I run a good number of websites in a variety of verticals. One of my sites that does exceptionally well in the search engines monetizes poorly with contextual ads and does not yet have the scale to sell direct ads, so I tried integrating affiliate ads on it.

When I initially applied for CJ with this site, the advertiser I wanted to partner with rejected my site (I am guessing because there was a new account associated with that site). The traffic quality and relevancy are as high as you can get though. About 3 months later that same advertiser contacted me asking me to join their affiliate program with my search-marketing.info website, which is wildly off topic. I joined the affiliate program and also added my relevant site to the account about two weeks ago. I integrated the offer and waited for the money to roll in. But did it?

This particular affiliate program was a lead generation program, which I figured had a delay in reporting while the leads were classified and approved. This site is a high traffic site in a big money vertical. The advertiser's ad was integrated similarly to how it is integrated on other sites still in their program today, and their ad was seen by about 100,000 people.

I logged in today and still no conversion. Odd. Weeks for an approval? Hmmmm.

I looked at my invalid clicks report and it said my offer from this advertiser was disapproved. I was not told why, and was not even informed of this disapproval (from the advertiser who approached me) until after I searched out the information.

Meanwhile that same company is paying search engines thousands of dollars to buy similar traffic to the stream they rejected from me. I know someone in upper management in the marketing department at that advertiser, so I will ping them to see what is up with their affiliate manager, but how many publishers get scammed like this every day? Sleazy workflow their CJ.

The value add for publishers going through an affiliate network (vs going direct) are

• having fewer accounts
• independent reporting (for if you don't trust the advertiser)
• the offer data on top performing offers

But on the down side,

• many other marketers are looking over the same offers you are
• some networks (like CJ) require tracking images or other footprints that identify your site as an affiliate site to search engines (and search engines do have algorithms to detect and demote certain types of affiliate sites)
• communications channels are generally worthless when you add a bulky affiliate network to the mix

I have had a number of affiliate networks come to me asking me to join them, often offering reduced rates, but I still don't see their value add, especially after this experience.

When markets are healthy and growing that growth can hide major issues, but when the markets swing toward a loss the winners are separated from the losers. As the markets consolidate and the thin arbitrage opportunities fall away the market leaders own a much bigger piece of the market.

The above chart could just as easily be a finance chart comparing Google's 5 year performance to Yahoo's, or any other industry undergoing heavy consolidation. Google's brand is search. Yahoo's brand is ???

Many people view you how you view yourself and label you with the labels you attach to yourself. Something to consider when creating a new business in a saturated field.

If you are not considered the #1 site in your class / vertical then you need to change your brand, find ways to add value (like editorial content, unique data formats, syndication, or open APIs), build an organic advantage (using a strong domain name, a great site design, and through public relations) or do something else to change the rules.

Open source content management solutions like Drupal get more powerful each day. But everyone has access to it.

Firefox has extensions like Firebug that allow you to test modifying page layout or CSS in real time.

Custom feeds, leading blogs, personalization, recommendations, aggregators, filters, and alerts allow us to consume a firehose of information.

Search engines are giving away a lot of valuable data to try to win marketshare. But everyone has access to it.

You can buy full feature affiliate software for under $300.

About 40% of retailers do not have a physical store location.

Companies like 1ShoppingCart offer an affiliate program and hook into on demand publishing and fulfillment companies like Vervante. Selling an information product means no shipping is required.

Amazon reduces hosting costs to virtually nothing, offers an order fulfillment service, and now they are pushing their WebStores aggressively, which really automates a big piece of the workload of most businesses. Amazon also owns BookSurge, a print on demand publishing company.

Lots of people are solving common problems and giving publishers a wide array of choices that keep driving costs down. Just about everything is getting cheaper and easier - except marketing. Audiences fragment, people ignore advertising, and everyone is so busy that they have no time for you.

Public relations and search marketing are the new advertising because unlike most ads they are not ignored. They are seen as editorial content even if it is bought and sold on a per article basis or per ranking basis. And so you have smart business deals where you slap Lance Armstrong's name on a bunch of user generated content. Generate the PR buzz and watch the ad dollars roll in:

The Lance Armstrong Foundation, which spends about $40 million a year on health programs and cancer research, is teaming up with Web-site operator Demand Media Inc. to launch a health-and-wellness Web site funded by advertising. The site, called "livestrong.com," is expected to go live this year.

How does the Google view of spam and editing out non-editorial link buys stand up in a world where companies like Demand Media recycle the web and cross link it all, while companies like Pay Per Clip offer:

WEB MEDIA placements can range from $450 for a brief appearance in an online article, to $2,750 for a full feature, including a link to your web site, in a top tier web publication.

Google needs to realize that public relations, promotions, and advertising are a normal part of the business process. After all, ads only account for 99% of their revenue. But Google engineers can dictate arbitrary mandates based on a broken understanding of the business world because Google's founders thought big.

Value your time properly and think big. You can not invest too much in learning, clean organic looking marketing (like domain names, site design, and public relations), or brand building.

The mind can adapt itself to do whatever you want it to. But if you wait too long to act, nobody cares what you do.

Central hubs on the web fight off manipulation to keep their status and profit margins in tact. A side effect of this war on control over information access is the butchering of the English language.

Digg is Illegal?

Digg's CEO Jay Adelson said:

I'm sure there could be blackmailers out there. We absolutely know that every single day, people try to game our system. Users are involved in illegal or inappropriate activities all the time. They try to set up fake accounts to promote a story. The thing is, we make changes to our algorithm on a regular basis. We plan for that.

Notice how he put illegal and inappropriate right next to each other, as to equate them. This comes from the same company that published this:

We had to decide whether to remove stories containing a single code based on a cease and desist declaration. We had to make a call, and in our desire to avoid a scenario where Digg would be interrupted or shut down, we decided to comply and remove the stories with the code.

But now, after seeing hundreds of stories and reading thousands of comments, you’ve made it clear. You’d rather see Digg go down fighting than bow down to a bigger company. We hear you, and effective immediately we won’t delete stories or comments containing the code and will deal with whatever the consequences might be.

If we lose, then what the hell, at least we died trying.

Sure you can buy votes on Digg, and they arbitrarily ban websites. But does controlling a bunch of worthless traffic give them the right to butcher language to push their business objectives?

Google is Illicit?

Michael Gray's continued debate about the war on links spurred on additional conversation.

Why is the Yahoo! Directory Considered a Legitimate Link Buy?

In addition to what Jim said, I also believe the following play a role:

• They predate Google.
• Google needs some sort of baseline.
• The directory business model is horrifically inefficient and poses no risk to Google's market dominence. (Yahoo! demoted it in favor of Yahoo! Answers. Even the Google Directory, a DMOZ clone, has a higher PageRank than the Yahoo! Directory does.)
• Few other sites are comparable to the Yahoo! Directory (especially after the Google directory purge of 2007), so it is not a technique that can't be easily and profitably be replicated like paying for reviews.

The truth is independent link sellers often exercise more control than directory editors do.

The entire Business.com directory of over 65,000 categories is managed by 6 editors (source). How could they possibly review stuff as well as you or I do? They can't. But if we all do our business in a direct to direct exchange fashion the central networks and search engines do not get a cut of the action.

Why Google is Different than Digg

Unlike Digg users looking to waste time, searchers have real targeted intent and real value. In response to Michael Gray's post Danny Sullivan said:

But if he wants to stand up to Google, take the lead and block him from crawling his site -- and encourage others to do the same. ... No one has a right to Google traffic. Follow the rules, as stupid as they are, if you want it. If don't like the rules, sure, complain about them -- but don't argue they're robbing you of anything that is supposedly "yours."

But unplugging from Google is not as simple as blocking them in robots.txt. They can still pay others to steal your work and wrap it in their ads.

They change the guidelines on an as needed basis (use nofollow or else), apply them unevenly (why is TLA penalized when TextLinkBrokers still ranks?), and if they don't like you they can penalize other businesses associated with you.

Michael pointed out that the Google's Webmaster Guidelines butcher the word illicit. In response Danny wrote:

Michael, illicit as used on the Google Webmaster Guildelines page is defined by however Google wants to define it -- in that case, doing stuff against the guidelines.

When the networks screw people over it is the fault of "users" or "the algorithm," but when the central networks do not like what we do we are "criminals performing illicit acts."

You know what is illicit? Adultery. And Google ads recommend it.

Recently Google has been more than fair to me, but if they want to use the language they are using to try to control others, they need to clean up their ad network. Just because an ad has a high CPC and gets a high CTR does not mean that it is not immoral or illegal. Plenty of people commit crime.

When you evaluate the actual opportunity cost of business opportunities, most client relationships, equity stake deals, and other partnership opportunities fall short of what you could do on your own. The only ways it works out is if their is a symbiotic relationship through different approaches that balance out each other's shortcomings, or if you can learn something from working with them.

Problems With Many Opportunities

• Unwilling Clients: Many clients are unwilling to change their sites to add unique content or value to them.
• If you have a thin affiliate site Google told you what they wanted years ago.
• Andy Hagans and SugarRae followed up with great tips.
• If you own the site you can do whatever you want with it. Not so with client sites.
• Employee / Slave Wage: Work for equity stake partnerships where the partner provides the domain name and you do everything else are both lopsided and useless.
• At any time the partner with lots of domains can decide to screw up the project you are working on together, and has 0 time investment and limited capital risk by only putting one or a few domains into the partnership.
• 6 months or a year after working with you they can take all the knowledge you spent years learning and apply it to their more valuable names while giving you nothing for teaching them everything you know. They were not teaching you how to buy domains why they were accumulating them for years. Why give all that knowledge up for a slice of a slice of a slice?
• Buy an alternative average quality domain and keep all the equity. Build it up with sweat equity and learn your market. Buy great domain names when you can afford them.
• Follow the Crowd: Many marketers try to saturate a field with affiliates marketing their products and teach affiliates how to market that same product as a piece of the product that is sold. The margins on those opportunities get compressed with each additional competitor you sell that product to.
• Many marketers show stats out of context, use meaningless sample sizes, and/or lie about the hows and whys.
• People hype opportunities long after they no longer exist because they are addicted to the easy profits still rolling in from old work building out an affiliate network.

Are You Moving Up the Value Chain?

I am not against any of the above models as a starting point, as everyone has to start from somewhere. But if you....

• love business
• love what you are doing
• want to create a sustainable business
• can afford short term risk for long term stability

...you need to build equity from your work, and have a controlling stake in the outcome. If it sounds to risky to change then at least start building a site for yourself in your spare time.

What If? ...

Sure it would have been nice to have been an early programmer at Google, but for every Google there are thousands of market losers. Investing in yourself is the best investment you can ever make, and you one have to be right once.

What happened if you invested in Google a month ago? It seems those who just bought into that market hype just lost a couple dollars. Will Google go back up? Most likely. Will they increase in value at a rate as quickly as you can? Not likely.