Call it Black Thursday.
Today some very big names in incentive marketing are pulling out, leaving incentive publishers grasping at straws and wondering who is next.
For those of you who have no idea what incentive marketing is: Ever see an ad that offers you a free iPod in exchange for signing up for a trial offer and referring a few friends? That is incentive marketing: Giving the consumer an incentive (the iPod) to try out an offer from an advertiser.
Earlier this week I got an email telling me that Hydramedia was no longer accepting incentive traffic, and now I have learned that Clickbooth, PerfectPayCheck, and Netblue have followed suite.
The reasons for this massive shift in policy are simple to understand: increasing levels of fraud and extremely poor lead quality.
Fraud affects an incentive publisher, the advertiser, and the affiliate network to different degrees, however the root of the fraud is easy to discover: Greed. More and more, fradsters are using incentive publishers to launder money through stolen credit cards, false identities and disposable proxy servers, not to mention many of the members on incentive sites where users can "get paid to try offers" are there to do just that, sign up for an offer, get paid and cancel. This brings us to the second part of the problem: Poor lead quality.
Every week, hundreds of people sign up for a free trial of BLockbuster or Netflix and a few days later they cancel their membership, just for the sake of the $20-$30 that they have been promised in exchange for "signing up for a trial offer".
The combination of massive organized fraud and poor lead quality has become increasingly difficult for advertisers, networks and individual publishers to handle, and is now threatening to destroy the incentive publishing and marketing industry completely.
I hate to say it, but I picked the wrong business.
There is a storm about to break over every incentive site-owner's head: A lack of new advertisers in the incentive marketing business has left us scrambling, and now it looks like advertisers are voting with their feet and taking their traffic to more fraud-resistant networks that don't allow incentive traffic.
Over the next few days I anticipate that there will be finger-pointing and blame laid at the feet of everyone from the Incentive Publisher who owns a free ipod site, the members on his site, the affiliate networks, and the advertisers themselves. Each group can take steps to help preserve this type of marketing, but they are not easy, and they require big changes.
I asked Byron Kho, CEO of AdIntegrity/InstantDollarz Publisher Network what he thinks can be done:
"Even until today, many merchants in the incentive space are not adequately informed about how incentive leads are produced and the dangers they may face, and neither are they secured against credit card fraud. The former may be an intentional step on the part of the network or agency involved, but the latter can definitely be improved by currently available authentication methods and technologies priced only slightly higher than their current credit card merchant accounts."
Various things have been suggested to help Incentive Publishers cope with the changes, including telephone verification of new users (to deter fraud) and ending the practice of cash payments which are a common and frequently requested gift on incentive sites.
The only networks that I work with now that are large and respectable enough to still be offering incentive publishers a chance to make a decent living are MaxBounty, Azoogle and Instant Dollarz.
My bet is that at least one of these is going to pull the plug on incentive publishers, and soon. Smart money is on Azoogle, since they seem to have cut way back on adding new incentive friendly offers, and rumor has it that they will announce this soon.
Comments are welcome, if anyone has an idea of how to fix this industry from any side: Publishers, Networks, Advertisers or members of the freebie community, you are encouraged to add your thoughts. I will continue to cover this story as it happens.
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9 comments:
I can't say I say it coming, however, it certainly isn't any surprise. As an AM at one of the larger network I see alot of this poor quality lead and loads of fruad. No big deal, the next opportunity is for the AM that know how to create good quality relationships. The same qualities that work selling anything applies here on the internet.
NOT SURPRISED
For anyone who has been doing such sites and analyzed it enough, such an event was bound to happen. We all know what really happens behind it all, and I guess merchants are realizing it now. lol.
It's a real shame that this is happening when it's so easy for users to NOT scam the sites/offers/other users. For years, people have been providing legitimate leads and getting to try out great new products, while earning free iPods and other prizes. But the influx of uninformed newbies who are just in it for the cash has made the ratio of "good" freebie enthusiasts to "bad" ones go waaaay down. Hopefully the scammers/frauders will lose interest and bugger off, leaving the industry to recover for those of us who are truly interested in every offer we try.
All good thoughts, I agree that "good" incentive traffic is the best kind, however no matter how you advertise, your site will eventually end up on discussion boards where people buy and sell referrals to make a buck.
Eric
Much of the problem lies with the networks. I'm the co-owner of one of the largest group of incentive sites and I can tell you that for years we have tried to get the networks to put in place an automated feedback system that would let incentive sites know why a particular user didn't get credit for completing an offer. This would help spot trouble/fraudulent users very early so the sites could stop them. Instead, the networks wait weeks or months after these users produce large amounts of fraudulent leads, then complain about it.
Also, these networks allow any and every incentive site to join despite the fact that dozens of these sites pop up every day, run by inexperienced people, some of which are in it for a quick buck and have no regard for whether or not they send bad leads to the advertisers.
There are many articles and research that shows that incentive traffic, when properly monitored, can be very profitable for networks and advertisers. The problem is the networks won't provide the tools or information to allow these sites to police their users.
People should not have to pay people to be referrals for them. That leaves it open for frauders to do their thing. Also, this is not a way to make a "living". It should be something done as a "hobby"-which is something you do because you enjoy it-not because it is gonna make you money.
Here is one solution to the problem.
Have the theme of the website were offers are presented to a targeted visitor that is not just interested in your free offer (which should be a gift not cash). Bringing visitors who are genuinely interested in what your site has to offer, having an incentive offer related to the theme of your site. Requiring the person interested in this free offer to sign up to your double opt-in list, were you can make additional incentive offers to them on the confirmation page. The website should not make multiple offers with no relation to the theme of the site. This would offer a somewhat more targeted type of lead and help reduce fraud by means of cross referencing information of the person who joined the opt-in interested in the incentive offer.
Ya this is a rising thing, but I believe that if site owners ,like me, go to farther extents to make sure some one is not a fraud then we can bring this industry back!
I am the owner of www.kellyrewards.com
If you would like to know how I check people for fraud, Just ask me.
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