BY THE TIME THEY
filed into the Rio casino's orange-carpeted conference hall, the 2,900 go-getters attending the Affiliate Summit conference in Vegas were already looking worse for wear. The acronym-crazed online marketers had been boozing it up since the previous day's "Meet Market," where they swigged Budweiser, struck deals and traded tips on how to increase their CTR and goose their EPC; the evening's Jacuzzi party at the Palms Hotel didn't help. Little did they know their keynote speaker, Internet entrepreneur and blog magnate Jason Calacanis, was about to induce an even bigger headache. Strutting on stage, he took the mike and delivered a whopper of an opening line: "Affiliate marketing is bull****!" He went on to call the attendees "the bottom of the food chain" with a "Lex Luthor mind-set."
For the uninitiated, affiliate marketing is a mom-and-pop sliver of the online advertising business with a big impact. Most participants are regular folks who work from home, posting online ads and promotional-text links for thousands of brands, ranging from AT&T and Wal-Mart to lesser-known outfits like SexPlayCam.com. While the majority earn less than $100 a month, their numbers are vast (Amazon.com alone is said to employ more than a million), and their efforts may account for as much as 7 percent of online spending. Anyone can participate with zero investment and little upfront effort I recently became an official Wal-Mart affiliate on my lunch hour and companies love that this army works on straight commission, earning only when consumers click on their links and make a purchase. But as Calacanis warned, the industry's proliferative and sometimes deceptive practices could backfire. Affiliate marketers threaten to pollute the web so badly, he said, that users could stop surfing altogether.
Even if you can't identify affiliate marketing on sight, you're probably already tired of it. It often takes the form of promotional-text links buried in sham product "reviews," blog posts and email spam. But the larger annoyance is the stunning proliferation of useless web pages created solely to serve up affiliate-marketing links: bogus business directories that pop up when you mistype a web site name, blogs filled with computer-generated gibberish, and endlessly repetitive sites carrying content stolen or "scraped" from legitimate sources. They often rank high in Google search results, forcing web surfers to wade through dozens of useless pages in the quest for useful information. Calacanis estimates that these sites account for more than half the content online.
Shawn Collins, the affiliate-marketing guru who organized the conference, says his industry isn't all bad. Useful shopping and bargain sites like FatWallet.com and PriceGrabber.com are built on affiliate programs, for example, while many legitimate blogs run clearly identified affiliate ads. But as I discovered, it's tough to earn affiliate-marketing cash the honest way. During the three weeks my blog ran ads for companies like Wal-Mart and PetSmart.com, I earned a splendid total of zero cents. Meanwhile, affiliate marketers employing some of the more obnoxious tactics posted photos of themselves with six-figure checks making the legit route look like a sucker's game.
As FTC Chief Privacy Officer Marc Groman notes, it's up to the companies to monitor their affiliate-marketing minions. But good luck with that. Of the nine that accepted me as an affiliate partner, only one bothered to call and verify my existence, and the screening wasn't exactly rigorous. When I confessed to applying under my dog's name, the manager had a ready response: "No problem!" Twenty minutes later she sent a congratulatory email. I was approved.