Be Careful of Affiliate Spammers!

I was reading some blogs recently and have come across two reports titled "The Death of AdSense" and "Life After AdSense". 

A number of different blogs, some that I follow regularly, have discussed the report as a legitimate, thought-provoking analysis of the change in market conditions that have resulted in Google AdSense becoming an ineffective revenue-generation mechanism for an average Internet site.  The following is a list of blogs where I have found various discussions of this report:

• http://www.clicknewz.com/235/adsense-debate/
• http://www.sandbergventures.com/blog/2006/09/13/the-death-of-adsense/
• http://www.askjinger.com/2006/09/14/the-death-of-adsense/
• http://www.kedaiemas.com/blog/2006/09/22/the-life-after-adsense/
• Many other blog mentions from Technorati

Having contemplated various aspects of AdSense for much of the past several years, I yearned for an intellectual stimulation of a controversially-named report.  I then went ahead and downloaded it.  I came  to a realization of the true nature of this report this morning when I opened my inbox.  This realization and how it applies to affiliate marketing is behind my current post.

My first warning of something strange happened while I read the report.  It was very poorly worded and the two major points it made were repeated over and over for the entire duration of 50+ pages it  contained.  In my estimate, the points the report made could be discussed, even in detail, in as few as perhaps 5 pages.  There was another fundamental problem with the report.  It made very broad assertions  without any back-up of those assertions.  None of the examples it provided were believable and seemed to be targeted to the uneducated, ill-informed audience.  Lastly, the report writer had his own affiliate  program, claiming to pay $0.50 to anyone who distributes his free report.  So, what was his business model?

To spare you the trouble of downloading the report, I will quickly state the two major points it made:

• AdSense is "dead" because it significantly lowered payouts when Google separated the advertiser platform from a single advertising marketplace where advertisers bid on combined, AdWords (Google Search)  and AdSense (publisher network) into two marketplaces where advertisers bid separately on AdWords and AdSense.  The writer claims that this caused the advertisers to bid significantly less on AdSense inventory,  resulting in smaller payouts to individual web sites that display AdSense ads.  This assertion is well-documented and has clear business reasons for Google and advertisers who vocally complained about  the combined AdWords/AdSense advertising marketplace.


• Publishers should instead engage in "Click Flipping", a technique by which they themselves bid on AdSense or AdWords keywords at pennies per click, lead the user to their own site where they "convince" him or her  to provide an email address which the publisher should later sell to anyone wishing to pay per free lead at significantly higher price.

The fact that a number of bloggers have covered this report in a positive manner has shown me that if one ignores the poor writing, Death to AdSense and Life After Adsense are believable reports to an average reader.  I  also have no doubt that as a result of this blog coverage, quite a number of unsuspecting people have downloaded the free reports. 

Let's take a look  at the concept of "Click Flipping".  While the Internet was full of people who paid significant amounts for "free leads" in the late 1990's, the big Internet bust of 2000 quickly eliminated anyone paying so  much in large quantities to grab a "free lead".  It is simply not possible to have a single customer pay more for an opt-in email address than an average publisher site can spend in obtaining this lead.    What is lucrative is having an opportunity for you to obtain the lead and then sell the lead to a large number of customers, none of who really care how you got the email address in the first place, as long  as it is a valid address.  This group is conventionally described as unsolicited mailers or spammers.

What the report effectively teaches you is that obtaining someone's email address and selling it to a large group of spammers is a valid business model which will cause the "Death of AdSense".  Whether this  is the business you ultimately want to be in depends on your ethics.  It also depends on whether you would like to live on the edge of the law that has significant criminal penalties for generating and  abetting un-requested emails.  I am sure that very few of my readers, readers of the Death of AdSense report, and bloggers discussing this report are interested in this business  model.  And this brings me to the last two points of this post.

1.  It seems that the big motivation for why these bloggers have implicitly and explicitly  encouraged distribution of these reports is because of the hefty affiliate payout ($0.50 per download) that the writers of these reports have offered.  Have we as a community become so complacent that we are  willing to endanger our credibility by promoting a senseless piece of material in the hope of an affiliate payout?  I certainly hope that this case allows us all to revisit the business we are in and the  service we are offering to our readers.

2.  Lastly, back to the business model of The Death of AdSense and Life After AdSense.  It seems that all of us who have downloaded the reports have become victims of the very same business model that the report is encouraging.    Any business model that allows payouts of $0.50 for each distribution of the report has to make that back somewhere.  And where better can it make the money back if not to sell every email address generated  from its promotion to a large number of unsolicited marketers, one at a time, perhaps for pennies per name, until the total pay-back is far larger than the $0.50 it cost to generate the address in the  first place?  The following is the unsolicited email message I received this morning at the address I only provided at the time I downloaded the reports.  I now fully expect a large number of such emails  without any ability for me to ever put any stop to them in the future.

Would love your thoughts,

Gene Kavner

Comments

[Pete]

Gene,

The moment that you said that the author's poor writing style is acceptable to the uneducated I knew you had some self serving interest with this post. :)

Gene .. you claimed that the motive to pay .50 per lead is just to resell to email address collected to spammers is simply stupid.

Hmm .. maybe your a Google inside ??

You are right about the length of the ebook .. every information product I've purchased is packed with filler. A close friend taught me years ago how he used the same filler methods to graduate at the top of his class. :)

I would love it if people would get to the meat .. but I suspect that a 1 page ebook would have a low perceived value.

Regards,

Pete

[Sucker]

I'd have to disagree with you on this. The report was a good read, it was clear and logical, and Click Flipping is not about selling email addresses.

I do expect spam to increase though, but that is happening because people keep buying stuff advertised in spam...

[Casper]

I believe in efficient market and so while I think there are quite a bit of truth in Scott's report, the click flipping idea still violates his "income must be permanent rule" nicely. If CPC-CPA conversion is full proof and works, then other would bid higher on adwords on google and content network, and hence driving up the price of the CPC until CPA no longer gives much profit.

His point on adsense at the bottom of the food chain should provoke some serious thought by web publishers to see if a mixture of CPC and CPA will increase their ROI on their website.

Haven't seen more spam yet but I am waiting to see. But gmail spam filter works very well - so I doubt selling my email would be a worthwhile pursuit.

--
casper
http://www.e-malaysian.org

[fres]

I also believed on what Scott said on those 2 ebooks. Although those points on the areas of less adsense payout and profitability of click flipping are nothing really new and had been mentioned on various blogs and sites.
The way he illustrated the click flipping methodology down into its finer details hit a very good point I think. It drilled down to something that's more understandable.
My true question now is if he could really deliver with what he is charging? If he is asking close to a thousand dollars on the first month and almost $300 the succeeding months it better be not just helpful but should almost be close to a miracle. I'm not sure because I'm not sure the details of his/their plans at modernclick.
They better deliver on their promise otherwise the whole affiliate program will be tainted again with fraud that we all help propagate somehow or another.

[Chris Sandberg]

Gene,

I disagree with you and agree with John completely. I have not seen any increase in spam due to signing up for the two reports, and the revenue Scott is generating from his click flipping group memberships is most likely paying off for him. I don't think that paying $.50 per sign up is that much, and it certainly isn't enought for me to blog about Scott's reports solely to earn a commission, as you have insinuated(My blog is the second on your list). I would have blogged about it anyway.

-Chris

[John Morrison]

Hi Gene,

I saw your comment on my blog post, Click Flipping, Life After Adsense, The Payoff, and am here to give my thoughts as you requested. First, I don't agree with your analysis. I stand by the analysis in my post Adsense is Dead, Brilliant, Adsense is Alive, Yawn which you seemed to have missed. In a nutshell, Scott initially "profited" from the $0.50 affiliate fee in two ways. First, he is an established Internet marketer and names are a high value commodity to him, particularly names generated from a piece of Internet marketing material since that is his market. Second, he had two affiliate links of his own, one of which will allow him to make 5% on the revenues generated by other affiliate marketers for as long as they sell. This, in my mind, makes the $0.50 bounty worthwile to Scott.

After writing that analysis Scott unveiled the real payoff. He was able to take that list of over 30,000 names and market a program requiring $997 to sign up and $297. I certainly think $399,000 in immediate income and $118,000 in recurring monthly income is worth the nearly $20,000 in affiliate fees he paid, don't you?

Now to address some of the points you make. You say there are no legitimate high paying lead campaigns. Have you looked? I have 3 words for you, gambling, finance, broadband. Gaming sites, credit card companies and broadband companies are paying $25 to $80 for people who request information and/or sign up for a free trial. You say there are no details in Scott's book but I recall him explaining that these companies understand the long term value of a new customer. Do you think Verizon hasn't crunched the numbers to prove $32 per lead doesn't pay off in future wireless revenues? I doubt very much they are buying names to sell for that price.

Also, you neglect to mention Scott's clear message that it takes testing and research to find the proper bid phrases to make the lead campaigns pay off. And I think his argument that Adsense arbitrage is all but dead because of the content network bid differentiation, which is real, is a sound argument.

So I've written more than I planned. I just think your argument is based on pure conjecture which do not match the facts. I signed up for his report and have seen no increase in spam. I think you need to provide more evidence to substantiate you email resale theory. There it is, you asked for my thoughts and I gave them. Keep on blogging.

Peacce and Prosperity.

Cheers,
J Andrew Morrison
(John)

[Kedai Emas]

Maybe you're right, because I have been getting so much spam these last few days too..