Shawn Collins joins Monte on Tonights DomainMasters
06/28/2006 - Monte Cahn
Shawn Collins is CEO of Shawn Collins Consulting, an affiliate program management agency, and an organizer of the Affiliate Summit conferences. He authored the book Successful Affiliate Marketing for Merchants and the AffStat affiliate marketing benchmark reports.
Topics for this week include: trends in affiliate marketing, future of the industry, thoughts on Google potentially starting a CPA network, overview of Affiliate Summit, & who is going to be there.
[Commercials]
Monte: Hello, everyone, welcome to another great week of Domain Masters. I’ve got a great guest today. We’re going to talk to Shawn Collins, CEO of Shawn Collins Consulting. He is a affiliate program management expert. He is also the founder and conductor, as you would call it, for the Affiliate Summit, which is a very successful gathering of affiliate partners, merchant services and networking folks. And he’s been extremely successful in his industry and has a great newsletter and a great site and will be attending the Affiliate Summit July 9th through the 11th and also SES, so we’ll go over some of the activities with him of the show, kind of find out what’s going on in affiliate marketing, the future of the industry, his thoughts on the Google potential launch of a CPA network and some other things about domain names.
In addition, at the end of this interview, I will also just touch base with a pretty significant meeting that happened today at the ICANN meeting in Marrakech, Morocco; I was not able to make it due to another obligation in travel that I had to make. But for the first time, a gathering at ICANN was geared around the marketplace for domain names and several important items were discussed today regarding the “tasting” of domain names, using domain names for the 4-day grace period or 5-day grace period, deleting them, how one goes about valuating domain names in the aftermarket and the questions that are going back and forth whether this is appropriate use for domain names; can people really go and taste; is it legal; is it against ICANN policy, those types of things. So a number of my cohorts and associates, who are both friendly competitors and other people in the marketplace, represented both sides of the market today and I have some notes from the transcripts from that meeting that I’ll touch base at the very end of that show.
So with that said, we’re going to break for a commercial and be right back on with Shawn Collins from Shawn Collins Consulting. Stay tuned.
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Monte: Hi, welcome back to Domain Masters. My first guest, Shawn Collins, is CEO of Shawn Collins Consulting, an affiliate program management agency and organizer of the Affiliate Summit Conferences. He authored the book “Successful Affiliate Marketing for Merchants” and “AffStat, the Affiliate Marketing Benchmark Reports.” We’re going to talk to Shawn today and talk about the Affiliate Summit. We had the pleasure of attending the first Affiliate Summit that we attended back in Las Vegas and it was very successful and feel that it is an important show. All of those that are listening, that are successful affiliate marketers should be at this conference. The conference is in Orlando, from July the 9th through the 11th, at the Lake Buena Vista Hilton Walt Disney Resort. Shawn, welcome to the show.
Shawn: Thanks a lot; its great to be here.
Monte: Great. So, give us a little background. You’re kind of famous in the affiliate marketing business. Give us a little background of how you got into not only affiliate marketing but into the Internet in general and where you kind of, you know, left your mark and how you brought things up to where you are today.
Shawn: Okay. Well, I guess I sort of backed into the whole industry back in the late nineties. I was working in circulation for print magazines and I was just sort of bored with where I was so I was looking for something new and I was just scanning The New York Times looking at different jobs and I ended up over at a start up club called MedSite.com; this was back in 1997. And, what they were trying to do was emulate the whole Amazon model down to the fact that they were going to have an affiliate program and so I was just . . . it was a very small company – I think I was the third employee – and I was sort of thrust into taking care of their marketing and so I just sort of had to figure out how to make an affiliate program. We had a homegrown technology and so I just struggled through that whole process of just trying to make up best practices and [inaudible] newsletters or [inaudible] at that time and so I just managed to figure out how to do things on my own and after doing that for a-year-and-a-half I went over to affiliate program directory [inaudible], which was owned by Internet.com at the time and I ended up just meeting a lot of people in the industry that way, a lot of the early movers and shakers, James Marchiano, who had founded Refer It and a lot of the people who are still around today, like Todd Crawford, who was at Commission Junction at the time and a lot of folks like that, [inaudible] Digital River. And so I sort of learned how to run conferences through the Refer It companies as well as got a more refined view of how to run affiliate programs. This was back in ’99, 2000 and after that I moved on to a company called ClubMom.com, where I ran their affiliate program through 2004 and that’s where I sort of put all my tools to work and I sort of formalized a lot of different processes and how to run affiliate programs and started making a lot of more connection running regional events and things. That sort of set the groundwork for where I am today, where I split off from there a couple years ago and started running affiliate programs as a consultant as well as running the Affiliate Summit conferences with my partner, Missy Ward, who works over at CP Empire.
Monte: Now, the Affiliate Summit – how many conferences have there been, thus far.
Shawn: This will be the fifth one; the first one was back in November of 2003, and then just starting this past January, that was the first time we did . . . we moved to a twice yearly schedule. We had one last June and last January. Now we’re just sort of going to stick to that kind of schedule. Have one on the East Coast and one on the West Coast. The one this time will be done in Orlando and then we’re going back to Las Vegas next January.
Monte: Great. And how many people typically attend the conference in totality?
Shawn: We started out, we just had a couple hundred and then we broke the 515 last June and then this past January, we were at about 1,200 and coming back to the one this summer, we’re just about doubling from last summer. That said, [inaudible] typical business where its . . . usually summer isn’t quite as big as the fall or the winter, so we . . . we’re not quite hitting the numbers we hit this past January but we’re [inaudible] the numbers that we did last summer.
Monte: And, who should attend the conference: should it be newbies or people that are well experienced? Is it a sophisticated conference or is there something for everyone?
Shawn: Yes, its really something for everyone. We have three different educational tracks: one geared towards affiliates; one towards merchants running the affiliate programs; and then sort of a general track for just anybody in the industry at all. Its . . . we try to really balance out the sessions so they really can appeal to the people that are veterans as well as newbies. And one big focus we have which we make to make it different from other shows is that we have a lot of different networking events that are structured; we just asked a lot of the attendees over the years what they want and they keep coming back and saying they want just different ways that are organized to help them meet people and make deals.
Monte: Now, you guys do a unique networking kind of a networking event, where you get some face time. Kind of like a speed dating type of format, only with people that are in business with each other, or introducing people that should be in business with each other; is that correct?
Shawn: Yes. We . . . actually, we did that the first four times around the show and actually, this time we’re moving away from that just because we found that as we scale up in size, it was making it tougher to really execute that session, ‘cause we were having a lot of people that set up matches where they wanted to meet certain and just with the number of people participating, we were having no-shows and that was frustrating some of the participants. So this time we’re doing something different where there’s not really any event set up but its going to be called Bingo Networking, where as people enter the hall, they’re going to pick up a card that has 25 spots on it and they’ll drop their business card in the little fishbowl and then they’ll go around and we’ll have very short time meetings, where you have to meet 25 people in a short period of time and each person you meet, you get them to sign a box on your card and at the end we’ll call names out of the bowl and somebody’s going to win $1,000 in cash and some other things . . .
Monte: Oh, great.
Shawn: Sort of a spin on Bingo; its just going to force people to meet a lot of different people and so, I guess, one person’s going to get some cash out of it and everybody will hopefully feel like winners because they made a lot of new connections.
Monte: Right. Right, right, right. That’s great. And the conference is, I guess, packed full of not only valuable conferences and networking events but there’s also some parties and some other things that people can get to meet each other and talk to each other as well, right?
Shawn: Yes, absolutely. It kicks off on Sunday afternoon on July 9th and at that we have a session that’s going to go on for about 4 hours called “Affiliate Meet Market” and basically, what that is, is sort of a stripped down version of an exhibit floor, where companies will have tables and they can just set up meetings and meet with people and also it’s a place where vendors can show off their different technology and things. And then . . . that’s just to push people. If they don’t have a table, they can just meet and sit down and ask for meetings there. And that will flow into the evening where we have some networking ice breaking sessions and then we’ll have a . . . that’ll be the social event for that night; we’ll have drinks at the networking event for that night and then each night after that we have organized parties where people who ready to focus on networking and just relaxing and meeting people.
Monte: That’s great, that’s great. Now, you also have a unique angle on domain names as well. You happen to be somebody who owns some domain names and are a positive believer in domain names and the value they can bring to their websites and their affiliate networks. Why don’t you go into that a little bit and why you feel it’s so important.
Shawn: Yeah. I have a, I guess, I’m not sure if I’m an average person. I have, I guess, a hundred domain names and so I’m always looking for different angles and ways to monetize the ones that don’t have blown out sites with them and so I’ve done a lot of different things over years. I tried having them just host some syndicated contents, my blogs, and different things through RSS and in some cases I’ve tested them just to see if I get much type in traffic just pointing them at different sites of mine and throwing some tracking on them and different things. A lot of different things. Things that people with a lot of domains can do as affiliates; it just requires a lot of testing and playing around to see what works. Maybe just . . . if its just a good keyword in there, just a couple different affiliate programs and thrown up some content that’s relevant to those programs and maybe one or two targeted ads and see what goes around and see what works.
Monte: And, I know that you had an interest in parking domains and earning money on PPC traffic and stuff – I think you tried out Traffic Club or using Traffic Club; I know you announced it in one of your newsletters. I assume that you believe in that approach if the domain names not in use and not live in the affiliate network so that its earning money, you know, for your clients.
Shawn: Yes. And I do have, uhm, Traffic Club on a couple sites right now and I think that’s a great way – it’s such a nice turnkey way to monetize some traffic without having to go in there and do much manual work; that’s something I definitely recommend to a lot of affiliates when they just look for recommendations on how they might monetize their parked domains.
Monte: Right. Now, what are some of the trends that are going on in affiliate marketing today that are different than even 6 months or a year ago?
Shawn: Uhm, I think one thing is a lot of the more saavy affiliates are just figuring out different ways to have sort of [inaudible] content to try to just really get some other people to do the work for them to just generate new pages and new, just, really power entire sites and serve as an example of the preponderance of affiliates that are coming up with blogs and different topics and things. And one example of that is there’s a guy that’s actually going to be a speaker at Affiliate Summit, a guy named Kevin McCormack. He has a site called DressKevin.com and its . . . he bills it as sort of the first reality site and basically the whole concept there is that he set up the whole back-end where he uploaded [inaudible] all this clothing and people come in there each day and they vote on what he should wear to work and to different social events and things and so he actually takes a picture and he wears what other people pick for him each day to work and just going out and having fun and so he’s got a lot of people there talking about what he’s wearing and there’s a whole big discussion going on and people come back each day. They’re very . . . visitors . . . and he’s gotten a lot of good press about it. He was just recently featured in People Magazine and a lot of the morning shows and different things. But the way he monetizes that on the affiliate end of it is that the clothing he features there will have links to go purchase it. If somebody likes a pair of shoes he has, or a shirt or a sweater, what have you, they can just . . . he has it all work through the data feeds to the different affiliate programs, so people can purchase what they see him wearing.
Monte: Right, right. That’s a unique approach. So its more of a viral kind of, hey, lets see what so and so is wearing today and then it jus spreads around like wildfire then, I guess.
Shawn: Yeah, exactly. And so that’s sort of . . .
Monte: Without having to spam; without having to send out, like, spam messages and trying to drive people. The actual uniqueness of that live, reality-type site, is driving traffic automatically.
Shawn: Yeah. And I think he’s pretty bright. And generally when somebody has a special idea like, they’ll have a lot of copycats and he had the foresight to also create sort of a sister-site for that called MyDrobe.com (that’s “M” as in Mickey, Y-D-R-O-B-E.com) and basically that enables anybody out there to sort of replicate what he’s doing, if they want to just ask people what they should wear to a wedding or to work next day, whatever any event they sort of have people vote on. So people in his community which he’s built can vote on what you should wear as well as if you want to send it to your friends and try to spread it around yourself.
Monte: Right. And so, besides that type of a marketing approach, are there any others that are starting to pay out or looking very unique or something that could be successful in the future?
Shawn: Just using any of the blog software is a sort of easy way to get people to sort of build up content for you. Just write about whatever you know and care about a given topic and when people just measurably, as you build up the community, they’ll be commenting on your posts and so they just keep adding to the keyword rich content, then you can sell, just place target affiliate ads against and it’s a way that you can really build a robust, active community of people that are sort of [inaudible] what you’re writing about and your interests and you can get some very quality traffic, especially if you add some textural ads, maybe for Google Ad Sense or the Yahoo! Publisher network.
Monte: Right.
Shawn: Also, if you just want to feature, if you’re writing about dogs, you just find the many different affiliate program that focus on dogs and put their targeted ads up there.
Monte: Now, the future of the industry: do you see it continuing to expand and grow as more and more people get on the Web? Do you feel that there’s a lot of legs in the affiliate business online?
Shawn: Yeah. I think one thing inevitably every year, especially around Christmas time you hear about how just the e-commerce online is just growing so much from year to year, so I think its just more of the pie for people to get a piece of from year to year. And certainly the bigger affiliates, they’re just growing along with the industry. But I think they’re just everyday there are probably more companies and there are just many thousands of affiliate programs out there. So there’s just so many options in the marketplace for an [inaudible] to jump in and try things and, for instance, I was speaking with a guy at the recent [inaudible] conference and his company; his name is Mikey, he just goes by Mikey; he doesn’t go for the last name thing. But he has a site called FabulousSavings and they just started off about 18 months ago and they’re in the coupon area of affiliate marketing; that’s a pretty saturated space. But just in a period of 18 months they’ve sort of ascended to become one of the top sites [inaudible] SEO and a lot of top placement in the search engines and so he was awarded the most [inaudible] affiliate from Link Share of [inaudible] affiliates. I think that’s sort of a nice example of how someone can come out of no where and they just put the time and energy and resources in they can build up a very successful business [inaudible]
Monte: Right, right. So it sounds like that there’s still a lot of legs out there. What’s been the most successful affiliate campaign in history? And then, what’s been the biggest flop?
Shawn: I guess people aren’t really so open with their metrics, its hard to say the most individual campaign. I’d say in terms of retail, sort of the big star is generally UPromise. They’re sort of the big 800 lb. Gorilla for a lot of the retail sites just in terms of sheer volume and [inaudible] drive, ‘cause they have this robust membership of people that are trying to generate money to get into their kids college funds and so they’re very active in shopping through the e-commerce links, so they tend to be a big cornerstone for a lot of the big affiliate program. But as far as a flop, I guess there are a lot of examples. There’s . . . I don’t want to name any particular companies. There are a lot of particular companies that just came out there and tried to be the loss-leader in their channel and they would pay way too much commission to try to get a lot of attention from affiliates and people, and they would lure affiliates over from other affiliate programs and they never really could sustain that kind of commission rates, so they would drop it and all of a sudden, the whole affiliate program would bottom out and all the affiliates would go back to wherever they were promoting before that company came along and so they, the company, as fast as they ascended into being the biggest marketing stars, they disappeared because they thought that somehow the affiliates were stupid enough to think that they should just stick around this company after they dropped the commission rate and I’ve seen that sort of scenario play out a number of times.
Monte: Right, right. So, they’re being so aggressive that basically they kind of out of steam run out of money to be able to pay people, because they’ve offered too aggressive a commission rate.
Shawn: Yeah. And I think, uhm, affiliates are a lot more saavy that some companies give them credit for and they’re not going to be just sort of bamboozled into thinking it’s a great place to . . . it’s a great offer to run after all of a sudden the commissions aren’t quite as favorable. [inaudible] There really are a lot of cases [inaudible] they’re mercenary, they’re going to go were the money is and when it dries up in one place, they’ll just go to the next most logical company to promote.
Monte: Right. Now the two big gorillas in the affiliate space, you know, are like Commission Junction, I assume and then LinkShare, right?
Shawn: Yes. And also PerformX; they’re a little bit of a different model where they actually sort of run the affiliate programs while whereas with Commission Junction and LinkShare usually have somebody internal in the company running the program. But PerformX also has a lot of very big brands in their stable there.
Monte: Now, if you’re either getting in to the business or you’ve been a mature player in the business, what’s the advantages and disadvantages of using any one of those top three networks versus some of the mid-tier players that a lot of people don’t hear about? And obviously, there’s a lot of affiliate systems, a lot of affiliate networks in the online industry and so there’s a lot of business that’s going around to everybody. And I also understand that a lot of people spread themselves across multiple networks, I guess, just like, you know, mitigating your risk, I guess; and also taking advantage of where some affiliates shine in certain niche markets. What’s your take on all that? And where would you say some of the key top niche players are that aren’t a LinkShare or a Commission Junction or PerformX are? You know, what are the names of some of those companies and what do they specialize in?
Shawn: Okay. Well, I guess first your question as far reasons why a company might want to be in those big networks – one of is just that you want to be where the affiliates are and a lot of the bigger players, they have do, uhm, they have to, uhm, say for example, like you promise where they have a royalty component they have to track sub-Ids to be able to reward their many members that are shopping through their links. They have to go in and do all kinds of set ups to work with the given technology so they’re not going to go out there and set up, like, a hundred different technologies; they try to prefer to work with networks that have the most companies they want to work with. So if you just sort of work with associate programs with technology that’s [inaudible] well known and not a lot of other big companies are using it, then some of the bigger affiliates can be so inclined to work with [inaudible] custom work so [inaudible]; being in the big networks sort of gives you more access to some of the bigger affiliates that might not be willing to work with you. And also, just, uhm, I guess part of its just perception. Some companies, its important, sort of, to be on the same street with all the big names and they don’t want to be the brand that’s sort of the first big brand to go out on a network that’s sort of not relatively unknown. Part of its just ego being with the other big companies. But also, the companies, the big networks, they’ve around for awhile and they’ve really sort of perfected their technology. They’ve been at it since the nineties and they’ve gone through a lot of different stages and versions of their software . . .
Monte: Uh-huh .. .
Shawn: . . . . and they’ve just . . . they’re constantly improving; they just know how to do it the best, so its, uhm . . . you can always find somebody cheaper but you have to figure what kind of R&D have they done versus these guys that have been at it and they’ve got 100 or a couple hundred employees and they’ve just put millions of dollars into developing the technology. It’s, uhm . . . I think its . . . if you want something really solid, the bigger networks are the way and a lot of them are more expensive. I think you have to really consider that you get what you pay for.
Monte: And . . . okay, so . . . another thing I noticed about some of the networks is that they allow multiple players in the same industry to participate. Like they don’t, you know, have one key affiliate that handles, say, clothing for instance; they allow multiple players. How does that affect the competitiveness between affiliate partners within that affiliate network? You know, what gives one an advantage over another? Or, how . . . what do you recommend as a consultant on how one competes in that kind of busy space? Because not only do you have competitors within each of the networks, but then you have all three of the large networks with multiple people in the same businesses and the same industries all competing with each other. Then you have, like, you know, hundreds of people offering the same products and services through an affiliate network.
Shawn: Yes. And sometimes its tough to stand out and probably you just, uhm . . . one big thing is that you have to really . . . you have to be the top player in the space to really stand out and the way it sort of filters down. If you’re just really converting better than your competitors and you have the . . . so inevitably you still have the same problem – commission rates are going to be paying more to these top players and the way it works is if you’re featured on the sites of the bigger affiliates than rather than have the rest of the industry sort of copy what they’re doing, but they realize that they’re still making a good volume, then they’re going to feature the best performing affiliate programs, so if you have a program that’s really doing well, then you can get some top placements with the better affiliates, then it just sort of resonates down through the rest of the industry. But with . . . I guess it sounds like its easier than it really is. You have to just have a good payout and good conversion rate and all this stuff can just be too many factors involved in it – what you’re landing page is like and what you’re creative . . . what kind of creative you have and different options. If you have a robust data feed for some products and how big your brand name is, so that in some cases it might sell itself to a degree and help the affiliates. And also, uhm, how many different . . . how many return days you have for the affiliates, which is a cookie that just rewards the affiliate, somebody that just goes to their link and then comes back X number of days and this approaches the affiliates [inaudible] 30 days up to 60 or more days for that cookie and if somebody just has a single session cookie for return days or maybe a couple days, that makes the program less attractive.
Monte: Mm-hmm.
Shawn: So I think if you’re just breaking in then you have a lot of competitors in your channel or your category, then its essential to really look around and see what else people are paying and what their different metrics are for their affiliate programs. And one thing I like to do whenever I have a new client is just join the programs of a lot of competitors so I just build up real sites to compete with . . . just to be real affiliates with these affiliate programs so I can just see what kind of communications they have and what creative they’re using and just the whole way they run their affiliate program.
Monte: And lets say you’re on a limited budget, you know, lets say you’re on a limited budget and you have a new product or service you’d like to hook up with . . . so, you know, you talked earlier about, uhm, you know, making sure you’re one of the top placed companies on the affiliate network in order to get more exposure – obviously, I assume that costs more money to do that or you have to be in a position to pay, you know, towards the top versus towards the bottom. Kind of like a, you know, an online advertising link on your . . . on Google Search or Paid for Placement type of relationship – is that correct?
Shawn: Yes. We have some opportunities for actually paid placement but in the case of Commission Junction and PerformX, a lot of affiliates will sort the different opportunities by E(?)PC which is the [inaudible] per Click – the average [inaudible] that affiliates are getting from each click they send to the affiliate program. So, it really just comes down to . . . totally . . . I guess it works around different variables – the brand, the conversion rate, the payout and everything.
Monte: So the more money an affiliate partner is earning for the network, the chances are that you’d move up naturally without having to pay more? Its just that is you’re successful at what you do and you have a good strategy, you’re obviously earning the affiliate . . . the affiliate partner more money, so therefore they would place you higher to make sure that they’re getting the lion’s share of that revenue as well?
Shawn: Yeah . . . well, they have sort of a . . . PerformX and Commission Junction, they have two different ratings. One is based on volume [inaudible] through the [inaudible] the respective network and so they have a series of five bars – having five bars means that you’re, I guess in the in the top 20 percentile of the affiliate programs in terms of [inaudible] ascending and then the EPC is just [inaudible] but the potential for the affiliate program is they can earn, say, 10 cents for each click on average if they to that merchant . . . 5 cents or 20 cents, so the affiliates have sort of those tools [inaudible] get a gauge of what they can potentially own with that company . . .
Monte: Right, right.
Shawn: . . . and so by being a good performer in the network [inaudible] gives you more exposure to the affiliates and I’ve seen some . . . running some programs on Commission Junction that [inaudible] certain stratospheres. Say if you’re paying out . . . if you have a $35 EPC on Commission Junction and all of a sudden you get a whole lot more applications than you do if you have a $10 one, a lot of affiliates take that seriously and pay a lot more attention to the people that have higher EPCs.
Monte: Right, right. Now talk to me a little bit about the . . . the . . . the, uhm . . . the word on the street with Google potentially starting a Cost per Acquisition Network.
Shawn: I think that’s a very interesting thing. It’ll be hard to see how they really roll that out because right now, according to [inaudible] called AffStat, about 15% of the current market industry is CPA and the rest is revenue share, with a small margin being PPC and uhm, one thing I guess they were going to do [inaudible] AdSense, you’d think there’d be sort of a self-service model but I think CPA is just a lot more complicated than PPC and I think it would be sort of difficult for them to make the whole process automated because there’s more screening for the offers that are going to be there and just a lot more details going on with those kind of [inaudible] programs but I, uhm, certainly a good thing, uhm, to show the fact that Google wants to sort of invest that much more in this industry. I think, uhm, it just lends that much more credence to it. Some people tend to look at affiliate marketing as being sort of a small player in online marketing compared to search. Its gratifying to see that Google’s been paying more attention to it and thinking of it as being a significant channel for them.
Monte: And, do you see anyone else attempting this? Like Yahoo! or any of the other typical ad sense type players or PPC type players moving into this space?
Shawn: I guess, uhm, I would assume they’d want see what happens with Google first, to see if they do fantastic with it or if it ends up [inaudible] . . .
Monte: If they trip over themselves, yeah.
Shawn: Yeah. It’s, uhm . . . there are a lot of people watching. I think, uhm, one thing that, uhm, that some people have a little difficult problem with running off on the CPA networks is that there isn’t a transparency where you don’t necessarily know who’s running your offers and so, I’m not sure if there’ll be around that with Google or not.
Monte: It seems like it would be a hard thing to manage with such a massive network like that but . . . being on the PPC side and having the experienced some CPA ourselves, uhm, there’s been all kinds of talk about CPA coming back because obviously its more of a paid-for-performance model versus a Pay Per Click model, where you’re just . . . your paying for someone to get to the site but you’re not sure what they’re doing once they get there. Then it shifts responsibility over to the site owner or to the . . . to the network to do a good job of converting the customer instead of paying for ads to get there. They have to have a really good customer conversion, you know, initiative going on at the same when you’re under that kind of strain.
Shawn: Yeah, and I can certainly see why its attractive to Google because the [inaudible] revenue share there’s a lot more money out there, a lot of more margins for CPA offers but also, one I don’t know that Google can necessarily really compete with the likes of these Zoogle Ads or CPEmpired; that they have various type of terms to the affiliate [inaudible] if you’re really earning some big money with them they’ll pay you by wire weekly and some cases some of the networks, they’ve been known to even front some of the affiliates. They don’t have to worry about [inaudible] put so much out there where to get paid. I think the competitiveness of that space as well as just a lot of networks to either pay weekly by wire or to front the money; I don’t really see Google having to [inaudible] to do that. I’m not sure how Google [inaudible] compete with those guys.
Monte: Yeah, yeah, definitely. Well, Shawn, before we wind up with you, can you give us like the top 3 things or top 4 things that one should do to have a very successful initiative in the affiliate marketing space that could really help them out, that they may not know today?
Shawn: Uhm, would that be on the merchant side or the affiliate side?
Monte: Give me both, because we have both sides listening as well.
Shawn: Okay, I guess, uhm, on the merchant side, uhm, I think the most important thing is to really understand the . . . you have to practically run the affiliate program. A lot of people run them on autopilot so there are three different components I think you should focus on – there’s the [inaudible] of recruiting for targeted affiliate and then once they’re in the door they make a big effort to actually activate them; I hear a lot of people, they say they settle for having like a, like a 80-20 rule, with 80% of that coming from 20% of the affiliates and in some cases more extreme or maybe like 90-10 or 95-5 and probably that reason is that people aren’t [inaudible] with the affiliates, they think they magically just pull up links and get probably [inaudible] without any effort on the behalf of the merchant so it really requires some kind of campaign to not reach via direct mail or phone calls or emails to have to go through the affiliates. And then once they’re active, what I really do damage to keep them active and have some kind of retention effort to keep those affiliates happy, just try to sort of differentiate here the affiliate programs from your competitors and just acknowledge the affiliates; just once in the while, send them a Trotsky in the mail or give them a bonus here and there to keep them happy . . .
Monte: Show ‘em some love.
Shawn: Yeah, absolutely. ‘Cause the funny thing is there’s so much competition out there; I talk to a lot of big affiliates and they very seldom really . . . many affiliate programs acknowledge and just give them a little gift and just let them know how important they are to you and they have [inaudible] affiliate program, those affiliates are very important to you, so you should really treat them as your top sales people . . .
Monte: Yeah, they’re your whole sales network. Instead of you putting 50 people in your own office, you’re using a network that becomes your sales force.
Shawn: Yeah, absolutely, and its just not sufficient to expect them to be happy by just sending them an email once in awhile as part of a newsletter. You have to really treat them well if you want them to treat you well and I think its just pretty basic and logical but a lot of people don’t bother to really do that.
Monte: Right.
Shawn: And I guess on the affiliate side, uhm, one thing I would [inaudible] to realize its not any kind of get rich quick multi-level marketing kind of thing. It’s something that requires investment of common resources and money and if you bother to actually treat it like a real business and not just a hobby you can really do well with it, and uhm, part of the key there is that you should have some kind of unique selling proposition. I see a lot of people that just figure they can copy the code from someone else’s site or just try to replicate what somebody else has successfully done and its just not that easy. If it was easy, there’d be a lot more people that were doing well in it. It’s, uhm, the cream of the crop, they’re all people that are doing something unique and working hard at it. They’re not just putting 5 hours a day just trying to create some kind of site to try to gain the system [inaudible] and getting some good placements. Its really something about just putting in some sweat equity and gaining some unique ideas and building up a real property that’s going to have some kind of lasting power, not just some kind of thing that will trick the system for a couple months.
Monte: Right, right. I guess its like with any material business that you want to be successful. If you don’t spend time at it, and continuously try to improve and stay on it and like you said, have a relationship with your network, it’s not going to be successful. There’s very few businesses or very few applications other than, you know, parking your domain name pages, you know, where you don’t really have to do anything but sit there and collect a check . . .
Shawn: Yeah . . .
Monte: But its obvious that if you spend time, energy and money on really getting your affiliate network out or your products and services through affiliate systems, you can actually, you know, see very big returns and you have to invest time and energy and money into it.
Shawn: Yes, absolutely. And one thing I would encourage affiliates to really do a lot of [inaudible] but if you just, uhm, ask for things. For instance, if you just ask for a raise and generally it’s a really good idea to do that after you’ve earned some money rather than on the front end but a lot of people on the affiliate programs are more than happy to [inaudible] have potential so I think a lot of affiliates [inaudible] money to people but don’t realize they’re the potential for getting some more money issues and actually you’re engaged and you can earn some more money for the company, I think affiliates will definitely take advantage of that . . .
Monte: Right.
Shawn: . . . and uhm . . . .
Monte: You know, something else that you do very well, too, that I notice – you’re actually, you know, in touch with your network. You have a great monthly newsletter that comes out that gives some very valuable tips to being a very successful affiliate marketer, for both sides (the merchant side and the affiliate side); and that whole strategy of, where everybody says, oh, you know, you have to send out your monthly newsletter, I mean, even our own company can improve on that ‘cause we don’t send them out enough and you got to make sure they have valuable points and tips in them that retain a customer or your client’s interest so that they, you know, stay on your mailing list, so that they are engaging you, participating in your conferences and getting something out of what you’re sharing with them.
Shawn: Absolutely. I think that’s a very good point. I think a lot of people that are on the affiliate side and on the merchant side, its important when you send out those communications to have some quality content in there and I see a lot of affiliates that just send out newsletters with 10 offers in it and they don’t bother to put any kind of value in there. And the same thing with the merchants. They’ll send out a newsletter to their affiliates and say here are our new deals and just go and put these up , but they don’t really try to enrich the affiliates and just keep them [inaudible] some kind of edge-marketing techniques or any kind of industry trends. They don’t really do anything except to try to say go sell this for us. I think its beneficial for everybody to make the [inaudible] more rich. It gets people more engaged and they’re more likely to open it month-to-month or week-to-week or however often you sell it, send it out there.
Monte: Yeah, value-added product or what do you call it? A, uhm, uhm . . . you know, the thing that brings you back a freebie that keeps you coming back, keeps your interest level that people can learn from. That’s good.
Shawn: Yeah, absolutely.
Monte: That’s good. Well, Shawn, where can people go to sign up not only for your affiliate tips newsletter but be part of your network? And what’s the best way to become a member of your network?
Shawn: Uhm, I guess in terms of keeping up on all different things, the trends, affiliate programs to join, I’ve got my site AffiliateTips.com and that’s not only . . . it’s a place where I have the home to my affiliate marketing blog that I post news and opinions and information daily on. There’s a directory there with affiliate programs; affiliates can find different affiliate programs to join and they find the metrics about those programs and also once there are different things that I added to it is that it has the contact info for the affiliate managers so you can actually get a name of a person on the program and reach out to them. I see a lot of affiliates claim that they can’t find the right person when they get accepted to the program. They just get a letter saying, like, thanks from XYZ Affiliate Program and they just give an email address, like “affiliates@xyz.com;” you know, there’s never any phone number or name or personal email. So I, uhm, I tried to create a directory that has only programs that are willing to give the contact info so affiliates can actually . . . its always been sort of counter intuitive to me that programs don’t share that information because it just builds their relationship. Affiliates want that and a lot of merchants aren’t [inaudible] to give it. I’m trying to foster that. So, that’s also [inaudible]. And then, at Affiliate Summit, we’re trying to help people get together and network. That way, in addition to the conference, we have a social network there and that’s one of the sort of upcoming trends during the [inaudible] marketing, to just kind of build community and content and so, uhm, the people can go and join there to do some networking before, during and after the conferences. Its sort of a live entity that goes on from month-to-month.
Monte: That’s great. Yeah, I mean, I think its important, you know, uhm, especially on your side of the business and in ours, that people come to these types of conferences and touch each other and get to see people face-to-face. The Internet’s such a virtual world and for years, we’ve all been doing business virtually and not meeting the other side that we do business with. And these conferences, yours included, are the best way for people to see people face-to-face, look them in the eye, know that they have integrity, that you can do business with them and that those relationships, then, mature and grow and basically result in a lot more business and a lot more revenue for everybody, because we’re in the still very beginning stages, in my opinion, of a very successful, online marketing initiative and online business. I mean, we’re still, you know, small potatoes in comparison of where mature markets are and it requires that everybody communicate with each, that they work together, that they have a good code of ethics and that they prevent fraud and that they’re meeting each other and can trust each other to do transactions – even competitors – with each other. Because that’s what materially grows an industry and helps it be successful so that outside investment continues to flow into us.
Shawn: Yes, absolutely. And I guess, uhm, uhm, one last thing I can say that its, uhm, a lot of people try to make a free market more complicated than it has to be and in the end it comes down to relationships and so, just, uhm, people go to run [inaudible] the affiliates just work on building a relationship with each other and uhm, and then you’ll see that it’s a lot more than if somebody just so absorbed in messing around with spreadsheets and projections and everything that, uhm, it’s just, uhm, it doesn’t have to be that complicated in reality. Its really more about just getting together with people and just getting them to work with you.
Monte: Yeah, definitely. Well, Shawn, I really appreciate the time that you took today and it was great to have you on Domain Masters. We’d like to have you on as a regular guest in the future. And perhaps we can do a wrap-up after the Affiliate Summit in Orlando. We both . . . we look forward as a company to participating there and being there as basically the only domain company offering products and services there.
Shawn: Great, I look forward to seeing you.
Monte: Great. Alright, well, thank you for your time.
Shawn: Thank you.
Monte: Take care.
Shawn: You, too. Bye.
Monte: Okay, special thanks to Shawn Collins, my guest for Domain Masters, and we will continue to bring great, live content like that again and I will look forward to a wrap up show – actually, I think we’ll be there . . . I don’t think we’re going to be at . . . I think we’re are going to be at Domain Masters live at the conference and I know WebMasterRadio will be there covering the event as well. So we’ll pop on and do some live coverage from that event. And we’ll also be at SES Miami at the same time, so we’re splitting up our team to be at both conferences to bring you the best information for search engine strategies and for the affiliate marketing networks and how domain names are used and built on those sites.
Just a reminder, also, that at SES San Jose, for the first time we will be participating – actually, for the first time there will be a domain specific panel at SES (which is Search Engine Strategies) in San Jose, which I think is their largest conference. And I will be participating on a panel and actually doing the opening presentation on that panel on the value of direct navigation and domain names and giving some people some rudimentary information about domain names and their value in the industry; and there’ll be a pro-side and a con-side of direct navigation and its value and I think it’ll be a very good conference and one that will be discussed during the conference and afterwards and we’re, of course, participating and hosting another great search bash at San Jose and its going to be a great party.
With that, we’re going to take a commercial break and we’ll be back on with Domain Masters.
[Commercials]
Monte: Master of my domain; such a funny skit. Anyway, again, I want to thank Shawn Collins. He’s really a dynamic guy and I look forward to getting together with him at Affiliate Summit in about 9 days, 10 days (something like that) And anybody should go and check out AffiliateSummit.com and sign up for sure if you’re in or thinking about getting into the affiliate marketing business. Or if you’re looking to diversify a little bit on your portfolio and you want to get some of those names that you’re parking or not wondering how to develop . . . if you want to go a full fledged website and you want to do a partial development and hook up to an affiliate network, it’s a great conference to go learn and just get up and running right away. A lot of people come out of the show just firing on all cylinders, you know, with a business.
I just want to wind up on just a little recap on an important meeting that took place today in Marrakech , Morocco, as I said in the beginning of the show. As I said, I was not able to attend the ICANN meeting in Morocco – it’s too hot in Florida now as it is; why would I want to go someplace hotter and smell camels all day. But [laughs] we will be at the next ICANN conference, which will be in Sao Paulo, Brazil, which we’re pretty excited about and there’ll be some follow up on this particular open forum or session that happened today. Today, there was a session around the domain name marketplace. It was a workshop that was held today and it had a number of important folks participating and a huge audience listening. Obviously, there’s a lot of speculation and questions going on in the industry about tasting or testing domain names for the grace period; that is where you can register a domain name, see if it drives traffic or see if its generating some kind of revenue or traffic or serving a particular need and then being able to delete it within the 5 days of registering the domain. Registrars are not credited back to them physically for that credit when a domain is deleted within the 5 day period but they are given a credit at the registry. So there’s only 2 registrars that I know of that offer this to their customers. We are one of them – the other is eNom. But we offer to our customers the ability for customers to go and register .COM and .NET and .INFO and .ORG names, see if they make sense to them and that it is either driving traffic or PPC revenue and if they do they keep them and if they don’t they delete them and we charge a small delete fee, instead of charging the full registration cost. And, that delete fee is similar to what we’re charged from ICANN for the tax on that very registration; its about – it varies between $0.25 and $1.00, depending on your volume and if you’re a customer that has all your names with us and so forth. But what is happening is a lot of registrars are doing this for themselves. In other words, they’re going out and registering domain names that are newly registered domain names; these could have been domain names that were registered in the past that have pre-existing links on them that could have page ranks still left on them because Google hasn’t caught them yet as being deleted. It could have a previous website or other types of traffic indicators that say they have some value and they’re going and sucking them in and then selling them off to their customers or putting them up for auction or doing some other things. And, ICANN is definitely getting their mitts wet a little bit and they want a little piece of the action. They want some of this revenue, I think, to help pay for their budget. We all pay an exorbitant ICANN tax as it is – in case all of you didn’t know, when its all said and done, between registry fees and ICANN tax, we’re paying an extra 36 cents on every domain registered that goes to pure taxes. So you pay $6 for the registry and 36 cents to ICANN and your costs before you turn your lights on and your operations is $6.36 and when you provide the very highest levels of service, security and support (like we do here) and you have a staff that touches our customers and answers the phone and 24 hour service and support, its rather expensive to service a domain name that has very low margins but we do it because we target, you know, very specific customers that believe that their domain names are valuable and that have asset value and they believe that Moniker is the best place to them.
Today, Jothan Frakes, formerly of NameIntelligence (or WhoIS.SC) was the moderator of a session on the marketplace and there was a couple points given. John Berryhill, who I’ve had on my show several times, who’s one of the leading attorney’s for Domain Name Law and Intellectual Property and cyber-squatting, on behalf of domainers spoke and described what PPC was and the domains that were getting the natural type-in traffic; Jothan acted as the moderator. Tim Cole, from ICANN, the liaison between registrars and ICANN was on the panel, and expressed that their position and was to advance the market in whatever way was possible and monetization of domain names was addressed, explained in various ways. John Berryhill had a slideshow that described what Pay Per Click was, how people derived revenue from it, different types of ads that show up and so forth. And then we had another speaker, which was Josh Meyers who some of you probably know – he’s the senior director at Yahoo! Publisher Network Group and also general manager for the product that Yahoo! called Domain Match, which is their PPC matching product, so when you type in a domain name that’s on a PPC page that’s a Yahoo! driven page that you get something driven around the keyword of the domain name and pulls up relevant advertising for that keyword and helps their advertisers convert ads and also convert customers. So he spoke about the topic of how they’ve done a great job of matching up the keywords in domain names to relevant ads so that people are generally trying to get . . . are ultimately getting somewhere they intended to go, even though the domain name that they type in through natural type in or direct navigation, may not get them to an actual website, the links on that website are getting them to where they want to go. Josh also clarified and made it a key point that Yahoo! is very concerned about any kind of domains that are associated with famous brands or trademarks, and that they don’t support any trademark or cyber-squatter names and as soon as they see those, they get them off their network.
Robert Datono, who is representing the At-large Advisory Committee, brought up some interesting points. He was neither for or against the practice of monetization of domain names, but he brought up the fact that its kind of a Wild West situation right now (which it is) and that there isn’t a policy from ICANN or anyone else that has anticipated this tasting type practice for trying to see whether domain names are valuable or not. But just made a point that if you’re not ultimately getting where you want to go, then obviously, this is not serving a good purpose for the general population community – not the commercial users, but the general population, or the individual domainer. Its been well known and well publicized that Bob Parsons from GoDaddy has been bashing the fact that people can register names and then delete them; however, Bob needs to also remember that in order to have a very successful IPO (which he’s planning), he’s going to want many, many domain names to be registered and in this environment, because this is actually, this Wild West environment that we’re in, in my opinion, is actually good for our industry because its creating 1% to 5% new registrations, more revenue into the industry and more outside investment to those that are doing the tasting and showing that there is profit generated from the tasting of domain names and generating revenue for advertisers and driving traffic to relevant advertisers that are actually paying for those ads, when people click on them and converting customers. The last speaker – well, actually two more speakers attended. One that was totally against this practice, which was Miss Sarah Deutch, who’s’ the vice president and associated general counsel for Verizon Communications. She brought up several examples where domain names were registered by Dotser and Enom that just totally squatted on their brand and the fact that traffic was being driven away from their particular ads and onto competitors and showed the negative side of this tasting event or this practice of buying domain names and then using them to derive revenue and then using them in the wrong manner, using a famous brand or mark. She had a couple of very good points, but, basically, over exaggerated to the extent they were actually being violated because many of the ads that were showing up in her examples and also in the examples of the domain names that she posted (which I looked up), are actually showing Verizon ads. So, what she’s getting is the benefit of ads being displaced from domain names that they didn’t even have to purchase and they’re actually converting customers from them. So that example is kind of ironic, given her argument.
Paul Stefora, from eNom, got on and made a couple comments. First of all, they defended the fact that they didn’t intentionally go out and register these domain names that violated Verizon’s trademarks. And that, you know, these names were actually confiscated and offered back to Verizon and there’s not 145 of them, only two or three of them when they checked the records. Bottom line is, they probably did have a bunch of domain names that were violating trademark and they confiscated them as soon as Verizon made a warning to them and they probably offered to give them back and they were probably driving traffic through their PPC to their ads and Verizon was actually getting benefit from that. That’s probably the bottom line.
The transcripts go on. Chuck Gomez got on from the registry and basically said, you know, they don’t have a position one way or the other. That’s the Verisign registry; however, I want to remind everybody that just a year ago, or a year-and-a-half-ago, the tasting of domain names or the registering and checking and adding of domain names and then deleting them was a very frowned upon practice, and now all of a sudden its okay to do. This is because the registry stands to gain quite a bit of money, as you can imagine, if there’s even a 1% to 2% more domain names registered every year. There’s 90 million domain names registered today and if 1%, if there’s an additional 1 million domain names registered as a result of tasting, the register just benefits $6 million of profit to their net bottom line for not doing anything but allowing it to happen. So of course the . . . it’s benefited them quite a bit because they’re seen a huge spike in registrations and also in profit. And I won’t go into all the other transcripts but its just an interesting panel and it’s the first time at an ICANN meeting that the whole aftermarket side of things, including domain valuations, the monetization of domain names were mentioned and discussed and I suspect that at the next conference its going to get a little bit more involved and we’re going to be there to defend ourselves and also to stand up for our industry and make sure all of you are protected as well, so we can just see it coming.
In any case, I want to wish everybody a happy Fourth of July weekend. We will be working throughout the weekend and also on Monday. It’s going to fine, so if you’re having any issues, we’ll be online and also be in the office. And we’ll be back on Wednesday with some follow up shows. We’re going to be attending, as I mentioned the Affiliate Summit and SES in Miami, the first Latino Summit of the SES circuit and we’re looking forward to participating on the panel at SES San Jose in August. So with that, I’ll let everybody go. Have a great weekend and have a great week and I’ll see you next Wednesday on Domain Masters. Be the master of your domain. Take care.
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