I had an idea for T-shirt slogan, but you’re probably not going to appreciate it unless you’re sad enough to go to as many affiliate marketing industry events as I do. It would read:

“Every time you clear your cookies, an affiliate cries.”

Not too hot, right? But at least you, seasoned reader, might have understood where I was going with it. Ask my Mum what ‘clearing cookies’ means and she’ll stare at you blankly and tut-tut, wondering where you’ve picked up such yankee colloquialisms from. You used to be such a nice boy/girl.

The truth is, today’s web users (including my Mum) rely heavily on first party cookies to ensure a smooth browsing experience. Remaining logged into Gmail, heading back to Amazon to be told which comedy DVD to buy; these are tasks and actions we are used to and value as users. I could probably explain that to my mum. Given a couple of weeks…

But the value of third party cookies is less obvious.

The privacy lobby would try to tell you that these super-scary ’spy cookies’, a phrase coined by EU Commissioner Viviane Reding (see her at 13m20s of this video), are used to track your every online move, spam your cat and seduce your daughter. The reality is very different.

Online advertisers and affiliate marketers depend upon third party tracking cookies in order to be properly rewarded for the promotional actions they take on behalf on brands and retailers. These advertisers fund the free content and services that users have come to expect online, and form the unspoken contract between content producers and consumers. Without them, distribution of free content becomes impossible. Moreover, in the highly liquid market that is e-commerce, any marketing action acts as a signpost for users directing them to useful and relevant sites.

With the CPA model as used by affiliates, this becomes ever-more apparent. My actions as an affiliate would only ever be rewarded when a sale occurs, or in other words, they were found to be useful by a user. These signposts, therefore, are fundamental to the usability of the web and inherently valuable.

The EU hasn’t bothered to see this side of the story. The 96 pages of contradictory directive recently passed (and much discussed) describe legislation designed to protect user-privacy but do little to define how member states should define privacy or even how user consent could be taken. There appears to be little or no understanding of the very foundation of the internet’s functionality. But there’s no point appealing to our Brusseleir friends now: this legislation will be UK law by June 2011.

At a well attended meeting of the IAB’s Affiliate Marketing Council yesterday, the Head of Regulatory Affairs, Nick Stringer, gave an outline of what we can expect. As a country, the UK has a tendency to push through legislation like this as drafted and ‘on-the-nod’. That is to say, it’s not likely to be debated in Westminster. It may well pass into UK law sometime in the next two years as ambiguous as ever with the fight to be taken to the courts.

What can we, as an industry, do to counter these dismal prospects? Unfortunately, little at the moment. With an election looming, there is no way to guess when the next government might enact the directive. For now, all we can do is wait and turn the discussion to what technological changes we could implement to preserve our industry if it came to it . Will we end up with other cookie-less tracking? Would the browsers implement a sensible method of consent or will it be left to publishers on their individual sites?

When the time comes, and the new PM is getting comfortable in Number 10, just try and keep us from yelling at those in Westminster to explain the true value of online marketing.

If the next government clears our cookies, it won’t just be a couple of affiliates crying, it will be a whole industry.

I’m the Account Director at Skimlinks. If you want to carry on the discussion, leave a comment below, email me (mark@skimlinks.com) or find me on Twitter (@markofmac). For more information on the legislation, see the great posts at Econsultancy and Out-law.com.

It was announced today that Skimlinks has made the shortlist in three separate A4U Awards categories.

We’re up for Innovative Publisher of the Year, Best New Entrant in Affiliate Marketing, and Best Use of Technology within Affiliate Marketing.

The A4U Awards 2009 winners will be announced on the 2nd of June, at the Hilton, Park Lane.

See the entire shortlist here.

This past Tuesday, Joe and I turned our backs on the glorious London springtime weather we’ve been graced with this week, and instead joined a multitude of Europe’s finest web movers and shakers at Geek’n'Rolla 2009. With the day packed full of fascinating panels, pitches and talks (including one by the illustrious Joe Stepniewski himself), we thought we’d bring you some of our highlights.

Our friend Andy McLoughlin from Huddle had some great tips for hiring a top-notch team whatever business you’re in. Hiring is like falling in love, when it’s right, you’ll know. Don’t compromise. Huddle uses a famed four point scale for rating candidates: Definitely No, Maybe No, Maybe Yes and Definitely Yes. If there are three people involved in the hiring, you need three Definite Yes’s.

Treat your team like family and build a sense of trust and openness by encouraging people to learn about all aspects of the company. Buy a great coffee machine, and ensure that good ideas can be generated and fostered by anyone, be they CEO or Office Manager. I’m confident we hit a lot of those goals here at Skimlinks, although we could use some higher quality caffeine… Alicia?

Andy’s slides can be found here.

Inbetween some heated debating, launch of an excellent wiki full of web tools, William Reeve, (formerly of LoveFilm, the UK’s answer to NetFlix) had some excellent things to say about managing your cashflow. If you’re bootstrapping your business, pick some core metrics to monitor meticulously, and keep your cashflow super-tight. Most of all, push your suppliers hard as every extra day you can squeeze out of payment terms is valuable. You can find his slides and some more in-depth notes here.

Finally, Fred Destin from Atlas Ventures gave us an insight into the day-to-day life of a VC. They’re human too! Working with VCs is about building relationships. Pitching is show-business, so if you have the opportunity to pitch, make sure you get the VC excited from the outset. Also, beware of ‘pitch decay’. Leave your audience with four or five key points that they will remember when considering you at the next stage. More details here.

It was an action-packed day, and I’ve only scraped the surface in this post. Check out all the coverage at TechCrunch Europe. Alicia will be at A4U Europe next week. If you’re there, say hello. Otherwise she’ll report on it here once she’s back.

Thanks for reading!

Mark

In our discussions with publishers, we are often asked if using Skimlinks will affect their SEO/PageRank.  Will their links still pass on linkjuice/PageRank or do they to use nofollow on their links?. To be clear on this, lets address this question in its two parts:

• What’s the SEO effect of having affiliate links on my site?
• Do I need to use nofollow i.e. are affiliate links treated like paid links?

SEO effect of having affiliate links on my site

Google’s webmaster guidelines are clear that having affiliate links on your site is absolutely fine, as long as your site adds value and has original content.

“If your site participates in an affiliate program, make sure that your site adds value. Provide unique and relevant content that gives users a reason to visit your site first.”

“there is no problem in being an affiliate as long as you create some added value for your users and produce valuable content that gives a user a reason to visit your site.”

These guidelines conform exactly to Skimlinks’ publisher requirements whereby we only permit sites that are adding value to merchants we work with, and are providing original content.

Skimlinks’ mantra is to maintain the balance of the value-chain whereby publishers are adding real value, and generating incremental sales, and therefore merchants are happy to continue paying affiliate commissions.

Are affiliate links paid links?

Since Skimlinks converts relevant outbound links to merchants into affiliate links, allowing you to earn commissions from your content, and works by leaving links as direct links to merchants: are affiliate links like these treated in the same manner as paid links by Google?

Definition of paid links

The paid link debate basically says that in order to maintain a equitable and accurate system if you want to sell a link for visitors/traffic you must disclose this by using rel=”nofollow” on the link, so that the search engine rankings are not artificially inflated to the site receiving that traffic (as compared to an unpaid link, added for the relevance/value of the content being linked to, which will naturally contribute to search engine rankings).

Google’s statement is that if a publisher accepts payment from another party to put unrelated links on their site for the purpose of helping the other party artifically boost their Google PageRank (and without disclosing it with nofollow), then this will be penalised by Google. Google is working hard towards ensuring sites with quality content are given preference in search results, and paid text links seek to subvert this.

This also applies to paid posts, whereby editors/bloggers receive upfront payment for writing a blog post and linking to the site that sponsored them.

Affiliate links that pass link juice

However, what isn’t particularly clear about the above is how Google views affiliate links. Affiliate links enable a publisher to be paid, but does that make them paid text links? Some affiliate links go directly to the merchant, rather than via an affiliate network redirect (for example, Skimlinks enables this), so does that mean because it can pass ‘link juice’ to the merchant is it therefore a paid text link?

The truth is, we cannot be 100% certain. Google understandably keeps its proprietary search algorithms secret, and although they give guidance as to what is acceptable, there is still a degree of interpretation involved in whatever they state.

Why affiliate links aren’t paid text links…

1. Google now own an affiliate network, so are likely to be understanding to the ethos and goals behind this area of internet marketing.
2. Affiliate marketing’s goal is NOT to help merchants boost their page rank, but for the publisher to make money from their content. They naturally perform well when this content is quality, relevant, and unique.
3. There is no guarantee a publisher will receive any payment for adding an affiliate link, if no-one goes on to buy a product/sign up for a service that the publisher was promoting then nothing is earned.
4. The choice over what to write and who to link to is completely up to the publisher’s editors, as opposed to paid text links which are driven by 3rd parties.

…As long as you have trustworthiness, quality content and relevancy

There has been a public statement by Google’s Aaron D’Souza, Sean Suchter of Yahoo and Nathan from Microsoft confirming this.  See this SEOmoz post, which stated:

“when asked point blank if affiliate programs that employed juice-passing links (those not using nofollow) were against guidelines or if they would be discounted, the engineers all agreed with the position taken by Sean Suchter of Yahoo!. He said, in no uncertain terms, that if affiliate links came from valuable, relevant, trust-worthy sources – bloggers endorsing a product, affiliates of high quality, etc. – they would be counted in link algorithms. Aaron from Google and Nathan from Microsoft both agreed that good affiliate links would be counted by their engines and that it was not necessary to mark these with a nofollow or other method of blocking link value.”

So as long as the publisher is trustworthy and writing quality content that is relevant (and we only approve publishers that do this), by using Skimlinks’ technology that employ juice-passing affiliate links, the publisher is not penalised and the merchant derives some value from being linked to by a quality publisher.

We are pleased to have this validation, as although we felt logically that Skimlinks did not breach any Google guidelines, we could never truthfully give 100% confirmation to our clients without some public statement from the search engines.

Further reading – A great analogy of why Google doesn’t treat quality affiliate links as paid links and why they can’t officially confirm it.

In Summary

In conclusion, this is our summary of why Skimlinks is comfortably within Google’s guidelines:

1. Our publishers are editorially focused. They care about writing good content and providing good services, that have relevant, useful information to users.
2. Skimlinks is about helping publishers stay financially viable, not about helping boost other parties’ search engine ranking
3. Skimlinks enables publishers to be rewarded if their content/service leads a customer to click through on the link and buy something on a merchant site. Publishers are not paid just to put a link on their site.
4. Publishers are encouraged to provide disclosure that they might earn revenue if users end up buying something as a result of their content/service. We also encourage our publishers to retain their full editorial integrity and objectivity when writing about products/services. It may impact their short-term affiliate revenues, but long term their users will trust them more, and return more often.
5. If the content that publishers write is of good quality, and they are an authority site, then it seems fair the merchant benefits via link juice for the publisher choosing them as being relevant to their subject matter.

As always, we will continue to stay abreast of developments, and will continue to advise our publisher clients on the best strategy to continue monetising their content in an ethical and user-friendly way.