Affiliate Programs Network Provider Industry - Commission Junction 2008 Preview - Discover the Revenews 2008 Affiliate Network Preview
Hi everyone,
I'm going to give you a great post by Angel Djambazov who has interviewed with Kerri Pollard, General Manager of Commission Junction.
Here is the interview report about the affiliate marketing industry:
"What challenges are currently facing the affiliate industry?
"One of the big challenges in the affiliate marketing space is for publishers to not only retain their existing share of advertisers' budgets but also to grow it," said Kerri. "I think there is always new competition entering the industry. We have seen a lot of new and exciting business models enter the online space with Web 2.0. These businesses definitely create additional competition among publishers for advertiser budget, which in turn increases the complexity of the space. As a network, we want to make sure we help publishers maintain visibility with our advertisers in addition to increasing their distribution to help all parties grow their piece of the pie."
Helping advertisers define where search publishers fit in among agencies and in-house teams can sometimes be a challenge. Kerri feels that the often-misunderstood role of search publishers is due to misperceptions and the lack of client education.
"I hear a lot of blanket statements regarding search publishers," she said. "Such as, 'You shouldn't allow publishers to bid on your branded terms or trademarks.' Those kind of statements fail to take into account the complexity of the overall search engine landscape. Every advertiser is different. You need to take an in-depth look at the role search publishers might play based on each individual advertiser's goals and how those goals best maximize the advertiser's search strategy within the vertical. It's also important to note that it's not an all-or-nothing proposition - advertisers can elect to start slow and experiment with a small number of search publishers and take it a step at a time, if that fits their objectives. It is definitely something we are always striving to educate our advertisers on so that they can make the best decision as it relates to the overall ROI of their programs."
Kerri also cites the overall health of the economy in the upcoming year as another challenge for the affiliate marketing industry. "Such factors as the credit crunch due to the subprime loan situation, the fluctuations in oil prices, and other economic concerns may impact online spending," she continued. "We saw this in 2001, but performance-based marketing proved itself as a viable and adaptable business model thriving in even the most adverse economic conditions."
What about the annual proclamation of the affiliate industry's demise?
"Having been in this industry since 1999 and seeing it survive the dotcom bust, unfavorable economic conditions, and an onset of new competitors every year, I can confidently say that our industry continues to grow at a healthy rate," Kerri replied. "I've heard the predictions of demise, but what I've heard more loudly are the advertisers I speak with every week who continue to be very bullish on this program and, if anything, are eager to look for additional ways to grow their programs. The doomsayers must be talking with different people than I am. You just have to look at the data to know the industry is thriving."
How do you feel about the affiliate industry's health overall?
"Looking at our growth trends, I know there is so much more opportunity out there, both domestically and internationally," stated Kerri. "We have just barely scratched the surface. I talk with advertisers who have been part of this space for more than a decade and occasionally they wonder if we will hit a plateau with their programs. But every year new publishers enter the space and expand distribution in new and exciting ways. There is still so much opportunity that has not been realized or developed yet. Affiliates have always been, and will continue to be, the most creative and innovative people in all of online marketing.
"I always come back to the question of 'What is the consumer doing online, and are we doing a good job of supporting our advertisers and publishers in their efforts to reach that consumer?' As consumers' habits change, our advertisers and publishers will continue to adapt to meet their needs. It is important for us as a platform to bring those parties together -- the consumers, the advertisers, and the publishers -- and to make sure we have the features and functionality to support them."
In what ways is Commission Junction addressing industry challenges and needs?
"We have focused on accelerating the growth of our network to keep up with the demand," said Kerri. "We have more than 2,000 advertisers and 60,000 active publishers, so the quicker we can facilitate those relationships, the faster they will be up and running and making money. So we are always looking at how publishers and advertisers find one another. Once they find one another, how do they work together? How are they going to communicate efficiently? How do they determine what the success matrix is for their relationship? We do a lot of in-depth analysis and review in terms of each of those questions as they pertain to accelerating relationships in our network, because ultimately that's what makes the difference between a successful program that achieves continual growth versus a program that stagnates."
Recently, Commission Junction introduced publisher and advertiser advisory boards. The input those boards provide, according to Kerri, has been instrumental in giving the network insight into improving the product roadmap to meet the clients' needs. The advisory boards are just one way Commission Junction gathers and incorporates client feedback. "We also formed a Product User Group," said Kerri. "We recruited clients who know our core product inside and out to 'bang on the keys' and give us feedback so we can improve our core technology at the daily functional level."
Aside from suggested technical improvements, Commission Junction has received significant feedback advocating for improved communication between advertisers and publishers. "The message we heard repeatedly was about the industry's need to improve the overall communication between publishers and advertisers," stated Kerri. "We feel a lot of accountability and responsibility to help facilitate that. We want to go beyond simply saying 'Here is their email address now you can contact them.' The goal is to enhance the core platform to be truly communication-oriented. Our network's diversity and breadth in terms of the types of publishers and advertisers we have is a vital component to our success. I think it is one of the competitive differentiators that we really work to expand. It is great to be able to have that diversity and to give our clients so many choices in terms of who to work with. But it is equally important to ensure that our advertisers and publishers have the ability to find one another in the most efficient way possible.
"I think there is still a lack of understanding among publishers and advertisers as to how they can be most successful together," she continued. "The introduction of Web 2.0 has been a great injection into the overall space. But it has also increased the complexity in terms of how do I, as an advertiser, work with this new kind of publisher, whether they are social media or another type of Web 2.0 property? As if search wasn't a complicated enough of a concept in terms of managing relationships. Now we have introduced all these other new publisher models to the mix. We have made a lot of investment both on the technology and the resource end focusing on matchmaking and client education.
"Ultimately we strive to be the best online performance marketing consultants. I think that is what our clients want and expect from us because there is so much complexity and noise in the space," Kerri added. "We had an excellent year in terms of adding large, new advertisers, including significant wins like Apple, Dell Home, Dell Small Business and Symantec. We are also really excited about the Border's program, which will formally launch in 2008. It is rare to have an advertiser with such a strong brand that has been absent from the affiliate marketing space. It's exciting to bring a new revenue opportunity of this size to the publisher community. This is a relationship business and I think it is due to the way we build out those relationships that we were able to bring those new advertisers on board."
There where also some bumps in the road in 2007 for ValueClick, Commission Junction's parent company, in terms of legal challenges. What lessons can be learned from these challenges?
"The FTC matter is an industry-wide review of lead generation, similar to how they have reviewed the paid search industry, the email industry, etc," replied Kerri. "It's their job to review these advertising channels as they reach critical mass, and to ensure that consumers are being treated fairly. We applaud their work and look forward to the conclusion of their review so that any lines that are drawn and sharp and bright, and put all providers on a level playing field. That's really all I can say about it at this point."
What are Commission Junction's plans and goals for 2008?
"We have achieved a lot of positive momentum over the years and we are not going to drastically veer away from the direction our core principles have taken us," stated Kerri. "Performance marketing is a relationship-based business, and I think one of our biggest differentiators, when you look among the networks, is the number of relationships we support. So it is vitally important that we recruit and develop the best publishers we can find, as well as the best team to support those publishers. We will continue to expand our sales offices internationally in 2008. We have also had a quite a bit of domestic expansion. I am happy to report that we have built out our New York and San Francisco offices, and we are hiring more people for our Westlake Village office north of LA, in addition to placing new resources in our Santa Barbara and Boston locations. We will be expanding to the Chicago area as well in 2008. Because we are in a relationship-based business, we feel that it is vital that we constantly expand our talent pool.
Kerri believes the health of the economy will shape some of Commission Junctions interactions with traditional and emerging media in 2008. "I think a lot of the traditional media establishments are concerned about what the overall economy is going to do next year," she said. "Where they will continue to see growth is in online advertising. I predict you will see traditional media conglomerates and agencies try to move more into the online space and maybe look at opportunities that they wouldn't have looked at a year ago.
"Sometimes today's market feels like the dotcom boom all over again. Unfortunately, some of these emerging Web 2.0 companies may not be around in six to twelve months. That being said, we are actively looking at emerging Web 2.0 markets to determine which will be viable, sustainable distribution," she said. "When I look at different applications that are successful, like Facebook, I think they are getting a heck of a lot smarter in terms of allowing consumers within their communities to be able to dictate what they will and will not promote rather than being dictated to. We have seen better conversion rates thanks to consumers being empowered in that manner. I think the nature of the overall model works a heck of a lot better than just having these blanket ads that roll across ad networks. It is silly to expect that some fifteen year old on MySpace is interested in the mortgage offer that is flashing in front of them.
"When qualifying emerging publisher models, we ask a lot of questions such as: Does this model make sense for our performance-based platform? If not, why not? Perhaps at the end up finding that a new model isn't the right fit, but we will investigate the opportunity thoroughly. There is so much noise out there, and a lot of that noise may never come to fruition, so we really need to do the due diligence on behalf of our advertisers," Kerri explained.
"Maintaining our high network quality standards is part of that diligence and will continue to be a major focus next year," she added. "It is the monitoring layer that sits on top of our core platform. There are certain verticals in which our advertisers are subject to more regulation. We have put in place additional network quality and brand compliance efforts to support those verticals. Financial services, for example, has strict regulations about annual percentage rates and how they can be displayed on the publisher sites. To insure compliance with those regulations, we added additional monitoring layers to make sure publishers display messages on their sites in a way consistent with those regulations.
"In addition, we will be expanding upon our core technology through the addition of new features, the introduction of new APIs or web services, as well as additional client services," continued Kerri. "One successful initiative we introduced in 2006 was Value- Added Services, which fulfill our advertiser's specific needs such as publisher recruitment, publisher optimization, and brand compliance. We will continue to enhance these services in 2008.
However, she believes that technology alone no longer defines what a network is. "When I speak to potential clients, they often have the opinion that it will be difficult for them to differentiate between the core technologies of individual network platforms," Kerri explains. "I think I speak on behalf of my competitors when I say that as an industry we need to enhance and grow our technology and do a better job of marketing it to prospective advertisers and publishers.
"We continually strive to ensure that our technology can accommodate accelerating activity within our space, as the diversity and breadth of our network is a truly our greatest strength," emphasized Kerri. "We support so many advertising verticals and we attract a wide variety of publishers to those verticals. That alone makes Commission Junction unique within this industry."
Source of the above post comes from Revenews Blog"
What do you think about this? Please feel free to share you ideas. I'm happy to hear from you. :)
Cheers,
zMillionDollars
Labels: home based affiliate business, home based internet marketing business
posted by zMillionDollars @ 7:11 PM
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