Editor’s Note: Last year we provided coverage of the Affiliate Management Days conference (a conference for businesses that offer affiliate programs) and this year we will be doing the same. The interview below features Brian Littleton, Founder and CEO of ShareASale, one of the world’s major affiliate networks, by conference founder Geno Prussakov.
Question: What are the major challenges you see affiliate managers struggling with?
Brian: Generally speaking, it is the speed at which the industry evolves and develops. Affiliate marketers are quick and smart and those are really positive things – but there are negatives that go along with it.
An affiliate manager needs to be able to stay on top of the negative trends as well, in order to maintain positive momentum in the channel.
One of the best examples of this is the cloaking of search results (showing one result to the search engine, but a different one to a user). With any cursory glance at an affiliate engaged in cloaking it will appear just as a product link – but with further research and a knowledge of trends the affiliate manager can spot the issue quickly.
Question: What do you view as the main affiliate program growth opportunities?
Brian: While it may not represent the majority of the volume going through the affiliate channel now, I still believe that the longest term positive growth opportunity is in the acquisition of new customers that were previously untouched.
If affiliate managers and affiliates alike focused on this target, I believe the growth opportunity is significant. But it takes a combined effort starting with the affiliate manager.
Question: In April 2012, an Illinois Circuit Court Judge ruled the affiliate nexus tax unconstitutional. However, in September the law is set to be reinstated in two other states (Pennsylvania and California). Two questions: Is there a good solution to this snowballing affiliate nexus tax situation? How can affiliate networks help merchants to continue working in the states with the affiliate nexus tax legislation?
Brian: Yes, Senator Dick Durbin (IL) and others have proposed a Federal solution to the problem that would be fair and even for all States. This is the only way to accomplish their goal (allowing States to collect an already due tax) while preserving jobs in the affiliate industry.
To answer your second question, I don’t believe that there are any legal ways to get around these laws. I have heard possible solutions floated around such as filtering out commissions based on the State of the customer, which came up long ago in the first passing of the law in New York.
I don’t believe it to be a solution based on my reading of the laws. In my opinion, they just put the merchant in a worse legal position.
Question: What about the “Do Not Track” legislation? Is the affiliate marketing industry in danger here? And does ShareASale have relevant solutions?
Brian: Yes, the industry should be aware and have a lobby for the issue. This is something that is being accomplished through the Performance Marketing Association.
As for solutions, certainly we are looking at the issues closely but there isn’t anything definitive that I would be able to share. I also think it is important to remember and respect the privacy of a user. Ultimately, if they ask that their information not be shared – it is important to respect that.
At the same time, we may not be able to provide to them some of the services that would be supported by the advertising dollars involved in tracking purchases… so it goes both ways.
The important step here is to make sure that the industry is well represented in our viewpoints which are critical to online commerce.
Question: In October of this year, you’re speaking at Affiliate Management Days East 2012, participating on “The Role of the Network” keynote panel. What are the top 3 things that affiliate managers (and merchants) should be looking at while choosing an affiliate network?
Brian: A network is a partner. As I alluded to earlier, there is a lot of danger in putting too much trust into an affiliate. An affiliate manager needs a network that is going to help them understand the pluses and minuses of certain traffic techniques, that is step one.
Step 2 is all about technology and flexibility. An affiliate manager needs a network that can provide to them the tools that they need for organization, segmentation, attribution, contact, etc. The network needs to be flexible enough to adopt to trends and develop technology around them as well. Ask specific questions about exactly what you want to do.
For example, if you want to pay half of your affiliates only for transactions on certain products, and the other half in a different manner – make sure it is easily handled. Unless you ask specifically for what you are looking for, there is no way to tell how flexible the solution really is.
Step 3 is trust. There are quite a few affiliate networks who have been in the space 10-15+ years and have developed years worth of knowledge and trust of the community. I would not place my affiliate program in the hands of a brand new network without serious consideration.
Question: Over the next 4 years Forrester predicts a steady growth for affiliate marketing. What are the top 3 areas of opportunity for affiliates these days?
Brian: Opportunity exists, as I stated earlier in finding new customers for retailers. This, to me, is the long term value of the channel and what affiliates should be focused on.
In terms of top 3 areas I think “Local Search” is probably the most obvious – as users move more and more towards their mobile and tablet devices. Trailing that I would say both “Social Gaming” and “Consumer Review” are both really open for opportunity although both carry with them some caution.
Question: If you were to leave affiliate managers with just one bit of advice today, what would it be?
Brian: Use your instinct. When it comes to finding a really good affiliate, don’t be fooled simply by statistics or language. Use your instinct and knowledge of your own product and website to help you.
Too many Affiliate Managers are forced into relationships either by lack of understanding or through automatic approval. Unfortunately, their programs can suffer due to it. If you are going to actively manage a program – make sure to use your #1 asset.
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Affiliate Management Days takes place October 9-10, 2012. More information about Affiliate Management Days being held in Ft Lauderdale, can be found here. Or follow the hashtag #AMDays on Twitter. Register using code SBTAM150 to receive $150.00 off your pass. Check back here for more interviews with the speakers.