The following is part of a MULTI-PART SERIES (see Part II here).
Where is online affiliate marketing (a la Linkshare, Commission Junction, etc.) heading? Ironically, forces with social media are driving it toward its roots — multi-level-marketing (MLM). Indeed, roots. You’ll recall, this is where it all started back in the late 1990’s. I was there and quickly steered the affiliate network I was helping build in the opposite direction of MLM upon noticing advertisers’ fear and disdain of it.
“Eeew, gross” was advertisers’ reaction to what we Web marketers still call “two-tier” affiliate programs. Affiliate networks were quick to do away with “sub-affiliates” and the rest is history. We just don’t do ’em… until social media came on the scene. Now it’s back in vogue (as an example, Dan Adler’s Amway’s Fanista.com) and affiliate network stalwarts like Linkshare are… well… they’re missing the boat completely (see Sam Harrelson‘s latest on their rather backward achievements).
The real opportunity for the traditional (entrenched) Web-based affiliate marketing community is in combining affiliate marketing with basic network marketing principals. Social media platforms of today (i.e. Facebook) are ripe for development. Social shopping is the opportunity and companies like Linkshare, Performics (hello, Dan Chiss?), ValueClick’s Commission Junction and others stand to lose out. Facebook is on the move — this week announcing its RadicalBuy program which turns Facebook-ers into eBay style affiliates! Commission Junction? Hello? Pulse check? This as eBay runs like hell at taking its platform and solidifying its leadership position as a community of sellers.
The affiliate marketing community needs desperately to do what the MLM/network marketing industry has done — take the idea of “affiliate” and make it local, personal. They must also throw away bad habits — a culture that values and functions on anonymity (right, Angel Djambazov, Kellie Stevens?). Survival means embracing the Web’s new, socially-driven culture of transparency and authenticity.
Says Jay Weintraub, who is far smarter than I…
“… affiliate marketing and network marketing (i.e. Multi-Level-Marketing, Amway/Quixtar) sit on the same spectrum of generating revenue through an outsourced, commission-only sales team but that the two sit on opposite ends of that spectrum with respect to how they accomplish this. It’s free to join affiliate programs but not free with networking marketing companies such as Quixtar. Money comes through sales with both, but with affiliate marketing one earns cash only and with network marketing, one earns cash but the amount depends not on the product moved but on whether those sales come through a network of other people – their downstream.” (source)
Jay actually said this in 2006!
This is the future. The inter-twining of network, or multi-level-marketing, and cost-per-action Web affiliate marketing. Ironically this is where affiliate networks started but the MLM association was a “dirty” one among advertisers.
In Part II, I’ll focus on why advertisers (and their traditional affiliate network helpers) aren’t leveraging the new, social cost-per-action affiliate realm to drive sales and leads. We’ll examine why this is, what they’re missing out on (who is eating their lunch — or, in the case of networks, who makes a good acquisition target!), how they can get in-the-game and what investments they should be making.
This is part of a MULTI-PART SERIES (see Part II here).