PhatzNewsRoom.com News Room and Blog

By Kathee Brewer
08/01/2009

Affiliates are the lifeblood of online marketing … right?

Once upon a time, the answer to that question was so self-evident as to need no voice. Especially in the adult entertainment industry — often credited with creating the virtual equivalent of a business model successfully employed for decades by brick-and-mortar companies like Amway and Avon — recruiting, equipping and deploying an army of sales associates made the difference between rousing financial victory and inglorious defeat. Traditionally, affiliates composed the troops upon whose shoulders Web-based adult empires rose to prominence. Among the fields of cyberspace, some of the most successful affiliates even developed affiliate armies of their own.

In the Web’s early days, the affiliate model, based on sharing the wealth, worked exceptionally well for selling adult content and services. Untold numbers of foot soldiers got rich based on little more than their ability to throw up a quick Web page liberally sprinkled with enticing images, some catchy verbiage and some prominent links to “join now” pages. The success of the vanguard convinced thousands of others that pushing porn was an easy, virtually risk-free way to make bundles of cash. New kingdoms appeared with exciting regularity. So did new affiliate recruits. For quite a while, the boundaries of cyberspace seemed unlimited, and everyone was happy.

Kingdoms were established without firing a shot. Then the milieu changed, and war began. The Web became saturated with adult content, affiliates began to trip over each other, and profit margins declined. In their constant skirmishing to maintain hard-won ground and gain new territory, some soldiers and their leaders became a bit too creative. Mistakes were made. Federal scrutiny rained down on the industry’s collective head like mortar fire. Those who escaped allegations of fraud and spamming often found themselves in the crosshairs of once-friendly competitors who pulled out all the stops on payouts, driving affiliate expectations through the roof and creating unsustainable environments that bred more underhanded tactics. As the adult online industry began to hemorrhage from self-inflicted wounds, its once-vaunted ability to turn everything it touched into gold began to seem more like a curse than a blessing. Affiliates and some programs cut their losses and beat a hasty retreat for safer markets.

Amid the rumble, the remaining players started to modify their battle plans. Some closed their affiliate programs except by invitation. Others redoubled their recruitment efforts. Still others abandoned the affiliate model altogether in order to avoid risks they would rather not face.

Had the time come to pull the plug on affiliate programs before someone got hurt?

A call to arms?

Yes and no, according to managers who spent years rising through the ranks at some of the oldest affiliate programs on the adult Web. In some ways, marketing models are shifting away from relying exclusively on commission-driven salespeople, but most doubt the affiliate model will disappear.

CECash Marketing Director Ardy is among those who think affiliates may be destined to follow the dinosaurs. One of the first adult online companies to offer sales commissions, CECash’s predecessor, Cybererotica, also was one of the first to publish adult content on the Web. At one time, Cybererotica dominated the landscape with a larger-than-life recruitment program that offered all sorts of larger-than-life perks to top performers. The company’s affiliate army was astounding in its depth and breadth, but even the largest armies suffer losses over time. As battle lines crisscrossed and new conscripts became more difficult to find, CECash retreated, re-evaluated its position in the field and regrouped with new ideas the company believes will establish new benchmarks. “Three years ago, as we began to see the extinction of the ‘Average Joe’ affiliate, we started focusing heavily on building our own internal traffic sources,” Ardy told AVN Online. “Obviously everyone would love to have 5,000 active affiliates, but that is just not a reality anymore. Today the most successful affiliate programs contribute the bulk of their sales on their own rather than relying just on affiliates, and this will ensure their future in the marketplace.”

In contrast, Badpuppy Marketing and Advertising Manager Lisa Turner, a 14-year veteran of the industry, is convinced almost the opposite is true. “I can say with 100-percent confidence that without our affiliates, Badpuppy would not be where we are today,” she averred. “I’d not trade our affiliates for the world, and I don’t think affiliates can be replaced. Buying quality traffic is difficult. I’ll be very honest: We’ve had very little luck with traffic purchases and email marketing campaigns. I don’t even know why anyone would want to replace affiliates. You only pay your affiliates when they make money, so you’re not throwing money down the tubes with unsuccessful paid traffic campaigns.

On the other hand, she added, “trading traffic has worked successfully for Badpuppy. We’ve been doing that for the past 14 years, either traffic-for-traffic, plan and simple, or traffic trades with other affiliate programs. Program managers tend to promote another program far better when traffic and promotions are being reciprocated.”

Alfonsus “AK” Kusuma, vice president of sales and marketing for DatingGold, agreed. “Many companies do buy and trade traffic with other companies, including us, but I don’t think this will be a replacement for affiliates,” he said. “You will always find an affiliate who doesn’t have a product but who’s good at sending traffic. There needs to be a balance between traffic companies and affiliate businesses. It’s how the system works the best.”

Basic training

The prevailing opinion seems to be that affiliates remain a viable, if shrinking, component of most adult industry marketing plans. In fact, many affiliate programs still actively seek new troops with fresh ideas and a good amount of gung-ho spirit. “I have never heard anyone say that trades equaled the performance of a hard-working and successful affiliate,” Tom Hymes, co-founder and publisher of quirky news site DailyBabylon.com, said. “Many companies still live and die by their affiliate traffic, even if its converting percentage has lessened.” In addition, Hymes noted, the face of affiliates is changing, in many ways for the better. “The troubled economy may drive some mainstream refugees into adult, but there also is renewed interest in the biz by very serious and capable marketers who are not your traditional sort of affiliate,” he said. “There has been increasing interest by people who work in other verticals — the video game marketplace, for instance — which points to a more direct connection between multiple industries. That’s very good news for adult.”

Hymes’ assertions and conclusions certainly are valid, Turner said, confirming an influx of “mainstream refugees” at Badpuppy’s PuppyCash. Finding good recruits shouldn’t be a problem as long as the affiliate program exercises a bit of care in the selection and approval process. Turner described her process, which can be time-consuming but worth every second. “When researching affiliates, I look at the overall quality of their site, as well as to see that there is no apparent illegal activity such as copyright violations, illegal content or inappropriate affiliate behavior like blind links or consumer trickery,” she revealed. “Secondly I look over the site’s [search engine optimization] and actually search for [the site] on Google and Yahoo to see how its search standings are. I also look to see that there is no negative chatter about the site.”

Diamonds in the rough seem to be hiding in every foxhole these days, according to Turner. Once they’re on board with a program, what makes the difference in their performance is training and investment by the program itself. “There is something to be said about investing some time and sharing knowledge with affiliates,” Turner opined. “Investing time in teaching affiliates how best to market Badpuppy, as well as giving them ideas about how to generate more traffic to their sites, has paid off time and time again. If an affiliate is willing to give Badpuppy or any of the sites at PuppyCash premium exposure, I’m willing to help them any way I can to ensure they do well with their promotions. Let’s face it: If they do well and convert, then obviously Badpuppy does well.”

She added a caveat, too: Always treat the troops with the same respect generals demand. “In this business, word of mouth is huge between affiliates and program managers,” she said. “If you mistreat them or appear that you don’t care, those words can spread quickly.”

AK said DatingGold takes a personal approach to almost every affiliate for just that reason. “We always welcome all of our affiliates to share their ideas, goals and vision with us, so we can help them create the product and results they want,” he noted. “If their site needs an innovative tool, we’ll work on getting that for them in a timely manner. I think even the smallest affiliate can work their way up into the ‘whale’ category with a little bit of a challenge and some good, creative thought. That’s what we do for thousands of our smart affiliates, and it proves to work exceedingly well.”

“Whales” — top performers who generate tons of traffic and consequently piles of income — are the ultimate storm troopers for any affiliate program. Even though CECash is diversifying its marketing programs so as not to rely so heavily on affiliates, it still embraces whales, according to Ardy. “The difference between a mid-sized affiliate and a whale is time and experience,” he said. “The whale has survived through the thickest times of our industry and has been able to do so by maintaining relationships with traffic sources, always being proactive about changing with the times rather than staying stuck in their old ways.

“There are still dozens of whales in the industry,” he added, noting that the same special attention that keeps whales happy can tip smaller affiliates into expending the extra effort required to become a whale. “It can always help to make sure your affiliates know they are important to you. Send them gifts, bonus pays, whatever it takes to help them realize that by moving their traffic away they are not going to receive the same level of service with the next guy. Make your affiliates more money than your competition and they won’t leave you.”

Morale and welfare

Of course, that’s not to say the troops won’t become restless — and sometimes downright hostile — without a firm leader in charge. For any affiliate relationship to work, there must be give and take on both sides, each must respect the other’s contribution, and the lines of communication have to remain open.

“These days anybody can have a website or some offshoot and call themselves an affiliate,” Ardy warned. “What differentiates the real ones from the fake ones is the amount of work they do. Most of the larger affiliates that have survived the past few years in this industry have done so by working as much as the sponsors they promote. As an affiliate you have one main responsibility: Find profitable traffic streams and learn how to convert them better than your competition.”

That said, however, he allowed sponsor programs have responsibilities, as well. “Affiliates are the bread and butter for many companies, but they also can be very difficult and demanding to deal with,” Ardy noted. However, “at the end of the day I tell all of our salespeople one thing: ‘Put on your knee pads and do whatever they want.’ Because the affiliate pool has grown so much smaller, the best ones that are left can demand much more for their traffic both in per-sign-up amount and in terms of services and needs. If you want to reel in the big fish, it’s just a game you have to play. Once you take enough of their traffic for a long enough period of time, any sponsor can run an analytical report and decide if they are making enough profit per join to deal with whatever requests they might have.”

AK opined that if one looks hard enough, he can find something positive about even the most difficult affiliate — but some affiliates make the search more pleasant than others. “I think the most worthwhile affiliates are those who understand how business relationships work,” he said. “They grasp that we have to rely on each other; help each other out and when there’s a bump in the road. They don’t just assume and quit promoting us without trying to communicate with us. They understand that it takes two to tango.”

And just as reportedly there are no atheists in foxholes, there are no true amateurs in the online marketing game, according to Turner. “For the most part, I find the best-producing affiliates to be those who are doing it for a living,” she said. “Because promoting other sites is their business and what pays the bills, they tend to be more in tune with traffic acquisition — whether search engine, purchasing traffic, trading traffic, etc. — as well as targeting that traffic to specific sponsors and obtaining the best conversions.”

In the final analysis, according to Hymes — who for 11 years has been privy to the triumphs and tragedies inside the adult industry — affiliates are an integral part of online marketing and probably always will be … just as they are in the real world.

“Affiliates have, in many ways, been the missing link in the online adult industry over the years,” he said. “Many have worked their magic behind the scenes and been hesitant at best to discuss their methods. What I have managed to glean, though, is that once a promising affiliate is found, that is a relationship that best develops over time. Knowing the habits and preferences of your own members is probably the best way to identity the right affiliate for you. Staying creative by adding new features and continuing to update your site on a regular basis is a good way to keep the good affiliates from being poached, but the mercurial nature of the average affiliate seems to suggest they will always be looking for something better. It would be unwise to panic in those situations. If what you do is unique and authentic, the affiliate who needs you will find you.”

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