AffiliatesNeeded.Com What's New In Affiliate Marketing

Note: This article is a reprint of a response Rebecca Madigan, Executive Director of the Performance Marketing Association, gave in the comments section of our Illinois Gov. Quinn Flaunts “Fairness” in Passing Nexus Tax, Cuts off Nose to Spite Amazon story. The response shed light on the PMA’s stance on the situation. We contacted Rebecca and asked if we could reprint the response separately so it would not be lost in the comment thread of the other article and give readers more of an opportunity to reply to the PMA. Here it is, for your information:

I don’t have much to add to the amazing comments on this thread. I’m late responding because of hard cross-country travel. I’m not going to share publicly where I was because I was visiting with state legislators in other states. The Alliance of Main Street Fairness crew are following the activities of this industry and the PMA very carefully, and have tactically reacted to everything we do. We show up – they show up. Their lobbyists see us with affiliates at various state houses; they follow us around and undo all our work with their yarns. They read this website. They quote comments from this website back to legislators. We believe they infiltrated a weekly strategy call we have with public policy folks and lobbyists. They are playing dirty – on many fronts.

This year the game changed. The money and power behind these big box retailers is much greater than we expected. Our fate was probably sealed years ago when the big box guys started getting the right politicians elected who could force this legislation through, and their guys just took office.

We realize we lose the support of more people by keeping our tactics close. But after doing this for 3 years, and getting burned many times, we made the decision that the risk of a more publicly waged grassroots campaign was much greater than the gains.

We ask all our grassroots advocates to join private in-state Google groups, where we share and discuss updates and tactics. Several networks post information just to affiliates in states where there are active bills. ABW has a private forum. It’s not to keep affiliates or interested activists out, it’s to keep the bill proponents out.

Agree with Jim Kukral’s post that we have a branding issue. Agree we could do a better job in the press. Agree we need more people to help. Agree the PMA site could be better updated. But we’re a small industry, the PMA is a small organization, and we decided to put most of our resources directly into the actual fights. I’m not updating our site because I’m in multiple states every week, along with amazing affiliate activists, fighting this on the ground. We wish more than anything we had more resources to keep everyone better updated.

And now to the affiliate activists. YOU are the ones who are making a difference. We’ve beaten this back in every state since 2009, the only state to pass in 18 months. It was accomplished because legislators got to see real live business owners who would be devastated if passed. Amazing, wonderful, passionate people have gotten involved. Tim, Scott, Brian and so many other Illinois affiliate marketers put their businesses on the line and fought their hearts out. As someone said to me Monday, “If this passed and I didn’t do anything, I’d feel terrible.” Yes, that’s a very terrible feeling.

Here’s the deal: we’re actually still winning. Yes, Illinois was a terrible blow but the Governor took so long because the Illinois affiliates made it extremely difficult for him to sign. We’re seeing a kitchen sink of tactics and misinformation being thrown at this by the proponents because they’re desperate, they don’t have logical legal arguments on their side like we do. We still have uber-successful affiliate business owners who don’t whine about unfairness but who work hard, grow their businesses and contribute to the economy.

We can’t back down – we aren’t backing down. We’re actually going to UP the game. We can win this war!

The fallout from Governor Pat Quinn’s ratification of the ill-conceived affiliate nexus bill HB 3659, Illinois’ version of the so-called Amazon Tax, has begun. As threatened upon the approval of the bill, Amazon terminated its relationship with all affiliates within Illinois. Overstock and other merchants are expected to follow suit.

According to the Chicago Tribune, Illinois has approximately 9,000 companies active in the affiliate industry that generate $610 million in taxable revenue for the state. All will be impacted by the approval of the nexus tax and many will be stripped of revenue earning agreements as out-of-state merchants like Amazon terminate deals in order to avoid the tax.

Today one of the well known companies who focused on affiliate marketing indicated it would leave the state. CouponCabin, winner of multiple industry awards, is currently based in Chicago, is active in the community with $700,000 worth of donations to local charities, and has over 40 full-time employees. According to a press release issued by Scott Kluth, CEO of CouponCabin, the company is now actively seeking to leave Illinois:

“The Governor’s approval of HB 3659 is deeply disappointing. As a result, Illinois will lose jobs, many thriving businesses like CouponCabin and other affiliate marketing firms will be forced to move to other states, and most important, this law will not generate the tax revenue Illinois thinks it will collect.

Those of us who opposed HB 3659 made every effort to persuade the Governor that it is a misguided attempt to bring ‘fairness’ and new revenue to Illinois by requiring out-of-state merchants who advertise on websites operated in Illinois to collect sales taxes from Illinois customers.

The reality is that just like other states that approved similar legislation, Illinois will not collect additional tax revenue. Instead, the merchants who would be affected by this law will simply sever their contracts with Illinois affiliate advertisers, as they have done in every other state. The only result of this law is that high-growth businesses like CouponCabin will be driven out of Illinois to maintain their relationships with out-of-state merchants.

We support efforts to find a solution in Illinois that could correct the damage HB 3659 will cause. We will also continue to work within our industry toward a national solution to these tax issues that would enable our businesses to continue to grow and create more jobs, no matter where they are located.

In the meantime, CouponCabin is actively exploring moving to Indiana. It’s a shame we have to consider leaving our longtime home in Illinois, but we will do what is best for our business.”

Other large affiliates who could be severely impacted include FatWallet (over 50 full-time employees), Brads Deals and Mr. Rebates.

Editor’s Note: There has been a lot of discussion this week about disclosure. One particular high profile incident was sparked by Chris Brogan who sent out a tweet with a link about StudioPress. The link lacked disclosure within the tweet and Danny Brown, Co-Founder and Partner at Bonsai Interactive Marketing, called Chris out. Now Chris is quite clear about his relationship with StudioPress on his blog, but with his elevated profile what Chris does attracts a lot of scrutiny. He gets called out pretty frequently for slights both real and imagined.

It’s at this point Jason Falls, Founder of Social Media Explorer, entered a brief but spirited debate with Danny on Chris’s behalf stating that if a business relationship is clearly and publicly disclosed somewhere it doesn’t need to be disclosed everywhere (aka buyer beware). Jason added the well taken point, “Let’s be reasonable. This is Twitter.”

Danny strenuously argued the point that many, especially in social media, agree with that all instances of affiliate links should be disclosed. Unfortunately I am pretty sure the FTC would agree with him in principal.

Which leads us to today’s guest post by Daniel M. Clark, Founder of QAQN, and reprinted here in it’s entirety with his permission. Daniel brings up a very interesting point about affiliate links in particular and how disclosure of affiliate relationships is held to a more stringent standard then other forms of sponsorship. It could be just the taint of affiliate marketing, as if somehow affiliate advertising is “seedier” than other forms of advertising. What Daniel doesn’t point out is that only white hat marketers (affiliate or otherwise) would have any moral pangs about disclosing. Black hat marketers would just keep distributing links.

I hope you enjoy the article and take part in the debate in the comments. (BTW in the spirit of this topic the links Daniel included in his original post are kept intact. They are all affiliate links and they are all his.) Enjoy.

The Hypocrisy of Affiliate Disclosure Rules

I might end up doing a show about this down the road, but as I was running around the internet this morning, something occurred to me. I came across some articles about the disclosure of affiliate links, and how we’re supposed to disclose everything now, everywhere we are. Post an affiliate link on your site? Disclose. Tweet an affiliate link on Twitter? Disclose. Facebook? Disclose. No matter what the context, we’re supposed to disclose.

Well, let me ask you two questions, and I’m genuinely curious what you think.

First, why is it that other forms of media are not subject to such stringent rules?

Television and radio are not required to disclose every single relationship they have. Movies? Product placement is the norm. There’s never been a requirement that says “If you show a product in your movie, you must disclose that you were paid to put it there.”

Second, what about situations where there’s money on the line, but it’s not an affiliate relationship?

Here’s an example: Chris Pearson created the Thesis framework for WordPress. (Wanna make a guess about whether or not that link was an affiliate link?) Chris is very active on Twitter. He promotes Thesis pretty regularly. He potentially benefits from every link back to Thesis because he’s its creator! So… should Chris be required to “disclose” that he potentially makes money when people click his links? Remember, affiliate links are not guaranteed compensation – only if someone makes a purchase does an affiliate get paid. Maybe someone clicks one of Chris’ links and buys Thesis, maybe not.

I could be another example. I’m launching a podcast consulting gig. Do I need to disclose when I link to my pages that I’m going to make money if you hire me? Technically, according to the concepts and the spirit behind what we are required to do with affiliate links, Chris and I should both be disclosing on each and every link we put out there.

I’d like to know what you think about this.

Minnesota is apparently ready for round 2 of its attempts to pass an Amazon Tax. Governor Mark Dayton (D) recently recommended a nexus tax for the state budget.

The last time this bill came around Connie Berg, Owner of Flamingo World, did a great job of leading the affiliate push against the measure,  but she will need more help this time. According to the Performance Marketing Association:

The next steps in the political process include both houses of the state legislature to propose and vote on their own budgets. The Republican Party chairs have already come out publicly and opposed the governor’s tax increases. This will impact Minnesota affiliates and out-of-state merchants who do not have a presence in the state.

While, as the PMA points out, Republicans who control both Houses in Minnesota are anti-tax, Dayton’s team has smartly positioned this as “enforcement” legislation.

Specifically this amendment proposes changes to Minnesota Statute § 297A.66:

The Governor proposes amending statutes for sales tax nexus to create a rebuttable presumption that a retailer maintains a place of business in the state if they enter into an agreement with a solicitor for the referral of Minnesota customers for a fee and the retailer’s gross receipts are at least $10,000 over a 12-month period….The proposed change will promote fairness and compliance with the sales and use tax by clarifying the expectation that remote sellers of taxable products to Minnesota purchasers should collect and remit taxes as do storefront retailers selling the same products…This change would require remote sellers who sell to Minnesota purchasers that are referred under an agreement by a business that has nexus (physical presence) in Minnesota to collect the sales and use tax on those purchases. This situation typically occurs when a purchaser goes to a Minnesota seller’s web-site and then is directed to a remote seller’s web-site to purchase products. Several states have taken steps to ensure the collectability of tax by remote sellers in recent years and more states are considering such action in current legislative sessions. The current proposal is similar to the approach adopted by the state of New York a few years ago.

The referenced New York state law also has yet to show any profits and faces continued legal challenges. Like in other states such misguided legislation is poorly thought out because should the bill pass Amazon, the main target of such legislation, will simply terminate its agreement with affiliates. It will not generate revenue for Minnesota.

Senator Julianne E. Ortman introduced bill SF458 – “Solicitor definition for federal nexus and Internet sales tax purposes” in support of Dayton’s budget language. If you are an affiliate in Minnesota we urge you to contact Senator Julianne E. Ortman (R), who authored bill SF 458, as well as your local representative and the governor’s office. Connie Berg has also generously made her self available to any affiliates who need guidance drafting letters/emails or just want more information about how they can help, to contact her at connie (at) flamingoworld.com.

$275 million is what News Corp. spent on improvements to MySpace in 2010. That was simply in an attempt to right the sinking ship that the network has become.

Now, News Corp. COO Chase Carey told analysts during quarterly earning reviews, that:

“With a new structure in place, now is the right time to consider strategic options for this business. The new MySpace has been very well received by the market and we have some very encouraging metrics. But the plan to allow MySpace to reach it’s full potential may be best achieved under a new owner.”

However their attempts at resurrecting MySpace by targeting the under 35 demographic through new site features like playlists, custom backgrounds and hooks into Facebook have met with lukewarm interest. Causing Time.com’s Techland blog to put out such tongue-in-cheek lists like: 5 Failed Social Networks Even Worse Than MySpace.

In fact MySpace can be credited with some of News Corp.’s biggest losses in Q2. News Corp. has tellingly classified MySpace in the “Other” category, for which losses grew $31 million dollars over the previous year to$156 million dollars in total losses in Q2. The huge jump in losses was pinned on “lower search and advertising revenue” on MySpace.

That type of performance should attract a lot of buyers.

Both Samsung and Apple have come off of record high share prices. In Samsung’s case the growth in share price reflects investors’ expectations that company will take a bite out of Apple’s market share in both smartphones and tablets. According to Reuters, Samsung’s market value is an estimated $136 Billion dollars which is equal to the combined value of Sony, Nokia, Toshiba and Panasonic.

The winners of the Affiliate Summit Pinnacle Awards were presented on Tuesday, January 11, 2011 at Affiliate Summit West 2010. The awards took place at the Wynn Las Vegas.

Affiliate of the Year

• Deals.Woot,  @woot

Affiliate Manager of the Year

• Carolyn Kmet, Director of Affiliate Marketing, Groupon,  @catango

Exceptional Merchant

• Zappos @zappos

Affiliate Marketing Advocate

• Lisa Picarille, Founding Board Member, Performance Marketing Association,  @lisap

Best Blogger

• Eric Nagel, Blogger, ericnagel.com @esnagel

Affiliate Marketing Legend

• Todd Farmer, Professor of Internet Marketing, University of San Francisco,  @toddfarmer

Congratulations to all of this year’s affiliate marketing stars from the staff at ReveNews!

Editor’s Note: Usually we don’t reprint articles from other sites but this one, written by Joe Sousa on his blog What Does Joe Think, was so well done and funny we had to share, with Joe’s permission of course.  Enjoy!

Last year I handicapped the 2010 Pinnacle Awards and only got two picks right. Maybe I can improve on that this year.

The Pinnacle Awards are given out by Affiliate Summit and recognize the best and brightest in the affiliate industry. There are 6 different categories and they accept nominations from the public and then the Advisory Board votes on the winners. For some history of the awards you can check out the Affiliate Summit Pinnacle Awards History that covers everything from 2006-2009.

In 2010 the winners were:

Affiliate of the Year: Nicholas Koscianski (Nickycakes)
Affiliate Manager of the Year: Matt McWilliams
Exceptional Merchant: eBay Partner Network
Affiliate Marketing Advocate: Angel Djambazov
Best Blogger: Jeremy Schoemaker
Affiliate Marketing Legend: Scott Jangro

So without further delay lets get into the odds for this year. These are just my opinions and if I pick you that will probably only hurt your chances of actually winning. Sorry. And as always please remember: These odds are for entertainment purposes only. Please… No Wagering!

Affiliate of the Year

Deals.Woot – Deals.Woot.com is a deal aggregator and I am sure they can push some good volume to the merchants. They work and they are the first company to be nominated. They pull in deals from many different merchants and also allow users to submit deals so they have a very broad reach. In the past the nominees have all been individuals so that might put them at a disadvantage.

Odds on winning? 10-1. I lean more towards individuals for this award as opposed to companies.

Kim Rowley – This will be Kim’s third nomination for Affiliate of the Year and while there are two affiliate managers who have received 3 nominations in the past without winning (Jamie Birch and Stephanie Harris) there has never been an affiliate nominated three times and I can think of few people more qualified for that honor than Kim. She was my pick last year but lost out to Nickycakes. Kim runs multiple sites including Shopping Bookmarks, Steal The Style, and Shoeholics Anonymous.

Odds on winning? I would probably put Kim’s odds at 2-1 on this and she is my heavy favorite in this category.

Tricia Meyer – Tricia is a newcomer to the Pinnacle Awards but could end up giving Kim a run for her money. Tricia runs Sunshine Rewards along with many other sites. She is a Pittsburgh Steelers fan which could hurt her odds a bit in my mind. Tricia is a former lawyer and has a very good handle on what a good affiliate is and she is a great example of how to do this affiliate thing the “right” way.

Odds on winning? Tricia gets 5-1 odds. She will be in the race for this award.

So who will win? My money is on Kim Rowley. Third time is a charm and Kim is very deserving of this award. Tricia will probably be taking home some hardware sometime in the next couple years but this is Kim’s year.

Affiliate Manager of the Year

Carolyn Kmet – There are few affiliate managers out there who have been around as long as Carolyn. I remember hearing about her back in 2002 or 2003 when I first started in this industry and she has been impressive whereever she has been. Recently she took over as affiliate manager at Groupon.com and I know she will be able to do great things with that program. Maybe Groupon knew how effective Carolyn would be in growing their business when they turned down that huge offer from Google. This is Carolyn’s second nomination and is probably a favorite for this award.

Odds on winning? Carolyn is the favorite at 3-1 odds.

Kim Salvino – Kim is the senior account manager and affiliate evangelist at Buy.at and was a finalist for this award in 2009. Kim has won 3 different Abestweb Best Of awards including Best Affiliate Manager in 2008, Best Affiliate Program in 2007, and Most Improved Affiliate Program in 2007 when she was with 4Checks.com. So as you can see she is no stranger to winning awards. I have never personally worked with Kim on any programs but she does know her stuff and is a threat.

Odds on winning? I will give her 5-1 odds. Maybe next year Kim.

Wade Tonkin – Wade along with being part of the team at GTO Management, Wade recently took over the affiliate program at Football Fanatics and they are very lucky to have him on board. Wade has a ton of experience in the affiliate industry and he is on my short list of great affiliate managers. This will be Wade’s first Pinnacle Awards finals and it can be tough for first timers. He might crack under the pressure and expectations or he might come through with flying colors and take home this award.

Odds on winning? Wade gets 4-1 odds. He has a chance but if he loses he can always drown his sorrows at Five Guys.

So who will win? This is a very tough field and I don’t envy the people who vote for these awards. All three of them are very deserving and I am guessing the voting will be very close for this award. But I will go with the odds and take Carolyn Kmet.

Exceptional Merchant

This is a very tough category to pick. On one hand you have two of the biggest retailers on the internet in Buy.com and Zappos. On the other hand you have a smaller, niche site Tiny Prints that focuses on custom greeting cards, wedding invitations, and the like. I have never done much with any of these merchants so it is hard to rate how well their programs perform. Past winners have been both big companies like Amazon and eBay but also smaller ones like CelebrateExpress.com so you can’t discount TinyPrint’s chances. So lets handicap this race:

Buy.com – They have a pretty wide reach and tons of products and their program is overseen by the wonderful Melissa Salas. I think Melissa gives them an advantage over the other nominees.

Odds of winning? 2-1

Zappos – Zappos is one of the best run companies on the internet and they are expanding far beyond shoes and getting into markets like watches, housewares, clothing, sporting goods, and more. Their partnership with Amazon is a boost for them. This is their first nomination.

Odds of winning? 4-1

TinyPrints – If you like rooting for the little guy take TinyPrints in this fight. They may be a small company compared to Buy.com and Zappos but they aren’t affiliate lightweights. They are the #2 merchant on the Shareasale PowerRank Top 100 and their numbers would be very attractive for affiliates to work with them.

Odds of winning? They are the longshot here at 20-1

So who will win? If I were putting money down on this I would take TinyPrints on the 20-1 odds since they do have a good chance but I think Buy.com and Melissa Salas will take home this award.

Affiliate Marketing Advocate

I know this is a huge cop out but all three of these nominees are very deserving. There are dozens of other people who put in a lot of hard work on behalf of the affiliate industry and it is a shame to not recognize any of them but Rebecca, Lisa, and Brook have all done great things this year for the industry. Rebecca Madigan is the executive director of the Performance Marketing Association, Lisa Picarille is the Content Strategist for the PMA, and Brook Schaff is the Board President for the PMA. I would say give them all an award for their great work.

See how you can get involved with the Performance Marketing Association and start making a difference in this industry.

If I had to pick a winner? Rebecca Madigan is very deserving of this award so I am guessing she will get it but all three of them deserve some sort of recognition.

Best Blogger

Lisa Barone – Lisa has been in the SEO community since 2006 and while her blogging isn’t specifically focused on affiliate marketing she is one of the best bloggers I have read in the business. At Outspoken Media Lisa blogs about every other day and when she attends conferences she is a live blogging machine and can crank out the content like few others. It is almost as good as being there.

Odds of winning? If it were just based on a huge volume of quality content Lisa would probably win easily but since Lisa isn’t focused on affiliate marketing specifically her odds are gonna take a hit. 4-1

Eric Nagel – Eric was my pick for affiliate of the year last year and this year he is up for best blogger. There are few affiliate bloggers out there that provide as much practical information as Eric. Every one of his posts has something you can take and implement in your business. He doesn’t post often (probably averages 2-3 posts per month) but what is there is gold.

Odds of winning? 3-1. I think this could be Eric’s year to take home some hardware.

Geno Prussakov – Pretty much every day you can count on at least one quality post from Geno. Much of the content Geno puts out is more industry news related than practical “how to” information and you can always count on Geno’s posts to give some good statistics. This will be Geno’s second nomination for the best blogger award and I picked him to win last year based on a bunch of quality content.

Odds of winning? I will give Geno 3-1 odds again. He will be right in this until the end.

So who will win? I could make a solid caes for all three nominees. Personally I get the most out of Eric’s blog but Geno’s isn’t far behind. I wish I had a three sided coin so I could flip it and pick a winner. I am gonna go with Eric to win it though.

Wayne Porter Affiliate Marketing Legend Award

Brad Waller – Just like last year I have to claim a bit of ignorance when it comes to Brad. I met him last year but we never got much of a chance to talk. I know he has been involved in the affiliate industry longer than probably 99.9% of the affiliates out there. I think his first site went up in 1994. Many of the affiliates today were still in elementary school when he got started. Based on longevity he is already a legend.

Odds of winning? His true odds are probably better than this but since I don’t know too much about him I will go 6-1. A bit better than last years odds.

Jen Goode – If niceness was part of the judging criteria Jen would win in a landslide. Jen is primarily an artist but she is also able to combine that with affiliate marketing. Bridging the gap between those two industries can be tough but Jen has done a great job at it. Her hook is her penguins and you can see her work at JGoode Designs.  Jen heads up the Affiliate Summit Newcomer program which connects first timers with veterans and is one of the many things that sets Affiliate Summit apart from other conferences.

Odds of winning? I hate to do this to Jen but I am guessing she will have some pretty long odds to win this award. I would love to make them lower but I have to go 9-1. Sorry Jen. But I would love to see you beat the odds and take home this trophy.

Todd Farmer – Todd has been around this industry for many, many years in quite a few different capacities. From his early days developing the MyAffiliateProgram software and the Kowabunga platform Todd has seen it all. His latest project MyContentPro helps people make their content rock.

Odds of winning? I am gonna put Todd in as the favorite here at 3-1. He is very well liked in the industry and is one of the friendliest people you will meet and I think that will go a long way in the voter’s eyes.

So who will win? Sorry Brad. You might have to wait for next year. I think Todd Farmer will be the Affiliate Marketing Legend winner.

Congratulations to Kim, Carolyn, Buy.com, Rebecca, Eric, and Todd. You are my favorites to take home the hardware.

What are your thoughts? Am I totally off base on my picks? Can you provide any information to sway my choices? Leave a comment below and let me know.

And if you haven’t done so already sign up for Affiliate Summit West 2011 ! It will sell out very soon.