you used a 50 cent coupon on that hamburger you raved about, you’ll probably be just fine. Likewise, if you blog that your new Ford gets 33mpg but in reality only gets 31mpg, you won’t likely face the wrath of the FTC.

In fact, the only bloggers that need to be wary of any new FTC guidelines are the ones that have brought this on us all. They are the ones that accept gift cards, then rave about their shopping experience. They claim their acne cleared up overnight, while receiving a free monthly supply of the skin-care treatment. In other words, the FTC is going after the professional bloggers that make a living off of freebies and commissions–all without an ounce of disclosure.

So, how can you make sure you don’t ever hear from the FTC?

If in doubt, spell it out! Cheesy, I know, but it will help you. If you ever stop to ask yourself, "should I disclose this?" then the answer is probably "yes." The chances are that whatever is causing the guilt-trip isn’t worthy of the FTC’s attention, but you’ll feel better for disclosing it AND you’ll earn the trust of your readers!

Other tips that might help you sleep at night:

• Create a page that lists all of your potential "conflict of interests" and simply link to it whenever your post includes mention of one of those relationships.
• Tag any links with something visible and obvious. Such as (affiliate) or (sponsor).
• You don’t have to publish the full terms of your compensation. Simply stating "Company X sponsored this post…") or ("We received free XXX as part of this review…") will likely be enough to satisfy the FTC.

My last piece of advice is to simply sit tight and see what happens. The FTC hasn’t actually enacted anything yet–and we have no guidelines from it on what we should or shouldn’t say. In addition, any guidelines could hurt the revenues of those companies that rely on affiliate marketers. If Amazon is being proactive about protecting its affiliate revenue stream in one state, you can bet it’s going to try and block any new standards from the FTC.

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.

But because the new law is drafted to go into effect once enacted – which could happen in the next two weeks – we will have to terminate the participation of all North Carolina residents in the Amazon Associates program on or before that same day. After the termination day, we will no longer pay any referral fees for customers referred to Amazon.com or Endless.com nor will we accept new applications for the Associates program from North Carolina residents.

The unfortunate consequences of this legislation on North Carolina residents like you were explained in detail to key senators and representatives in Raleigh, including the leadership of the Senate, House, and both chambers’ finance committees. Other states, including Maryland, Minnesota, and Tennessee, considered nearly identical schemes, but rejected these proposals largely because of the adverse impact on their states’ residents.

The North Carolina General Assembly’s website is http://www.ncleg.net/, and additional information may be obtained from the Performance Marketing Alliance at http://www.performancemarketingalliance.com/.

We thank you for being part of the Amazon Associates program, and we will apprise you of the General Assembly’s action on this matter.

Sincerely,

Amazon.com

Last time I checked, adding new taxes in a recession were a bad thing. Amazon is a huge retailer and many people–myself included–supplement their income using its affiliate program. If others follow Amazon’s lead, then what affiliate revenue will be left to actually tax? NC would still not have any tax revenue from affiliate marketing AND those making a living from affiliate marketing lose their income. Nice move NC….not!

If you’re one of those that will be affected, then you might want to contact your state representative (thanks Scott for that suggestion!)

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.

As of May 1, 2009, Associates will not be paid referral fees for paid search traffic. Also, in connection with this change, as of May 1, 2009, Amazon will no longer make data feeds available to Associates for the purpose of sending users to the Amazon websites in the US or Canada via paid search.

This change applies only to the Associates programs in North America. If you are conducting paid search activities in connection with one of Amazon’s Associates Programs outside of the US and Canada, please refer to the applicable country’s Associates Program Operating Agreement for relevant terms and conditions.

We appreciate your continued support and participation in this advertising Program. If you have questions or concerns, please write to us by using the Contact Us form available on Associates Central.

Sincerely,

The Amazon Associates Program

Is this the end of search marketing for Amazon affiliates? Yes, and no. While you can no longer send traffic directly to Amazon via paid search, I’m assuming you can still send searchers to a landing page and THEN send them to Amazon.com. Also, there doesn’t appear to be any restrictions on using search engine optimization (SEO) to send referarals, but good luck trying to get your own affiliate link to rank in Google.

OK, time to hand this over to the Pilgrims that live for affiliate marketing. What’s your take on this move by Amazon?