(Illustrations courtesy of Louis Gray and Jeannine Schafer)

The FTC revised its guidelines regarding truth in advertising practices. Specifically targeting Internet Marketers and social media. The main focus of the revised guidelines are on stating your relationship with the product/advertiser and not using any deceptive marketing practices.

The FTC wants bloggers to disclose the relationship with the product they are promoting on each entry. One broad disclaimer is not enough in their eyes – whether it is in your terms and conditions, on a FTC Disclosures link on the home page (or all your pages).

This even applies to tweets and facebook status updates. The FTC recommends using hash tags on twitter for example: #ad or #paidreview. Even videos, such as those posted on youtube channels, must also adhere to the same disclosures.

While the FTC will not likely go after individual affiliates, it is putting the burden of regulating affiliates on the advertisers and networks. Most advertisers and offers have stipulations that you can not use fake testimonials and must follow applicable laws, however until now they haven’t really been monitored or enforced by most companies. The new FTC focus will force advertisers and networks to more closely monitor affiliates and stop any questionable marketing tactics.

Here is a FAQ the FTC put together regarding the new guidelines:

http://www.ftc.gov/bcp/edu/pubs/business/adv/bus71.shtm

Over the past year we have witnessed hundreds of merchants offering CPAs of $40-50 dwindle down to just 3 or 4 main operators in this space, many of which can process Visa only.   As every merchant comes to realize over time, sustaining a CPA of $40 + on a trial is simply not profitable.  At the end of the day the network and affiliate get rich while the merchant dies trying.

This week Health Converter rolled out new lines with the strongest processing the industry has seen.  Our pages such as www.Cenalex.com/cc are powered by processing that puts the customer first, making it easy to cancel via an online.  Additionally, if a consumer calls to dispute, we take the high road and issue a refund.  In order to make any model work math must dictate.  At a CPA to networks at $40 this offer will go in the red.  At a CPA of $30 the merchant will go in the black, affiliates will notice higher conversion rates because end users are enabled to buy with Amex/Discover, and networks will realize a profit due to volume.

When we first presented the $30 CPA to our trusted network partners we met resistance.  “A $30 CPA?  I’m sorry, no affiliate will run it.”  We expected this and truly empathize with them.  Truth be told, many of us have become fat, lazy, and happy with the old model.  And what happened?  Everyone got burnt for millions of dollars – and some even went out of business - hah choooo hydra.   Excuse me, must be a summer cold coming on.

Let’s take a closer look at the numbers in order to understand why our $30 CPA works better for all parties:

Networks:
1.  The offer won’t go down.  How much time and money does it take to board new offers, sign IOs, place pixels, communicating with affiliates about offers pausing, communicating with advertisers about going back up?  The opportunity cost in time is tremendous.

2.  Getting stiffed for millions?  Whether you’re Epic Advertising or Ads4Dough, it’s happened to us all.  Remember the advertisers bring the dollars to the table.  Without strong processing they can’t sustain.   Zero Sum games may work in Chess, but they don’t in business.

3. Continuity of campaigns!  Keep the campaigns running strong, have your pubs push volume traffic through commital campaigns such as SEO, and you’re ROI will sky rocked.  Most SEO pubs that have high traffic avoid fly by night offers.

Afffiliates:
1.  Higher Conversion Rates:   Jonathan Volk, a publisher earning over $400k a month in commissions, noted that higher CPA doesn’t necessarily equal higher ROI.   What matters are conversion rates.  IE If you take offer A that pays a $35 CPA with a 3% conversion rate and take offer B that pays a $30 CPA with a 4% conversion rate, which one is better?  You guessed right, offer B, earning you $3.75 more per sale.  Zac Johnson, who pushes millions of dollars in leads a year, goes into further detail here.

2.  Time - Having to switch links out every week is a time killer.  Run with strong offers and avoid having to waste time switching out links: spend time moving forward not looking back.We want to see your campaign win.  At a lower CPA you won’t need to reject leads, rather you can cut a pub that you feel is not fit for your campaign.  We have several solutions to help you provide quality products, service, and support to your customer.  Contact Us.

Merchants:

1.  Advertiser – We want to see your campaign win.  At a lower CPA you won’t need to reject leads, rather you can cut a pub that you feel is not fit for your campaign.  We have several solutions to help you provide quality products, service, and support to your customer.  Contact Us.

Change Is Here!

At Health Converter it is our goal to see that advertisers campaigns stay up and running without delay.  One of the most inefficient and profit cutting areas of this vertical is watching good offers go down for exceeding their processing limits.  Sure, Health Converter can send thousands of leads to an offer  in a day if the landing page, brand, etc. are all in line.  But most advertisers cannot handle the volume due to merchant account processing limits – until now.

Vantage Payments connects merchants to CCbill, a well established merchant account system that has been processing continuity offers for over a decade.  CCbill hosts the checkout page, to ensure that full disclosures are made to the consumer and the page is compliant with all FTC/Visa/Mastercard regulations.   CCbill handles all customer service, chargeback response, and refunds.   With this turnkey system, the advertiser can focus on churning out top notch landing pages and developing top notch products.

In order to expedite approval, please contact Dustin Sparman and let him know that you are working with Health Converter:

 Dustin Sparman
dustin@vantagepayments.com
www.vantagepayments.com
[P] 480-609-5730 X 2151   
[M] 480-766-9163 
[F] 866-316-9993

Lately there’s a lot of talk about how the free trial is dead.  In fact, it is in the health and beauty vertical, most specifically the product acai, where the keyword “free trial” has become synonymous with “scam,” “easiest to convert”, and “death to the hardsale.”   Well the good news for affiliates, networks, and most importantly the consumer is that free trials are here to stay and are now widely marketed with scruples in mind.

Before we delve into the new wave of free trial, let’s rewind the clock back to 2001 and take a closer look at how the free trial made its way into the health and beauty vertical.  Does anyone remember Steve Warshak, creator of Enzyte Male Enhancement, well known for the smiling Bob commercials?  Well Steve discovered early on that nutracueticals, when advertised on a free trial basis, sell at unbelievably high rates.  He also discovered that when you hide the rebill terms from the consumer and make fictitious claims about your product line that you can sell way more of it.  Steve would later realize that his unscrupulous marketing methods (fictitious claims and hiding billing terms from customers) would not only harm thousands of consumers, it would also land him in prison for 25 years. See GQ Article.

Followed by the downfall of Steve Warshak, several mini-me’s would follow suit.  In 2009 we witnessed the explosion of free trial in the health and beauty vertical with the massive popular Acai Berry.  With official endorsements by stars such as Oprah and Rachael Ray, affiliate marketers quickly jumped on the trend and realized unprecedented conversions.  Several affiliate marketers started creating their own offers, building out kick ass landing pages that just about broke every FDA, FTC, and Visa/Mastercard policy.  These marketers were able to procure processing from every bank via websites that were totally noncompliant, with no credit, and without a simple pro forma.  It reminded me of the real estate loan crisis in 2003-2006, a time when 20 year old college dropouts were getting approved for million dollar plus loans with less then 10k in their bank accounts.

What was the final disposition of all of the Acai Marketers?  99% of them lost their MIDS, most were sued by the FTC, and some went to prison.   The moral of the story: you can only win at this game by providing true value to consumers, and those that don’t will eventually fail.

In the current zeitgeist it is nearly impossible to obtain a merchant account for continuity billing onshore let alone offshore.  Just like the curtailment of the loans to unqualified applicants, banks will no longer issue accounts to unqualified merchants.  Of course there’s still the 90 day and out merchant: the merchant uses a sponsor for an account for a shoe-in approval product (such as an online clothing store), only to use the account for a free trial with hidden conditions.  These accounts result in a summary TMF (terminated merchant file, thus eliminating the sponsor from ever receiving a merchant account again) and the funds are held for a period of 6 months or more.  The FTC is now freezing the funds of these merchants and very rarely will they receive the reserved funds once the campaign is frozen.

With that, the serious players in continuity have discovered that they can win in the long run by adhering to the following best practices:

1. Creating superior landing pages that provide the consumer with the perception of quality from the beginning.
2. Providing the consumer with a quality product, packaged professionally with pamphlets that further improve the perception of value.
3. Clearly and conspicuously stating the trial terms, while at the same time offering the consumer options with hardsales on the same page.
4. Providing easy methods for the consumer to cancel their trial such as professionally trained call center reps.
5. Instock orders that are shipped quickly with delivery confirmation.
6. Sophisticated CRMs empowering the business, such as Lime Light and other’s that we provide in our Rolodex: http://www.healthconverter.com/articles/health_converter_rolodex.php.

We commend advertisers such as Gary McNelley over at Market Health that have set the standard in our industry.  His Acai Berrry Select Formula has been running well over a year now without interruption.  No, this offer does not convert at 20% ratios like several of the historic sites that hid the rebill terms.   Yes, Acai Berry Select completely covers the above best practices!

Free Trial 2.0 is finally here and it’s here to stay.  Those merchants in the space promoting hardsales should not expect volume anytime soon.  Instead of fighting against what affiliate marketers want, listen to them and create a legitimate trial offer that will allow the consumer to try your unbranded product before they buy.  Unless you have the capital to invest in branding a hardsale outside of the internet, then do not waste your time trying to introduce a non-branded offer to the net on a hardsale basis – The Free Trial Will Crush You.