Tricia Meyer

Affiliate Marketer, Blogger, and Consultant

Relationships and Adaptation Led to 10 Successful Years

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sunshinerewards-collageThis month my company Sunshine Rewards celebrates 10 years in business. Although I have been in affiliate marketing longer than that, for some reason this milestone is the one that is most important to me. It’s meant weathering a lot of storms and building partnerships that are the foundation of everything I do.

When we started SR, my husband Kevin and I were armed with some technical skills, a little knowledge about affiliate marketing, and a desire to create something that would get us out of the $100K debt we found ourselves in between college and law school loans, building a house, and having 2 kids in the first 4 years of our marriage. We knew that if we wanted to really change our lives, we had to do something BIG. This is how we did it.

The Start of Something Big

On January 10, 2006, we registered www.sunshinerewards.com. We bought a cheap starter script and Kevin spent every evening and weekend hour rewriting things to make it our own. The logo was made in Paint or something like that. Our goal was to make a simple site where we could put up affiliate links and share the revenue with our friends who used them: Here’s how the site looked (this is really embarrassing):

sunshinerewards-1 [Read more…]

Affiliate Cheats: Finding Merchants and Offers

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finding-merchantsAt least once a week I get an email from someone asking me if I know what network a merchant or offer is on. Sometimes it is because I am running the offer or working with the merchant. More often it is because I am seen as the keeper of all secret affiliate marketing information.

I always answer the question but my real secret is that I use various cheats to get the answer. I used to go into every network and search by keyword but I got smarter because sometimes finding the information is like looking for a needle in a haystack. Today I’m going to share my cheats with you!

Three Ways To Find an Offer or Affiliate Link

1. Check the merchant footer: This is the easiest route and the one I try first when someone sends me a merchant link. I just click the link and look for something about the affiliate program in the footer. More than half the time I find it.

findprogram1These tend to be your most affiliate-friendly merchants and those pages often tell you not only where the program is but who manages it and other information about the program.

So what about the other half the time when the merchant doesn’t give the information away directly on their site? [Read more…]

Why You Need an Affiliate Manager (And It Can’t Be Me)

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Affiliate Manager RecommendationsI get a fair number of affiliate marketing consulting inquiries as a result of my blog, but I have to turn away over 90% of them because I know I’m not the best person for the job. Sometimes they just don’t need to be spending any money on a consultant yet because they are not far enough in their process, and I tell them that. Most of the time, however, it is because they need a specialist on the opposite side of affiliate marketing from me. They need an Affiliate Manager or an Outsourced Program Manager (OPM).

What Does An OPM Know That I Don’t?

Essentially everyone in the industry has the same basic knowledge of affiliate marketing. We should all be able to explain to you things like: what networks are, the key players, flat rate versus percentage commission, cookie length, coupon sites, cash back sites, content sites, CPM/CPL/CPA/CPS, text links and banner ads, widgets, auto-updating banners, deep linking, conversion rates, reversals, etc. Those are the basics that affiliates and affiliate managers should all understand.

But when it comes down to very specific knowledge about program management, OPMs know things that I am not qualified to answer. For example:

  • How much does it cost to launch a program with X network?
  • Should you launch a program on more than one network?
  • Who are the top affiliates in various niches?
  • How long will it be before you can expect sales?
  • Who will make the banners you need for your program?
  • How do you upload your datafeed to the network? What format should it be?
  • How do you get your program featured with a certain network?
  • What kind of attribution levels should your program use?

Of course I have opinions on things like which network does certain things better than another or whether a merchant should work with coupon sites. In all fairness, though, those things are going to be very dependent upon the specific merchant.

How Should You Pick an Affiliate Manager or OPM?

If you want to hire someone in-house to manage your affiliate program and have direct control over them at all times, you need an affiliate manager. They may have other social media or ecommerce responsibilities as well, but you want them to have enough time to dedicate to understanding affiliate marketing and managing the program that they can do a good job with it and not just “set it and forget it.”

Otherwise, if any of the following fits you, you want to hire an OPM:

  • You don’t want or can’t afford a full-time employee.
  • You have an in-house employee with other responsibilities who needs someone with more experience to act as a consultant on the program.
  • You want someone to launch the program quickly and need them to leverage their existing affiliate relationships to do that.
  • You are a small company and want to manage the program yourself but don’t know enough about affiliate marketing to do it effectively.

Whether you want an Affiliate Manager or an OPM, here are some questions to ask to find the right one:

  • Do they fit your budget? (I’ve heard these can range from $500 a month to $10K or more)
  • How long is the contract? (less than 6 months won’t likely give them a chance to really launch it)
  • Do they only work with one network? (not every network is best for every merchant)
  • Are they managing any conflicting programs such as a competitor to you?
  • Do they have experience in your niche?
  • How do they find the affiliates that they recruit?
  • Do they attend conferences and will they represent you there?
  • How much experience do the people who manage the program day-t0-day have? (not just the owner of the company)
  • What is the ratio of the number of employees to the number of programs managed?
  • What exactly is included in the monthly rate including reporting, recruiting, approvals, loading creatives to the networks, newsletters, etc?
  • Are their top affiliates coupon/deal sites or content sites or a mixture of both?
  • To what extent will they allow trademark bidding on your name and how does that fit with your current strategies?
  • Are they a member of the Performance Marketing Association?

As you can see, it’s not sufficient just to be good at affiliate marketing to be an affiliate manager. Even knowing a LOT about affiliate programs doesn’t give someone all of the tools and experience that they need to manage a program. It’s a different mindset completely and requires someone who does it on a daily basis to really do it effectively.

Which OPMs Do I Recommend?

I get asked for OPM recommendations on a daily basis and I always struggle with it. After 10 years in the business, I have worked with a LOT of different OPMs (including my mom!). I don’t recommend based on who pays me for referrals (although some do) or who I “like” better (because my mom would always have to win, right?). Instead, I ask questions about the merchant, try to ascertain a little about their personalities and their budget, and check out their site.

Based on those things, I ask myself who I think would do the best job with that particular merchant. Do they already have a similar merchant or have they had a similar merchant in the past? Do they work with sites that I think have the same target demographic as this merchant? As an affiliate, do I feel like they do a good job of keeping me informed about programs, being fair with cookies and commissions, and helping me be successful?

For that reason, I don’t tend to recommend the same people every time. I have a little list in my head and I work my way down it until something works or the merchant decides that program management isn’t actually right for them right now anyway. So I’m not going to publish any kind of list because it wouldn’t really do anyone any good (and would probably just get people mad at me if I forget to put them on it).

If you have a site and are looking for affiliate management and have read everything in this post and still want a recommendation, please reach out to me! Tell me a little about your company and your site and I will check it out and give you 3 or 4 OPMs that I think might be a good fit for you. If you are an OPM, feel free to drop your link in the comments so other people can check out your site and so I don’t forget to think about you the next time I make a recommendation!

Vemma FTC Action and Affiliate Marketing

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vemma-affiliate-marketingThe FTC announced today that the United States District Court for the District of Arizona granted a temporary restraining order against Vemma for allegedly operating an unlawful pyramid scheme. Those of us in the affiliate marketing industry were understandably concerned given that Vemma announced in 2014 that it was moving from a multilevel marketing (MLM) business model to an affiliate marketing business model.

In fact, Vemma launched an aggressive rebranding of sorts to associate themselves with affiliate marketing, including attending Affiliate Summit and even joining the Performance Marketing Association.

However, what Vemma did was mainly a change in terminology and not in actual business practices. The changes that they made didn’t take them out of the MLM business. They wanted to be “less like Amway and more like Amazon.” And yet the focus of the business was still on recruiting new sellers, not on selling the product.

The Difference Between Vemma and Performance Based Marketing

When we talk about “affiliate marketing” at Affiliate Summit or the PMA or ABestWeb, we are talking about performance based marketing. I, as an affiliate, put up a link on my blog or Facebook page or Twitter. I only get paid if someone buys something through that link. I don’t buy anything myself to join the program. I don’t recruit other people to sell anything. It’s a simple referral transaction in which I am paid for referring a product.

Conversely, the Vemma business model first required “affiliates” to buy an “affiliate pack” at around $500. They were then told to sign up for an “auto-delivery” every month of around $150 to ensure that they always met their monthly minimum of sales. After that, the “affiliates” would then start recruiting other people to duplicate the exact same system. “Affiliates” were incentivized with bonuses to bring other people in under them as quickly as possible and were encouraged to give out free samples to get people to sign up under them rather than buy the products from them.

Vemma didn’t care if any products actually got sold and “affiliates” didn’t make money based on product sales. They made money based on 1) buying products themselves whether they wanted them or not, and 2) convincing other people to sign up under them and also buy products whether they wanted them or not. Internal documents showed that the majority of “affiliates” were actually losing money based on what they were investing each month compared to what they were making in compensation for sales.

Vemma Took Advantage of “Affiliate Marketing”

In my opinion, Vemma understood that it was losing out on potential customers by being dubbed an “MLM” and decided that because Affiliate Marketing is a growing, lucrative business, they should change what they call their business model. They ingratiated themselves into the affiliate industry in attempt to see how they could take all of the GREAT things about what we do (unlimited earning potential, growing number of participants, increasing reputation among big brands, etc) and twist it around for their own needs.

They attempted to use our terminology to avoid being classified as an “illegal pyramid” under Section 5(a) of the FTC Act, 15 U.S.C. § 45(a). But the FTC wasn’t buying it. Because the compensation was based on “recruitment of new participants, not on the retail sale of products or services,” Vemma was indeed an illegal pyramid.

This whole situation is unfortunate in many ways. First, a lot of people invested a lot of money in the hopes of living “the dream” of this great Vemma business. Second, once again affiliate marketing is getting a bad rap for something that isn’t really even affiliate marketing. And third, Vemma missed an opportunity to run a true affiliate program that would have allowed people to make honest money introducing their product to the public. If they truly believed that they had a great product that people would want to buy, they wouldn’t need to run their business the way that they did to make it profitable.

Which Companies Are Next?

Reading the documents in this case, I have to wonder who the FTC might target next. While companies like Tupperware and Mary Kay have been around for a long time and have survived because of the way that they are structured to encourage product sales, what will become of all of the newer companies selling essential oils, mascara, and diet shakes? What about affiliate marketing “gurus” who are selling their 10 step plans that guarantee you will earn passive income by investing in their courses? Hopefully we can continue to educate the public about how to do affiliate marketing the right way and continue to distance ourselves from the companies and practices that are deceptive to the public and focused more on people at the top making money than people at the bottom being treated fairly.

New Guidance on “Contractors” Impacts Affiliate Marketers

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department-of-labor

Lately there has been a lot of talk regarding the distinction between employees and independent contractors when it comes to services like Uber and Lyft. However, the guidance being handed down could very well impact the way that many affiliates and OPMs are managing their businesses.

New Guidance on Employees Versus Contractors

On July 15, 2015, Administrator David Weil issued a Department of Labor’s (DOL) Administrator’s Interpretation of the Fair Labor Standards Act (FLSA). The 15 page document speaks specifically to the misclassification of employees as independent contractors. The main concern of the DOL is that “some employees may be intentionally misclassified as a means to cut costs and avoid compliance with labor laws.”

The DOL has historically defined “employ” as “to suffer or permit to work” and uses a more recently adopted “economic realities test.” That test uses the following factors, which are analyzed against each other with no single one being determinative.

(A) the extent to which the work performed is an integral part of the employer’s business;
(B) the worker’s opportunity for profit or loss depending on his or her managerial skill;
(C) the extent of the relative investments of the employer and the worker;
(D) whether the work performed requires special skills and initiative;
(E) the permanency of the relationship; and
(F) the degree of control exercised or retained by the employer.

One of the most important paragraphs in the document explains that the label that the employer uses or the agreement between the employer and the worker are NOT determinative. It’s not enough for the employer and the employee to just agree as part of their contract or negotiation that the worker is an independent contractor. The factors in the economic realities test will still prevail.

Another paragraph that is particularly important in our industry describes the element of “degree of control.” Simply having workers who are free to work from home and set their own hours with little supervision does NOT make them independent contractors. The control factor has to be weighed against the other factors.

The document concludes by blatantly summarizing that “most workers are employees under the FLSA’s broad definitions.”

How It Impacts Affiliate Marketing

It’s no secret that the many people in our industry work in a consulting or contract capacity quite frequently. There are quite a few instances that would actually fall under the “independent contractor” status such as guest writers, graphic designers, programmers, and social media or SEO experts.

However, those lines might very easily be crossed if the person doing the work is either working exclusively for one company, is performing work that is integral to the company, or the company is relationship has the signs of permanency (perhaps the giving of executive titles or listing the workers on the employer website).

What’s the difference how you classify workers if both of you are fine with it? Apparently quite a bit. There are major differences in the assessment and collection of taxes, unemployment, overtime policies, and minimum wages.

Right now it does not look like online marketing is being closely scrutinized for labor violations of this type, but as our industry continues to grow, it’s likely that we will become a bigger part of the discussion.

If you are employing people in any way, it’s a good idea to evaluate your relationships and determine whether people you consider to be contractors might actually be employees.