Data Double Duty
By: Lisa Picarille
Affiliates fear the threat of potential privacy breaches at networks and by search companies.
Website publishers are up in arms about the potential threat posed by employees at companies, who have access to their crucial data that could be used to compete with them.
Insiders have nicknamed the situation "Triple Jangro," after the catchy title of a blog post on Revenews.com by David Lewis, CEO of 77Blue. The title refers to ex-BeFree/Commission Junction product manager Scott Jangro, who left the affiliate network several months ago to become a full-time affiliate.
The crux of the recent situation revolves around the threat of perceived or potential conflict of interest. Observers claim many employees of search engine companies and affiliate networks are infringing on the data privacy rights of their clients by using data from affiliates and merchants to enhance their own affiliate sites, or to go to networks and buy traffic based on inside information these employees receive from clients.
While many say they have suspected this practice for years, news of the situation came to a head at the LinkShare Partnership Summit 2006 in January. A few former Commission Junction employees attended the event as affiliates and revealed that three CJ staffers resigned after the company recently put a policy in place prohibiting employees from also being publishers.
"In the early days of affiliate marketing and affiliate networks - especially CJ - there were a lot of entrants into the space who came to us being program managers or some were publishers and gravitated toward this space," Jeff Pullen, COO of ValueClick, says. "Over the years they have operated websites of their own on weekends and evenings and in the past we have not discouraged that. It was a good way for people to know the business. We always had a code of conduct and we are aware of the proprietary nature of the information we handle. Because we consider ourselves a leader in networking quality, we wanted to eliminate any potential appearance of a conflict of interest."
To that end, an email was sent to everyone at ValueClick and its subsidiaries, clarifying that publicly-held ValueClick would no longer allow any employees to be publishers and violators of that policy would be subject to disciplinary action, up to and including termination/dismissal, according to Pullen. He says the change was spelled out and included in an updated restatement of another policy related to the issue of confidentiality.
"It really is easier, from an operational stand point, rather than to have to try and implement policies to monitor the issue, to just eliminate the practice altogether and not be concerned," says Pullen, who noted that the new policy was not prompted by any wrongdoing nor was there any evidence of any improprieties.
Still, the new policy resulted in the departure of three employees - Chad Darling, an account representative for many of search affiliates; Andy Powell, who didn't work with publishers but was part of the search management team; and Don Batsford, a CJ employee, who joined the company when it acquired BeFree.
"The people that left took a look at two different business opportunities. These are entrepreneurially focused publishers that chose to pursue that route. We hope they continue to do well. But they can not do both things."
It's unclear if these ex-CJ employees were running affiliate sites or doing arbitrage. Commission Junction officials declined to provide any details.
Regardless, the situation has angered many affiliates, who claim network staffers are supposed to be helping affiliate partners, not helping themselves. Despite their outrage, many affiliates, network representatives and industry watchers say the overall issue is so politically charged, they declined to have statements attributed to them and spoke only on the condition of anonymity.
The issue also sparked a lot of heated discussion on the affiliate forums and generated plenty of fodder for bloggers, many of whom admitted to posting comments on a variety of industry blogs under pseudonyms.
"The networks have been very quiet on this issue and are reluctant to make any public comments. This lack of communication is causing an increasing concern of potential wrongdoing at the networks. When the networks have to talk to their lawyers before commenting, nobody feels comfortable," says Adam Viener, president of IM Wave, a Virginia-based search affiliate. Darling was Viener's account manager.
Here is a typical post. "Let me get this straight, top affiliates shared their secrets with account managers at a network only to find out those account managers were their competition and using those hardearned secrets - I'd be fuming. So much for a trusted third party."
One angry - and anonymous - affiliate tried to put a positive spin on things. "If they quit their day jobs at the network, they were obviously making more money as an affiliate and that certainly bodes well for the state of affiliate marketing as a very lucrative career."
Cause for Concern
Viener says he alerted Commission junction to the potentially problematic issue.
"I had a conversation with Todd Crawford [Commission Junction's vice president of sales] about this issue at Affiliate Summit [2006], after talking with some top search affiliates who were concerned that CJ employees were looking at HTTP referrer data to determine exactly which keywords they were bidding on were converting to sales. They seemed to have some internal evidence that showed that when they identified new keyword niches with no competition, that almost immediately after there was a conversion on those terms, new affiliates popped up advertising on those terms," Viener says.
Both Crawford and other CJ executives insist that calls to that specific database are tracked and protected. In some case only two to three people at the network have access to that sensitive information.
"To be an effective account manager we certainly have access to operational data. We have to do that job in a good and helpful way and that means seeing a variety of data," Pullen says. "There is no scrutiny that we can't withstand, and we encourage and hope others can say the same."
One CJ super affiliate, who asked not be identified, says that on more than one occasion, within days of launching a new campaign, he would also see competition. "No one knows we are running the keywords, so in theory, no one should pick it up. That led to some speculation how it got started and I went away thinking that I should speak to the network about my concerns regarding who has information about keywords and referring URLs. I'm concerned about who has access to keyword data as well as what is converting and what is not converting."
Vinny Lingham, founder of IncuBeta, poses a possible scenario:
"CJ has about 2,000 merchants, and it takes a lot of time and effort to evaluate, negotiate, research and run test campaigns. Continued on Page 2...
Tags:
data, breach, privacy, security, shared, networks, website publishers, befree, affiliate networks, valueclick, cj, linkshare, affiliate marketing, crucial, search engine companies, proprietary nature, partnership summit, time affiliate, catchy title, affiliate sites, search companies, program managers, affiliate network, crux, commission junction,
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