New Rules of Entrepreneurship for Building Highly-Profitable Companies – Shoulders of Titans Ep. 017

with Matt Frary of SmarterChaos.com

“Remember how to be a student again, take knowledge and use it to achieve your goal.”

Shoulders Of Titans Podcast Interview #017 with Matt Frary

Matt Frary is CEO and Founder of SmarterChaos.com, an Internet Marketing and Sales Agency focused on large brands such as the Nationwide Pet Insurance, ValueMags.com, CBS Interactive, StraighterLine, JewelScent, Meredith Magazines, ShaveMOB, SkinIt and many more. Matt is a also a Founder of one of the former top 30 online Ad Networks in the US called ROIRocket.com, and a frequent speaker and influencer in the Affiliate Marketing and Online Marketing arena. Building highly profitable companies is something he has had much success with and loves to share his knowledge.

Matt has an MBA from #1 International Business School in the world, Thunderbird Graduate School, an education in marketing and business from the University of Colorado, with a strong focus in Russian and Brand Marketing and Finance.

As a Mentor at The Founder’s Institute in Denver, Co, Matt enjoys working with start-ups to realize their positive ROI quickly and is a passionate and serial entrepreneur.  His career also includes branding for the Smart Car at Mercedes Benz, Marketing at eBags.com, Lead Generation for the Auto Channel at MSN (DriveOff.com), Brand Agency Experience at The Integer Group in Denver, and becoming a dominant force in ethical lead and sales generation online. Recently Matt’s company SmarterChaos.com was listed 2 years in a row as one of Colorado’s Top 100 fastest growing companies, and was listed on the Inc. 5000 Fastest Growing Companies in America 2015.

To learn more about Matt, visit: www.SmarterChaos.com

Topics Discussed In This Interview:

  • How to spot the #1 sign a profitable business that is about to go out-of-business… A lesson on business all entrepreneurs must know, but most ignore
  • How to create a $40 million dollar business even with a tiny marketing budget
  • The step-by-step guide to becoming an internet marketing millionaire… an insider uncovers how to instantly and accurately spot huge growth opportunities in online affiliate markets
  • How to “stack backend offers” to easily double, triple or quadruple the lifetime value of any client or customer
  • The 3 powerful ways to instantly and strategically increase cash-flow in any business
  • How to create social capital and get big business favors from successful entrepreneurs… discover powerful strategies even if you’re just starting out in business
  • The easiest and fastest way be a CEO that is respected, loved and influential
  • What is known as the simple “Your-Mama Rule” that gives business owners consistent, long-term influence and income
  • How to 10 times the success for a business using simple, proven tools, cheat-sheets and training
  • How to “practice the game of business” and profit handsomely… all while spending more time for yourself and your family than ever before
  • The secret to investing in “Brand Champions” that promote your work and your brand around the clock… and only paying them when they make you money
  • And much, much more!

Full Transcript of Interview:
http://www.shouldersoftitans.com/interview-with-matt-frary/

Resources Mentioned:

www.Clickbank.com
www.SmarterChaos.com
www.ROIrocket.com
www.Pollen-8.com
www.SheIsMedia.com
The E-Myth” by Michael Gerber

Quotes:

“There are only so many Ubers, Googles, Facebooks in the world. The rest of have to grow through sales.”

“Reward your partners upfront, handsomely.”

“Just pick up the damn phone, call people and ask them if they trust you and ask them if they’ll trust you on this product.”

“Remember how to be a student again, take knowledge and use it to achieve your goal.”

“It’s not the business that we want to work with. It’s the people we want to work with.”

“Discipline doesn’t mean a lifestyle without fun or working around the clock. Discipline means being effective in the hours you do spend building that business.”

“Busy doesn’t mean effective.”

Matt Frary – Founder & CEO, SmarterChaos.com – Underdog.nyc

Matt Frary – Founder & CEO, SmarterChaos.com – Underdog.nyc

Matt Frary is founder and CEO of SmarterChaos.com, a digital performance marketing agency focused on driving customer acquisition for large brands such as eBags, ValueMags, Dollar Shave Club, JewelScent, Meredith Magazines, FabFitFun, and many more. SmarterChaos.com has been recognized two years in a row as one of Colorado’s top 100 fastest-growing companies, listed three years in a row on the Inc. 5000 Fastest-Growing Companies in America, and as a Forbes Agency Council member.

Matt has achieved great success in building highly-profitable companies and loves to share his knowledge. As a founder institute mentor in Denver, Colorado, Matt has worked with thousands of startups to drive profitable growth and build award-winning marketing campaigns. A national expert on brand management and customer acquisition, Matt is a frequent speaker and influencer in the affiliate marketing and digital marketing community. A passionate serial entrepreneur, Matt is also founder of SheIsMedia.com, founder of Pollen-8, and founder of Elite Media Partners.

Tell me about your early career.
Early on, I knew that I wanted to work in business and marketing, but I really didn’t have an idea what that meant. After graduating from the University of Colorado in business and marketing (and Russian language), I looked for a job in marketing or sales. I was lucky to come across a posting for eBags.com in 1999, which was just starting along with the great rush to build eCommerce sites. My first job was to build links for eBags through their affiliate program, and later to manage merchant relationships at an affiliate shopping mall for charity called Kickstart.com. I was told to call as many websites as possible and have them place ads on their site for luggage and bags, and through those links, they could earn commissions. This was called affiliate marketing and everyone was starting to do it, including Amazon and eBay. I was hooked, voraciously learning everything that I could early in my career about affiliate marketing, online tracking, ad placements, ad sales, media buying, and search.

After a year at eBags and Kickstart, I moved onto DriveOff.com, which was later CarPoint.com and MSN Autos. My job there was to build an affiliate program to drive auto dealer leads for more than 5,000 auto dealers across the U.S. Here I got chops in lead generation, and building out lead paths for auto programs, including partners such as Costco Auto Buying, as well as Kelley Blue Book and Edmunds.com. Microsoft quickly purchased DriveOff.com and I was looking for a new position.

From there, I went to a traditional advertising firm called The Integer Group, and we launched a digital division called Integer 2.0. Anything that was even remotely considered “digital” was passed along to me and my team, and we developed creative interactive strategies for large brands. I realized quickly that I wanted to have a larger part of the digital space and moved to another position with a software development firm, and then decided that if I was going to have a real shot at business, I’d have to take it to another level.

In 2003 and 2004, I went back to school to get my MBA in International Finance and Brand Management from Thunderbird School of Global Management. I focused on how to build brands profitably, and with a positive return on investment (ROI). I had to learn accounting, finance, statistics, organizational management, and cross-cultural communications – all of which became valuable as I built my own businesses. During my time there, I interned at Mercedes Benz, working on the launch of a massive brand called the “Smart Car”. Taking on the monumental task of working on this brand and researching the market, so that Mercedes could determine when to launch into the U.S. market, was eye opening and a quick schooling on how large corporations make decisions.

In the spring of 2005, I found myself starting from scratch with a newly-minted MBA, $100,000 in student debt, and no job. I reached out to a former friend that I had worked with online before Thunderbird, and he told me that he was making millions doing Internet marketing. I called him, and we agreed that I’d consult for him so that I could help build his business and earn some income myself. After a few months, he and his business partner asked me to build them an affiliate network, which I did. We built ROI Rocket from 2005 to 2009 into one of the top 25 affiliate networks in the U.S., grossing millions in revenue. The result, when I sold my 25% share in 2010, was over 1,600 advertisers with more than 60,000+ affiliates. We had built from scratch a profitable digital affiliate ad network.

How did the concept for SmarterChaos come about?
Even though I had been a part of building a profitable online digital company at ROI Rocket, I had also faced quite a bit of adversity through my partnership. Through some discovery and investigation, I had found that my partners were doing things in the business that were not in my best interest and in fact were very detrimental and inequitable. After intensive litigation, I prevailed and settled.

The concept for SmarterChaos came about when I was sitting on a beach in Puerto Vallarta, Mexico trying to recover from the dizzying, pending litigation and stress from my exit at ROI Rocket. I started to draw out the eco-system of the online advertising universe, and when I was finished, the players were all interconnected in a very chaotic, very unstructured way. I thought that if I could provide clarity and value to the advertiser, I could help develop more profitable online channels than an advertiser could do for themselves.

When I returned home, I went to work right away to find software and build a business that could easily track online channels and help me manage the chaos for large brands. I also had to jump on the phone and begin calling every affiliate, affiliate network, advertiser, and ad tech company out there to shop this idea and get them on board to build my business. I discussed the idea with a few friends and neighbors, and my two business partners, Doug Davis and Stu Butler, immediately jumped at the chance to help me build this business. We met in the Castle Rock, CO Library on February 3, 2010 and bought the domain and sketched out a business plan for SmarterChaos.com. The rest is history.

How was the first year in business?
Our first year in business was an absolute struggle. We had several battles to fight. One, I was still fighting litigation from my former company and business partners, and that was time-consuming, expensive, and energy-draining. In addition, I needed to quickly educate and socialize my business partners to the online marketing world, but luckily they were driven and smart and picked up very quickly. We relied on some of my past business relationships to build the business and drive revenue and sales. We also had to choose and invest in technology to run our business, but found a great partner in Impact Radius. Almost immediately, Impact Radius helped us wire up our business so that we could track, pay for, and serve great ads through our affiliates for our clients.

What was your marketing strategy?
Our marketing strategy has always been to drive referrals via past clients, relationships, and thought leadership. We participated in conferences, speaking engagements, and articles about the industry and best practices. We asked friends and family to refer us to anyone that they knew that needed digital strategy and execution. We were fortunate to be able to trade on my past reputation and to quickly grow that into current clients that would also recommend and refer us in the future. We aimed at landing large clients that were growing fast so that we could become a part of that growth. In the early days of SmarterChaos, we landed large accounts such as Meredith Magazines, Dollar Shave Club, BeachMint, Fab Fit Fun, and more.

How fast did the company grow during the first few years?
The company grew at a profitable enough rate to bring on employees, but not profitable enough for the owners to pay themselves for a while. We had to let go of our desire for security and a paycheck to drive our vision for growth of the company. Our name grew faster than our profit, but that’s often what happens in a start-up. You spend most of your money hiring the next person, investing in the next technology, and doing marketing. We would eventually, after three years, get listed on the Inc. 5000 as one of the fastest-growing companies in America, and then earn that two more times. We also made the top 100 Colorado companies to watch, two years in a row. The top line revenues were growing, and our company was stabilizing. We did all of this organically with no outside investment or investors.

How do you define success?
To me, success is defining a goal, and then reaching and surpassing that goal. If you stop and look around you, and you want what you have and you have fulfilled your short-term goals, you should feel successful. If you are working towards your long-term goals, and putting in the work to achieve those, you should feel successful. You can’t feel successful without knowing where you are going and measuring whether you got there.

What is the key to success?
There isn’t one key to success, but there are factors. The factors that play into a person’s success, and that make them more likely to be successful are:

1. Be willing to take risks – without risk, there is no opportunity for reward. Take measured, calculated, and large risks.

2. Be willing to work when others won’t – you may not have more money or resources, but you can outwork your competitor or the other person.

3. Build a team around you – you cannot do anything alone. Everything in life that makes you successful requires a team around you. Choose your team wisely, and be willing to cut from that team when necessary.

4. Always be learning – there is no such thing as an expert, but only those that continue to learn and evolve in a certain subject. Consume information about your work, industry, peers, competitors, and also for personal growth including your health, money, spirituality, hobbies, and family.

5. Don’t stop, keep moving – if you stop growing, learning, building, dreaming or executing, you are dead. You have to have a restless quality that never quite gets fulfilled and that allows you to yearn for growth and movement. Settling, quitting, or giving up is not an option to reach success.

What is the greatest lesson you’ve ever learned?
The greatest lesson that I’ve ever learned is that failure is an opportunity for growth. When we view failure as an opportunity for growth, we can find many growth opportunities in many different situations. Fail fast, grow often.

What are some quotes that you live by?
“Never give up”, “Always be closing”, “Want what you have”, “Make it happen”, “Without rain, there would be no rainbows”, and “Don’t let worrying about yesterday take away your today.”

What are some of your favorite books?
The Bible, Know Your Why: Finding and Fulfilling Your Calling in Life by Ken Costa, Swim with the Sharks Without Being Eaten Alive by Harvey B. Mackay, Getting to Yes: Negotiating Agreement Without Giving Inby Roger Fisher, The 4-Hour Work Week: Escape 9-5, Live Anywhere, and Join the New Rich by Timothy Ferris, and The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It by Michael Gerber.

Tell me about one of the toughest days you’ve had as an entrepreneur.
It’s very difficult to choose one tough day, but I’d rather have tough days on my terms than “normal days” on someone else’s terms. One of the toughest days I’ve ever had as an entrepreneur is when I realized that my business partners were stealing from me by using company funds to enrich themselves, and that they were providing me with false documents to cover their tracks. I realized that all of the hard work that I had been doing, other people were profiting from without having to put in the work themselves. They had frozen my cash, told me that I wouldn’t be able to work there anymore, and pushed me out of a company that I had built. Essentially, I had to start all over and to fight them at the same time. Building a brand new company while draining current resources to get out of an old one, were my toughest moments.

The lesson learned is make sure that you know who you are in business with and build your team very carefully. You are only as good as the five closest people around you. Loyalty to the mission, to the company, and to me is a key trait and more important than anything else when I’m looking for talent and partners in business.

The other lesson learned, and this is THE KEY, is never, never, never give up. You might be on your knees begging for mercy from the tough days, but don’t forget to be on your knees rejoicing when you reach success. If you give up, you can’t experience the latter. What separates a successful entrepreneur from someone that you have never heard of is that the successful one didn’t give up.

When faced with adversity, what pushes you to keep moving forward?
When facing adversity, you must have faith. You need to have faith spiritually that your God or someone greater than yourself will pull you through, but you also need to have faith that the people you love and your family and friends will be there to support you. Strengthening my family and being able to give them everything they need drives me. My wife and kids push me to move forward, and at the end of the day, I realize that, “Without rain, there would be no rainbow.”

What advice would you give to young entrepreneurs?
I would advise entrepreneurs not to get wrapped up into trying to “act” like an entrepreneur. You either are, or you aren’t. Don’t get wowed by the stories of people making millions or billions, but instead by those that have faced adversity and overcome it to be successful. Be ready to adapt and overcome anything that is thrown at you in your business and personal life, because you will NEVER be able to stay on plan. Build plans, build goals, but realize you’ll never stay perfectly as planned.

 

This interview was conducted for research purposes by Jason Navallo for his upcoming book, Underdog.

Check out our Books page to see the top books recommended by successful entrepreneurs and executives.

Matt Frary Disrupts the Affiliate Marketing World with Purchase of Elite Media Partners from Brook Schaaf

Purchase brings large-scale affiliates under one roof, aggregating affiliates’ sites and increasing their negotiation power with multinational brands

Today, Matt Frary, CEO of SmarterChaos.com, a digital marketing company and affiliate marketing agency, announced that he has purchased Elite Media Partners, a monetization agency and FMTC asset, from Brook Schaaf. With this purchase, Frary brings large-scale affiliates under one roof, opening the way for better representation and negotiation of terms with advertisers in the space.

According to Geno Prussakov of AM Navigator, advertisers spent $5 billion in 2016 on affiliate marketing, making the channel one of the most important digital channels in a marketer’s toolbox. The primary issue, Frary points out, is that the industry is often fragmented with millions of affiliates that are vying for the brand’s attention and budgets. Affiliates end up having very little leverage. Elite Media Partners focuses on aggregating medium to large affiliate sites to increase their negotiating power and to drive incremental revenue that they would not have already received from those brands.

On the effects of the purchase for SmarterChaos.com to make new services and tools available to affiliates, Frary said,

“We are so excited to acquire Elite Media Partners. This is another major disruption of the affiliate ecosystem as we aggregate tens of millions of users across many different large affiliates’ publishers and represent them to the branded advertisers, outsourced program managers, and top affiliate networks. No one has brought together the power of the affiliate like Elite Media Partners, and we aim to grow the consolidation very quickly. We are so pleased to work with Brook and the FMTC team to purchase the Elite Media Partner assets, as we know that our businesses at SmarterChaos.com, SheIsMedia, and Pollen-8 are uniquely positioned to build on the goodwill that Brook and his teams have built with well-known online marketplace clients. The FMTC technology and Publisher Toolkit will remain a part of our ecosystem as we build the business.”

Brook Schaaf welcomes the purchase, saying,

“Elite Media Partners has brought meaningful value to its publisher clients, but our larger company is better suited to focus on other products, in particular FMTC’s data feeds and our Publisher Toolkit. I’m pleased to transition this business to Matt and his team, and I know they’ll do a great job with relationship management on behalf of publishers.”

Stepping in as General Manager of Elite Media Partners is Karen Hoxmeier. As Hoxmeier expresses her thoughts about the new venture,

“Having collaborated on various projects over the past six years with Matt Frary, I’m really excited to be heading up Elite Media Partners. I plan to be an integral part of each of our clients’ businesses. Building new revenue streams for publishers and providing innovative marketing solutions for advertisers is what I live for.”

Frary is the CEO and founder of SmarterChaos.com and SheIsMedia.com and is a national expert on brand management and customer acquisition. SmarterChaos.com develops customer acquisition marketing programs designed to drive sales and increase ROI with savvy implementation that incorporates affiliate marketing, search engine marketing, influencer, social media and email marketing. SheIsMedia.com is an affiliate marketing resource for female bloggers, reshaping the landscape of women-focused performance marketing.

Schaaf is the Co-Founder and Owner of FMTC.co, the data services company and parent company to Elite Media Partners, as well as Co-Founder of the recently-sold affiliate management agency Schaaf-PartnerCentric.

Hoxmeier is an 18-year veteran in the affiliate marketing industry, starting when she launched MyBargainBuddy.com, an online deal site, in 1999. Over the years, she has consulted for startups entering the affiliate marketing space, operated as an Affiliate Program Manager, served on CJ’s Publisher Advisory Board, and participated in panels at CJU and Affiliate Summit. For four years, she served as COO at FMTC,  and helped launch Fresh Press Media.

SmarterChaos.com represents top affiliates, brands and media partners around the world, including:

  • Tile
  • Miracle Ear
  • Donald J Pliner
  • eBags
  • Lillian Vernon
  • JewelScent
  • FabFitFun
  • and many more

Elite Media Partners represents well-known coupon and deal providers and online resource sites, including:

  • CouponCause
  • SendEarnings
  • InboxDollars
  • Spent
  • Healthgrades
  • Subscription Box Society

About SmarterChaos.comSmarterChaos.com is an international digital performance marketing agency that focuses on driving customer acquisition for large brands. SmarterChaos.com was launched in 2010 by industry veterans to address the needs of advertisers to navigate the affiliate, search and social media landscape in a profitable way. Our services include affiliate marketing, social media marketing, lead generation, app installs, influencer marketing, retargeting, programmatic media and more. SmarterChaos.com is located in downtown Castle Rock, CO, and is a member of the local Economic Development Council, the Performance Marketing Association and the Forbes Agency Council. For more information, visit http://www.smarterchaos.com or contact Sheila Kirby at sheila@smarterchaos.com.

About FMTC: FMTC specializes in aggregating affiliate content and making it available to affiliates and bloggers through a series of services and tools, including FMTC’s coupon data feeds and Publisher Toolkit’s merchant database and reporting toolset.

Is Influencer Marketing A Performance Marketing Strategy?

Is Influencer Marketing A Performance Marketing Strategy?

You bet it is!

To be fair, I’m a pretty die-hard advocate of Performance Marketing, and tend to see hints of its existence and absence in every marketing strategy known to man. That being said, I truly believe that Influencer Marketing checks off all of the boxes needed to be considered a performance marketing strategy.

#1: Performance Tracking

Let’s start with the simple mechanics of Performance Marketing: tracking. Without the tracking component, Performance Marketing wouldn’t exist. In order to understand what performs, what works, what doesn’t work – we need to track activities.

When it comes to affiliates, we track impressions, clicks, sales, leads, conversion rates, LTVs, refunds, times spent on pages, bounce rates, and so on. Affiliate managers are able to track and analyze the performance of each affiliate in their program, each product those affiliates promote, each offer the affiliates broadcast, and the cross-sections of each of those performance measures.

The same can be true for Influencer Marketing. In fact, many savvy advertisers have begun using their affiliate program tracking links and attribution models to track the performance of their influencers alongside and/or in conjunction with their affiliates. Whether or not they use their affiliate tracking and reporting platform, advertisers can assign each influencer their own tracked links, landing pages, hashtags, and coupon codes to track the activities of the visitors and customers back to the referring influencer.

In my humble opinion, if an advertiser isn’t implementing tracking mechanisms into their Influencer Marketing campaigns, they are doing it wrong. Placing performance tracking at the heart of Influencer Marketing will be key in seeing this popular strategy stick in the long run.

#2: Performance Compensation

There’s a interesting proclamation from member, Matt Frary of SmarterChaos… it goes something like this: Affiliate Marketing is a compensation model. That quip has been shared by Todd Crawford of member, Impact Radius from both the Affiliate Manager Days stage and the Influencer Marketing Days stage.

The statement resonates in both settings.

While many affiliate marketers may argue that there is so much more to affiliate marketing than the compensation model, it’s hard to argue with the fact that merchants and advertisers ask affiliates to go out and promote in a wide variety of ways – but they all compensate the affiliates based on their performance. Commissions on the sales they refer, bounties on the leads they generate… merchants compensate affiliates by sharing a piece of the revenue they refer.

Whether influencer marketers funnel activities through their affiliate programs or not, they too can and ultimately DO compensate influencers based on performance. At the most basic level, compensation stops when an advertiser determines that a particular influencer isn’t performing at an expected rate and simply stops hiring the influencer. At a sophisticated level, influencers are compensated based on the amount of business they refer to the advertiser with commissions on sales, bonuses for reaching thresholds, and tighter partnerships like co-branding, “celebrity” appearances, and other public-facing activities that tie the influencer’s brand to the advertiser’s brand (and visa versa).

As Influencer Marketing matures, I predict that we’ll see many of the same evolutions in tracking and compensation as we have in Affiliate Marketing. Again, savvy advertisers have already picked up on this and are running their Influencer Marketing strategies as an extension of their affiliate programs.

#3: The Third-Party Endorsement

While both influencers and affiliates have been asked to use ad units like banners, infographics or video spots, advertisers (should) agree that the most valuable content in both of these strategies is that which the influencer or affiliate creates. And out of that publisher-generated content, the best is the endorsement. That third-party voice saying, “This product is great. I tried it and liked it, and I think you will too.”

Whether it’s in words, a video, or a photo – influencers and affiliates who communicate with their audiences with passion, intelligence, and authority are the heart and soul of both Influencer and Performance Marketing.

Just as I predicted a similar pattern in compensation models, I predict a similar crack down from government authorities on Influencer Marketing as we’ve seen on Affiliate Marketing. The FTC’s focus on disclosure is a clear indication, that these third-party endorsements that both strategies rely on are viewed as one, regulation-worthy practice in the eyes of the consumer protection agents. How long before the tax agents begin to see the similarities?

 

Rachel is a partner at Rust Built Ventures. She has been an active participant in the affiliate marketing industry since the late 90’s with executive leadership roles at KowaBunga!, Lurn & FMTC. Her advice and views have been shared in FeedFront multiple times as well as from the stage at Affiliate Summit.
Attribution Models, New Performance Metrics & Tech Innovation are Key to Winning in 2017

Attribution Models, New Performance Metrics & Tech Innovation are Key to Winning in 2017

Interview with Matt Frary, CEO and Founder of SmarterChaos

What does Affiliate Window’s acquisition of ShareASale mean for the rest of the industry?

The acquisition of ShareASale by Affiliate Window means that ShareASale is now going to have a more global footprint, and Affiliate Window will have a larger domestic footprint. In terms of changing anything in the industry, it won’t change that much. Brian Littleton, CEO of ShareASale has assured us he will remain CEO of ShareASale and still be the spiritual leader of the karaoke and piano sessions in our industry. The ShareASale/Affiliate Window combo will allow these guys to compete even closer with Commission Junction, LinkShare, Impact Radius and PepperJam. They are all in a tight race for land grabs (Advertisers and Publishers) but there is so much blue sky in performance marketing that there is still enough room for these networks. In the end the Network that focuses on their key partners and can facilitate their growth will win. It’s not about trying to do it all in house, its about facilitating agencies and advertisers to do it on your platform. ShareASale has committed to Advertisers and to Agencies through changing technology and tools as well as constant communication and interaction. Affiliate Window has also done a great job with this, as has Impact Radius and PepperJam. Those networks competing with agencies to provide managed services and that try to manage 1000s of advertisers are going to find themselves unable to innovate with technology.

An increasing number of networks have major new-investor money behind them, funding more sophisticated technology and greater scale. Are networks inevitably going to get bigger, and will small networks be driven out?

The large networks that don’t innovate their technology will die the death of the dinosaurs and take any stubborn advertiser with them. For example, if you can’t place a publisher’s Server to Server pixel, you can’t work with sub-networks, you can’t track coupons properly, do data feeds right, handle cross-device tracking, or track mobile installs and engagement, you might as well check-out now and hang onto what you got as the other networks steal your business. The smaller networks will be able to move as fast as the software companies that power them like Has Offers, Cake, HitPath, LinkTrust and any other platform that is popping up to help networks. Most smaller networks are powered by these companies, and the survival of the smaller networks like She Is Media are dependent on servicing a smaller focused niche as well as a strong focus on advertiser and publisher client service teams with deep knowledge and added value. It’s not enough to just pay weekly or have “exclusive offers” but these days its about building strategy and becoming a strong advocate for the brands as a smaller network. They will survive as long as they can move quickly and stay relevant in these smaller niches.

What should an advertiser using performance marketing be thinking about in 2017?

An Advertiser in 2017 should be paying attention to attribution models and how their various channels interplay with each other. The old way to consider affiliate marketing in the media mix was to judge based on last click and how many sales an affiliate drove. This is no longer enough, and you have to have a system like Impact Radius, Conversion Logic, Convertro or any of the other marketing Systems of Record. The new way to manage your media spends it to back EVERYTHING into some sort of performance metric like Effective Cost Per Action (eCPA) or Return on Ad Spend (ROAS). At SmarterChaos we usually define a metric like ROAS up front with our Clients, and then affiliate, SEM, social, email, SEO and all other types of traffic are normalized using a common metric. We use Impact Radius to provide us proper attribution by channel, and then we make decisions using data and analytics that take into account the complexity of a strong digital marketing mix.

Another major trend to watch is the sheer amount of transacting going on in the mobile space.  Some of our retailers pointed out that this last Christmas and holiday season they saw as high as 80% of transactions occurring on a mobile device.  This is something that marketers will not be able to ignore.  Mobile specific sites, creatives, check out processes, apps, marketing mix, and strategy will make huge differences in the success of any performance marketing program.  Mobile marketing cannot just be an “add on” to the marketing mix and/or an afterthought.  The technology is available to do cross-device tracking, targeting, and measurement.  Marketers will have to become across all types of digital platforms like desktop, mobile, tablet, or other as well as proficient in the marketing mix and driving incremental sales using each.  We have an exciting year ahead, and I”m sure we will all learn a thing or three!

About
Matt Frary is CEO and Founder of SmarterChaos.com, an Internet marketing and sales agency focused on large brands. Matt was a founder of a former top-30 online ad network called ROIRocket.com, and is a frequent speaker at online marketing conferences. As a Mentor at The Founder’s Institute in Denver, CO, Matt enjoys working with start-ups to realize positive ROI quickly and is a passionate and serial entrepreneur.

Matt Frary on Merchant Risk and Technology Investment

Matt Frary on Merchant Risk and Technology Investment

Chris Trayhorn Interviews Matt Frary on Merchant Risk and Technology Investment

Matt Frary on Merchant Risk and Technology Investment

What’s the easiest point of entry for a small merchant wanting to test the affiliate marketing channel? How much does the merchant have to put at risk?
Our agency wrestles with this question all of the time. We don’t want a small merchant to have to invest a ton of money into the channel just to find out it doesn’t work for them, but at the same time in order to test affiliate marketing you have to be willing to spend money.  Our litmus test of whether or not a merchant is going to work in affiliate is dependent on how much they are spending in Social and Search Media.  Launching an affiliate program without any other form of paid media will ultimately result in poor results in affiliate.  Affiliate marketing is not the silver bullet and cannot be used as a stand alone marketing tactic.  All forms of marketing play off of each other and a small merchant has to be willing to invest in all channels.  Another misnomer is that Affiliate Marketing is not risky or has low risk.  Just like any other channel you have to invest in the people building the channel either internally or externally, you have to invest time into building the relationships, and you have to invest in the technologies required to run the affiliate channel.  The affiliate channel may take 6 months to hit stride and the merchant has to be willing to accept the time and money spent to get it there.

We have seen a number of networks introduce new platform features or interfaces recently. Is technology investment by networks increasing? If so, why?
Technology investment is increasing at some networks, but not at others.  The ones that are not investing in technology will find themselves going out of business, or at a minimum not growing.  This industry is so fast paced and there is such a demand for information on demand that networks have to keep up.  The network and platforms that recognize this are the ones that will still be in the game 5-10 years from now.  Unfortunately there are very large networks that haven’t changed since 2000 and we are seeing our Clients wanting to leave those networks or not work with them at all.

What is lead scrubbing? Why is it necessary?
Lead scrubbing is the practice of returning a lead to the Publisher in order to not pay for it as the Advertiser.  Different companies have different policies about lead scrubbing, and you should be sure that you understand those policies before sending leads.  Our company has different reason codes for returning a lead that include for affiliate fraud, consumer fraud, partial information, or any other reason that the lead is not usable coded as “other.”  We return sales in much the same way with similar reasons, but we also include for sales a return if the product is sent back to the company and the sale has been reversed.  It’s necessary in our industry for an advertiser to make sure that they aren’t paying for leads produced fraudulently or under conditions that were not contracted for.  The industry faces a challenge policing those advertisers that return leads or sales for the wrong reasons, but also with the publishers that are producing leads in nefarious and questionable ways.

The FTC seems to have been more aggressively enforcing their rules over the last couple of years. How has that affected affiliate marketing?
In my opinion the FTC is aggressively enforcing their rules that should have been followed by people in the affiliate industry a long time ago.  If you already do everything ethically and above board there is most likely no issue for you as an affiliate or an advertiser.  The industry is maturing from the wild west days and mostly the FTC is just closing up loopholes that were being exploited.  The latest FTC actions are focused on disclosures and truth in advertising.  An advertiser or an affiliate can look at FTC.gov and quickly determine what he/she needs to do in order to be in compliance.  If you are ever in doubt, remember the “Yo Momma” rule.  Just don’t market products or in such a way that would offend your mom or that you wouldn’t sell to your own mother.

About
Matt Frary is CEO and Founder of SmarterChaos.com, an Internet marketing and sales agency focused on large brands. Matt was a founder of a former top-30 online ad network called ROIRocket.com, and is a frequent speaker at online marketing conferences. As a Mentor at The Founder’s Institute in Denver, CO, Matt enjoys working with start-ups to realize positive ROI quickly and is a passionate and serial entrepreneur.