Ryan Stomel – Affiliate Networks: No Competitive Advantages?
Of the many groups that exist on Facebook around advertising, one is by far the most popular with those in the cpa network / performance marketing space – “Super Affiliates.” It’s like a big Google Group with greater visibility. The members mix in work with pleasure, often sharing what traffic they have and offers they need with the occasional missive meant to elicit laughs. Every once in a while, though, a member shares something that you almost can’t believe they did. Usually that means they over shared on the personal front and too many times. In this case, it was a lengthy post by one of performance marketing’s new kids on the block, Ryan Stomel, titled “Affiliate Networks: No Competitive Advantages.”
Ryan may have fewer total years in the space than many who read the forum, but the respect he has earned from key advertisers along with the logarithmic growth of his business means that he is not ignored. Equally interesting, despite the very successful business, he decided to add to his workload by getting an MBA. He is still in the early stages of the education, but it has had a rather strong impact on the way he sees the performance marketing space. Here is what he says, “While at USC, I have really learned how to look from an outside perspective at the overall strategy of business… I really got to thinking about how all of these affiliate networks are popping up and then going under…” The article begins with why so many networks pop-up. The reasons are spot on if not intuitive for those who have been in the sector a long time. True startup capital is low capital and barriers to entry are low. Who starts is next – it is often a progression from affiliate to network. The big lack of differentiation is what he gets stuck on.
The jokes we all make to ourselves while at many shows, Ryan decides to call networks out on what many claim makes them special:.
We have the best support and most dedicated Affiliate Managers in the industry.
The network was started by affiliates, for affiliates.
We always pay, on time, every time. Regardless if we did not get paid.
We have the best tracking system available.
We have the highest payouts – guaranteed.
We have more exclusive offers than any other network.
We are affiliates ourselves and test out everything before it hits the network to make sure it converts.
Partly because of the mindset that comes from his studies but also because he has given lots of thought to his own business, the point being made is to think about how real differentiation can occur. Instead of copying, why don’t people try to build in real competitive advantages so that they aren’t building a slightly re-worked version of someone else’s business but a unique business with sustainability. As he writes, “Why are the networks satisfied with copying each others model? And for those networks that have been in the space for a long time, why are you satisfied with others creating and maintaining the exact same model you have? What sets you apart that NO other network can say they have? Any network can give reasons 1-7 above, but what do you offer that is irreplaceable?”
Best of all, Ryan was able to get some networks responses to the questions above:
EWA: Plain and simple. Innovating. With the list of achievements posted, it’s hard to really disagree.
AboveAllOffers: Fierce competition.
FluxAds: Staying small, but working with loyal affiliates to drive large amounts of traffic.
Lead Synaptic: Niche market, own most of the offers.
Commission Edge: Direct lender, 100% of commission back to publisher.
Intela: AMs speak the language of the advertisers
Blue Trak Media: Business ethics and morals
MaxBounty: Business practices
EnvyusMedia: Diversity and Innovation (ScrubKit)
Marathon Ads: Trusted and Respected Founder
CPATrend: Efficiency and exclusivity with publishers and advertisers.
Fresh Ads: Custom Landing Pages
Crush Ads: Integrity, custom landing pages, weekly audits.
This is what the typical answer sounds like, though. We can’t tell if it’s serious or just someone poking fun of Ryan getting an MBA. “We strive everyday to outperform our larger competitors by strongly emphasizing our core competencies and value proposition. We’re a highly flexible and agile group with a global reach. We keep our costs low and we’re extremely efficient. At this point we can compete with almost anyone. We set our standards at the highest level and doing a great job for our clients is our primary focus. We have a talented group of people and we’re capable of accomplishing anything.”
For us, it’s not whether differentiation does exist or not. Is Burger King that different than McDonalds? If so, what is it? I think what we see, though, when looking into the topic is how the business has shifted, It was at first a game of technology. With Hitpath, Cake, DirecTrack, HasOffers, Impact Radius, etc., any network will struggle to win on the differentiated tech play. If we read the article correctly, what we’re hearing now is that to someone who is connected but not directly involved in the day to day, the pieces that we once thought of as differentiation aren’t. As is the case with fast food, ours is not a winner take all market. It’s not search, so we can’t expect there to be only one company or for those in the space to not have many similarities. But, if we look too similar to a learned outsider, how do we look to the outsiders we might want? That is probably what worries me more – making sure that the outside world can tell the difference so that they don’t become disenfranchised and make a decision not to work with any.
