The Surging Affiliate Model with Brian Marcus

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"Everybody's monetizing every link. Why not?" - Brian Marcus

"Affiliate is not a programmatic world. It's really a group of people that own websites that understand their audiences super, super well. And they're working with advertisers to unpack that." - Brian Marcus

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[00:00:43] Hello, everyone. Chris Snyder here, host of the Snyder Showdown, President at Juhll Agency, and founder of FinTech Startup Banks.com. On this show, we take a no B.S. approach to business success and failure told through the stories of the top executives who have lived them. Join us today as we get the unfiltered backstories behind successful brands. Juhll is a full-service digital consultancy, and we focus on helping executives solve their toughest digital growth problems while working as an extension of their team. That is today's sponsor. To learn more, go to Juhll dot com. That's Juhll.com. Or you can email me directly – it’s Chris@juhll.com. OK, without further ado, today's guest is Brian Marcus, V.P. of Global Marketing at TUNE - they provide SaaS technology that powers successful marketing partnerships across mobile and web. The tune partner marketing platform is the industry's most flexible SaaS platform for building, managing and growing partner programs and networks. Brian is responsible for creating awareness, consideration and conversion to tunes partner marketing platform. Together with his team, they oversee paid, earned and owned marketing channels that drive quantifiable digital marketing success. Welcome to the show today, Brian.

[00:02:08] Hey, thanks, Chris. Great to be here.

[00:02:10] Absolutely. Well, our audience loves to hear a little bit of the backstory, so why don't you tell us a little bit about how you got to where you are today, where you grow up?

[00:02:20] Sure, sure. Well, today, just so you know, I'm in Seattle, as you can see, that beautiful greenery behind me. But it was it was a it was kind of a nice journey from where I grew up, which is outside of Chicago, about 25 miles outside of Chicago, and spent the great, great part of my life in Chicago. There's a long history about like a boy you I think you'd have to extend your show with hearing all the stories. But let me let me cut to the chase. I really my my interests, my worlds have sort of revolved around technology, marketing and platforms.

[00:02:58] And one of the really amazing things that I've been able to experience is I've been able to get into marketing and technology when digital was just forming. And really, after a good 10 years and consulting, seeing all sorts of patterns, all sorts of interesting business problems to solve, I decided to really put my my MBA to work, which was zero digital, by the way, when I started my MBA. I ended up I ended up landing into a digital spot right shortly after my MBA. And I actually landed at a small cataloger that had been around for about 100 years called Jayce. Whitney and J.C. Whitney was looking to make the jump from being this large sort of Yellow Pages kind of directory for auto accessories, Madjid, make model year, whatever, bringing that online as these rescues. Right. Tens of thousands of SKUs. You got it. And every sort of type of make and model and year you got to imagine like what what type of data was required there. I joined there thinking that this could be a really interesting opportunity to take a very data driven approach to marketing, to technology and using brand new technologies, which at the dawn of that time were everything from like new internal search, being able to to build the Web site as a commerce kind of Web site and being able to sort through lots of lots of data quickly so people could find what they needed.

[00:04:27] But that that that just got me into e-commerce. And in fact, it was J.C. Whitney where I had my first sort of acquisition position. I ran all of our digital marketing channels, everything search, email, affiliate marketing to display and data feeds, et cetera, in addition to helping spec out how to build that Web site. And it was there that I got my first taste of this concept called affiliate marketing.

[00:04:57] So how big how big was J.C. Whitney? Were we talking like a hundred million dollar company, a billion dollar company helping with these?

[00:05:04] Yes, they were closer to the one hundred three digit million company ad. And I think they were you know, they had been around a long time and they had spent almost all their all their time practically on the catalog side. And when I joined them, they were just making. They just made the decision actually to move it over to digital. But they had really pretty brand new digital systems in place. And it was really quite interesting. But I tell you what, the one channel I knew the least about in my and my my two years over at J.C. Widney were was really around affiliate marketing. And it was really quite fascinating to me because it was also one of our our most profitable channels. And it had a level of complexity that just kind of blew me away, didn't know how to get my arms around it.

[00:05:53] So it did really two thousands, if you had to date it, for those younger listeners out there, which they're mostly founders, CEOs, executives on this on this show with that audience. But when do you think affiliate marketing, digital affiliate marketing actually took off? This is the early 2000s when you were at J.C. Whitney.

[00:06:14] I think it took off shortly before I joined Jay to any site. I think sort of first signs of logit accord legitimately. Marfin, we've talked a lot about that happened around 98 where some. The larger networks like perform X commissioned Junction Link Share knows where they were. There were a number of those kinds of sites and networks out there that were starting to build business around direct response advertisers. And you can imagine a cataloger like J.C. Whitney who believed in very, very much data driven marketing, was very attracted to digital, and they also were attracted to performance marketing, which affiliate marketing is the sort of that's the bigger picture of what performance marketing is, is that they enjoyed the fact that they can find accountable sales with great our Y and be able to actually get very little, very little low risk sale ahead of having to pay out. And that's what CPA advertising is all about.

[00:07:12] So your Chicago guy's Chicago kid went to Chicago's went to Illinois schools, Chicago schools, got your MBA hooked up with J.C. Whitney in Chicago. I learned quite a bit in a couple years there. And then what would you do after that?

[00:07:30] Well, I think the next big jump for me was taking what I learned across acquisition and getting more depth in affiliate marketing. Performance was based in Chicago. I had a really interesting conversation with their CEO. I actually ran two affiliate networks at J.C. Penney. I had the Commission Junction Network and I had performance side by side and I had some words for performance because at the time they were they were original network, but they weren't performing as well as Commission Junction. So I sat down with the CEO performance and said, like, what's going on here? Why? Why is this happening? And that conversation turned out to be sort of a key conversation. They not only did he explain to me exactly what is going on and why why our program is doing such. But three hours later, we found ourselves in a great discussion about sort of the future performance of performance marketing. And I was quite interested in it. And I think he noted that I ended up taking a job with performance sharp.

[00:08:26] Were that guys, how big were they back then? And they must have been they couldn't have been that big because honestly, I was at lower my bills in 2005 and I know lower my bills used perform X. Where were these guys like a hundred million at the time. They must, they must not have been that big.

[00:08:45] I think there were that big. They'd probably have roughed up a little less than half that size, but they were highly profitable business at the time and they had really started in the affiliate network space. They were one of the first one of the earlier ones. But then they also were able to take their knowledge of affiliate marketing and arbitrage, and they ended up building out one of the first ACMD, one of the first search engine marketing companies because of their knowledge and search. And that, in fact, became one of the more interesting parts of what performance became. They had search and affiliate. They had the tools and the technology in DoubleClick took notice of that. And DoubleClick ended up purchasing them for variety of reasons, one of which was they like their search technology, the bidding platforms, all that stuff that became what you see today with many of the larger as the ads. And they purchased perform X. And then within a few years later, Google ended up buying out DoubleClick. So I ended up starting at this kind of agency network, ended up landing into one of them. One of the more interesting Martek ad tech companies, DoubleClick, as they were being taken private. And then next thing I know, I'm being dropped off at sort of Chicago, Google Chicago as a leader in the Chicago office as part of that acquisition, and brought my whole team over there.

[00:10:09] I think we had roughly probably 80 people that we brought over to. Wow. To Google. Wow. Just the performance side on. Just the performance side. So it was pretty, pretty exciting to be part of that. That timing in that timeframe.

[00:10:24] Yeah. And Google's tools back then, they were shit. I mean, that's why DoubleClick. Well, you had DoubleClick can chew Marín. You had all these bid by budget manage systems because people were trying to buy media on being and were trying to buy media on Yahoo! By the way, Yahoo! Did used to be a search engine. Long time ago. People might not remember that, but there was also a lot of other search engines. But if you wanted to aggregate and get more efficient with every single one of those search engines, you basically use DoubleClick to do this. Use DoubleClick to serve ad tags. Right. You use DoubleClick to generate conversion pixels, encode and put it on your Web site is, believe it or not. Google Marín. He's got I mean, Google in being in Yahoo! Like, these guys weren't even they didn't have their act together enough to even. I don't think Kara enough because they were printing money. So why provide great administration like DoubleClick was doing when double. They just had that market, obviously, Google's got a lot wiser to that now in there. They've run away with it. But DoubleClick, actually DoubleClick. Do they still aggregate and in do the platform, the Martek platform stuff that they used to do? It's probably a lot better now.

[00:11:46] Yeah. I mean, so what ended up happening was I think I don't actually remember the history sort of of what went down, but I remember opening up The Wall Street Journal, my way to work. And I was like, hey, Google just purchased DoubleClick. Here I am at DoubleClick going. No, actually, it was Microsoft. Microsoft made the first bid at DoubleClick. So I'm opening the paper. Hey, it looks like we're gonna be Microsoft employees next day. Open paper again. Google boom. Outbid them, started a bidding war on on all those ADTECH platforms. So it went down for like three weeks. It was I think DoubleClick was purchased for three point five billion dollars. Well, then I think it more than I think it doubled. The next acquisition was Microsoft and Razorfish Avenue A and then it was Yahoo! And I think it was Reprise Media. I don't know if my facts are a hundred percent. Yeah, I said don't quote me on it, but it was like watching things just escalate. Bye bye. Two x three x the price. And that's what started sort of the whole craze around building out these giant ecosystems around Adz networks. I mean, the Google Display Network started to form when first they bought. But now the actual Google DoubleClick business. And then they started piecing together their display network, their affiliate network, all the pieces together. You could essentially all their blogger network. I mean, think about all the properties they had. We became a big feeder into that because we serve the same advertisers. We all had retailers like Target and Sears and you name it. And we are able now, instead of their Google pod being just this search person, we now had somebody who was a specialist, an affiliate and all these other things. So Google affiliate network was was launched, took the performance DoubleClick name and we launched Google Filter Network when I was 16 that I did get. And that's exactly right. That's exactly that was one of my one of the most interesting fun moments in my life, just being able to sort of get that across the line. I worked with some really great people to make that happen because affiliate marketing at that stage, like, you know, having Google put their name next, the word affiliate marketing was it was not the easiest thing to convince Google to do.

[00:14:03] But the fact of the matter is, we both served really great clients, great advertisers. And I think we were are we endeavored to make a affiliate into what it really you know, it's sort of what it could be, right. And not necessarily where it was and what it was doing before.

[00:14:19] So I thought, let's talk about that for just a second before we move along to the eBay partner network. And by the way, kudos to you for, you know, these are a series of really great decisions. This is a this is a good. This is a good one. But when we think I don't know, why don't you describe for us or define for us the difference between what we would consider maybe white, you know, white hat or gray hat affiliate marketing or the other affiliate marketing, which is just generally a bunch of shysters. Right. I mean, guys like us, we do not operate that way. We don't work for companies that operate. We don't take clients that operate that way. I actually define a lot of this stuff as partnerships rather than affiliate. Even to sometimes avoid the terminology. But why don't you help us? Why don't you define the space as you see it?

[00:15:13] Yeah. And I actually think just today, as I stand here today, a partnership is probably the closest thing to what we're talking about. But it's been a long evolution to get there. I'd say very simply, affiliate marketing had sort of three phases. Bob Glaser, who wrote this book called Performance Partnerships, has done a really good job outlining this. But really, the first phase was around sort of these first online businesses. Definitely a marketing formed around things that we didn't have a lot of rules around it to begin with. So these were entrepreneurial, super, super like opportunistic people looking to make quick money. And a lot of them were in their basement trying to find ways to drive lengths to drive referral traffic anywhere they could. It included a wide range of different properties.

[00:15:56] You know what started out line pretty early days. It wasn't all wasn't all the best, most sort of, you know, I don't know, family friendly kind of kind of businesses, online marketing, marketings, you know, had had some presence there. That's not the kind of affiliate marketing. I'm not talking about people who are trying to trick people into clicking click bait. They're trying to stuff their cookies into links so they could get credit for sales. I'm talking about real, honest individuals who built businesses. Around referring traffic, creating audiences for that that were super, either nearshore or really interesting groups of people that had affinities for each other, affiliates are really about a business model. It's about performance based Cosper action cost per sale. And it's really about sort of the level of risk they're willing to take on on behalf of the advertisers. So a a display ad, for example, doesn't look any different in the affiliate world. It just has a very different business model and pricing model behind it. And in fact, it drives the kind of person that takes on that risk. So instead of paying for impressions, you're paying for actual conversions. And in order to pay for conversions, you need somebody who's willing to take the risk of buying traffic out there and then redirecting that traffic. They have to take that financial risk before they see a penny of that sale. So you can imagine it attracts a group of people that have a lower tolerance for risk or a higher tolerance, higher tolerance. And so maybe they have grown up over the years. They started as somebody in their basement. But these people have built billion dollar businesses. I mean, look at eBay. It's just these days records and rewards and every television station you can imagine. I mean, that business started like every other affiliate marketing does this shopping comparison sites. Those guys, they were all affiliated businesses. It was like it's part of the evolution, I believe, of monetization. It usually starts the CPA. As the audience builds, it becomes CPC. And then as they could just cash in on on giant giant audiences, that becomes the CPA. And I think you tend to find affiliate as real low, tends to be lower funnel, but could be across the funnel, but tends to be people who understand the metrics really well.

[00:18:17] Why wouldn't things? I've been thinking about this because obviously, you know, I own and operate banks dot com and we have a quote unquote affiliate model, partner model. We're a marketplace in the way we get paid. We take all the risk. We spend all of our time on development. We buy our own media. We build our own sites. We build our own creative. We do all of it in the hopes that, you know, maybe someday someone will pass. Right. So I'm being sarcastic. It does work. But, you know, as I think about it, why wouldn't CNN or Fox News or MSNBC, why didn't they ever flip to that affiliate model and get closer to the revenue? Because I would think their upside would be massive. And I don't know why I didn't put this down as a question before the interview, but I'm thinking to myself, I don't know why I've thought about this before, but why don't they just do an affiliate model and get paid for their performance? They would make so much more money, I think.

[00:19:14] But guess what? Predictable. Now, guess what they are. They are an affiliate marketing. I mean, you look at the Today Show and you better believe when they broadcast out products and offers out there on their show during the day, their Web site has got a monetize zable engine of of links and content that turns those links into performance based sales. I mean, think about BuzzFeed.

[00:19:38] You think about, you know, all the different that wire cutter content these days, large Ziff Davis, Ziff Media, all Herse Media, all those guys have affiliate properties, big ones versus it's got got a. Oh yeah. These guys are they're very much in that business these days. And when you look at like a BuzzFeed, for example, or you look at today's show, I mean, you got to believe that there's a good reason there's that there's monetization behind the fact they're picking their likely influencers, they're picking their best products, and they're putting them in and starting to kind of cure rate a set of great deals and great products that they want their name next to. And they're able to use that power of their audience to drive sales through through their length. So, yeah, very much. You're right on track. I mean, that's exactly right.

[00:20:29] I've been, you know, started by the media in 2008. And it was, you know, the old IO model, right. You saw you said, hey, we want to buy this many impressions. They're going to be remnant. We're gonna pay two dollars. Everyone else is going to pay twenty. Or we're gonna we're gonna buy these clicks on Yahoo's home page and they're now pennies on the dollar. So maybe these guys have realized that there's still has to be a mix because you have to get preempted. You know, the the classy advertisers, the Unilever's of the world, the Procter and Gambles of the world, they're going to want that number one spot. But I guess there's, you know, three or four levels down. You finally make it to that affiliate model because they're going to have traffic that's on monetizing. All right.

[00:21:14] So sure, you're you're exactly right. As well. I mean, if you think about at a premium inventory, they probably sell through their their SMP SSD or whatever they're basically buying. To buying through trading desks, and they're also creating their owned and operated properties where they can take a portion of their of their Web sites and make them into deals, types of things. I mean, I think about eBay, for example, eBay used to have daily deals. Now that that was like that's kind of like this section of their world where it was very much offered, driven outside the fact that we're using acquisition where I was when I was at eBay Partner Network, we're actually driving people to eBay. That was the primary sort of responsibility I had is which is go out to the world and bring me traffic. Me being eBay. And we did it through a partner network. One of the largest out there next to probably Amazon and spends others. But then we used our deals as a beta to get people, you know, we'd have deals today. We'd we'd have best deals out there. We'd be able to cure AIDS stuff for people. And those tended to be the most consumable through the affiliate channels. And that's where we're able to get lots of good conversion and lots of good traffic and eyeballs.

[00:22:28] So, so so let's talk about the delineation between the two, because at performing X performance and DoubleClick, that's more of an ad tech play. You're probably selling a little bit more on the tech in the network side. But when you go to eBay, you're basically on the publisher side. Now, is that accurate?

[00:22:49] Well, it's funny because. So you're correct about network with performance. That was what they were. They were sort of a full service network sharing network with an agency built into it was long, which has long changed since then. That's what's going on now. But then you got eBay, which has an acquisition program. So they're an advertiser on one hand trying to drive traffic to eBay, acquire customers. And in that case, we were a publisher network. So we were also it was it was like this really unusual opportunity for me to play ball an advertiser and a publisher network, because we needed to build a network of publishers and a source of traffic to come in outside of our owned and operated kind of traffic as well.

[00:23:35] So you were arbitraging, so you were going out as an advertiser buying CPM and clicks probably on the paid side and arbitraging that into visitors to eBay products. And you guys were taking a vague on commission on anything that was sold on eBay, right?

[00:23:56] Well, it was. So we you know, we had a whole paid group where I was part of the traffic team. We had display, we had social, we paid socially affiliate and search. And as part of that team, we were buying media and Google and everywhere else. And then the affiliate network was just this huge diversified portfolio of thousands of Web sites that drove traffic in. And then we would take a portion they had a essentially a God. I can't believe I can't remember it now, but it was essentially a percentage that they take of every eBay transaction that's made on eBay. And we take that and be able to take a piece of that and use that to feed revenue or commissions for affiliates.

[00:24:34] So you are. So you were really thinking about tracking and understanding each unique click or each unique visitor because you had to figure out, OK, if we spend a dollar on Google in. So that means someone landed on an eBay page for one dollar. Probably probably a dollar ten because, you know, we're a dollar five, five percent of the traffic never makes it. OK, fine. But you put a dollar in and now someone's cruising around eBay. That must have been a really hard problem to solve back then, because you've got multi-channel, you've got affiliate, you've got partner networks. You've got these publisher networks. You've got social, you've you've got search. Ah, did your team solve that problem? This must have been one hundred people working on this thing.

[00:25:24] So my team, I had a team of 12 I think at the time. And what, what, what's really fascinating is that eBay so good at analytics. Right. So this is why things so that we essentially knew very quickly, they knew every incremental dollar, what it produced so they'd know it was like a bunch of levers. They'd be like, all right, are paid, gets us this hour. Why are feeling gets this hour. Why in this much traffic. And they would they would balance those depending on the time of the need, the category, all those different things. But you don't always know who comes to your Web site. Right. So you have to go through kind of the acquisition costs, the types of customers you have. And you have to think about the categories and their margins. So you have to think about how you price media like on the affiliate side. We ended up we switched from one of my one of my big events that I did there was I undid one of their this is going to make me sound bad, but I undid one of their most sophisticated pricing models because their their affiliate business. When I joined, it was almost like a programmatic business. It was really very it was like an underused asset that they were trying to figure out how to turn it around.

[00:26:33] Well, ahead of its time, because back then, programatic was not programmatic, right?

[00:26:39] That's exactly right. But they put the pricing algorithms. They use the attribution algorithms they used. It was so complicated for the affiliate channel that affiliates didn't know how to optimize against that. Yeah, they. And that's CPA, right. So they're taking the risk. It was not a good match. So one of the things we did was we did that. And I know I'm sure many of the data scientist didn't love me at the time because I was like, this is not this doesn't have to be super complicated. In fact, categories were the way that we priced. It was sort of two dimensions I chose. One was new versus reactivated customer. That was one dimension of how much commission they made and another dimension of commission was essentially category because we had certain margins that we could make in electronics vs. car peril or all, you name it. So it's pretty interesting being in this giant group of marketers. It wasn't as big as you think, maybe. But on the traffic side, I think, you know, maybe we had 50, 60 people working on marketing and we had to weekly think through. Has the impact of search on affiliate, like our affiliates bidding on our keywords. Right. If so, is our search costs going up? We'd have to watch those interactions very, very carefully. And that was one of the one of the most interesting things about being at a really large tech company on the marketing side was being in the mix and just learning so much about digital marketing at that moment that it was fun. But I was more focused on affiliates than I was being that integrated marketer because I really thought there was so much NFL in that it took a full time job just to think about how do we manage this world. I ended and I ended up eventually leaving eBay and working my work and thinking about the technology itself was actually super interesting to me. Back to my platform. I have a platform theme throughout my my career. I mean, even a company like TI Spring. So I worked for a company called TI Spring, which was an e-commerce platform, more to Google, which is a media platform. EBay was a marketplace platform. I looked at the affiliate platform as really the future of what commerce is going to be. And I think eBay had a great program and it was a lot of fun working there. And I met a great group of people here in Seattle. That's one of the things that brought me out here. But what I realized at the time is eBay. That affiliate is so complicated and it's so deals with such an ever changing world that building your own technology, which eBay did. It's very limiting. In fact, you can't keep up with other Martek platforms as well. Even with, I don't know, we had 16 engineers working on it. We had engineers working on it. And I had people in marketing business. Right. And so. So and no offense to anybody that did a great job, their imaginary side. But think about like issues of fraud, issues of quality, issues of traffic. All the pieces that went into expanding and scaling affiliate different business models coming on mobile, social influencer. I mean, all these things had to be built and there was no possible way to look at that. I looked at a place like Toon, which was also here and here, here in Seattle. I thought they had a pretty cool answer to this problem. And it was Sash. Nobody had really started thinking about sex quite like Toone did, or there were a few, but it really was right in my wheelhouse. I had I was in Seattle. I was I love the technology. I loved the affiliates because I end up landing it and tune in to help them think through from an advertiser perspective what's required. And I think like it is just the perfect kind of place for me to take what I love to do and think about it from just purely a software Martek perspective now and be a product marketer.

[00:30:31] I get it now. Well, it's interesting because everything you just started to talk about there, if if people haven't. If the audience hasn't been in this business, as long as you and I have been in this business, you could get lost really easy in this conversation. But I think something that's important to remember for people listening is don't try this at home. You you need to find people that understand this. And if you don't have a good platform going into this, you are going to lose money. You will lose money, you will work harder than you're supposed to work. You have a lot to learn if you don't know anything about affiliate marketing, because it's what even if you have put your career on Google and said, hey, I'm just going to learn everything there is to know about Google's platform, that is a career endeavor in and of itself. Right. Search is a career endeavor display. Back in the day, it might be changing a little bit now, but display was a career endeavor. It is a completely different channel. It's a different audience, different medium social BNA. Amazon is a career endeavor now, and they're starting to slowly make improvements. And then you to affiliate in their affiliate is basically you need to know all of these things and be careful of who you work with at the same time and really take care of the good people that are great affiliates because, I mean, what is it? It can't be any more than. 10 or 15 or 20 percent of your overall network is delivering all the value and the rest is just a lot of work.

[00:32:10] It's a lot of 20 percent drive, 80 percent of the volume. Sometimes it's not always the same. 20 percent. So there's the large network of available affiliates out there that can do it. But you're typically you're highly concentrated in a few big, big players and a lot of torso and a tail of smaller. It's a it's just like any other portfolio business. And you really need to treat each of those like us like different like Salesforce, a marketing channel. Each of them sort of follow their own type of management. So like the large guys that you work with tend to you you got to treat them like a partner and you've got to treat them with like a business development perspective. You've got to get be able to look at each other, share data, share tools, all those pieces, maybe the torso of your program are up and comer partners that you start to see ramp up.

[00:33:04] And you need to give them training and tools and education about your products. And you need to help them, help you. And then you've got this long tail where you're doing mass marketing and you're essentially broadcasting out best deals of the week if you're an advertiser or things that help somebody who maybe has a thousand other links that just want to include you in their Web site or their property. I mean, it is really an interesting business. I think that's why eBay made it its own sort of almost its own business unit in some ways. And that's and that's why I mean, eBay was it was their largest acquisition channel or not. And when I was working. Oh, really? Where the money. Yeah. It was their largest acquisition channel. And a second. A second was search and third was display. I mean, who knows if that's still the case. But I actually think that affiliate tends to be their number one or number two terms of driving sales and most of e-commerce businesses that are large.

[00:34:01] So maybe let's talk about this. You mentioned earlier on you move to the product side and obviously you're the you know, the V.P. of global marketing there. Are you more product or you more analytics or are you more? This might be a little bit of a rhetorical question. Or you are a marketer. Are you more marketing Sophea in hard marketing? Like, what is it that you really feel like, OK. Have all these things. I do it all. Our team does it all. But this is what I really am passionate about, is a product or what is it.

[00:34:30] Why at two and I'm a full stack marketer, so my team is really in charge of everything from creating traffic, creating awareness down through sort of the B2B funnel and then through all the way through our trial and conversion and sales.

[00:34:44] So from a B2B marketing perspective, we are that's our job is to create the brand, create the positioning drive leads, convert leads and drive happy customers and advocates afterwards. Now, I came into tune, really my entry way was through product marketing. When I started there, and that was because I knew the product. I mean, it was like I was like there was essentially someone who used it from an advertiser and a network perspective. And I could bring marketing and product together for them pretty, pretty quickly. But I think my passion is really it's like being a subject matter expert on platforms, like being able to tell stories, drive awareness of this channel. Being an evangelist and then using that to sort of tune is like a like a great place for someone who loves this business. See it all happen. Right. We are not just a software company, but we're building out different capabilities. I can see what those capabilities are going to be to help people do better at partner marketing, Philly marketing. And so I get to be a part of that. I like the marketer that's invited to the table at the product meetings. And I got that that KRED because I know the business and I'm passionate about it, but I am really attuned. I am their marketer and my team is the marketing team.

[00:36:04] So let's talk about maybe a little bit of the difference between someone like Tune, which is a pure Martek SAS subscription model, I believe. And someone like I know you guys either spun off or has offers was a piece of your business. You know, there's there's S.J Commission Junction. You talked about them a little bit earlier, Braxton. You talked about them a little earlier. What's the difference between someone like a S.J and Iraqi Tahn and in tune? Because I know you guys actually work together, if I'm not mistaken. So what's what's the difference?

[00:36:40] So I tend to think so. I think of tune as a platform. No. First and foremost. So we are not a network. We don't want to be a network, nor do we want to compete with networks. In fact, some of our a lot of a lot of our large customers, our network, we help networks. We are the infrastructure for many of these mobile networks and and affiliate networks that that run their own show. But we are also working with. Advertisers directly to help them build their networks. Much like an eBay partner network would be. So advertisers need that infrastructure. You would go to a S.J or record 10 because you needed an embedded base of publishers, perhaps, or you needed full service agency kind of service that that knows how to tap into that network. Are our world if you think about what's happened in affiliate, the evolution is that we all start. It all started as full service networks. I mean, there were like three or four of us be free and S.J formed to become value click.

[00:37:36] I think was the value that we can then value click media. They bought a bunch of companies back then. Right. Plax, I think value. I'm glad you Plex. And a major work also.

[00:37:47] Yeah. Yeah. So they if I, if I think about that world, it used to be full service advertiser publisher many to many with services. Soup to nuts. Right. Pretty quickly I think people started to realize a where the vast majority of their money was coming from 20 eighty. And so when you start to see that, you know, you're 20 percent of your publishers that are driving 80 percent your volume. You don't really need a network all the time to manage and take a toll on top of every single one of those transactions. Yeah, that's what they do. So pretty quickly, the world started splitting up and it's sort of becoming unbundled. So you'd have both technology and agency. And then there were all these other players that started filling into this ecosystem. So I think of S.J and records are still full service, full stack agency networks, and they know all the big players in retail financial services. And you'd use them like we can use them, for example, as a traffic source to plug into into our world. Like they're just like any other network to us. Yeah, we're working with advertisers. Why wouldn't you be able to use the S.J record 10 or or or in a win a Philly window, as it is a large sub affiliate network where they have all these other publishers they work with now? So that's our our goal is to get as many different either direct publishers or networks that want to be part of our technology platform. But we don't charge on as a network. We don't charge our percentage of media. We charge a straight SAS fee. Our goal is not to charge people for big media deals. It's to get people to drive there and grow their businesses. And those are typically based on conversion, like the number of conversions, number of seats, number of features you use. It's just like any other SAS product as it scales, as you scale good sort of alignment with the business if they want. They know affiliate marketing. They want a tool to get them into it and they want all the flexibility to build it into their own kind of brand in the affiliate's space. That's what say 10 would look like, different from record ten and S.J. And we've got friends at all these networks. Our goal is to be an open platform. We want to be like think about like the segment of what we want you to plug into all these pieces so that we can actually help partners work with partners. And you need a lot of technology freedom. You need a lot of strong technology in particular to be able to connect API together and links going through these sort of daisy chains of of different going from advertiser to network to publisher. I mean, you need to be able to have very standard processes so that conversion tags make it all the way through. What was the source of traffic? What was the end result? They need to be tied back and therefore you need technology. Really great technology to help that tracking through.

[00:40:44] Yeah. And I'm I'm actually kind of surprised. I've hired my fair share of developers over the last 15 years. Front end developers especially. They're useful usually in advertising agencies that are heavy on you know, we start talking about pixels, we start talking about tags in containers and attribution and installing all this tech. But it's always been shocking to me that there's a there's a very small group of front end web developers that understand this, but most of them don't like at all. They don't even know what a pixel is or why they would put it on your page or they put it in the head instead, or they put it in the body instead of the head or they put it in the foot here. And I'm like, no, dude, that has to load when the page loads. Like, you can't. They don't know the Google tag manager is right. So it's shocking to me. So that's just a general comment. And then, you know, I'll ask you a question. You made a comment at the beginning of the show and you said, hey, I think ultimately affiliate is going to be the model, the business model, because everybody has different business models. I mean, you can sell media just straight up. CPM or CPC, and that is a business model. But in your view, if we were to look around the corner, if we could see the future. You have a belief that the business model might morph more into this affiliate model rather than paying for this traffic.

[00:42:17] Is that accurate? Is accurate. I mean, I like the movie The Matrix. I can't look at the world the same way anymore. Now that I've been an affiliate, I probably talk about people are probably sick and tired of hearing me talk about affiliate. But everything I see here is a referral link. Right. Everything on the Web, everybody's connected.

[00:42:35] People are driving traffic, too, from A to B.. The tracking is the infrastructure of the web. Right. And that's what affiliate marketing really. The technology underneath that is tracking infrastructure, helping you connect the dots from point A to B.. And the model is a cost per action model. So as people want to get more hyper targeted, more accountable with their marketing as much as they can, they're going to push the ability to get their desired outcome before they pay. And so why wouldn't people continue to adopt these models as far as they can go? Obviously, a flea market is not for every objective. But you know what? There's influencers out there that drive sort of branded awareness with their audiences. You can look across the funnel and see different types of players in the affiliate space that drive certain actions and they should be compensated for those actions. I see commerce and affiliate and sort of that is the way it's going right now. Everybody's monetizing every link. Why not? I understand that there's a level of authenticity. You know, there's a there there's folks out there that are purists and they say like, hey, this is my blog and I don't want any advertising dollars again. So it's perfectly fine. I think, in fact, that I'm sure there will always be that way. But I got to believe at some point in time, even somebody who believes very strongly about something and their authenticity could still be a an advocate for something they love and actually helped build those businesses up. And I actually don't think they are in conflict with each other whatsoever. So I think that those up, if you look at that, is an affiliate model like I do, unfortunately, look through everything is a model. You can see how quickly referral traffic that gets monetized gets very quickly, becomes the affiliate model. And so why wouldn't it then lend itself to most of what's happening on the Web these days if it could?

[00:44:27] Yeah. So you talk to companies large and small. A lot of them. You guys are quite sizable yourselves. And you feel like as you go out there and you look at certain industries, whether it be e-commerce apparel or whether it be B2B demand gen, I'm sure your financial services. Yeah. Financial services. So in your mind, maybe you could let us know. And obviously maybe this is a little bit more qualitative in nature, not quantitative. What I'm hearing is you're saying, look, I talked to a lot of I talk to a lot of these people at some of the biggest companies in the world. And they are telling me by installing our software, they are telling me they are moving in this direction. You think? So if if five years from now, if we're having this conversation, you think that the top you know, the Fortune 1000, if you had to give a percentage to it, would be a heavy, heavy mix on affiliate marketing. What percentage of the Fortune 1000 would have like 50 percent mix on affiliate marketing and start to push those other paid channels down? Have you thought about that or you talk to your customers about that?

[00:45:38] Well, I mean, so let me break it down a little bit. Number one, I think sort of the retail financial services direct to consumer subscription businesses, those are all businesses today. They're already bought in and they probably comprise the vast majority of of those Fortune 1000 companies, just large entities that have already signed up, already using acquisition marketing, be a paid search affiliate, you name it. It's always in that same list. So it's always in the top three, four or five channels now. Next next comes B2B. And I think B2B as good is a super interesting area, especially huge opportunity, huge opportunity, especially when you think about SAS, some of the software out there. They're using affiliate or any that's that's already happening. We get conver we have conversations going with many of those types of companies that are interested in growing their subscriber base. And then what's left are just large sort of D to C companies. I think of just like, you know, just the monolithic. Most of them have their own retail outlet or way to work through some sort of a reseller. But those that aren't and want to go direct to consumer, I mean, affiliate marketing is perfect for them because it just helps them build relationships with customers through probably the most targeted sets of audiences out there, which are our affiliate partners to value the two things.

[00:47:01] I want to talk. A little bit more, we've got a great deal of experience on Amazon and. Before Amazon was Amazon and we had some e-commerce partners we were working with, you know, if you. Amazon has this metric called a KOTS, right. Average cost of sale. And so but if you look at selling a product, let's say we're selling a direct customer product on an e-commerce Web site on our own, buying a Google click, hoping that we get a one or two or three percent conversion rate for it. You spend a dollar, you get a one percent conversion rate. Like all of a sudden that product cost a thousand dollars per, you know, for an acquisition. You put that same product on Google and let's say the product is, you know, the lifetime value is one hundred bucks. You put that same product on Google. It only cost you like ten dollars to acquire the same customer. It's mind blowing, mindblowing because it's. So I guess what I'm getting at is. What might happen because Amazon is so powerful and they're so cost effective. They've got that big audience and they can monetize it because they don't. They spend some money on advertising, but they're not arbitraging like you were it at eBay. Like this is all natural search traffic coming to their platform, doing their shopping. So it's just money on the floor to them. But I can't imagine when e-commerce comes, e-commerce companies come to our agency and they say, hey, we want to spend, you know, fifty thousand dollars a month on Google PPC or we want to spend a hundred thousand dollars a month on Facebook. And we want you to be able to get us you know, we sell a hundred dollar product. We want you to get us a, you know, a twenty dollar CPA. And I'm like. What? That's not gonna happen, you might as well just go straight back to Amazon. So I think as I think about this, I never really thought about it because I talked to someone with as much experience as you before. I'm glad we're having this conversation. But now that I think about it, why would they spend their money on Google when Amazon is. I'm talking about e-commerce now. By the way, I'm not talking about I do want to come back to be to be demand gen. But why would they spend their money on Google and Facebook when they can? Good. Go. Fire up the CPA network and say, look, I'll give you guys 20 dollars for every sale. Or maybe I'll give you 30 for every sale on one hundred dollar product. Pay you that commission. Like, why would they give Google that money? I don't understand it.

[00:49:34] Yeah. Why? I mean, I'm totally with you. I'm on board. I'm sold.

[00:49:38] I mean, one of the things that affiliate marketing, you know, even being an ex Google or I will say, you know, we are the diversification play. So if everybody is is worried about the escalating cost of Google and Amazon and Facebook and whoever it may be, who, where, where they own that and they can set price. Why wouldn't you build a diversification play?

[00:50:02] And like, if you're if you're if you're buying if you're in the financial world and you're trying to buy a portfolio of a well street constructed portfolio, your stocks and your bonds and whatever, you wouldn't just have like derivatives. You know, you wouldn't just bonds. You wouldn't have any of like you would have a loan. So we consider ourselves this this industry, this ecosystem is a way to sort of break away from the duopoly and to get highly targeted, high quality, great lifetime value customers, because you're tapping into audiences that have beyond that sort of the A.I. side of it. They are people who work in this in these niches or with these audiences and understand them inside and out. And so I believe that's why affiliate is not a programmatic world. It's really a group of people that own Web sites that understand their audiences super, super well. And they're working with advertisers to to unpack that and understand what the secret moments of Truth SA and where they what types of assets or offers worked best. Because they understand offers. They understand conversion. So I'm 100 percent with you like that. They should not be spending their entire budget on Google AdWords or Facebook ads or would it make whatever maybe may be they should be working with partners that can go deeper and can actually get them specific results. Like you can put a commission or a bounty on any commission will event in our software. You can name that event in the price and the pricing model and the tearing. And you could build that and say this is your commission structure. This is your power structure.

[00:51:44] Yeah. So why whinges being in? That's interesting too. It's almost like saying. It's almost like the content game, so you could go to Google and you can give them one hundred thousand dollars. And by the way, I'm not picking on Google. They just happen to be the biggest fucking, you know, traffic source on the planet, like Facebook, Google, Amazon. Let's be clear, like there's this only reason why we're talking about these guys. But if you go to Google and you say, hey, I'm going to need to invest. Potentially depending on the brand. Hundreds of thousand dollars. Let's one hundreds of thousands of dollars in paid media. Let's take banks, dot com, for example. It's a big network. You know, you've got investing. You've got savings accounts. You've got you've got all kinds of different offers. Right. But in order for you to figure out on Google's platform how to get that traffic to come to your Web site, every time you buy a click, you could be paying up to 30, 40, 50 dollars a click. I'm like, well, why don't you just start writing a blog article and try to get it with SVO? Or better yet, that hundred thousand dollars you spent trying to figure out the investing vertical by giving Google.

[00:52:55] You know.

[00:52:56] One hundred dollars a click. It's not 100 hundred, but it's a lot. I guess maybe you should just hire a partnership. Marketing team starts setting up a partnership marketing team and going to publishers one by one, onboarding to onboarding the rails and the infrastructure, and then going to publishers one by one and saying, hey, by the way, what are the CPM ads that Google is giving you when they put that that shitty ad on your Web site that is completely irrelevant to the content of your site. And the publisher is going to come back to me and I am a publisher, so I know the CPM is ah, shit here. Awful. All right. And the support is awful, too. But why wouldn't they just want to work with banks dot com directly and say, you know what, Chris, we know you're going to be fair. We know you have technology in place that you can be monitored and measured. It's a third party, completely objective source. We are going to build a partnership with you. We are going to work together. So I. I agree with you, man. I can actually see a day where.

[00:54:01] Eighty percent.

[00:54:03] At least 50 percent of an entire marketing team's budget and time would be allocated to partnerships and affiliate marketing. I absolutely can see it.

[00:54:13] I totally agree. And, you know, when I worked that Google, we were working with companies like Citibank and Capital One and we're driving their credit card programs. And we were looking at sites like yours and working with them. There were some of the top partnerships at the time. Top one or two volume drivers. And we were you know, we were paying in the hundreds of dollars per sign up. So within black, we were getting at the time it started with the sign up.

[00:54:38] I'm sure over time it started getting deeper into the funnel, saying we'll pay with for a funded account or. Yeah. Or whatever it may be. But that's the beauty of it, is you can test your way and you could start with a commissioner Bill, that being a sign up. You could look at the traffic quality and the sources of traffic, and then you could start to say, hey, let's look at who's sending me the best quality traffic. Let's give more. Let's give the guys that are sending us less quality traffic. Let's give them less and we'll start to double down on sources of traffic. Yeah, very much like you said. I mean, it's like giving hundreds of dollars for a credit card sign up that that is that's low risk for those those types of companies because of the fact that they know they have their they have their outcome that they want in partnerships.

[00:55:22] If you broaden the spectrum and back to where we started a conversation. I think partnerships is really where it lands. I mean, you can call it an affiliate partnership because that that denotes these professional guys out there that are making their living thinking about monetization of their Web sites. Or you can have partnerships like business to business partnerships or you can have influence or partnerships. You can have all sorts partnerships as long as they have technology underneath them. So you can get out of the world of red lining contracts and setting up one to one and not figure out how you're gonna measure it. And you can get into the world of more standardized partnerships. Call affiliates where you can actually you can actually size up a partnership. You can actually say how much it's making. You went our why? I mean, I saw a great example in town, T-Mobile. Does this really cool thing there an acquisition? They are. And they acquire their own customers on the front end. They have all the different channels to do so, including affiliate paid search display. But they also have this thing called T-Mobile Tuesdays where they create with an app. If you're a T-Mobile customer, you get an offer sent to you every Tuesday like Taco Tuesday. Yeah. And Taco Bell, basically, they basically an offer wall monetizing their own traffic. They're basically or not or they're just building a case for Taco Bell on how great their audiences. So one day when they want to go charge them and they want to go figure out a way to build out their monetization plan, they're gonna have all the data they need to do that. And I think that's why technology applied to partnerships. All of a sudden, it becomes a game changer for me. It opens up the world that I remember the guys out there with, you know, the you know, the briefcase and the leather briefcase making deals. It's not maybe it's helping them become heroes because you now have the backing of real accountable sales behind you and a way to measure them. That's what partnerships and a flea market are going to be.

[00:57:17] Yeah, well, you know, it's interesting. We went through this. I'll call it a weird period because I actually started my career in sales and enterprise sales, what I would consider to be professional sales like.

[00:57:29] Down, you know, in the city, you know, the fiftieth floor of the city bank building with a suit and tie on. Doing, you know, stuff that required professionalism. And then this whole crew of, you know, digital marketers hit the scene and you could kind of hide behind a computer and get a lot of this stuff done by hackie sorts of ways to get traffic and get customers that really talk. Anyone are looking at anyone or having that kind of I'm I'm generalizing a little bit. But as I think back, as you know, I think we're, you know, a little bit similarly age brought. We haven't been doing this for five years. We've been doing this for like twenty 30 years. But. I look back and I go, well, wait a second. Someone could if they were a Google PPC expert, they could basically sit in their basement and build the whole business without ever having a conversation. You write ad copy. You put pixels on your Web site. These are these are a little bit, you know, develope nerdy. Yes. Things that are not a lot of people know how to do back then. Back then. Now, a lot of people know how to do it. And to your point, I kind of feel the pendulum swinging back to the deal, back to the deal person. So now, because the rails are there, you don't have to be you don't have to think really deeply about how I get into Google and learn Google to get this meeting. This is all happening. So I'm getting the meeting now. The one thing I wanted to that I wanted to mention is and I agree with you. You're you're calling it affiliate, which is obviously the the partners and affiliates. But what I would like to add to that is your private network. You're basically building a private network.

[00:59:22] That's exactly right. Right. So it was a one to many network. It was. Everybody's driving.

[00:59:27] It was a lot of Web sites driving the traffic to eBay in their world, in their infrastructure, getting paid by eBay, getting a commission check by eBay, as opposed to this many by many model that say the old wreck of the old link shares and perform X's work.

[00:59:43] It's your own network.

[00:59:45] Let's talk about let's talk about attribution, because you had me thinking about that Taco Bell. Model or you had me thinking about the T-Mobile store model. And if we were to fast forward and do the Matrix thing and go to the future and we were to say, hey, 50 percent of all of our business is going to be driven by affiliates, we're gonna find fans, we're going to find evangelizer is we're gonna find influencers and we're gonna give them a thing, a link. Let's call it a link. But I want to talk about attribution and I want to talk about offline attribution. And I want to talk about everyone from a kid who goes into a Taco Bell, comes out with a frickin gordito and says, I love it, or the spicy nacho cheese and goes to ice to another high school kid and goes, I just status Bisie fucking nacho cheese. And I love it. Go to Taco Bell. Do you guys have the ability to to track that yet? Or is that the next thing? Is that coming down the pipe? What's going on with that?

[01:00:48] Oh, it's it's there. And so thank you for bringing this up. I mean, I think about. So as I said, the infrastructure of affiliate is tracking. Right. No attribution is where you assign that credit. And that's kind of how I think. But you need to track and measure. You need to measure and attribute to measure what happened, who sent the traffic, how much, where and why and not why. But then you assign credit to to whatever you decide is your model of who you place importance to. When I think of tracking form from a tune perspective, we track everything and in fact, pixels and cookies are going away. I mean, that that that out is going to talk about that, too. For sale, right? Yeah.

[01:01:32] So the thing is, you need to have an infrastructure that sort of future proof. Number one. So you need to be able to go server to server or you need to be able to do click with tracking cookie, which tracking all those different pieces. And that is what makes a great software technology. Right? Some some someone who can anticipate the future for you and have in place mechanisms to connect. Point A to point B. And so that's happening now with, say, tune. Tune understands that we have all those we've got online. Right. Oh, and Off-line. Sure. So we created the post back of the word postbag, which is essentially a server, a server notification that was created a 10 week. We called it the post back and we've been doing it for almost a decade. We will also obviously work with pixel cookie based tracking because everybody does. But we also work with click lists tracking, which is what you're talking about, promo codes, influencer off-line. If you see a billboard, you see a you know, put this in your cart and get a deal. Yeah. Like list tracking. We handle that and cookie lists tracking where you're sort of on the mobile web world and you're in this weird world where cookies may or may not exist. Likely don't. And you're going from desktop to mobile and something gets lost in the mix. What we deal with that through cookie lists tracking. So JavaScript STK kind of work where the local storage of the information is happening and server to server communication. So we handle all those scenarios and use cases. And you need to when you're thinking about building and expanding your business, it's like an extend ability issue of being able to grow. And I think you would not call yourself a technology that helps businesses scale if you can't deal with those different traffic scenarios. Yeah. Mobile is tricky in and of itself, like that world. That's what tune has offers to marketing counsel. All those brands that we use down, we developed mobile tracking.

[01:03:35] Way back when it's going to unlock this thing, though, you know, it's going to blow this thing wide open. Actually coded has moved so many people to mobile payments. I can imagine. Let's say you guys did a deal with Apple Pay. You guys did a deal with American Express or some other wallet or even crypto, whatever, everybody all day long is making referrals to businesses that they love and products they love. So let's say we're texting and you're like, hey, man, go buy this wetsuit. I just got one for my son. Seventy nine dollars at Dove In Surf buddy of mine just sent it to me. So it says Dove and Surf. I click the link to Dove and Surf, which is an embeddable link which takes me to Dove In Surfs Web site. And then I pay with PayPal or Apple Pay and it's got his affiliate link in it.

[01:04:29] It's already happening. So there's this guy. This is why. This is what I'm saying. So I have some friends over at Wildlings, Wildlings, this really cool technology. And essentially it's built into the OEM like the handset where you can text somebody out message and your your link turns into an affiliate text link already. So that's liner that's been invented. Super cool. Good group of guys over there.

[01:04:52] But the the other piece of this that you've just talked about is what's happening. So look at what honey and PayPal. Oh, yeah. Yeah. There you go. That is the marriage of mobile payments and deals and data. I also think you could say the same about what's happened with your credit karma and and into it into seven billion dollars worth of love there.

[01:05:19] Yeah, I think it was roughly. I don't know what the price tag of honey PayPal, but if it was like three billion. Yep. Alienage too.

[01:05:24] So I don't even think there were one hundred million dollar company man. I think it was not. Yeah.

[01:05:28] It was kind of a beautiful thing. So now you see, if you can't convince yourself after seeing those two transactions that others that see this are paying big dollars for stuff that isn't yet here or is here and people don't know about it. That's why I say telemarketing is the best kept secret in Martek. Right. And in in paid acquisition because it's everywhere and you can't help but see it once. You've seen it once. Yeah. The Matrix.

[01:05:57] Now you're gonna now you're gonna give me. Now I can't unsee it because I knew about these acquisitions and obviously you know, banks dot com is a is a marketplace. You know, we have some pretty high intentions and goals, but you don't really see it until you have someone like yourself put it all together. You say, well, wait a second, did you see the honey thing like Doretti doing that? And those are only you only gave like two examples. There's probably 50 50.

[01:06:25] Right. Look at look look at all the look at what records is built up. I mean, there is a separate set of loyalty assets that it is incredible.

[01:06:33] They came out of nowhere, by the way. Nowhere. I saw them like Rack. Jan, who is that? Another seam on Super Bowl commercials I've seen.

[01:06:42] I see him everywhere now. I believe they were like the war in Japan. They were one of the largest e-commerce sites. Bar none. But they did come here and they purchased Link Share.

[01:06:52] And then they bought they bought eBay. It's they bought which became record in rewards. And then they also bought this company called Cartera Commerce, which owns Powers, all the mileage plus malls and all the airline malls and the Chase Bank malls. Oh, wow. Like, they own the pipes that deal with loyalty and credit. That's smart. So all the plumbing back to double click. You want to really go back to the real analogy for this DoubleClick. One of the coolest parts that I saw when I joined DoubleClick was this was all about plumbing. You become the plumbing. I hate to say it.

[01:07:28] I've always wanted to become a hammer hammer.

[01:07:30] It's glamorous. It is all the tech behind all the pipes together. So if you apply that now to what what what's going on with the links and the link economy and all all the things that are going on, you realize that Philly marketing is right there and the ability to be a software technology that connects to be the source to the outcome. Yeah, you know, I mean, I feel like you can build any partnership on top of that and make it measurable, make it transparent and accountable. And that to me is where I want to spend my time when I'm thinking about where I'd want to spend my next marketing dollars.

[01:08:07] Yeah. Well, you've convinced me because I always yeah. I grew I kind of grew into this as a sales and a paid guy, and you could really solve a lot of problems with a big fat paid hammer. You could just go tell your clients, look, if you give me 30 G's a month for six months to test, that's one hundred eighty thousand dollars plus some services fees. Give me another fifty thousand dollars in services fees or sixty thousand dollars in services fees. We're gonna grind on Google and Facebook and we're gonna figure this out and we'll figure it out. We've always figured it out. That's fine. But that business is getting a shit ton harder. That is getting really hard. The barriers to entry are zero. So you've got you know, I saw a stat the other day when all this stuff was going down about apples, pulling out of Facebook and Coca-Cola is not going to advertise on Facebook and billions. Susie. Well, guess what? They account for five percent of Facebook revenue. Five percent. They have over eight million advertisers. You are competing with eight million people every time you go there.

[01:09:17] So it's like the App Store, you know? So it's like all it's a year. It's the same scenario. It's cutting through.

[01:09:23] The clutter is impossible to do there at the top or in that game. You're in the tail. And being in the tail is it is really difficult place to be. I know we're almost that time and I hope you have some time to address this, but you'd mentioned something about B2B, which is near and dear to my heart. We've been doing B2B demand gen that this agency since probably 2010, 2011. So the better part of and basically all we did, we came from the the direct customers to the direct to consumer side. And we had a hypothesis that any of the marketing stuff that we did for consumers at scale, because there's a lot more transactions we could do for B to BS because the model is the same. And I ran a couple of experiments with a couple of clients on partner marketing, quote unquote, affiliate partner marketing. I think we licensed a platform that was we may have even actually used has offers for mobile app tracking some time ago. You guys, it may may have had a You Are Alcalde mobile app tracking some time ago. Oh, we did. Yeah, I remember that. I was actually one of the first people on that platform. I was like, how do we do all they had cassava and they had Google was trying to get into that. But you mentioned B2B demand, Jan, and you think about Cap Tarah, G2 crowd software advice I think was bought by Gartner. I say a hundred million bucks. I think there were about 400 million bucks. I say a hundred million bucks a lot on the show. But where do you see based on. Because you're sitting in the chair and I don't see any it, by the way. I don't see anyone else that can touch you guys from a competitive standpoint, either with your tech or your personnel, your people, because I've talked to them, they're super smart and ingrain in all the stuff that all these other front web developers are not ingrained in. They understand what you and I are talking about and they build these systems. But whereas B2B demand gen going because I don't think anyone's cracked that. And when I bring it up and we start to try to talk about it, they'll just run over to software advice or they run over the G2 crowd. Where are you guys taking it. Where do you see that puck headed?

[01:11:37] Yeah, I, I think there is definitely that's kind of going to be a next wave, kind of.

[01:11:43] You're going to see more and more technology players getting in that space in the in the partnership marketing space. I mean you've mentioned two great sites we work with. Kept her too. I mean, we are in their world. They refer traffic does to to be in many ways that we see referring to. Right.

[01:12:00] So I do think that, you know, the funnel matters how the sign up happens and the conversion events matter. So if it's like an online service that you're selling, it's super easy. It looks like every other service you could sign. If you basically are subscription and you're a B2B subscription service, for example, I'm trying to think like if you can set up a power structure that says get somebody to subscribe to your service. That is a B2B kind of referral transaction. You can find partners that would would market it like that market, any other consumer Web site. So that's one thing is fitting into the mold. A little bit of what kind of a lead am I driving? I mean, you look at leads and particularly generation, you look at insurance companies, you look at mortgage companies, those kinds of things where you're basically or that's more probably residential. I think that's probably it would be to seek trying to.

[01:12:55] Well, they have commercial, too. I mean, commercial would just be a really expensive lead, like LoopNet. LoopNet is commercial real estate leads, commercial leads. So, you know, that would be one to look at from a network standpoint. But the way I think about it, we've had a lot of B2B. We've had a lot of B2B clients in the tried and true for us has always been. OK, let's go build all these ads. Let's go create all this content. Let's go do keyword audits. And let's go spend two hundred fifty thousand dollars a month on on measured media, full out and quantitative performance driven towards an acquisition like CPA on your ICP, your ideal customer profile. What is the CPA for this stage? What is the CPA for this stage and what's your your payback timeframe? It's four months. OK, now we go and we just match everything through that with the conversation that that I'd never had. I've never brought it up because we've had a lot of success with the the former. The latter would be, hey, fuck those guys telling you. You spend ten or twenty five thousand dollars a month on Google and Facebook, Google, Facebook, they don't need any more money. So let's talk about building a private network on these rails. You know, how do we go about that? And I haven't really thought about it, but it can't be much different than how you built the network on eBay or how you guys built the network with DoubleClick like it's not in publishers, right?

[01:14:28] It's right. It's really about the publishers that you're choosing. So, for example, if you are. Well, I'll give you I'm trying to think of some good examples, but like I'm thinking software, we use a sonna, for example. Yeah, great software. And their business software, they they have the easiest sign-up process you can imagine. They look like a consumer product, but you're signing it. You're putting your credit card down and you're you're buying business software. Yeah. So why can't you do that? Like any I like you. There's plenty of publishers out there that are going to have a category called productivity software and you're going to find distribution like that. There's probably influencers out there that write tons of articles about productivity. And you could probably. We get links and directions directly to their sign a page, and they don't have to have a human touch that lead. It just turns into I don't even think we talked to anybody. We're like. This thing's great. We heard about it from so-and-so. Maybe it was something we read, click through the link and we went and bought software. So those kinds of scenarios are here today and people are growing in those programs right now. More complicated, larger purchases, higher consideration products probably lend themselves more to a lead generation model. But there's plenty of publishers that drive those as well. There's Legian that works as well that help you tap into those. So, yeah, I don't see any reason why you could not and should not use affiliate marketing. And I think as time goes on, once retail, the retail battles so fierce, I mean, you know, just trying to get, you know, target to flip their programmers, someone to put their program where it's just like a bloodbath. Right. So there's plenty of brain space out there to go talk to businesses that that can identify a conversion event. And then they could get go talk to a publisher and say, how do I get. Like, how can you build content to help drive a lead here? I notice that you do it your topically aligned with me. You've got the right you get the right kinds of audiences, like how do we build that? And I think that's a conversation that's going to take off as time goes on.

[01:16:32] I really I got to tell you, I got to tell you, man, some of these budgets for size, the companies that we work with, we're in the mid-market. So 10 million minimum to a billion maximum in top line revenue. And the mid-market dot org, whatever defined that, that seems like very broad, by the way, 10 million to a billion. OK. Well, I didn't big on that. But you get a company that that's doing, you know, 50 to 75 million in top line. They're going to spend like 10 percent of their budget. 20 percent of their their top line is going to be advertising. Right. So that's a couple of million dollars. A few million dollars are going to spend on paid currently. That money goes to Google and Facebook or that money goes to these Prospekt e-mail trolls and some of these other guys. But in my mind now, I've never really thought about it that way. Why not position an offering that basically says you don't you give your money to those guys. Let's take that same two million dollars you to spend on advertising. Let's put our head down for six months and let's build an asset. Let's build an asset. Let's go find these publishers, let's sign them up. Let's overpay them because you're already you're overpaying these paid media source. You don't get anything out of it because the minute you turn it off, the minute you literally start pouring gasoline on that fire, there's no there's no embers there.

[01:17:53] You're done. You're right. I mean, look at look at.

[01:17:56] Kept her energy to I mean, they they could very well, you know, price things differently on a daily basis or whatever, that they could turn it around and say many of them do, depending on the packages you're buying.

[01:18:07] But I think they're like the beginning of what started affiliate marketing. They're like the comparison shopping sites. Yeah, like this rate, you know, you say. And so why wouldn't that be a sign to me that, you know, online is already starting to think about how to consolidate information for businesses and be able to link out to a landing page, which they're doing, and be able to drive lead generation, that is affiliate marketing. Again, I can't help but think it it's the way I'm wired and I like G2. They just happen to price it maybe in a different way. Maybe they're they're they price it like a like, you know, they do they price it like the influencers do. Right. Today, influencers want like a flat fee upfront plus a little X. It's exactly the same.

[01:18:52] That's easy to model. They want to get. I've done a lot of research on those guys because I've considered that model for banks dot com instead of the Legion model, because the Legion model in our business, in the financial services business, I believe is a pay to play model, which which allows which suppresses a free marketplace. So if you're Capital One and you're Wells Fargo, you can pay to play all day long. But if you're a new fintech who doesn't have the same kind of money that Wells Fargo and the same print brand recognition, you're not going to get that number one placement and you're not going to get that lead. Right. So for me, in the G2 model is basically I think they get. Twelve thousand dollars a year, and this is all public. You can go read and listen to their Sastre conferences with their CEO. He's done a great job. But they do about twelve thousand dollars a year in average customer revenue. I believe. And so in their mind, they're like, we're not going to do tracking. We're not going to track leads. We're not going to do anything. We're going to list you on here. And if you want to put your product videos on our site, we're going to charge you instead of twelve thousand dollars, you're going to charge thirteen thousand dollars a year. And they almost like a fast model. Dude, I love it. I actually love it. And I love your model, too, because it's so predictable in your multiples are like 10x your multiples are 10x the software advice model. Gardner Gardner bought those guys the software, but they only bought him for two or three X. You know, it was the same year.

[01:20:24] Yeah. Are they are media business versus being a side of business.

[01:20:28] I don't know. But you look at the subscription model business in back in the day, it used to be like 40 x four for every dollar of of I believe it was earnings. They were your multiples like 40 times or something like that. I think it was 10 or 15 times on top line. But I'm just kind of like, OK, how do you create a sustainable model where you don't have to be grimy and fight everybody for placement in pay to play and you've got a platform that's completely inclusive and it's affordable, and then you build a publisher network on the back of it's you grab all the publishers, you're getting all the inventory from the you know, from the from the buy side to the sell side. That's that's what I'm thinking about.

[01:21:12] So that's essentially what we do, like we we have a we built an eco system called Connect and Connect is not a network we do not like. We do not force connection points. We have a group, but we'll call them a large group of publishers that you'd want to start with. But it's really to facilitate integration. There's a new attack, right? They're using our attack and we have a pre established sort of like tech integration with them. And so when someone wants to work with them, it's just an easy it's almost like a LinkedIn sort of. Think of it more like like them than a media network where we're facilitating introductions, but we're not taking your cut of whatever comes after that. We're just. Our job is to create partnerships for people so we don't have to have an infinite number of those guys. We need a good group of great publishers to start and then businesses can figure out what works and what doesn't work. And then they can go out and do their own research. They can use tools like or discovery on our site, which is software we work with that helps them find and recruit other types of fish. I love it.

[01:22:14] I love it. You don't have to dance. Yeah, I just I mean, it just makes sense. I mean, unlike everything else in our country right now, this makes sense. So, like. All right. Last question. Since you've got a lot of experience and our guests always want to know, give us some advice. You know, you've learned a lot. You've done a lot. You know, don't sweat. The small things don't work too hard. I would never say that. I don't know what. What do you have for us based on years and years and years, probably 30 years, you've been doing this kind of work.

[01:22:47] What is it?

[01:22:48] Well, I mean, if you if you think about what's most important in a business where your interests are aligned and you're playing with different businesses, are playing together, et cetera, et cetera.

[01:22:59] I think having empathy, understanding what choose your walking in and understanding the publisher side and putting yourself in that in those shoes when these guys are out there buying media, putting their their pocketbook at risk. Some of them can't afford to do so. Like, you've got to think like a publisher or even if you're an advertiser, you've got to not always think like an advertiser. You don't think like a publisher. And so my feeling is it's like help, help me help you figure out how to put yourself in their shoes and then work backwards. How did they get their audience? What kinds of things? How did they monetize? What's important to them? What kinds of rules should you not impose on them to market for you? Like, those are the kinds of things I think that if you're thinking like a publisher, publishers are going to come to your field of dreams. Right? They're going to they're going to come into your network and sign up with your business.

[01:23:53] They're going to come to eBay versus Amazon or make choices at the margin because you do those things for them. So good customer empathy, walk in their shoes and really think about how you can help them.

[01:24:04] Yeah. Market. You actually care and come up with a with a with. I know it sounds a little cliche but come up with something that wins for both you guys. Because if it's too good for you, it's too good for them.

[01:24:17] It's never going to work. All right. It's a marketplace, right. It's got to be a fit. It's an efficient marketplace that you will figure out the right price. But it's not a one size fits all and it's only a marketing. It's not programmatic. It just happens to be great sort of structured marketing aided by technology as opposed to turn it on and let that let the machine do all the work. It's really people people power.

[01:24:40] I love it. OK, everyone. Brian Marcus, V.P. of Global Marketing at Tune Tune is a leading SAS technology that powers successful marketing partnerships, real marketing partnerships, I might add, across mobile and web. Brian, thank you very much. We're going to do round two because I think there's like 20 other things we didn't dress. But thank you so much for your time. And we'll see.

[01:25:02] Chris, great talking to you. Take care. All right.

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067 | The Surging Affiliate Model with Brian Marcus of TUNE

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