Facebook changes nothing — yet

First, let’s quickly explore why we should catch our breath when it comes to Facebook.  Jim McCann and his otherwise brilliant team are jumping on the social media hype-and-spin bandwagon and, as I see it, failing to truly innovate. I see this use of Facebook is a gratuitous one based on what I’m observing so far.  Can you afford to follow?  Mr. McCann says…

“Facebook is redefining the social Web, a cultural and social phenomenon that has changed the way we connect with one another,” says 1800Flowers CEO Jim McCann as he whips the ’social media’ hype engine into overdrive — blowing by rational thought.

Facebook cannot re-define the social Web.  Facebook isn’t doing anything that others aren’t doing — it just has more mass.  Secondly, the social Web isn’t a cultural or social phenomenon that’s changed the way we connect with one another.  The social Web merely makes what we’ve done for generations easier, faster and boarder-less.

The “Age of Conversation” is NOT now (yes, the book is wrong too!).  The “Age of Conversation” has existed since the beginning of human existence.  It’s how we’ve always engaged in commercial transactions — commerce, trade, barter.  In this reality-based context, Facebook changes very little for marketers — not yet.  Would you agree?

We’ve been there, done that — it didn’t work

The investment in a pop-up storefront on Facebook is a new idea?  Nope, it’s a seriously old one.  ePods, Affinia!, Nexchange, iMediation and a list of about a dozen other failed companies tried this and failed in the early 1990’s.  Nearly ever major publisher has tried to set up mini-storefronts using simple (affiliate marketing) to complex (drop-shipping) tech tools that link up sellers and publishers.  Fail.

“But things have changed, Jeff… this is the era of Web 2.0!”

Indeed, it is and we now have FAR more media on the Web being created by far more entities of all sorts.  “Consumers” spend FAR more time consuming and creating content than searching or buying.  So now things have changed… right?  According to their technology partner, Alvenda (a rather retro-startup providing those same pop-up storefronts) they have.

1800Flowers believes people are aching to engage in ecommerce away from their ecommerce site. Why?

What gives Mr. McCann the belief that this is going to work — that people actually WANT to shop from within Facebook?  I understand and respect the fact that consumers are busy NOT paying attention to ads and are ENORMOUSLY “engaged” by social media — distracted from buying stuff and only buying what they really NEED these days.  Problem.  Got it… but???

Beware: The ‘it costs next to nothing’ myth

Many of you have said, “but Jeff why not… what’s the opportunity cost… it’s next to nothing!”

I will continue to be accused of having an “anti-experimental” attitude toward social media.  I’m not anti-experimental.  I’m anti-silly; anti-illogical; anti-flash-in-the-pan-voodoo marketing.  I’m pro-reality.

It absolutely costs real, hard-earned dollars to experiment with social media.  Time is money!

Add up the costs of all that time we’re spending experimenting on social media pet projects that are designed to fail.

“But, Jeff, I’m putting a college intern on it…”

Beware: The ‘they’re young, they get it’ myth

Ok… but in real life when you put someone with NO experience on a project you FAIL.  Somehow, with social media, MY thinking on this is the failure — based on the belief systems of most marketers I talk to.  Many marketers believe that the key to success is…

Putting someone young on the project and paying them nothing actually increases the odds of success — they “get it.”

Somehow the experience they get with immersing themselves on Facebook, Twitter, etc.  changes everything.  Their experience is valued — to the extent that we can afford to experiment and hope that remarkable business outcomes happen.

Somehow the (often narcissistic) immersion of young folk QUALIFIES them to get the job done and supports our belief that something meaningful will emerge in social media.  Really?  Really.

‘Branding’ & social media: Re-defining failure as success

“But Jeff, there are countless examples of successful companies that have used college interns or inexperienced talent to net REAL results on Twitter and Facebook.”

Yes but how do many marketers define success?  How many times have you heard a marketer re-define a failure?

“This campaign didn’t achieve the sales/sales lead goal but it was a BRANDING success.”

When marketers’ campaigns fail to actually create tangible business outcomes we often fall back on that comfy space — “branding.”  Somehow marketers get away with this re-setting of the goal-post (for decades now) but research indicates that this won’t last much longer — not in this tough economy.

Too often we hear marketers define success in terms that are un-acceptable to the C-Suite (CFO’s in particular).  Here are a few popular ones:  Twitter followers, Facebook friend count, “engagement.”

How to avoid becoming a social eCommerce failure

The 1800Flowers Facebook storefront is one of two things:

1. A failure to actually innovate (propped up by the belief that there’s no cost involved in trying) or
2. A failure to create brand value to customers and prospective customers

Why is the company investing in social network marketing?  Because it needs to innovate — that’s a core expectation of its many investors.  Why did Amazon acquire Zappos?  Largely based on market expectations.  Yet I believe 1800Flowers has given up on innovation or is simply too large to innovate (which is what many are now saying about Google).

More importantly, I believe Mr. McCann’s crew have failed to create enough brand value among customers to keep their attention.  If a company cannot rely on its database of happy customers, it’s Web site, it’s catalog — everything that it traditionally relies on — what CAN it depend on?

I see the company’s social media pipe dreams as a scream for help in a tough market… I’ll admit.

When it comes to social network marketing we need to act responsibly in this new economy.  The first step in doing so is to realize that many bloggers, trade media and “experts” are irrationally rushing to hail “all that is Facebook” as bold and innovative — automatically and based on faulty reasoning.  I admit this reasoning is quite popular… yet this supports my point.  To rise above mediocrity a company must think strategically — resist following the lead of others tactically.  Think first, then act.  What do you think?

Time to read: 3.5 minutes.

The sooner marketers realize this the sooner they’ll stop looking foolish: All the Web is a social media.  Always has been, always will be.  How have we used digital media — since the beginning? ICQ and instant messaging? E-mail?  Mobile SMS/texting?  SOCIALLY!  Yes, the Web is vastly easier for people to use today but the resulting hysteria finds marketers handcuffing themselves in faux “newness” rather than integrating digital strategies in meaningful ways.  Marketers claim ownership of social media and measurement are the problem — they can’t settle on either.  Here’s why: all media is social — all media is customer service, marketing, human resources, finance, product development, etc.  How to fix it?  Read on.   It’s not as difficult as you might think.

Recently, Fiona Swerdlow and her research team at Shop.org (the online division of the National Retail Federation) asked consumers, “What do you do on social media sites?” (Facebook, Twitter, Kaboodle, etc.)  I respect Fiona’s work and Shop.org but the results are patently useless in my humble opinion:

Judging from the results, social media appears to be on the path to becoming increasingly mainstream media. While there is much growth ahead yet, social media is by now woven into the lives of adults across age, sex, household income, marital and parental status, and region. And while much of that activity to date centers on connecting with friends (both old and new), chatting, and sharing photos, consumers do recognize that social media is helpful for a number of shopping related activities as well.

I’m sorry if this ruffles feathers but if retailers need to invest in research to draw these conclusions we are in a very sad state of affairs.  I’m directly challenging how Shop.org and NRF is choosing to spend its members dollars.  I assume that’s how it was funded and hope someone can correct me if I’m mistaken.

Social media is not ‘becoming increasingly mainstream’

Again, the presumption is that some parts of digital/Web media is NOT “social media”.  Is e-mail social media?  Instant messaging?  Not according to a majority of experts, trade groups, standards groups and marketers themselves.  What IS?  Social networks, micro-blogging/lifestreaming (Twitter), review-based Web sites or widgets.

The fact is we’ve ALL been using the Web to shop, trade photos and music, compare prices, complain about products or brands… all of this stuff for over a decade.  This is NOT new and therefore is not becoming mainstream anymore than I’m becoming younger as I type this.

Social media is not increasingly pervasive

Is the Web weaving its way into people’s lives — moreso?  Of course it is.  Look at the remarkable advances in mobile as a single example… and how we all use mobile devices today versus a few years ago.  But is this a new trend?  It’s a trend spurred by technology’s availablity and ease-of-use… but otherwise it’s not news.

Social media has always been helpful to shoppers

Again, it’s hard to imagine spending money to conclude this but when hasn’t the Web been helpful to shoppers?  What portion of the Web hasn’t been helpful before “social media” arrived?  When we accept the truth (all the Web is social media) we begin to realize how customers have ALWAYS been using tools like email to shop together (socially).

Today customers no longer need to email or instant message each other — or scour the Web for product-based comments on bulletin boards.  Product review technology lets them do it immediately — right on the retailer’s page.  Customers have ALWAYS been reviewing products — elsewhere using other tools.  Socially.  All the Web is social media and always has been.

The conclusion here was never in doubt… unless you believe “social media” to be reserved to new technologies like Twitter.

Asking the question “who uses social media?” is nearly meaningless.  Answering it with “it appears it’s just about everyone one would pass walking down Main Street” as Shop.org and BIGresearch are is breathtakingly silly in my humble opinion.  It’s already realized and, more importantly, what are we to do with this information?

Family Feud: Integrating ’social media’

So why is what seems like my trivial semantics even important?  Because retailers need to integrate digital media to drive sales, leads and increase customer value.  Integrating what they perceive as separate “social media” with the rest of Web marketing is a real priority for retailers.  I won’t argue that… but so long as they treat some Web media as “social” and other as “traditional” they will lose.  They are losing.

Next I’ll demonstrate just how bad the social media integration situation is (using StrongMail Systems / Zoomerang’s recent study) and provide answers — a more effective process to integrate “social media” into the digital media mix.

There’s an endless amount of silly and illogical hype around Facebook and Twitter — their ability to create a new form of advertising.  Forget advertising for a moment: When will e-commerce become socialized?  Which companies will actually enable it?   eBay’s unbridled success gave birth to an ecosystem of  companies that “help sellers sell”… and eBay brings buyers and sellers together around shared interests to gab, blog, review products, etc.  But there aren’t any companies out there helping sellers connect with other sellers to create “merchant networks” — with one exception.  Not until today have sellers been able to instantly connect with other sellers to expand their own inventory (find new stuff to sell) AND create new sales channels (recruit other sellers as distributors).  Check out this short video for the basics and here’s a link to the media release http://pitch.pe/16159

What do you think?

Disclosure:
Jeff Molander is a Board member of, and has strategic interest in, Shopster eCommerce inc.

I sat down with John Ardis, Valueclick’s VP of Corporate Strategy (who’s company owns affiliate network Commission Junction) to talk turkey about the current state of the market.  I challenged John by making statements like, “there’s very little if any innovation in affiliate marketing” and “affiliate marketing budgets are being cut — consistently.”  John admits that some advertisers build a sense of resentment with affiliates over time — based on customer ownership issues and strong desire for incremental sales.  John speaks plainly and boldly to the issue.  That’s why I love the guy

After having helped get it revved up, I’ve been beating up online affiliate marketing for the last few years.  That’s not to say that its proponants haven’t hit back — they have.  From long-time affiliate and affiliate manager, Lee Gientke to my good friend John Ardis of Valueclick Corporation (VCLK) there’ve been a handful of people good enough to argue my points… and argue them well.  Here’s John…

Time to read: 6 minutes.

In a digital advertising world filled with hype, spin and flat out lies it’s hard to make reliable, strategic decisions about investing in social technologies or strategies.  What people or agencies should you say yes and no to?  What’s the qualification process in an evolving, “standards-less” industry?  Realizing that everyone’s got a good reference or two lying around… how do you qualify social media/marketing experts and agencies in particular?  Here’s my quick tip on how to find and qualify professionals who are focused on real, tangible social marketing outcomes.

Do they ask WHY?

When it comes to social media, social networking and marketing using everything from Bebo and Facebook to Twitter few digital specialists ever ask WHY?  Nearly everywhere I go and everything I read — none of the experts dare suggest that online social strategies are a place that could very well yield marketers nothing at all… or not enough.  If they do the sentiment is offered in reaction to your suggesting it!

Do they ask questions as part of a method?

Many social marketing experts are failing to provide a methodology to make decisions from — first understand IF social technology has use within your business and, if so, how to make smart investments. Again, their approach often assumes you’ve already arrived at the decision.  If this is missing from your conversation it’s time to move on.

Are the questions they ask irrelevant, focused mainly on tactical value or bordering on irresponsible?

No, really.  There’s plenty of this going around.  Here’s an example of what Michael Kahn of Performics suggests executives ask of their experts:

1. Are we using Twitter to help boost our site traffic?
2. Are we using Twitter to improve our search rankings?
3. Are we tapping Twitter to sell seasonal merchandise and excess inventory?
4. Is Twitter helping our search and reputation management efforts?
5. Are we doing more than distributing static news and chatter?

Now I don’t mean to pick on Michael here but this is a perfect example of what I, personally, find to be silly.  If this is representative (and it may be!) of where our minds are as marketers — our raw intelligence — then I’m more than sad I’m frightened.  Do we need to ask ourselves simplistic or ridiculous questions? (ie. “are we actively wasting time and energy?”)  If we make investment decisions based on their ability to boost site traffic or improve search rankings — today — we’re in trouble.  These are tactical questions not strategic.

I also have a hard time recommending using tools like Twitter to simply distribute promotions or clear overstock.  I’m simply not compelled unless such distribution delivers incremental value (ie. it can be proved that Twitter sometimes delivers what email cannot).

Do they “signal” their understanding of what “results” means and does it match your business goal?

Jonathan Paisner and Bill Westcott do a perfect job of this when they come right out and say SouthWest Airlines, “did not manage to grab the fare in this case, but they garnered buzz and demonstrated their brand values and social media savvy.”

Again, not to pick on Jonathan and Bill — who I don’t know — but they describe a scene where SouthWest was out to actively poach a customer complaining about JetBlue via Twitter.  Cool.  The outcome?  A failure.  No big deal but to Mr. Paisner and Westcott this failure was still a win in terms of how it, they think, made people feel or think about SouthWest.  This definition of branding is tired and, many suggest, all bud dead.  Had this encounter made people act differently it would have actually mattered.  Who knows it may actually have for Southwest…

Again, let’s look at the questions these two experts ask YOU to ask (of yourself) in making critical decisions about social marketing strategy:

1. Will it be an overtly corporate-sponsored initiative with corporate-branded resources or with objectively positioned brand ambassadors? There are pros and cons.
2. Should you establish personalities and personae with your participation or use your account functionally to distribute deals or tips related to your products? Too much self-promotion can be bad, but everybody loves a deal.
3. Do you look to actively engage prospects or do you simply hang out your shingle to let folks know you are available? Depends on what you’re looking to accomplish.

Again, in my humble opinion these are mostly tactical questions — not aimed at business outcomes nor focused on accountable (measurable, analytical) use of social technologies.  They’re also inherently squishy in this case — pose more questions than answers.

As an industry we need to consider how ridiculous we’re sounding.  Again, everyone seems to agree when it comes to social media.  It’s good for everyone, anytime, anywhere — so long as you have a good strategy, of course.  Who can’t agree to that?

My point: There’s no debate around the WHY and no plans to slow down and QUESTION (examine for tangible results) spending across Facebook, LinkedIn, Bebo, MySpace, LinkedIn et al.

Why is there no discussion about why?

Rather, there is “faux debate” about social marketing.  Sorry, readers, but I cannot help myself.  Illustration:  DM News “forced” Chris Johnson Founder, Terralever and Aviva Cuyler, Founder/CEO, JD Supra (23 years of combined marketing prowess) to square off — without gloves, oh my!  The topic:

“What’s the Real Value in Facebook”

Wow.  Sounds good so far.  Let’s tune in…

Johnson’s take:  A “resounding yes” to having your brand create a page on Facebook.   Why?  Here’s where it gets absolutely rediculous.

1. It’s  a “low-risk option to get your brand involved in social media… allows fans of your brand to engage both with the brand and with others who share the brand love.”
2. It’s “a great opportunity… to distribute your content to the community… it’s an even better environment for your brand fanatics to share their thoughts, engaging at a deeper level with the brand.”
3. Facebook designs its Web site consistently around facilitating the above.

Business outcomes involved for brands?  None mentioned beyond “the more engaged your fans are, the more social stories they will generate, and the more traffic your Facebook page will get.”  Compelled?  I’m not.

But wait, says Johnson “If you don’t cre­ate the ‘official’ presence for your brand on Facebook, someone else probably will.”

Aaah, yes.  Fear over the Wild-Wild-Westness of it all.  Fear that some goon will come along and impersonate you, Mr./Ms. Marketer.  Over a decade later this is how we rationalize our Web investment decisions?  This is patently silly.

Ms. Cuyler’s take:  Facebook is a “no-brainer.”  (No, really… this is the debate)

Ms. Cuyler goes on to suggest that it’s a no-brainer — but not for reasons you’d expect.

“The key is to make your brand’s Facebook page one of just many high-profile ‘presence outposts’ on the Web, and plant your flag in many places.”

I wouldn’t expect that?!  This is unfamiliar thinking??  Again, why is Ms. Cuyler afraid — to the extent that she’ll feign a ‘debate’ (and shame also on DM News in this regard) — to actually disagree and play the foil?  Rather, Ms. Cuyler is parroting that familiar social media mantra we’ve been hearing from social media gurus for a while now and packaging it as critical thinking.

Again, in my humble opinion, your goal as a marketer exploring online social media and marketing should be to locate people who are focused on real, tangible social marketing outcomes not nebulous, un-accounable “forms of engagement.” It follows that you pay close attention to the questions being asked of you — and bear in mind the difference between a strategic thought and a tactical one.

Twitter.  The world cannot stop talking about it — so it must be important right?  It’s been a fun ride but I say it’s mostly bull.  You don’t need to be using Twitter.  Large or small brand, you don’t need to be THAT worried about the social influence of customers on your brand.  Fact: none of this social marketing stuff is new, complex or urgent because the outputs, so far, are rarely (if ever) meaningful to businesses.  The experts are not only wrong but most of Twitter’s “big success stories” are mostly overblown, illogical or actually symptoms of a broken customer service system.

Twitter’s Illogical Value Formula
Latest example: Scott Rafer and others across the blogosphere are impressed with JetBlue’s continued use of Twitter.  I’m not and nor should you be.

A woman named Meaghan O’Connell tweeted “I want to make love to the @jetblue terminal” to which JetBlue  replied “Goodness… I hope you at least buy the terminal dinner first!”  The result?  Hundreds of re-tweets and exposure of the exchange.

Michael Galpert even goes as far as saying “You cant buy that kind of advertising with money @Jetblue did however buy it with 72 Characters!”

You can’t?  Of course you can and you can make the dollars spent deliver tangible value beyond MAYBE making people THINK “aren’t they a great, funny airline.” It’s called direct response marketing.  What about making people BEHAVE differently — DO something that adds value to their lives through your brand’s behaviors?

The Value Dichotomy
Getting excited about this kind of thing is common and assumes this nonsense somehow equals value to an advertiser.  This value, we’re told, are new and based on interactivity in a hyper-connected, digitized world.  But think about it — this “hey look how many times it got passed” value equation is extremely BACKWARD and LOW value. It’s borrowed from one-directional mass communications!

Creating campaigns with the goal of hoping people THINK a certain way will not get many of us paid moving forward.  Even the award-lovin’  ad agencies are admitting that this kind of big social media “win” means, in reality, zippo.

Yes, change is upon us.   No, this is not a revolution or even very valuable.  Creating preference means less and less.

Twitter’s Success is a Symptom of a Problem
Is Twitter a new customer service tool that deserves our time, energy and financial investment — or is its success a warning of something more serious?  Specifically, are Twitter’s legitimate customer service wins (ie. how Soutwest Airlines and Comcast use it) symptomatic of customer service FAILURES in traditional (strategically more important) channels?  While I admit Twitter delivers customer service value the answer is yes.

Jim Novo…

What worries me quite a bit about the Service side of social is companies have had access to all this information about broken processes or poor product design for decades, and they have largely ignored it.  All they had to do is some analysis of call center data tic lists and they could identify and act on their ‘Top 10 Biggest Customer Issues’.  But they did not.  So there is a much larger organizational issue here, regardless of social media — what is the process we use to identify and act on poor customer experience?

Could part of that identification process already be underway? Perhaps not at Southwest Airlines but certainly elsewhere like Comcast!

Small Business Twittermainia
Adage jumps on board this week with a story of Chicago-based yogurt shop Berry Chill who’s been using Twitter to send out promotions.  Get a deal by showing you’re a Twitter follower.  In a month, owner Michael Farah logged 700 followers.  He says…

“Our last big promotion we gave away 1,100 yogurts — $5,500 worth of product — but sales were the same as the day before,” he said.  “The people who were existing customers standing in line attracted people who hadn’t tried it.”

For Adage and a good number of its readers that amounts to a big win. I say…

Most of those who celebrate Twitter are, when you look closely, less concerned with actually turning a profit.

Naked Pizza’s Jeff Leach ran a similar campaign attracting local patrons.  He says…

“Every phone call was tracked, every order was measured by where it came from, and it told us very quickly that Twitter is useful… Sure, there’s the brand marketing and getting-to-know-you stuff. … But we wanted to know: Can it make the cash register ring?”

Bravo on the tracking and it did ring the register.  As for the profit?  Again, not a part of the discussion apparently.  And the hystarical, distracting (dangerous) social marketing beat goes on — during a time when we marketers have everything to lose by paying too much attention to social media blather.

When it comes to making decisions about your business and the Internet nothing is easy especially when it comes to “social media.”  How many blog posts are needed to make the exercise effective? How much effort must be invested in Facebook to see a return? How much Twitter ‘engagement’ is needed to realize positive effect? Do you rely on outside experts and if so is this a wise strategy?  I think it’s a terrible strategy.  Here’s a better way to make social / Web 2.0 marketing investment decisions:  Start with asking WHY…Marketers, please use this word more often: Why.

I argue that most marketers have failed to capitalize on the Web’s inherent interactivity.  Although we often think we  have, we truly have not.  We’re typically too busy fawning over self-appointed Web 2.0 experts — who rarely have marketing backgrounds themselves.

Look around.  A majority of social marketing experts are preaching what amounts to preschool-stage concepts to EXPERIENCED marketing executives — who too often act like this Web 2.0 stuff (listening, responding) is new, complicated and out of reach.

Jonathan Salem Baskin recently confided in me how — in the end — these new rock stars are preaching that…

Social media is so important that it will change everything, so broad that it includes anything and so profound that nothing can measure it.

Sound familiar?  Why do marketers embrace and USE such nonsense to make decisions from?  Am I just living on another planet where these people make no sense or am I here on Earth?  Please stop!

Why ask Why
Cut through the social-bologna and boldly ask WHY.  If you do, you’ll understand IF social technology has use within your business and, if so, how to make smart investments — focused on real, tangible outcomes NOT pretend metrics like “engagement.”  And PLEASE stop believing that none of this can or should be measured against hard dollars.

Beyond that, entertain yourselves with the likes of BossDev who thrill marketers with presentations that state:

1) Social media is important because everyone is doing it.
2) It’s important because it matters to your business (see 1).
3) Here are all the social media logos to prove how HUGE it is — and it’s VERY complex
4) But thanks to guys like us, brands are using it — you should too
5) Here’s how businesses participate
(listen, interact, etc. — you’re stuck in preschool ten years later!)
6) You should focus on business objectives; overcome barriers
(no discussion on how to or why)
7) Here are the steps to success: calculate ROI using metrics like conversion (purposeful only to marketers, not business people) — and the truly pointless “viral installs” etc.

The big close — act like spending $25k to earn $75k “top line” is a remarkable accomplishment.  Sorry, Bossdev.  Nothing personal and there are many other examples out there like this one.

Sometimes I wonder what these ‘experts’ are thinking — where they’ve been for the last decade.  In the words of Brian Clark of GMD Studios…

“What were you doing with your time before you realized that the whole Web is a social media?”

There are 2 approaches to managing affiliate programs these days:  affiliates as high-maintenance assets or as low-maintenance “let them wither on vine” liabilities.  Case in point Amazon’s decision this week to stop allowing affiliates to compete for the same customers using search engine ads.  Amazon knows better and has always changed-up the rules over time to manage risk.  Let’s look at which approach is best for your brand.

It never fails… affiliates, affiliate networks, trade magazines and those who run affiliate programs constantly ask us to believe facts that don’t hold water in real life.  Vendors and agencies insist online affiliate marketing is low risk and high ROI when those who are invested in it know otherwise.  This disingenuous “affiliate marketing is good for everyone” claim (uh, sales pitch) damages affiliate marketing’s already embattled reputation.

Internet Retailer tells us

“Affiliate marketing is a perennial revenue producer for e-retailers, made doubly attractive because of the low investment and risk involved.”

They go on to list how popular it is — as if this is some sort of proof or defensible rationalization.  Follow the herd!

Marketers: Raise Your Expectations
Affiliate programs produce revenue.  Ok.  But is that justification for investing in it?  That’s fairly naive yet how does your marketing team make decisions?  Often, many take the bait.

Stated plainly, do you know of a single Web marketing strategy that isn’t a revenue producer?  They all are but does this justify investment or influence how we execute?  This kind of mentality suggests rediculously simplistic goals in an economy that demands anything but simple answers.

More than a decade since the birth of affiliate programs marketers need to be looking beyond what generates revenue.   Metrics like customer lifetime value and *real* cost to acquire customers (when factoring in media spend across all Web channels) matter more than ever before.  However, more often than not, affiliate programs negatively impact these metrics — by design.  Hence, frequent change is needed.

Fact: Many retailers operate affiliate programs that are marginal at best — by design.  They’ll deny it but they ARE on auto-pilot.  Although they define value in terms extending beyond revenue they’ve set affiliate programs up for failure and walked away.  Amazon is a great example of a high profile exception.

Managing Retail Affiliate Programs: Asset or Liability
I don’t know many retailers *treating* affiliate marketing as a core online marketing strategy.  Do you?  Amazon’s decision is a marvelous example of how some retailers are trimming back.  Others are eliminating affiliates completely or letting them rot on the vine.  Why?

Some retailers (especially the larger ones) look at affiliate programs as an asset that must be constantly managed — again, just as Amazon has over the years.  Still others view them as liabilities — letting them rot on the vine out of fear of the unknown.  These fears typically revolve around perceived risk (not known risk).

As I see it, retailers like Amazon are becoming increasingly certain that they can shut down or reduce the scope of affiliate programs — recover or reduce undue “taxes” on orders coming through middle-man affiliates.

2008 Changed Everything
Think about it this way… In the past, nobody got fired for NOT shutting off their affiliate program or making major changes to affiliate terms & conditions.  Moving forward they may get promoted for making such sweeping changes in consideration of FTC rulings and State laws (New York and California “anti-affiliate” tax law).

Why are retailers going sour?  They’re deciding that, often, affiliates are not worth it — in specific terms or out of knee-jerk reaction.

Affiliate managers are constantly defending the affiliate channel — and feel powerless.  They are powerless for the most part.  Measurement rules and retailers are measuring for incremental value.  Even the likes of Commission Junction’s ValueClick are messin’ around with this thing called “conversion attribution.”  (come hear me speak about it with Jim Sterne, David Baker of Ave A/Razorfish and Raymund Sibulkin of Edmunds.com).

In the end, affiliate marketing has, for years, been an arbitrage game — where search-based affiliates arbitraged demand in an area that advertisers didn’t understand or practice in (search).  Today, what’s left?  Even Amazon is asking itself.

Comparison shopping is a “necessary evil” for retailers. Now… with that as our backdrop Brian Smith gives you the straight dope on how to improve results from comparison shopping engines though “data feed optimization.”  Think of Web site SEO for your product data feeds. Brian is founder of Simplefeed and a leading comparison search analyst (www.comparisonengines.com).  He provides his candid advice on how retailers can drive more sales at reduced cost and simplify otherwise complex processes.

Brian also discusses what’s on the horizon and gives online retailers hope that this rather stagnant industry IS making advances and will create new value for online sellers.

Are you hiring Internet business advisors or data reporters?  Most small businesses are hiring all the wrong help when it comes to Web marketing experts and agencies.   Small business blogger Ed Rivis found that most Web marketing mentors (people hired to help steer Web marketing and e-commerce) were either in-effective or DAMAGED their client’s business…

70% said the online expert’s wisdom either did very little or nothing at all when it came to bottom line sales.

12% said they lost sales or “the advice seriously damaged their business.”

While this “shocked” Ed it doesn’t surprise me one bit — and it’s why I’ve decided to speak out on this blog, in my forthcoming book, Ignorance Economy, and in my public speaking.

If you’ve hung around me long enough you’ve heard me declare things like “most Web marketing strategies are disposable” or “most of what passes as ‘good’ Web marketing strategies are little more than advice taken from self appointed guru experts.”

Ok, Molander… so how should we hire Web professionals?

Whether you’re interviewing employees or outside vendors/agencies — and whether it’s to run your affiliate program, optimize your site for search engine efficiency, create and optimize email campaigns, social media or paid search marketing — it’s critical to STOP thinking tactical.  Do NOT hire based on skills; rather on how the prospect thinks.

DO they think critically or do they just show up to “blast” emails, generate “traffic” or “increase conversion?”  Yes, increasing conversion is NOT that important these days.   What is?  Perspective (do they have any), curiosity (are they motivated beyond the paycheck) and the ability to rationalize beyond what they see in front of them.

Here are some questions to ask yourself — that will drive the questions you ask THEM on the interview:

• What language do they speak and why?
  (do they speak ‘business’ or geek speak, why?)
• Can they separate Web marketing metrics from business goals?
  (do they know the difference between increasing conversion to sale and converting the RIGHT customers?)
• Can they TIE Web marketing metrics to business goals?
  (can they prove they’ve actually DONE it or can they describe exactly what it takes to do it?)
• Before “The Web” did they work in marketing?
  (no, I’m not kidding — you should ask and it DOES matter!)

One of the best “question tests” I’ve heard of comes from my friend, Jim Sterne, who suggests asking, “What would your response be if I asked you for a Web metrics report?”

Most candidates will answer, “Well, I’d ask you when you need it by” rather than a more thoughtful answer of “WHY do you need this report and WHAT are you actually looking for within the data it will provide?”

As Jim says, it’s the difference between hiring a data reporter and a business advisor.