CJ Signals end of affiliate model in revival of CMP

Article in this months New Media Age...

"commission Junction has sounded the death knell for the affiliate marketing network model this week"
Through it's CJ vantage Programme and aimed only at the larger publishers.

Would have been a good idea to inform the merchants about this b4 the press release? It does after all affect us and we are your clients.

Asos.com

This is the press release issued by CJ last week. I can't see anything here that "sounds the death knell", maybe Nicky can tell us how this affects publishers.



Commission Junction Launches CJ Vantage

New Product Includes Item-Based Commissions, Hybrid Deals, Enhanced Catalog, Dynamic Ad Creation, and Consulting Services
SANTA BARBARA, Calif. - Nov. 18, 2002 - Commission Junction (www.cj.com), a leader in pay-for-performance marketing, announced today at ad:tech New York the launch of CJ Vantage™, a product that offers technology and services to increase online marketers' revenue and create profitable relationships. eBay, Expedia UK, and MSN are among the first to sign on for CJ Vantage's many benefits, including the ability to promote more products, increase customer acquisitions and provide more incentives for marketing partners.

eBay, using CJ Vantage, leverages the service components to successfully develop its pay-for-performance marketing program and improve recruitment of new eBay users.

"eBay is very pleased with the advanced functionality that Commission Junction continues to provide," said Steve Cohen, business development manager, eBay. "Since initially partnering with Commission Junction, we have significantly broadened our pay-for-performance strategy."

"CJ Vantage is raising the standard for how savvy marketers are advertising online, by increasing tracking and reporting sophistication and improving measurements to gauge success through pay-for-performance," said Elizabeth Cholawsky, senior vice president, marketing and product development, Commission Junction. "Our top clients have quickly adopted CJ Vantage because they see the power it gives them to return more results for their marketing dollars and to leverage the expertise Commission Junction is offering as part of this product."

CJ Vantage Features
CJ Vantage uses the foundation capabilities of the Commission Junction Open Marketplace, an industry-leading product introduced by Commission Junction in 2001, which gives advertisers and publishers sophisticated metrics to promote and effectively manage advertising programs. The CJ Vantage product offering complements CJ Access™, the company's original product introduction, which delivers comprehensive technology and services in an easy-to-use package.

Multiple Programs and Hybrid Deals: CJ Vantage clients are able to create multiple advertising programs and compensate publishers differently for each desired result, such as a customer referral or a sale. They are also able to create hybrid deals that encompass cost-per-action, cost-per-thousand-impressions, and cost-per-click to fully maximize their pay-for-performance relationships.

Enhanced Product Catalog: An enhanced and robust product catalog makes it easy for advertisers to upload and manage large volumes of product links and create unique product catalogs for select publisher relationships. The functionality supports state-of-the-art data transfer and accommodates numerous predefined and custom link formats. Commission Junction publishers can search the million plus product links available by keyword and easily download them for online placement via their Account Manager.

Item-Based Commissions: Item-based commissions reward publishers for the specific services or items purchased as a result of their advertising, instead of offering only one commission rate for their suite of products. This feature enables advertisers to offer a number of different products in a large price range via their online advertising. Advertisers are also able to offer performance incentives to publishers based on the number of sales or leads, the amount of sales revenue, or the amount of commissions earned for a specific action.

Connextra Partnership: CJ Vantage supports the automatic update and contextual placement of advertisements through Commission Junction's strategic partnership with Connextra, a London-based firm specializing in innovative technology for online advertising. Connextra allows for real time content changes in online ads. Already in use by MFI, ARG-Equation and bet365, Connextra capabilities, available with CJ Vantage, cost-effectively have increased click-through ratios and conversion rates from 40 to 200 percent.

Consulting Services: CJ Vantage clients are paired with Commission Junction's online marketing experts, and receive targeted consulting and value added services customized for their programs. Using the foundation capabilities of the Commission Junction Open Marketplace, CJ Vantage gives advertisers and publishers unique metrics providing benchmarks to promote and effectively manage their advertising programs.

Client Adoption of CJ Vantage
eBay, MSN and Expedia UK have all adopted the CJ Vantage product offering. MSN has used Commission Junction's Open Marketplace for almost a year to advertise its Internet Access service, formerly paid publishers a flat commission per new subscriber and offered incentives based on the volume of subscribers referred. With CJ Vantage functionality, MSN is preparing to segment its publisher commissions for the different services it offers.

"With CJ Vantage, we have been given more flexibility to promote our new MSN 8 offers to an extensive Internet audience," said Dana Nyyssela, MSN business manager, Microsoft. "More and more publishers are joining our program, and with Commission Junction's recent technology enhancements, we have the ability to scale our performance incentives and create more loyalty within our program."

The introduction of CJ Vantage extends Commission Junction's ability to meet the full range of demands from current and future clients. The quick adoption of the new product by major brands validates the foundation of the Open Marketplace. With this launch Commission Junction continues to expand its ability to offer state-of-the-industry comprehensive online marketing services.

About Commission Junction
Commission Junction, a leader in pay-for-performance marketing, delivers advanced solutions that facilitate strategic online relationships between advertisers and publishers, driving accountable results for each client. By publishing performance metrics on advertisers, publishers, and ads within its network and leveraging its own expertise in online marketing through service, education and promotion, Commission Junction creates an open marketplace of low risk and high reward for its clients. The company serves billions of impressions monthly, ranking it among the largest ad networks in the world. Clients include leading online marketers eBay, GSI Commerce, MSN®, and USA TODAY. Commission Junction is headquartered in Santa Barbara, Calif., with offices in San Francisco, New York and London. For additional information, visit www.cj.com or call 800/761-1072.

Would anyone care to put the two above posts into simple noddy english cos I be a bit dim this afternoon and can't quite see what's being said

Jason

CJ have taken the decision to introduce CPM deals with their "bigger publishers to free up more advertising space for advertisers" There has been a lot of hybrid deals going on in the US since the down turn in Traditional advertising in 2001 and CJ is after all US Driven. These hybrid deals are fine for the US where affiliate marketing has been around for a lot longer and the demographics are considerably greater but for the UK this is not good for Merchants.

Affiliate marketing has arrived in the UK and is still growing; the UK is not ready for this kind of hybrid deal via an ASP as Merchants are still sceptical about this performance based marketing. We need things to take root first. I can see my top performing affiliates unsubscribe from our program unless we swap over to a CMP deal.

We werenot consulted by any representative of CJ nor our opinions asked for.

I am hoping that CJ will use their US merchants to try this out. Interestingly, " Will Becker from
Advertising.com said " It will have a lot of work to do to compete because its publisher relationships, and most of its advertiser relationships, aren't well suited to providing competitive publisher returns on major media sites."

There will obviously be financial implications attached to these hybrid deals, which goes
against the very nature of what CJ.com was all about. I see this as a departure from performance-based marketing and if this goes full steam ahead, what will prevent
Merchants from doing their own CPM deals with advertising agents directly, there would be no need to belong to CJ.com anymore.
CPM and CPC is high risk for smaller merchants, if ASOS parted with £££ based on CPM and CPC we would be broke!

How ever this may work out well for the Super duper publishers and if so then that is a good thing for them.

Jess :0)

very interesting! all i can say is for the clients we represent and are talking to the feeling is they are moving away from CPM and CPC and more into performance based initiatves because marketing budgets are being cut left right and centre!

I guess its a watch this space

Helen

It does seem odd that they're now offering CPM and per click deals after the fuss they made about paying just for performance.

But surely if you're offering a good pay per perofmance deal the big publishers would still partner with the smaller advertisers, it would be very shortsighted of them just to deal with advertisers offering CPM.

I can't imagine too many advertisers would be interested in CPM deals anyway, surely it's better for them to just pay for performance.

Maybe this is CJ's way of getting their ads on some of the big portal sites that have traditionally only dealt with CPM advertising, and have been reluctant to change to a performance based model.

Are hybrid deals along these lines not been kicking around for ages?

I have had CPM + CPA and even CPM + CPC + CPA with some merchants.

CPM for me means I am getting money even if the program is a donkey, it allows me to try on new merchants see if they fit without the worry of losing sales.

Sure it's a U turn for CJ but as long as it's optional and not forced then I don't see it being to big an issue.

Hi Jess

The article you are referring to was taken totally out of context. As one of our Advertiser's, I thought you would have spoken to us before posting what CJ is doing as told by a "journalist". I have been misquoted on several occasions and the press always see what they want to.

Further, CJ have included extensive coverage of our product launch on our site and have posted message in every account manager. There was also an email sent out to Advertisers explaining the changes. I will forward you a copy of the email.

If you read the press release above, it explains that CJ is expanding it's suite of products. Our core focus is and will continue to be CPA. The market and our clients are demanding that we broaden our offer and provide a suite of products that compliment their online advertising. Currently, the product offering for all our clients remains as was. There is now the opportunity to expand that which is an OPTIONAL feature. I can only see this as a positive move in an increasingly exciting market.
I refer to your comment:
"the UK is not ready for this kind of hybrid deal via an ASP as Merchants are still sceptical about this performance based marketing. We need things to take root first. I can see my top performing affiliates unsubscribe from our program unless we swap over to a CMP deal".

This is not a move towards encouraging CPM. Some Advertisers and Publishers have hybrid deals that are not run through Commission Junction and this is now giving them the opportunity to consolidate their online activities. Again, I stress that this is not a move to change our business model.
A number of our clients are more than ready for hybrid deals as are a number of Publishers. The Pay for performance market in the UK is constantly underestimated - realistically many Publishers and Advertisers are generating large amounts of revenue.

In light of your concerns stemmed from the article I will drop Quentin and yourself a copy of the recent correspondence to clear up any confusion. Again, if you have any concerns regarding anything in the future, please contact our office.

Regards

Nicky Iapino
Commission Junction

JF:
I was interested in this... revenews.com seem to be in the CJ.com loop of things

www.revenews.com/archives/00000157.html

"But surely if you're offering a good pay per perofmance deal the big publishers would still partner with the smaller advertisers, it would be very shortsighted of them just to deal with advertisers offering CPM."

I hope this will be the case time will tell.

"I can't imagine too many advertisers would be interested in CPM deals anyway, surely it's better for them to just pay for performance."
Its about selling JF, depends how CJ pitch this... Alot of Merchants will still be wondering if they made the right choice with CPA and their affiliate program through CJ, here in the UK. I am not saying it can't work in the US, it is a CPM/hybrid world out there for sure.... but here in the UK? nope we are not ready. I feel a song coming on...
"all we are saying is give CPA through CJ here in the UK, a chance". Have we worked so hard to get affiliate marketing off the ground here in the UK to have CJ start with CPM?CPC? The question then would be whats the point of CJ? What makes them different to any other kind of Ad Agency? Why bother with affiliates? I am sure I am making more out of this then it is, but it saddens me to think cj.com will be soon Synonymous with CPM and CPC.

Jess :0)

Hi Nicky

I thought you may get a little excited at seeing my post, imagine then our excitement at reading what CJ was doing through NMA. We have received nothing from Cj either by email nor in the post to tell us about any of these changes.

If you were misquoted in NMA, surely you would have had the foresight to see how some clients may have reacted to this and perhaps sent a general email out explaining and clearing this up? Please email quentin@asos.com and he will pass it over to me. Thanks.

Helen, I agree, I would have thought so too.

Jess :0)

I noticed the article this morning and it really did look as though it was a journalist sensationalising a story!

Unless I'm very much mistaken it appears that CJ are simply providing an additional service to broker hybrid deals with key properties that wouldn't otherwise accept a pure CPA deal.

I can't imagine this will have any real impact on other existing advertisers or publishers. On the other hand it might just provide some advertisers with additional reach they may not have otherwise had access to if they where unable to provide a hybrid offer.

Recently I've worked with a number of independent merchants who understand that in order to achieve placement within some of the larger portals and ISPs that they simply have to be flexible in their offering and if that requires a slotting fee or hybrid deal then the outcome can be positive for all involved.

Jess, personally I don't see hybrid deals as a threat to the existing CPA model and the headline offered up by NMA as the 'death knell for affiliate marketing' should be seen as nothing more that an over zealous headline from a journalist who doesn't understand the affiliate space.

BTW, Nicky, are you joining us for a drink or two at the Get2Gether?

- Neil