Despite all the naysayers about Groupon and its business model, the facts remain the same: Groupon is an enormous success and helped to launch an entire industry. Whether it will be worth $5 billion or $20 billion based on market capitalization will be determined by investors, but its anticipated valuation is noteworthy for a three-year-old company. What’s most interesting is that Groupon built its empire with one major proven method: performance advertising.

In early 2010, from what I am told, the company knew that it was more than just a “small hit.” As Russian investment firm Digital Sky Technologies (DST) invested $135 million in Groupon in April 2010 and more and more companies sought to acquire Groupon, the executive team and investors realized they needed to do something fast.

They needed to show that the Groupon model worked not only amazingly, but worked everywhere and could easily get tons of new users overnight wherever it launched.

So Groupon started to work extensively with performance marketing companies, spending much of its investments on cost-per-action offers to drive new users to its site. At one time, Groupon was perhaps the biggest CPA advertiser on the planet, driving tens of millions of dollars on over 30 different CPA networks, paying for each visitor who signed up from each new city it was expanding into.

Everyone always talks about how performance marketing is a great way to help secure a positive ROI. Commission-based systems like Amazon’s associates are easy ways to sell products and only pay on those sold products. Affiliate and performance marketing represents one of the fastest growing segments of the industry despite the lackluster economy.

Groupon demonstrated that using CPA advertising to obtain new subscribers is an effective approach. Consider these facts provided by Groupon to the Securities and Exchange Commission:

• Its subscriber base grew from 152,203 as of June 2009 to 115.7 million as of June 2011.
• It sold 116,231 Groupons in Q2 2009 compared to 32.5 million Groupons in Q2 2011.
• It expanded from five North American markets as of June 2009 to 175 North American markets and 45 countries as of June 2011.

According to a TakingPitches.com report, Groupon’s marketing spend in 2010 was 94 percent of its gross profit. This is an amazingly high margin, showing that Groupon considered new customer acquisition to be a key goal before it was bought out or filed for an IPO.

Its technique worked, because Groupon went from an estimated $1.35 billion valuation in mid-April 2010 (Source: TechCrunch) to $15 billion in January 2011 (Source: NYTimes.com) to most recently $25 billion to $30 billion (Source: NYTimes.com).

This is an incredible valuation growth, based almost completely on its enormous performance-based advertising budget. It’s really quiet amazing: Groupon’s valuation has increased exponentially in relationship to its traffic and user base. Over time, each user in each country seems to have been worth more to the market than the previous user.

Financial analysts must start taking into account this new metric. What’s great is that it’s completely based on performance-based marketing, in which acquiring more and more users in the international Internet marketplace grows your value exponentially. For companies looking for funding and eventually looking to pursue an IPO or major sale, this is a revolutionary trend. This is why performance-based marketing is the fastest growing segment of our industry and more importantly, one of the most effective.

Here’s the issue simply. Almost every SEO Company works completely on Google optimization. In fact, almost SEO companies seem to spend all their time obsessing over Google’s infamous algorithyms, how these affect the search engine results and what they can do to get better results. Without knowing what Google is doing, how to make the changes, they can’t advise their clients and make money.  If you are to believe the news, Google Panda is Causing Job Losses.

Depending on Google Optimization is a great strategy, but let’s be honest here, it’s one of diminishing value.  Since Google’s Famous Panda Update, a lot of the tricks and strategies that “grey-hat” marketers use are not working. Read my article on Google Panda and notice why content is king.

However, if you are late to the Google optimization game, there is something you need to pay attention to. It’s called Bing. Yes, Bing, Microsoft’s Search engine service is slowly growing as much as 3-4% each month and according to some numbers Google is loosing as much as 1-2% of their users each month. If you are focusing on Google, you are ignoring a great opportunity in Bing.

Bing isn’t that different than Google, and from what I’m told, uses algorithms similar to Google and some of them make a lot of common sense. One thing that is evidence in Bing is that similarly, Content Sites that have more than 300 words do better than sites with little or no text.

One huge difference in Bing is that backlinks take a significant less priority than Google.  This means that people who have sites that have been around a while, with more content, will always almost be favored more than those that just came around and are trying to use backlink strategy. If you want to think “Bing” you need to start now with creating high content sites that will be around a lot.

Matt Cutts, the guy who determines what SEO spam is, what blackhat and white hat, and can basically ban your site from Google has been nice enough to share the following video which basically says that he really loves SEO. In a few words, he says that people are better than technology and SEO does a lot of great things including helping people discover new and great content. He of course points out that there are SEO firms that do things that Google does not like and goes way over the line. It’s a great watch in order to know the mind of the guy who can determine your ranking and success on Google.

November 8-10^th in NYC, held at the worst convention center in the world (no hotels, no restaurants in the area) will be ADTECH. Many affiliates do not attend ADTECH feeling that it is not for the affiliate industry; thinking that the lack of training, affiliate centric topics will make it a boring event.  They are wrong, and in fact missing perhaps one of the top opportunities to really learn about the industry and grow their business.  ADTECH in fact may be one of the best opportunities for affiliates and here are my thoughts on it:

1)   First, the idea that the affiliate industry is separate from the rest of the industry is turning out to be a complete fallacy. The new term, as you may know, is Performance Marketing, and with being a more mature industry, comes more mature technologies. The rest of the industry is embracing Performance Marketing as a method to reach consumers and they are looking for people to help them. Go to ADTECH with your experience, with your resume, and perhaps you’ll get a good consulting gig or project that uses your expertise to make a lot of money.

2)   New Media Buying Opportunities are always launched at ADTECH. Don’t wait until your favorite blogger tells you that some new system is a good platform to buy media. Find out for yourself what is up and coming and more importantly where there is cheap inventory. If you are an experienced media buyer, ADTECH is a cornucopia of untapped inventory. New companies especially are looking for someone to help them monetize inventory and you never know, you might become their main source for affiliate campaigns.

3)   Open your Mind & Brainstorm. Being an affiliate is a great job, but what is better is coming out with product that everyone can use. Don’t fall into the trap of being just an “affiliate” who follows other – but instead learn to create things and think outside the box.  ADTECH is an amazing place to really learn about technologies and opportunities that exist and then think about applications for the affiliate industry. If you create a product or method that you can pass to other affiliates and more importantly, works, you’ll find yourself beyond any “super-affiliate.”

Last of all, the floor is absolutely free if you register. Register now, get an exhibition pass, and you can walk the floor all day, pick up all the pens, plushy mascots and flashlights you want.

Don’t forget to register for The Official CPAWAY KickAss Party @ Adtech

Could Flash Sales be a new affiliate marketing opportunity? As more and more sites are turing to flash sales as a method of marketing, they seem to be almost expected. This technique, which seems to have a better longevity than the now failing Daily Deal model, provides significant discounts to consumers of certain products for a limited tiem

HubPages says of flash sales, that “one of the most crucial features of flash selling is, well, as the name abundantly suggests, abrupt offers for service at subsidized prices. The offers are ‘abrupt’ and lasts for a tiny window period – a brief time. It is also one of the safest deal takings. In other words you have to avail the opportunity as soon as you are offered the services. Consumers normally receive online offers including even invitations in the mail/emails.”

MarketingVox reports that Flash Sales in the Travel Industry are now a new staple in the travel industry:

…with Cruise price comparison website CruiseCompare teaming up with Cheapflights to launch a cruise flash sales on its site. The deals are available for seven days with savings of up to 50% being offered to members of the site on a range of cruises, according to Travolution.

Another example is Travelocity, which recently launched a twist on the concept: a single new “dashing deal,” available only on that day, but valid for travel for up to several months (via the Baltimore Sun).

Seems that many affiliates and CPA networks should partner up with retailers to promote their flash sales for unique positions both in social marketing and email marketing.

If you didn’t know, just a few days ago, Google updated Panda again, and quite a few more sites dropped off the radar. This change however perhaps is one of the biggest changes since the original panda update. Tons of complaints have been logged all over the blogosphere with people calling Matt Cutts, the head of all search, nothing less than the devil.

According to reports, companies like Consumeraffairs, prnewswire, entrepenuer.com and even Technorati have been experiencing huge hits.

What is most interesting however is that according to a poll taken by Barry Schwartz at Search Engine Roundtable, almost 10% of the industry asked claimed to have actually lost a job because of the Google Panda update. Some 6.8% claimed  that they laid off people since the update. Even more interesting is that 25% of the industry said they were afraid they’d lose their job since the update.

Does this mean that Panda is evil, or perhaps that a great deal of the industry was doing blackhat SEO and just was caught?

As part of ClickBanks continued desire to pretend to clean up their act, they have instituted another policy. Because of all the crap on Clickbank and more important Affiliates Revolt Against Clickbank, they have instituted a policy that will help them collect more money. However, it doesn’t address the issue of continued scams on ClickBank and worse, the fact that affiliates are the ones continually screwed by crappy products. Affiliates still have no way to be compensated when crappy products waste their traffic, or worse have huge charge-backs when they don’t deliver what they said they would. ClickBank still protects the owners of the product and refuses to provide information to anyone about the people behind these products, or to help take legal action short of a court order.

Here’s the announcement.

As part of our ongoing commitment to providing high quality products to consumers, ClickBank is adjusting certain fees relating to refund and chargeback rates for ClickBank vendors. These changes will affect a very small number of ClickBank vendors, and will not affect affiliates.

Beginning October 17, 2011, vendor accounts with a refund rate at or above 15% over a rolling 60-day period and/or chargeback rate at or above 1% over a rolling 70-day period may be subject to additional fees or penalties.

To help you avoid fees or penalties, we are adding a clear indicator of your current rolling 60-day refund rate to your Account Home page so you can easily track your refund rate and take action if necessary.

As we begin to implement this new policy in the coming weeks, affected vendors will be contacted individually before any additional fees are applied to their accounts.

We are committed to supporting our clients and end customers, and these changes are part of our commitment to keeping affiliate marketing profitable and sustainable for years to come.

Recently I’ve heard that several, including possibly the largest, CPA Networks are starting to pay affiliate late. It seems to be a topic of conversation on several message boards, that several networks, to be unnamed aren’t paying their bills on the normal schedule required of them. Because of that many major affiliates who have been with these networks are starting to look elsewhere, only to find that other major networks are also paying late. Is this an issue of the networks having issues, or is it just part of a greater problem that needs to be addressed? I want to examine the issues that face the industry, and have a real conversation about what is happening.

The problems facing the industry are the same problems facing the entire economy. Even though our industry is growing, and more and more companies are looking to performance based marketing as a solution to their advertising needs, this doesn’t mean that we aren’t plagued by the same issues.

Here are some of the issues that CPA networks are facing:

1)      Compliance Issues Costing Legal Bills. Some companies are facing enormous legal costs based on everything from FTC lawsuits to frivolous class action suits. As I pointed out in my article about the Essociate  Affiliate Marketing Patent, the industry is also facing people who are trying to get a quick buck on the backs of hard working networks. All these things cost money, and while some networks can foot the bill, many of them find that they often the legal problems are costing them both cash flow and clients. Expect more and more networks to face legal bills and questions in the coming years as the FTC says “No more” to certain type of promotions.

2)      Clients Paying CPA Networks Late. Simply put, CPA Networks, while making often tens of millions of dollars, are still often at the bottom of the totem pole when it comes to payments from major advertisers.  This is an issue facing almost all media companies and small business in general. Larger companies trying to shore up their finances will often pay “whenever” to smaller companies, especially CPA networks, knowing that the networks can’t afford not to stop working with them.  Since most CPA networks don’t report non-payments or late payments to credit companies like Dun & Bradstreet, they don’t have much leverage.  In plain English, the larger companies are using ad networks as banks. Paying late, getting interest on their payments.

3)      Poor Planning. You remember all those companies last year that were doing “amazing” throwing huge parties in Vegas? Most of those companies with all those promotions are gone (and some even started new companies right after, when their previous company went belly up.) Many of those had a few major clients, and didn’t have the experience to plan for the worse times. Any smart business person knows that you save when you are doing well, invest in other solutions and then immediately notice the time to cut back. It’s the same entire story of all dot-com bubble bursts!

What can you do if you are a CPA network or more importantly, an affiliate facing issues? Simply put, always plan ahead for anything. If you think that you are doing amazing, don’t spend all your money: save it, and look at other solutions. Putting all your eggs in one basket, because you have a great campaign that is making you “rich” is not the solution.  Keep testing, invest in learning and even create partnerships.

Additionally, please try other networks. I can’t say this enough to get your attention. If you have an offer that is doing well, send traffic to another network with the same or similar offer. Getting payments from more than one source will ensure that you don’t find yourself in a bad spot. Nothing is worse than having one large client not paying your bill. If it’s one out of many clients, you can immediate switch where you are sending traffic, and only face a small loss.

Pay attention to what is going on in the industry.

Find a reliable source for feedback, such as our CPA Network Review System. This is an independent, user submitted system from real affiliates. Leave feedback, and read about others. Please note that many of the “review” sites out there are completely made to get you to sign up for networks, and the people get paid on those referrals. Don’t trust most of those sites, because they are paid to make good reviews and they delete bad reviews.

What companies are you having issues with, what are your perceptions?

Every so often I waste my money on things that I don’t really need. That might explain why my storage is filled with about dozen types of stereo speakers, every sort of cleaning device for clothing and god knows how many chairs that I didn’t like. If you are anything like me, you like spending your money on ridiculous things. Then again, isn’t that why you got into the marketing industry, so you’d have the money to spend on ridiculous things? I know that I did.

Two Dell Ultra Sharp Monitors
Whether you have a Mac or a PC, there comes a time when you need to have a better monitor.  Perhaps one of the best investments I’ve made is using very large monitors, side by side. First of all, the benefit of the large monitor helps with eye strain and visibility. If you are using a cheap monitor, there is a huge difference on how fast your eye’s get tired and that can make a different in your productivity. Secondly, I highly recommend getting two of them. Two monitors allow you to multi-task better, and that is important while checking stats, loading campaigns. Buy at Dell

Herman Miller Embody Chair – Starting at $1,200
I was one of those people who loved my Aeron Chair, and even bought a dozen of them for my NYC office. However, this chair brings… chairs, to a whole new level.  If you aren’t concerned about the chair, realize that bad posture over a long term can create additional issues. Don’t want to be one of those guys who ends up in the hospital with a neck issue, missing out on making more cash. While I’m not sure that it does everything that their brochure claims, including “boosting creativity”  it definitely the chair that makes me want to cheat on my other chair.   Check it out at Herman Miller

Luna 2 Designer Italian Office Desk by Uffix – $12,000
This has to be one of the hottest desks that I’ve ever seen and itself is a piece of artwork. If you want something impressive that makes you want to work every day, this is a great place to start.  It will take at least 3 months to get these desks, but its well worth the wait.  A desk for an executive (and yes, affiliates you are an executive of your life) is much needed. Think of it this way: when you sit down every day to a nice desk, you’ll first think how you’ve worked your ass off to be successful, and now can have a beautiful desk to help you be more succesful.

Kohler’s Numi – Starting at $6,000
Good news is that you can actually get this much cheaper, that is the MSRP. The great news is that this is best fricken toilet you could imagine. Seriously this toilet does about everything for you, from opening itself, heating your ass, self-cleaning and even lights up in the dark. Somewhere I believe there is even a reach-around button. I have to be honest, this toilet makes me want to spend more time on the can.

Check out this amazing commercial about the product. I have to admit after watching it, I’m not sure I should be using this for a toilet.

Chivas Regal Royal Salute 50 year old – $10,000/bottle
If you aren’t a scotch drinker, become one. Scotch Whiskey has a tradition of being drunk by the richest people in the world, especially while doing business.  The Chivas Regal Royal Salute is one of the best Scotches that you can buy, and I promise that anyone that you invite to your house and offer them a glass of this, will be your friend and customer.

So a few night ago I was buying an energy drink at a place we all know and hate..Wal-mart.

Like usual the lines were backed up with a ton people and  I was going have to wait in line for a good 20 minutes just to buy 1 drink. This was a waste of time, and one of my biggest rules is Value Thy Time.

So, I instead walked 10 steps over to the electronics departments cash register and was able to check out in seconds while the horde of people continued to waste their lives waiting in line for one of the many open cash registers in the store.

The funny this is this is that 95% of marketers have something in common with these people.  Instead of a fighting over the same cash register though , marketers are dueling over the same traffic when the cold hard truth is THEY DO NOT HAVE TO.

Just like at Wal-Mart, there are cash registers (traffic) everywhere. However most  online Marketers, just like the Wal-mart people,  are stuck fighting over just 1 type of traffic.

American Traffic Is The Hard Way

Alright, did you know that well over a billion people speak English? Did you also know that only 300 million of those people live in U.S? That is not even half of the english speakers in the world.

So what is really crazy, is that most of marketers target only 30% of their potential English speaking customers (Americans)

The result is there being WAY to much demand for American Traffic and way to little supply of it. Because of this

• Ranking highly in the American Google(.com) is extremely competitive
• The price for advertising to American traffic  is astronomical
• You constantly have to fight your competition to stay on top

In short, marketing to American traffic is like going to overused playground covered in broken glass and expecting to have fun.

So who do I market to then?

The answer is foreign countries!

• Guess what massive country speaks mostly English and is exploding right now..India
• Canada’s first language is English, yet its is almost 10 times less competitive for online marketing
• The Google Adsense CPC for some completely untapped high traffic keywords in the Philippines (speaks mostly English) is over .90 cents

The thing is this applies to  applies to all sorts of traffic generation online methods (SEO, paid traffic, etc) Check out the example below ( based on real results I have gotten online)

For Paid Traffic In The Same Niche

Price for 150×150 banner ad on an American site = $2 per CPM (thousand views)

Vs

Price for a leaderboard sized Banner on a Canadian site = .02 cents per CPM (My cost per click was less than .01 cents)

Best of all results like this are very common. Here so other benefits to target foreign traffic

-The price for Pay Per View traffic is often 4 times cheapers from foreign countries.

-Adspace can be bought for next to nothing.

-Searchs that are extremely competitive in the Amercian Google are virtually open game in other countries ( I get into this a lot in another popular article of mine : The Harsh Truths SEO and How The Big Dogs Really Bank ).

There is literally an endless amount of loops holes when you start looking at traffic globabally instead of just focusing on one spot.

AND The reason for this is not because the traffic is bad, it is simply because no one is fighting over it yet!

So Stop Waiting In Line

If you are an online marketer, stop being one of the 100 morons waiting in line at Wal Mart and be the guy that finds the better way to do things.  One of the coolest things about the internet is it allows you to get access to customers regardless of where they live. Restricting yourself to just one country is absurd!

Stop fighting over high priced competitive traffic and start utilizing the untapped foreign traffic that will literally bring you the SAME results for 1/10th of the work.

After investigation, it has come to my attention that Pubcon is not launching a competive event to Affiliate Summit; they are in no way larger than Affiliate Summit; and it is impossible for Affiliate Summit to black-ball any speaker since they have a public vote for sessions.

WebMaster World, the Owners of the PubCon have announced that they are launching as part of the PubCon Las Vegas, a new affiliate conference to directly compete with Affiliate Summit. The conference which will be a sub-conference of PubCon will be in Las Vegas, November 8-10^th several months before the Affiliate Summit conference, also in Las Vegas.

The PubCon new affiliate track seems to be a possible serious competitor to Affiliate Summit as the convention features many famous executives and industry leaders as speakers. Matt Cutts, the head of Google Compliance aka Search Quality group is slated to be one of the top speakers at the PubCon Affiliate Conference. Past speakers include major money makers such as Tony Hsieh, Guy Kawasaki and Craig Newmark, giving PubCon a level of Gravitas needed to compete with Affiliate Summit.

Several companies have attempted to compete with Affiliate Summit in the last few years, including AffCon, owned by Webmaster Radio. While AffCon seemed to initially be successful, with two canceled events, the event seems to be completely gone from the radar. The owners of AffCon were however faced with significant issues from the start, including claims that speakers of their event were told that they would be banned from Affiliate Summit if they spoke at AffCon. Whether or not this is true, the two conventions have not had a friendly relationship.

Neil Marshal, a spokesperson for PubCon, told  PMi that they find the Affiliate and CPA industry, “Outstanding. All the forms of advertising are good for the industry. We need diversification from simple advertising models that can help us also pursue alternative sources of traffic. We rely too much on singular SEO as the end-all/be-all of traffic acquisition. Affiliate marketing makes the industry think differently.”

Whether or not this will become a serious competitor to Affiliate Summit, is to be seen. Affiliate Summit has been mainstay in the industry, and seems to attract affiliates from all circles.  While PubCon is much larger (correction: read comments below), the targeted audience of experts at Affiliate Summit keeps people coming year after year. Perhaps this is just a play to address issues that the publishers have been asking, while getting more sponsors and into the growing Affiliate marketplace.

 Find out what anyone is doing – Right Now
SpyPeeps lets you legally spy without getting caught!
http://www.spypeeps.com

Why run Spypeeps?

–          There absolutely no competition in the marketplace because entrance levels are costly and requires significant investment in data and data collection.
–          This is not a PULL based system like a “background check” company. This type of system appeals to many consumers, including the curious and casual browsers. Converts exponentially higher than any “background” company.
–          Patent Pending using proprietary data that is integrated with friendly user interface.
–          Owned by HD Publishing, a multi-million dollar corporation that has launched numerous products on the net and is the leading online “detective” company.
–          Online History since 1996, not a fly-by-night company.
–          Great Credit and Payment Ability.
–          Enormous room to create custom landing pages, demographic pages and adjust the CPA as necessary to hit any and all targets.
–          Industry leading 24/7 Live Custom Support.
–          Partnered with Litle & Co, the leading card-not-present merchant processing company.

More information about the product at: www.scribd.com/doc/67222340/SPbackgrounder

Contact Pace Lattin
pace@hdpublishing.com