Business - Affiliate Marketing, Route 53 - Life is A Highway

Business Lemmings and Lack of Marketing Fundamentals

March 9, 2010 erikhom@aol.com 2 Comments

Advertising is tax deductible, so we all pay for the privilege of being manipulated and controlled.: Noam Chomsky
US activist & linguist (1928 – )

Before I rant, let me just say 3 things:

1. Other than email marketing from an owned list, a well run affiliate marketing program is the best ROI marketing tool on the web when it comes to sales.

2. When it comes to customer aquisition, a well run affiliate marketing program provides the cheapest way to bring new customers or returning lapsed customers back to your business.

3. In the new world of social media and the fragmented web, we are finally at the point of peer-to-peer distributed marketing at it’s purest online form.

Now if you don’t believe these statements as fact, you (and your dog) can stop reading right here and talk to my hand.

Yesterday the State of Colorado passed a bill that caused Amazon, the so-called father of Affiliate Online Marketing to shut out its’ community of affiliate marketers on the Web. Some say that Amazon could have fought the State and others say that Amazon was sticking by it’s principles, but I say this is all a silly excuse by Amazon like many other greedy companies to cut their costs. They weren’t afraid that this might prevent them from having to do this in other states, but what I do fear is that this action will cause the many corporate lemmings of affiliate marketing to say, “we should follow Amazon’s lead” and drop our Colorado affiliates too.

A little over a decade ago, the lead venture capital firm , CMG Ventures, for my start-up specifically came to us and I was given money to “build an affiliate marketing program just like Amazon’s”. Back then, a deal with AOL was worth something, eyeballs were worth something, and building a strong affiliate marketing program was worth something. They were right. a $10MM investment turned int0 a $100MM business just 2 months later. I remember our acquirer marveling at how I had amassed 25K new points of distribution that drove 8% of our business.

While some might debate the validity of the analysis during those years, affiliate programs still were the unsung heroes of driving traffic for online companies which had no real name for themselves. The new online “dot-coms” and their online affiliate partners dominated and created formidable foes for their larger “brick and mortar” foes. The hope was to build a large enough network that would help fend off the bigger brands once they entered the online world. Other than email, the best marketing ROIs came from affiliate programs where contextual selling becme the key buzzwords along with collaborative filtering”. Back then and today though, companies really struggled to figure out whether these programs were “brand builders” or “traffic drivers”. I’ll address this in another post.

Now today you hear about Amazon dropping their affiliate marketing program in certain states because of taxes. Are they turning their back on the girl that brought them to the prom? Are they putting man’s best friend out on the street? Let’s get something straight. There are alternatives. They can charge taxes in those states and let those politicians see the inequities. People understand. How many times have you purchased something online where it said something like, “those in CA, VA, TX, and NY must pay 4% additional”? Happens all the time. Don’t tell me that Amazon couldn’t have imposed that strategy. Not to mention at a time when affiliate marketing is now showing some oats with the power of social media marketing coming in to play, there is no doubt that affiliate marketing is beginning to feel it’s traction again. This can’t happen in every state or else all affiliates will be living in another country or New Jersey (take your pick).

I’ve even had people in my company (you know the people who know little about your business but always like to send you links just because the follow Guy Kawasaki and Alltop which makes them a genius) send me the Colorado announcement and say “oops, looks like your Colorado affiliates are all going away.” It just shows the lack of clarity as my current business doesn’t fall under those same laws. The rush to judgment like lemmings would easily spell the ending of affiliate marketing as we know it. “Why would they do something like that then?”, I’ve been asked.

If you haven’t worked inside a large company, the phrases “customer ownership”, “brand dilution” and “incremental sales” are terms I’ve heard mentioned at almost every large company I’ve worked with. There is no doubt that now that Amazon is a large firm and not just some online start-up that they might just feel they don’t need as much help from the online community helping to build brand equity and that they already own the customer because just about everyone online knows who Amazon is by now, is in their database, and is no longer an incremental customer (somebody who hasn’t purchased from them before). They no doubt have done some analysis and figured what percentatge of those links from Colorado were already customers or could have come from links from somewhere else instead. As much as Google is the big Brother of the Web, Amazon knows more about Web consumption behavior than anyone.

So you see, they have spent the last 10 years gaining ownership over your traffic that you sent them. Your Uncle Charlie who clicked through your link in your blog and bout Sarah Palin’s book? Yep, Amazon now has his email on file. And likely knows his birthday and the last 8 items he looked at online. That next purchase? Yep, they don’t need your Colorado taxes and can pocket that 4% affiliate commission they aren’t going to pay out anymore.

Yep, Amazon is smart and they know points 1 & 2 stated above. What they argue though is statement #3 and where politicians look like the greediest (and dumbest) of all. Politicians are also to blame here. So this is a new advertising tax, eh? So now when I tell my friend via Facebook or Twitter about a cool book and add an affiliate link, that I should be taxed for opening my mouth? Dear Mr. Colorado Governor, since when is giving advice taxable? Are you going to tax every conversation on the Web? Books have always been sold because someone told them it was good or because the NY Times put it on their Bestseller list (Oh so now we might want to get all those last taxes for those NY Times Best Seller referrals)! Let’s have some common sense.

This just won’t happen. People will lose jobs. Measurable consumption will disappear. Good, quality advertising techniques and methodologies will be left behind in the dust.

As we post this entry, the Senator from Colorado has said he will listen to those who will want to complain. Let’s hope this is more action than just a political move.

Business - Affiliate Marketing, Route 53 - Life is A Highway

The Ugly, the Bad, and the Good from Affiliate Summit 2010

March 7, 2010 erikhom@aol.com 2 Comments

Half the money I spend on advertising is wasted, and the problem is I do not know which half

Lord Leverhulme 1851-1925, British founder of Unilever and philanthropist

I was recently asked to recap my thoughts on this past Affiliate Summit for colleagues in my Company as many are new to the business and we are going through a reogranization . It was pretty remedial and I wished I could have elaborated more. The industry has come a long way but it still has a long way to go. The good thing is that it has been two months, so nobody will read this anyway.

When I posted before I left for the annual Affiliate Summit, I had lots of thoughts about the industry and its direction. And while the Affiliate Summit gave me many more things to ponder, I think many of the assumptions I had going in were answered or at least became a little more clear to me. I have to say that I probably find myself on the more conservative side of the industry, but since I work in the more corporate end of the affiliate marketing industry that is probably where I get my opinions. That said, as an affiliate marketer industry veteran like most in the industry, we are rogues, entrepreneurial thinkers, outside of the box workers, and sometimes just plain troublemakers.

This year’s Affiliate Summit keynote was delivered by Dr. Robert Cialdini, psychologist and author of Influence: The Psychology of Persuasion. I’d actually heard Dr. Cialdini before and thought his speech would be rather interesting with this crowd given that the last time I’d heard him was in a room full of MBA alumni in our local Commonwealth Club. Online affiliates are a crazy mix of people. Most are on their second careers. I’ve met ex-lawyers, ex-dcotors, empty nesters, etc. But if there is one way to describe them all in one, it’s tenacious marketers. these people sell all day long and thus Dr. Cialdini’s speech while maybe falling on virgin ears to many was a rallying call to them. “How can I influence people and make them buy from me?” So why is this relevant and why am I rambling? Well one of the psychological influencing tools that Dr. Cialdini uses is to tell you the good news last. And that is why I reversed the title of this entry to The Ugly, the Bad & the Good”.

The UGLY – Given that I’ve been in the affiliate marketing world for 12 years now I expect to see change. How long is 12 years in this business? Scott Jangro just received the industry “Legend” award which I think qualifies me as a dinosaur (my boss so aptly called me a relic). Well there has been change, but we are still getting a lot of new people in the industry. I stomp my feet and smile when standing in front of a big sign that says “Ticketmaster” and someone asks me what we’re selling. There are lots of people new to the industry and patience (lots of it) goes a long way. I actually think that the most interesting person I met at the conference was a new first time attendee that I met at the blackjack table at 2 in the morning (Yes the conference was in Vegas, and part of why this was Ugly).

So what’s ugly? It’s that this industry has become more complex in its problems. It still struggles for the respectability and recognition of the contributions that it provides to the online world, and many of the basic understandings of the industry are still questioned and not being practiced in a respectful manner. This is not the fault of the industry but the greater understanding of affiliate marketing in general

THE BAD? The bad is that while there is innovation, there needs to be more. There appear to be a lot of businesses which are varations of others. The exhibit floors are aisles of networks peddling the same things. Everyone claims their network or platform is better than the next. As a merchant one could just look at all those networks and say forget it. In speaking with other merchants, many said that they couldn’t fathom the commoditization of networks. Sure, some had unique propositions such as video or mobile implementaions, but there was very little else different between the models. While the idea of belonging to multiple networks turns off many people because of the lack of control, publishers are left to play with many of them, not being able to really differentiate one vs. the other. That doesn’t mean that merchants are any better. The lack of representation from merchants such as Amazon, the leading merchant innovator, as well as traditional brand names leaves the publishers very little choice but to deal with the networks who try to act on the behalf of these merchants. It also shows a bit of concern about the lack of interest by management of these companies.

THE GOOD Well for all the issues, there are still some cornerstones that enable the industry to thrive. Affiliate marketing continues to be the most economical marketing online tool. ROI driven companies are starting to notice how efficient these programs are in terms of sales. As Gary Vaynerchuk said, affiliates are the hardest working people on the web (the also are the hardest partying). Many of the original pioneers in the business have done very well for themselves and many veterans in the industry (Todd Crawford) continue to innovate and develop new businesses to adress many of the problems that have plagues the industry for the last decade.

The industry doesn’t have as much low hanging fruit as it used to but there still exist lots of opportunities to innovate There are people still focused on financial gain or first mover advantage. We have to move beyond that. As this past year’s speaker (@copyblogger) mentioned, those who work at it longer will win. There is still a lot of opportunity to win in social media, feeds, APIs, etc. when you combine with affiliate marketing.

In the end though, what makes the industry is the people. It is one of the best parts about the affiliate market industry and as long as it attracts more smart and knowledgeable people. And if it retains the learnings of the past 12 years, it would become a staple in the arsenal of all successful online marketers and not just an afterthought.

Route 53 - Life is A Highway, Travels: The Route 53

Palm’s Place (Vegas)

March 7, 2010 erikhom@aol.com 2 Comments

The Palm’s Place (Las Vegas, NV)

4381 West Flamingo Road, Las Vegas, NV 89103
Reservations: L 702-932-7777 | F 702-944-3257 |

http://www.palmsplace.com

The Palm’s Place in Vegas offers the perfect alternative for someone who enjoys the glitz and glamour of the Vegas club scene but likes to retire to the peace and quiet sanctuary that bigger hotels don’t offer, yet keeps the flair and sense of style that made Vegas famous during the Rat Pack years. There is something about driving up to a hotel in Las vegas without seeing any cabs. There is even more when you walk into the lobby of a Vegas hotel and realize there are no slot machines, gambling tables in sight! The peace and quiet was deafening. Oh, and you couldn’t smell a hint of cigarettes or cigars.

Upon a longer stay you will also note there are few chambermaids (not sure if we ever saw one) blocking your hallways or chattering outside your room. The front desk was very helpful with reservations and providing us with amenities into the nightclubs at the Palm’s Casino.

Originally designed as condos only by the Maloof brothers, many went unsold and are used as hotel rooms. Included among the amenities are a beautiful spa, a great restaurant, beautiful pool with cabanas, and a quiet bar. Separated from the Palm’s Casino by a 300 yard indoor moving walkway which protects you from the Winter cold or the Summer heat, one has access to the casino, top concerts, movieplex and 4 top notch clubs (Ghost Bar, the World’s only Playboy Club, Rain, and Moon) without ever needing to step outside, deal with coat checks, valets, or taxis. It should be noted that when makeing a reservation one should also check the Palm’s Place for specials which might get you priotity access to one of the clubs, spa credits, restaurant discounts and/or free drinks. A recent stay in December 2009 netted $50 in restaurant credits, a free entry for two to the spa, and two drinks at the bar (the bartender served us another on the house)

The Simon Lounge Restaurant looks over the pool deck which offers a very open feeling and probably some good people watching during the summer months. The food while good probably isn’t up to par with what you would find at Caesar’s or the bellagio, but it was above average and with a $50 credit, we weren’t being picky.

The Palm’s Place rooms offer private balconies with views of the casino as well as the entire Strip as it sits on Flamingo across the highway (a $10 cab ride to Caesar’s). Each room provides a modern efficiency kitchen, spacious bathroom with jacuzzi bath and walk in rain spout shower. The jacuzzi tub is encased in frosted transluscent glass which seems to be the new architectural feature du jour (see the Thompson LES review) along with the rain spout shower (see Carneros Inn).

As one who believes that cooking while on vacation is not a vacation, I am usually not a fan of condominiums, but this room was very well done. I like full service resorts and hotels with great little amenities, stylistic design and great service. The Palm’s Place is definitely an upgrade over the Palm’s Casino.

Most of the rooms are designed as studio suites. So they might not be large enough for many. A note about a condominium that is designed for a GQ bachelor. The room had two flat screen TVs, a lounging area that you could sleep in, mirrored walls with New Century stone wall accents to make the room feel larger than it is. There still is only one bathroom, one sink, etc. The lighting is subtle and the room might feel like a night club even in the middle of the day.

There is a 2 bedroom option which has a unique feature of a soaking bathtub in the window overlooking the Strip. You can’t get more fabulous that that!

Breast Cancer - A Loving Fight, Route 53 - Life is A Highway

Running for my Wife

March 1, 2010 erikhom@aol.com 2 Comments

Bronze medalist Joannie Rochette

For all of the plans we’ve made,
There isn’t a flag I’d wave,
Don’t care if we bend,
I’d sink us to swim,
We’re marching on,

– Marching On by One Republic

As I watched Olympic skater carry the Canadian flag tonight the words to the One Republic song, Marching On, came to my mind. The courage of the young lady from Canada who performed her best just days after her mother died captured the heart of the whole world. Marching on….. People ask how she did it. When asked, she replied that she was able to get into a zone and for those few minutes on the ice her focus was on competition and not on her own personal grief. For Joannie, it was her 3 minutes of outer body experience. The focus and determination needed to compete consumed her. The same was for Lindsay Vonn suffereing days earlier from a shin injury. As soon as her run was completed, she collapsed. These stories repeated themselves over and over again. There was the story of the cross-country skier who pulled herself out of the hospital to compete and get a bronze medal only to collapse at the finish line and be taken back to the hospital.

With these stories, you can very much understand where Joannie is coming from. Finding that place to escape has been what has helped my wife and I move on past her cancer. Escaping the day to day worries and immersing ourselves in other tasks has driven us for the last 18 months. Yes there still are the monthly shots, the black and blue marks, the pills, etc. which remind you every day. Monthly I catch a glance at her abdomen which is bandaged from her monthly shot and am reminded of where we’ve been and how far we’ve come.

Tonight it hit me when I logged in and saw that I had reached 2500 miles. That is 2500 miles I’ve run since my wife was diagnosed with breast cancer. I’m not sure why, but I decided early on that this was going to be my own cause and I was going to use our pain and will to survive to drive my exercise. I remember being so grateful to her doctors that I vowed to personally contribute $.50 for every mile I ran to the hospital’s foundation. I didn’t want to be part of a large walkathon or other event for a national plan, but I needed to make this my own personal journey, my own run for my health and for my wife. This battle with my wife’s cancer was personal although I valued the community of survivors who gave words of encouragement and wisdom.

I can’t remember half those miles run. I was running numb and hiding from my pain and my fears. I remember some of those nights right after her surgery when I would put her to sleep and then just go for a run fighting back the tears at first and then those fears turned into energy fueled by my passion to not feel sorry and to start wanting to make a difference. I understand where Joannie Rochette was mentally when she skated this past week. Her inner strength and will to do her best under such extreme scrutiny and pressure in the face of such heartache was fueled by her passion and her will.

When we finished a recent vacation with our kids to our favorite resort, the hotel staff told us how they missed us. We missed them too. We had gone almost every year until we were given my wife’s diagnosis. Why hadn’t we returned earlier? I guess we just weren’t ready to truly resume our lives in a care free manner. It has taken us that long to feel like we can celebrate our opportunity to move on in life. We almost wondered if we had waited too long. We sat out on our lanai as our children slept at night and felt the sea breezes on our faces and asked that question. It didn’t matter. We were just happy to enjoy our wonderful spot again together. It was good to be in our happy place.

Cancer sites can be a very great resource for community therapy. In fact we have made so many friends and are especially grateful to a friend in Hawaii who showers us with gifts and has really truly helped my wife as a personal confidante on many recovery issues. Other than that, though, there has been a separate private struggle to return to normalcy. The struggle is to keep busy, do the things you love and get on with the things you always wanted to do, yet find the balance to give back and show your gratitude to those who helped along the way. My personal donation of running for my own charity and benefit for my wife’s cancer is not a poke against the Susan G. Komen walk or the Avon walk. For me, my wife’s battle with cancer was a personal matter and I wanted to give it back on my own time and my own terms and for my own personal battle with the pavement.

Route 53 - Life is A Highway

The Rio All-Suites (Vegas)

March 1, 2010 erikhom@aol.com Leave a comment

Rio All-Suites Hotel ( a Harrah’s Property)

3700 W Flamingo Rd
Las Vegas, NV 89103
(702) 777-7634

www.riolasvegas.com

This is my second review of this hotel. Please feel free to look into the archives.

If size is your thing, the Rio All-Suites is one of the better bangs for your buck in Las Vegas if you aren’t traveling on some kind of loyalty package. If you are in the Masquerade Tower (Ipanema is the other) you’ll have a nice view of the Strip although you will be far from the convention area. The rooms are quite spacious in size although those who prefer a luxurious bathroom will be sorely disappointed. Many of the newer and modern hotels have better amenities than the Rio which is in need of a bit of a refurbishment. There is an odd feature of a see-through window from the bath/shower into the bedroom, but other than that the room is pretty much non-descript. I’m not an interior designer, but the decor of the room (the bedspread) was definitely not appealing to me. An update is definitely needed.

In need of some repairs, my room had chair rails falling off the wall. Additionally, my in-room wireless service was spotty. I told the front desk and they admitted it was a problem and removed the charges from my bill. Overall, those looking for rooms at roughly $129 a night with a large living area and floor to ceiling windows will find some appeal to the room.

Most people attending the Rio are there for the moderate pricing dining and non-pretentious environment off the Strip that reminds one more of the crowd that might be found in downtown Vegas. The other hotels located close by are the Gold Coast Casino next door, which is the economy hotel, and the more luxurious Palms across the way. The Palms though has recently been advertising specials comparable to the Rio pricing.

Shows of note at the hotel are Penn & Teller, the comedic magic duo, as well as the Chippendales revue (yes I saw and heard screaming women as I walked by and saw a few women giggling in the elevator with Chippendales bracelets. The marquee restaurant is the VooDoo steak house which affords more great views. I would say the food is modestly okay for a steak house but there are probably better steak houses in Vegas.