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Do You Recognize Today’s (tomorrow’s) Affiliate Marketer?

Yes, I did suggest that affiliate marketing is an upcoming opportunity. No, I am not crazy. But I may have been crazy to assume some of the evolution of affiliate marketing was obvious, because it is apparently not obvious to everyone. What about YOU? Do you, or even can you recognize today’s evolved affiliate marketers?

Affiliate Marketing is the endeavor of partnering with companies to deliver conversions to their commerce engines, whatever those are for that vendor. As an affiliate you assume a responsibility for reaching a market, under a set of guidelines that often includes restrictions. Success is rewarded via a performance model (a commission on sales, a per-signup payment, or a percentage of recurring sales for example). A vendor may decide to bring on affiliates to approach a new untested market, rather than extend its own established marketing efforts in that direction at this time. Those affiliates go after the previously untapped traffic opportunity and deliver it to some engine set up by the vendor to convert (or at least try to convert) it. The affiliate marketing model is very simple, yet not as simple as some might think. There is a lot of business behind that model, and a good deal of opportunity beyond the obvious “get other people to promote our product and send us leads“.

It used to be that affiliate marketers were very simple-minded partners. They signed up and promoted affiliate links, sending traffic to the vendor’s landing page. Each month the vendor tallied up the sales assigned to that traffic, and cut a check to the affiliate for the commission. Networks like Commission Junction and Link Share started with that model, aggregating affiliate marketing opportunities under one management umbrella. Many, many web publishers still follow that model. But that is NOT what I referred to as Today’s Affiliate, and that is not the affiliate marketing model I suggested is evolving and looks like a real opportunity going forward…well, it is, actually, but not exactly. Not as that looks on the face of it. I suppose it USED TO BE, but has evolved. Have you evolved with it?

In case you missed it, the web has grown up. If you are still publishing pages and inserting affiliate product links as a way of existing as an “affiliate marketer”, I suspect you missed a good deal of the business that is the Internet. Time to catch up. To start, let’s see if you can recognize how your affiliate marketing skills fit into a modern monetization effort you may not recognize as affiliate marketing. Take a look at utest.com, currently promoted on TechCrunch and other places as a new startup applying crowd sourcing to the problem of software testing.

UTest.com gathers a social community to test software for “bugs”. Users who find bugs get paid (on a per bug basis) for their efforts. “WHAT A GREAT IDEA!” shouts the over-caffeinated Web Too blogosphere. According to UTest, the market for bug-finding is billions big. According to TechCrunch:

…recruiting a userbase of testers should not be difficult. There are droves of potential testers in countries such as India, China, Russia, Bulgaria, Estonia, etc. Also, getting hired through sites like oDesk, Elance and RentACoder is becoming increasingly difficult due to the growing number of service providers. These same individuals can theoretically provide testing services instead of programming.

Do YOU see the opportunity for affiliate marketing in UTest.com?

Notice the most obvious… payments to bug testers will be made via a “uTest Debit card” which is a fee-based credit card. You pay $10 to get a card, so that you can get paid. That’s right, if you want to get paid, you have to participate in a non-free credit card program. Did you know credit card affiliate programs pay $50, $80, $125 and even as much as $200 per sign up? If you have ever participated in credit card programs you know that there are fees associated with them… per transaction, per deposit, annual renewal, ATM use, virtual card number accounts, the float on the required minimum balance, etc. All opportunities for monetization.

As a credit card affiliate, you would know how those fees can be adjusted over time to impact profitability, right? Payoneer is… get ready for it… an affiliate of MasterCard. Starting to understand? I have one of these online debit cards from an affiliate program I joined years ago. It was free… fee paid by the affiliate program. Now it costs me $35 per year. Transactions were paid by the affiliate program… but now cost me $2.50 each. ATM withdrawals were free up to a daily limit, with a maximum number of allowable withdrawls per month. There is a now an ATM fee, and all of the limits are lower. It used to have a free virtual credit card associated with it, which I could managed on line. That is now available for a separate annual fee, with a separate set of restrictions on use. I still have that account, and I pay all those fees, because this thing is damn convenient. I never would have accepted it initially had I known the expenses associated with the convenience. And the vendors involved know exactly how much money I have been making as a Super Affiliate of the programs that pay out through that card (an amount which, coincidentally I’m sure, has been declining over time as that market has become more competitive). I’m hoping you get the idea.

Less obvious than something like the financial float on the debit card (the interest earned on all of those dollars sitting in the accounts as the “minimum balance required”) is the good will effort float. That is the value of the unpaid activity contributed by participants in the community like uTest. If you have ever developed good software, you know that most “bugs” are discovered in development, because testing is performed at every step of the development process. True software development includes concurrent software test development. While every “bug” found is not necessarily fixable right away, it is addressable. It can be considered for risk management… some need to be fixed immediately, others need to be evaluated for the value of fixing now versus later. Many known “issues” are put off to “the next revision”.

So true unknwon software bugs are not as common as might be believed by those who have not been through that process. And uTest pays for BUGS. In other words, every time you find something wrong, it is not necessrly a bug and won’t necessarily involve a payment. Your discovery of the “glitch” and your reporting of the particulars of your discovery (browser used, conditions to reproduce, entry into bug tracking database, etc) has significant value to the software developer, but doesn’t have any value at all to you because it won’t earn a payment. See the opportunity? You work, they get the value. I can see the testimonials now… “I reported a bug in WebTooSoftwareBeta and got $100! from the uTest program. Sweet!” No mention of the 120 hours spent documenting 47 glitches which in the end were already known, or considered collateral effects of an already known bug, and worthy of zero compensation.

Still less obvious but revealed by the TechCrunch observation is the opportunity for global outsourcing. While the Web Too crowd says “neeto!” and dreams of getting paid to fly the next Firefox alpha on their new Mac (turning their Cinema Display into a tax deduction), the world’s outsourced workforce lines up to turn those dollars into pennies. Numerous affiliate opportunities exist in the outsourcing market as well as the labor market. American’s signing on with dreams of earning money testing software are targets for numerous old-school affiliate marketing offers in the job world, the tech world, the work-from-home world, the education and training markets, etc. Hit them with University of Pheonix offers before they realize they can’t compete with workers in India doing manual software testing, right? But collect those email addresses and demographic data… what kind of computers they have, how often they log in, because the modern affiliate opportunities will value that very much. Seen the latest valuations of Facebook? All because they know about you and have your attention.

Affiliate marketing is not what it used to be. uTest is a real business, and I don’t mean to suggest otherwise, but rather to use it as a (fictitious?) example of what modern affiliate marketing looks like. That TechCrunch promotion of uTest? Affiliate marketing, no? What was that worth? How would that get negotiated, and paid? Business, baby. The Internet? It’s bidness, baby, as my New Joisey friends would say. (Update: the CEO of uTest.com has commented…see below)
I just got an email offering me a 50% discount on a conference registration I would normally go to, if i sign up using the affiliate code. What will that pay out to the marketer? Well, the commission on a $2000 reg fee probably started at $800 and with the 50% discount applied it’s probably now worth $200 or so to the marketer. The old-style affiliate marketers are now touting such “big ticket opportunities” as the way to get rich in affiliate marketing. Truth is, we’ve evolved. The uTest community is just one example of spending a million dollars of other people’s money to build something that will monetize beyond tens of millions as a defensible business, via numerous avenues, using nothing more than the same web technologies, social media, search engine marketing, and clever monetization tactics YOU have been using for years as a small-time affiliate marketer. It doesn’t have to start that big… most of these started small as an earlier incarnation of the same innovative affiliate marketing vision… a modern affiliate marketing vision not concerned with debates about the value of reciprocal links or the potential to sell $49 ebooks, link to 5% payouts from Amazon.com or even $300 last-minute conference registrations.

Perhaps most telling about the future of affiliated marketing is this here post. As I look back and scan for typos, I am cognizant that well-known Internet marketers will gasp at the density of this post. No pictures… tsk tsk. Too long. Too many words and sentences. Too many ideas for one post. Not search optimized; doesn’t prompt the reader to act on a click; too abstract for the common reader; not “diggable”; won’t get bookmarked etc. And I don’t care. I don’t care about any of that old-fashioned stuff, because relative to the bigger mission they don’t matter. I’ve got a different target in mind, and it’s got nothing to do with $0.35 AdSense clicks or $45 affiliate payouts or even $500 sponsored blog post payments. Yes, it involves SEO and search marketing and modern affiliate marketing. And those who are my targets, know exactly what I mean. Which is all that matters, right?

Update: Received a communication from Doron Reuveni, the CEO of uTest, regarding uTest’s status as an affiliate.

Doron Reuveni wrote:

Hi John,

I am the CEO of uTest Inc. A company mentioned in your affiliate marketing article. Wanted to set the record straight and let you know that uTest is focused only on application QA and testing and is not involved in any affiliate program . We chose the debit card approach since this proved to be the most cost effective way to pay our GLOBAL community of testers. Due to the high demand from our testers we will also be offering Paypal as an alternate option for payment in our next release. You should also be aware that we actually subsidize for our testers the loading fees and mailing fees associated with the Payoneer Mastercard debit card.

You can read the exact details on our blog http://blog.utest.com/ I would appreciate if you will mention this comment in your blog.

Thank You
Doron

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4 Responses to “Do You Recognize Today’s (tomorrow’s) Affiliate Marketer?”

  1. Affiliate Internet Marketing Says:

    As a result, if you are an ESPN GamePlan subscriber, the game(s) shown on the ABC affiliate within the local market will be blacked out.

  2. Jeremy Luebke Says:

    Probably one of the better posts on this blog, and there are alot. What you point out is why the whole “make money online” is doomed to fail. The majority of them are failing to adapt and think big (or at least like a real company). They sit around and make stupid statements like SEO is a waste of time (http://www.45n5.com/permalink/the-best-seo-advice-you-will-ever-hear.html) and it is from them because they can’t see the big picture through their little affiliate mini sites.

  3. Todd Mintz Says:

    This really is f’ing brilliant and incredibly perceptive…to take this one step further, the person who can broker deals between companies & the “new affiliates” could make some serious coin and would add substantial value to both sides of the affiliate relationship.

  4. Kelly Lieberman Says:

    Awesome post. I have been imagining all the development possibilities for a domain that I own, uDecideContent.com. You have given me a great idea to play around with! On the other hand, since I own 1,000’s of domains a better idea might be to call UTest and see if they want to expand.
    I also read with interest your post on the upcoming Moniker auction at the Affiliate Summit. You are a 100% correct about affiliate marketers not quite getting the value of a keyword domain name. With some SEO they could rank at the top of their search without paying Adsense top dollar till the end of time.
    A lot of domain owners are holding on to their keyword affiliate domains until they catch on. The market for domains climbs higher every year and to be honest, with a little development of our own we can be at the top of the search with their ads on our parked page!
    The cost per click to rank #1-3 on the page multiplied times the estmated clicks/day multiplied times 365 days in a year can be in the 5-6 figure range! Multiply that times 10 years and you can see why the domain owners are holding out – or why some domains have such high reserves at auction. Until business “get’s it”, we develop our domains as our time and resources allow, using the current market to determine priorities.
    I actually submitted some killer generic affiliate domains for this auction and I am just waiting for Moniker to send out the complete catalogue to see which ones are “in”. I am curious to test the waters to determine if the affiliate industry has caught on yet. If not, there is always next year!