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[upbeat music] That simple little humble link that we thought was simple, actually that involves-- You gotta deal with about 20 different parameters or 20 different variables, business variables, day-to-day on each link.

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And now imagine that times fifty thousand or that times hundred thousand, coupled with a team that is probably one or two or three people. So now you're dealing with a large complexity.

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And this is why a lot of affiliate businesses, if you ask me, don't do a very good job at their operations because they're just... They underestimate the amount of work that's required in dealing with links.

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They think that it's a link. "Oh, it's simple." [chuckles] But it's not. So you- That's probably why they got into it. [laughs] So now, so now, Brian, think of it this way.

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You've got, you know, it's so simple- I love simple. I love-- You know what I love? I love passive income. What? I think the reality is it doesn't-- it-it's not out there [laughs] But I love the idea of passive income.

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[upbeat music] Welcome to the Rebooting show. I'm Brian Morrissey. This week's episode is a spotlight episode where I speak to one of the Rebooting's partners.

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In this conversation, I talk to Lavin Punjabi, the CEO of Affinity, which operates an ad network as well as an affiliate SaaS platform called Nucleus Links. Lavin and I discuss the state of affiliate publishing.

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I find this part of the publishing ecosystem fascinating because it sits between what I consider the digitally native internet publishing businesses and the legacy publishers.

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You know, an affiliate used to be thought of as something of a backwater, a scruffier third cousin to the marquee publishing businesses that focused on the top of the funnel, while affiliate publishers duked it out at the bottom of the funnel.

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Well, that's all changed. The funnel has collapsed. Publishing businesses can't be content to stoke demand and burnish brand image alone.

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They need to provide receipts, and Lavin and I discuss the challenges of publishers shifting their mentalities, operations, and skill sets from a CPM world of impressions to a CPS world of transactions.

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That requires nailing the details of internet marketing, something that in many ways legacy publishers are playing catch up to their pure-play competitors who have affiliate as part of their DNAs.

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This is an age-old story in many ways. And we also get into why AI's collision with search doesn't have to be a bad thing for publishers. In fact, it could end up to be a benefit to the old guard's strengths.

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Hope you enjoy this episode. Thanks to Lavin and Affinity for their support. I will always wanna hear your feedback. You can send me a email at bmorrissey@therebooting.com.

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And if you like this podcast, I hope you do, leave it a rating and review on Apple, Spotify, or anywhere else that takes reviews. Now here's our conversation.

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[upbeat music] Lavin, thank you for joining me on the podcast. Oh, thanks a lot, man. Hap-- So glad to be here. Okay.

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So for, for those who don't know Nucleus Links, 'cause you have, like, two sides to the business, just give us a little quick backgrounder on, on the business and, and each side. Sure.

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So broadly speaking, we're Affinity as a company. We operate two themes of business. One is the ad network theme, and one is the SaaS theme.

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Within the publisher SaaS theme, because we've been working with so many different publishers, you know, within the ad network side, we've been operating with different kinds of publishers from, you know, affiliate publishers, buy now, pay laters, content, you know, coupons, so many different types of publishers over these years.

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As we worked very closely with them over these years, we realized that there's lots of technological gaps, product gaps within these publishers.

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And so we said, you know, we were like, "Okay, I think if we build technology for them," and that's really at our DNA, right? We build a lot of technology as a company.

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So we're like, "Hey, why don't we build technology stacks for these publishers?" And that's how we began our SaaS business about two years back. So, you know, broadly speaking, two themes, ad network and SaaS.

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Publisher SaaS is relatively new. And here we operate Nucleus Links, which is our AI for affiliate ops, simply speaking. You know, we think that the ops specifically within the affiliate industry is broken.

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And I say broken because I think everyone's taking a very simplistic view to ops, and I'll, I'll dive into that as we chat more deeper about that problem.

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But I, I-- the way I see it is AI can solve a lot of the broken problems or broken challenges of affiliate links, and that's where Nucleus Links- Yeah... really emerges. Yeah.

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Let me ask you this, just 'cause a definitional sort of thing. Do you make a difference between- Yeah... affiliate and commerce?

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Because they've sort of melded between, and I think a lot of times it, it kind of reminds me of performance marketing 'cause, you know, as a guy with a little bit of gray, all right, a lot of gray in the beard, I, I hear a lot of people talk about performance marketing.

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I'm like, "Are you talking about direct marketing?" Because I used to write about direct marketing. A lot of what you're, you're talking about sounds like that. And kinda similarly- Yeah...

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you know, I, I-- when I was in the direct marketing, like, space, affiliate was, like, sort of original business model of the internet. You know, I mean- Mm-hmm...

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when Amazon started its, whatever, Amazon Associates program, it really kicked off affiliate.

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And it was always this part of the, the publishing ecosystem that sort of stood apart from the, the regular, you know, ad systems and double-click driven and, and, and whatnot.

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And it was-- I don't want to say it was looked down upon. It was kind of like direct marketing. It was, like, super below the line, right? And I think what we've seen now- Yeah...

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with performance be-- e-e-eating sort of the entire industry is, like, the funnel has collapsed, and now publishers, the biggest publishers in the world, are scrambling to compete in this area that they kind of ignored, I want to say- Yeah...

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for, for-A generation? [chuckles] Yeah. Yeah. Yeah, you're right. I mean, I'd say it is interchangeably used quite a bit in the industry too. Commerce, affiliate, you know, performance marketing.

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It's all-- to me, it's all one thing, if you ask me. Okay. I don't really come at it from a different lens, no. Uh, they're all the same thing. Yeah. Okay.

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And so basically, you know, a lot of times publishers have been monetizing through, through ads and su- It's like ads or subs. You're either selling like access to your users, or your users are paying for access.

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And affiliate became very popular as, I don't know if it's a third, but I think a lot of times, and I think this is sort of the issue, it's sort of treated as a, a sort of side, I don't wanna say side hustle, but in some publishers it is.

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Some, some publishers it's the main thing. But for a lot of- Yes... like marquee publishers, it's a department and they have to figure out where it fits 'cause it's not really editorial, but it's not really sales.

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What, what-- how are you seeing with the maturation of publisher affiliate businesses? Like, what, what are you seeing on that front? Well, you know, so my view of affiliate is relatively broad if you ask me.

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And this is because, you know, I, I don't just work with one-- I mean, we don't work with one kind of publisher, which is just the co- content or, you know.

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Again, so I mean, the-- what you just mentioned about, you know, how some-- for some publishers affiliate is sort of, you know, second or third, not really, not the primary.

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Those are usually the content publishers at large, right? Because they have, you know, the whole big Google chain of revenue, like all the display revenue, and then they have direct sales, and they sell branding.

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Those-- for a lot of those publishers, affiliate becomes very hard to deal with because remember, you're, you're selling CPMs, and suddenly now you're making CPS or CPA.

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And that for a lot of publishers is just, you know, mind-boggling because you gotta-- you're not operating-- So think of the layers, right?

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So you show, you a- you show an ad, that's CPM, then you show-- you pay for the click, that's CPC, and then only if the person converts, you get paid CPS or CPA.

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Now, going from really top funnel all the way to the bottom, for a lot of content publishers, that's just mind-boggling. Like, they find it very hard to get past to the other side.

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But the publishers who have really moved fast enough, specifically within the content space, you know, you have the cases of like, uh, the Dotdash Meredith guys who were acquired by... What was the company called again?

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Well, Dotdash acquired Meredith. Dotdash, sorry. That's what I was lo-looking for. Sorry, I m- I blended them. But Dotdash, right?

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Like, they came from a very commerce first angle, which is they're like, they operated with CPS for a large degree, and then eventually with, with Meredith, went to CPM.

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They kind of-- I feel like they kind of tried to find middle ground. But point is, you know, there's a lot of publishers outside of also content.

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So yes, so while content, you know, there's the whole CPM, CPC and CPS and which is where most publishers have difficulties.

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But there's a whole host of other publishers in the industry from, you know, there's the loyalty and cashback guys, there's coupons and deals, there's price comparisons, there's buy now, pay later apps, there's influencers, there's email lists, there's extensions.

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Now, a lot of those publishers have never actually seen CPM ever, have never seen- Yeah... branding sales, have never seen the other side of the business. They've always existed within affiliate.

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They started in affiliate, they grew within affiliate, and they continue to thrive within affiliate. So when you say affiliate, it's really a very- And also, by the way-...

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broad universe And also by the way, they're really good at affiliate, right? Like, it's not their- Yeah... side hustle.

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They, they don't have the sort of, I don't wanna say baggage, but yeah, it's baggage of having lived in a CPM world and all of a sudden you're living in a CPA, CPS world. That's, that's a different- Yeah.

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It's a-- It's different muscles. I mean, they might be related, but they're different muscles. Exactly. Exactly. So, you know, coming to the affiliate world. So I-- So my view is actually very broad.

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It's not just content, and even within the content, there's-- I would consider content to be broken down into the old guard and the new guard.

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By the old guard, I mean, you know, publishers that are, you know, the regular, you know, the co- the, the well-established journalistic entities and names that we're all used to, right?

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Like the New York Post, The New York Times, CNN, Review, and you know, the big names.

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And then you have the new guard, which is the YouTubers and the influencers who are also producing original new content and pushing it out on these platforms, and then somehow connecting that to affiliate more recently.

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And we've seen that as a big emerging trend, you know, at these conferences that I've been seeing, where influencers are now being tied closely into affiliate. Because, you know, i- if you s- if you track the- Right...

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growth of the influencer industry, at first it started off by selling directly to advertisers, but there were always, you know, yes, you, you'd have one or two s- you know, you have a few star influencers that would make it big and could really, you know, claim the big bucks from the advertisers.

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But then there's a whole host of mid to long tail influencers that don't get the big deals, and a lot of them are now leaning towards affiliate to somehow say that, "Hey, if, if I can drive the sale, you pay me then."

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And it's, it's actually a growing emerging space within the affiliate industry. Yeah. And I think this is something I talk about all the time.

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I like to call it the information space, because there's no, like, media ecosystem.

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And I mean, there is a media ecosystem, but it, it operates within a larger space in which the competitors that, quote unquote, what we used to call publishers, which I think of content publishers, you know, they often have offices and all these kind of things.

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You know, who they compete against now are, you know, not just other publishers, obviously, not just the large tech platforms. They, they compete with, you know, everyone under the sun.

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You see retailers taking so much money out of the system that that comes from somewhere. It's not just all shelf taker budgets. And- Right... then you see creators. It's like a death by a thousand cuts.

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And I think one of the big questions is, let's just stick with content publishers for a, a minute, the sort of old guard, I believe you called them. This is a nice way- [chuckles]... of putting it. [chuckles] Dinosaurs.

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But h-how does the old guard compete?

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Because I think a lot of their, in my view, k- kind of unearned competitive advantages sort of get stripped away, and you really get close to the metal.With, with-- when you get down to CPA and CPS, you, you, you're either driving sales or you're not driving sales.

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It's kind of binary. You can put all kinds of packaging on it and pizzazz and, you know, take, take people out to Minetta Tavern, but, like, you either convert or you don't. [chuckles] That's right. That's right.

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And so before we move forward, as much as I did reference them as the old guard, well, they're still very important. I'm not saying that they should fade away or, like, dinosaurs just go away.

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They're very critical to the journalistic ecosystem. So no, they're very important. Well, that's why they have- But no-... they have to adapt. Yeah. That's- They have to adapt... that's why they have to adapt. Yes.

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So, you know, so I think for a lot of the content publishers, you know, the traditional content publishers, what I've seen or what, at least what I've explored, you know, in my conversations with a lot of the industry, what I've seen is that commerce or affiliate is a relatively newer section or department for most of them, and I think a lot of them were inspired by Dotdash.

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I mean, I feel like they were sort of the trailblazers in this space for a while.

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And, you know, when, you know, when they went out and started acquiring a lot of the other companies, everyone's like, "Wait, what have we been doing wrong, you know, all these years?"

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So I feel like a lot of, lot of businesses began their commerce operations in the last three to four years. And of course, that was kind of fueled a little bit by the pandemic.

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You know, people weren't going out, so people were looking online for guides on how to shop better. So th- like, you know, that gave it a little bit of a boost as well, along with online e-commerce.

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And, you know, so, so I feel like the last three, four years were very prime for most of the traditional content publishers to come out with their own commerce divisions, and some of them have reached a certain level of maturity.

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I've seen some actually taking a slight step back and say, "Okay, this is not as important.

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We're not gonna invest more time and resources," because they realized that the s- the shift from CPM to CPS was a big shift, and, you know, they're not seeing the, the maths or the economics work out, so they're like, "Okay, we're getting out of it."

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So I've seen a lot of different players there, and some have really emerged, you know, pretty successful too, at this.

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So one of the things that I've observed within the content space is that there are some content publishers that can drive amazing f- conversion rates and some that just somehow never get those conversion rates.

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And I think it- a lot of it has to do with the type of audiences that they have and what are they truly trying to do behind it. But broadly speaking, it's still of...

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You know, it's still not-- I wouldn't say there's a perfect formula to s- of success in the commerce/affiliate world for most traditional content publishers. A lot of them are still trying to figure it out. It's still...

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You know, some have, some have barely scratched the surface, and some have been really successful, but I'd say most of the industry still hasn't figured it out. Yeah. That's what wa- that's my view.

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I mean, I think about it as, and when you talk about Dotdash, I think one of the int- having covered that company for so long, back when it was About.com.

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I might have even done a little bit about the mining company and metal. But yeah, that was a native internet business. It was an internet business. It wasn't really a publishing business.

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It was, it was part of, of, you know, The New York Times for a little bit. They didn't really do much with it at all, and I think because it was a strange animal to them, right?

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Like, before they broke it into actual verticals and what I call minimally plausible brands, you know, it was basically just a, a collection of SEO-driven properties.

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Now, SEO got rebranded as intent as, as more money went into it. [chuckles] Definitely was like, like direct marketing became performance- Right... and, uh, affiliate became commerce.

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But I think what one of the things that they've done really well is marrying that deep executional, you know, the, the i- internet businesses are about execution and optimization and really sweating the details and- Right...

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marrying that with the bra- with the brand, you know. Because they had, you know, brands, but they were brands that existed in an intent world for the most part, right? I know- Right...

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Neil will disagree with me on that. But, you know, being able-- You cannot coast on a brand, right? Like, I take someone like Forbes, right? Forbes has been incredibly successful with its affiliate, which I call- Yep...

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calls commerce. In large part, I believe, from everything I've heard, and people from Forbes can tell me wrong, it's because they've got experts operating marketplace, right?

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Like, it, it- it's not enough just to have, you know, a great, you know, hundred-plus-year-old brand. You've got- Oh, no... to be operationally excellent. Oh, absolutely.

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You've got to sweat out every little detail from the CMS. I mean, starting from the content. Like, that's where, you know, you have your journalistic, you know, integrity and, you know, the, the, the legacy in place.

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So starting there, to the way you write your stories, to what, you know, to you really understanding your consumers and really, you know, reviewing products that really they care for or, you know, recommending products that they-- you think they would like, to the CMS, to the deals behind each of them, to the way it's plugged in on mobile and desktop, to every little moving part behind the link.

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Because remember, that's where the revenue comes in an affiliate. That link has to function.

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If that little-- If there's one extra character in that link, it could be broken, and you-- that's difference between zero revenue and a few thousand dollars.

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Like, every little element of the operational pipeline in affiliate needs to be perfect for you to really make significant revenue.

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And this is where I feel like, from what I'm seeing today in, you know, at, from ten thousand feet, after having spoken to about, you know, a hundred odd publishers within the entire content/coupon/PMPL space, I feel like a lot of them take this, the attention to detail for granted.

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Not everyone's-- I, I'd say honestly, at this point, the way I look at it is, I think twenty percent have really paid attention to the detail, like the guys from Forbes. We work with them very closely. Great team.

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Mm-hmm. Phenomenal, phenomenal level of expo- you know, level of, uh, detail to attention. Attention to detail. My bad. They get it.

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And then on the flip side, we've worked with so many other players that, you know, I don't wanna name, but, like, the point is, like, well, why are you not paying so much attention to the detail, specifically with the operations?

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'Cause that's the difference between zero and a few hundred thousand dollars. They're like, "Yeah, well, whatever. It doesn't matter."

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So, you know, I, I, I think if you, if, if you're a company that wants to get into affiliate, you have to be operationally sharp.And you got to be like laser focused on it because- Yeah... makes a difference. Yeah.

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And I think a lot of it is like it- when things are a side hustle at, at publishers, you know, they don't get the attention.

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Like, you know, if they're, if it's a, it's-- if it's in an experimental budget, you're not gonna, you're not gonna build up a giant infrastructure because you're not sure if, if- Yeah...

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this is just, you know, yet another... I mean, publishers have been tr- have been chasing incremental revenue forever and, and sometimes, you know, you end up neglecting the details.

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Like as you say, I think about it a, a lot like how digital advertising, display advertising, you know, used to be a waterfall, right? It was a pretty [laughs] like basic sort of system. It's did I sell it? No.

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If I didn't, let's send out to a few ad networks for fill.

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And, you know, I think a lot of people in a it- when they get into a lot of publishers and they get into affiliate, I'm sure, it's like, okay, well, we're just gonna put some affiliate links on products and, and then we'll get some money in.

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And I think of what you guys do, tell me if I'm wrong here, is kind of like the SSP of this world in some ways. Uh, that's- Is that fair? That's a, that's a very fair way of putting it.

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Actually, I would take it a step-- I would actually blend two things into this. Think of it as like the GAM, like the Google Ad Manager for display. Like what you just mentioned, right?

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Like you can set up your direct campaigns. Yeah. You can set, you, you can sell it to, you know, exchange bidding or program, program, you know, some sort of bidding inside the ad server.

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That's exactly what we would be for the affiliate world, right? So think of it as like there's no-- So actually just rolling back to exactly thirty seconds back what you just mentioned, right?

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Oh, I just put, you know, I write some content- Mm-hmm... put some links, connect the dots, and my job's done. But no, because guess what?

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Publishers are operating sometimes, and some of the publishers we talk to operate over fifty thousand merchants.

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Now, if you're a coupon site or you're buy now, pay later, you're operating hundreds of thousands in some cases of merchant links, which means these are different types of merchants.

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And again, with every link comes a whole-- Let me, let me throw in some variables that most times people tend to ignore, right?

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When it comes to a link, as it seems really simple, but behind each link is firstly a product page. Now, what if the product that you recommended is sold out? Well, you gotta now update the link to another merchant.

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Sometimes the merchants change, like some merchants go out of business. Merchants change pricing.

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Or you've written an article with certain pricing saying, "Oh, this product's under fifty dollars," but now it's now suddenly over ninety dollars or vice versa.

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Merchants change pricing, so then every time that happens, you gotta update your content.

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Then, you know, users are not just visiting you from one country, so sometimes you do a deal for a merchant link or like, let's say, a Walmart deal.

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Now, Walmart is in the US, but what about users coming to that specific article from Germany, Canada, UK, or other countries? How do you deal with that? What about mobile and desktop?

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If the user clicks on the link and went to the Walmart website versus the Walmart app, well, you're gonna have a better conversion rate if you sent the user into the app if they already have the app installed, because then the purchase is more frictionless.

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Your payment details are saved. All the information's in there. And then sometimes merchants move between affiliate platforms, so you gotta then update the link.

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You gotta parameter-- You gotta put parameters in these links so you can track things correctly.

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Now, sometimes in the process of para- inserting these parameters, people make-- human mistakes are made, and they go to four oh four dead links.

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So that simple little humble link that we thought was simple, actually that involves-- you gotta deal with about twenty different parameters or twenty different variables, business variables, day-to-day, you know, environmental variables.

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By environment, I mean like the, the affiliate environment variables on each link.

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And now imagine that times fifty thousand or that times hundred thousand, coupled with a team that is probably one or two or three people.

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So now you're dealing with a large complexity, and this is why a lot of affiliate businesses, if you ask me, don't do a very good job at their operations because they're just-- they underestimate the amount of work that's required in dealing with links.

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They think that it's a link. Oh, it's simple. [laughs] But it's not. So you- That's probably why they got into it. [laughs] So now, so now, Brian, think of it this way. You've got, you know, for simple- I love simple.

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I love-- You know what I love? I love passive income. What? I love the idea of passive income. Sure. I think the reality is it doesn't, it- it's not out there. [laughs] But I love the idea of passive income.

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Yes, but I'll tell-- Now, allow me to explain you the difference between now passive income and really interesting passive income. This is where... Now, okay, let me, let me take an example.

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So a publisher that, I won't name, I won't take names, but basically the difference between passive income and interesting passive income could-- like for one specific publisher, it was a million dollars more of revenue over a course of four months just by them tightening- Yeah...

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the operational screws in their business. You know, a popular publisher that we work with went from start-- added an additional million dollars in top line, in new revenue over and above what they were already making.

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Now, that million dollars means you're now gonna look at that specific passive business a little differently. You may invest differently for that.

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You may have a different acquisition strategy suddenly 'cause now you can afford it with a million dollars more in your pocket. So that's the difference between good operations and bad operations.

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It could mean a few million dollars more of passive revenue. And hey, with that, your risk appetite changes and your view of the business changes. And so- Mm-hmm...

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you know, that's why I feel like, yeah, the operations of links is just so critical, and this is exactly what we've built- Mm-hmm... at Nucleus, which is-- Well, think of it as like a GAM- Yeah...

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a Google Ad Manager for affiliate links because you gotta deal with affiliate links. You gotta be able to, you know, spin them out.

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You-- I mean, churn them out if they're not operational, if they're not generating revenue, find an alternative, like just like how you have in programmatic advertising for one specific spot of ten people bidding, can you do that for affiliate links?

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And that's the infrastructure that we're creating, which is think of it as like a ad server- Right... plus SSP put together-For affiliate links essentially Yeah.

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So earlier you had mentioned, and maybe I'm reading into it a little bit, like basically some publishers almost pulling back on their affiliate because let, let's be real here, a lot of people got really excited about this space due to a few- Yeah...

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reasons. One is just their ad, their ads businesses were under so much pressure because they're competing with so many people. Two, they had...

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There was the pandemic and there was a, there was a ton of tailwind for all kinds of, of, of affiliate stuff.

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Now that, that has sort of, you know, normalized and, and then on top of that search has, has become as unreliable as it's ever been, I think really. Yeah. I mean, if you look at what's- Yeah...

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going on with Google, with its helpful content update, with its, what is it? S- domain, like site abuse, basically- Site reputation... site reputation abuse.

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You know, when I see those things, those crackdowns, I think affiliate, right? Because, you know, I've been, I've been told by some people in the space that like, they're not really sure if Google likes this stuff.

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I mean, if you think about it, is this an invasive species to, to search? And obviously as affiliate grew in stature, right? The search results pages became very clogged.

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There's not a, a lack of like gift guides out there and, and reviews. Right. And everyone's battling out- it out in there. And so I don't know, I guess I could look at it two ways.

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One, I, I would say usually the tourists get washed out and the people who are just looking for just easy passive income or saying, "Hey, look, we built up this brand. We'll rent out our domain to some coupons provider.

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We don't have to do the hard work. This is great. Money shows up every [laughs] month." There's... That kind of arb. Yeah, we know how that lasted. Arb is great- Yeah... but arb never lasts. Arb never lasts.

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It never lasts. And the whole point of arbitrage is that it finds a seam in the market and then that seam gets closed. That's the point of arbitrage. Exactly. Exactly.

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As soon as the differences between the two markets fizz- fizzle away, then, you know, the arbitrage fades away.

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No, of course, you know, so the way I look at it is, Brian, yes, I think publishers, specifically content publishers, need to just stick to producing good quality original content. And I think no matter how...

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I don't think Google's ever gonna penalize that because I mean, if you look at how Google's policies have come about, they always keep insisting on, "Hey, don't take advantage of your reputation."

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The site reputation abuse policy, right? Like how publishers were leasing out the coupons.domainname.com to, you know, other companies and just letting go of control and just making ad- additional revenue off that. Yeah.

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Well, Google saw through that eventually and said, "Okay, this is wrong." Now, well, I think it was smart for a while. While it lasted. You know, publishers made some cash out, out of that. Great.

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But they stick to their original, you know, their original policies that, "Hey, publishers produce original good quality content, and I don't think you will be impacted."

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I feel like if content and reviews and, you know... I- if content publishers just stick to that truth, I don't think it'll ever change.

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If you look at the guys at reviewed.com, you know, part of the USA Today Group, now they go into the details of the reviews of a specific product. They're not just superficially covering it.

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They're, they're diving into the details in their labs. They're taking pictures. Original content is coming out of these reviews and they're really spending time at it. So they're not doing it superficially.

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And so in cases like these, you won't see companies like these take a hit from Google. Now, of course, there's the whole AI wave or tsunami, if I may, you know, hitting the content publishing industry at large.

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But there too, I think deals are being struck with companies like Perplexity or SearchGPT or, or I mean ChatGPT as well as, you know, the different engines that are coming out.

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The LLMs where, you know, the publishers are getting paid some sort of licensing or royalty. Is that enough? I don't know.

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I don't have much knowledge there, but I can say that well, you know, I think the pipes will keep changing.

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Sometime back it used to be, you know, Google Search, then it came-- it became social and now it's AI and I feel like as time passes, the pipes will keep shuffling. But- Mm-hmm...

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remember no matter what the new pipe is, content is the magnet that they all need. They all, they all cannot survive without original good quality content.

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And that's why they all lean on publishers and that's why publishing is still in some shape or form. Yes, the sheen has fizzled away over time, but it's still, you know, an active business.

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You know, publishing is still a business. Yeah. It's not fizzled away. It's getting tougher, yes, but it's not necessarily going... It's not dead. No, of course not.

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A- and I think, you know, one of the thi- the questions with, with search, because like a lot of, a lot of affiliate has been inextricably, it's a search strategy for, you know...

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Yes, there are a lot, but search is the front door.

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When we-- when someone's talking about intent, they, they mean search usually because, you know, John Battelle sort of w- wrote what I think was one of the early great books about search, you know, and he, he called it the Database of Intentions.

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And- Mm-hmm... and that's why Google has had-- has made search the best business model ever invented. [laughs] And that's also why the government's after them. Absolutely. But it- It's just-... it, it, it...

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You know, people are-- You're always trying to define people, what people want and what you can put in front of them to get them to take some action. Well, it's, it's really easy when they tell you what they want.

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It's just easier. You know, [laughs] you're not- Yeah... you're not trying to- Of course. It's not a, a gigantic da- data crunching exercise.

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Do you see affiliate sort of, I guess, becoming less inextricably ento- en- entwined with search and becoming more diversified as far as...

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Look, a lot of publishers when they were starting affiliate operations, they looked at their SEO and it was, it was an SEO strategy.

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To me, affiliate was part of an SEO strategy and I think that that will inevitably, I, I would guess, change for a lot of publishers. Will it?

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I, I mean, I-I haven't thought much about it, but honestly, I don't think it would change if you ask me, because even with the, with the onset of AI and how people are now, you know, putting in queries, and those queries are somehow linking to intent, and the content is somehow linking back to that intent.

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Mm. So it's indirectly still search in some shape or form. It's just probably now called AI search. But I feel like, no, I feel like, you know, it's going to be very closely tied- Yeah... to intent always.

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I mean, I, I also know the guys at Insider, like, they do a great job of, you know, writing different content around B2B and then linking that B2B content to specific affiliate sites to solve different business needs.

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Like Business Insider does a good job at this. And that's, that problem is never gonna go away.

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I mean, I was watching actually one of the videos on Search GPT more recently, and what I noticed was that for different types of queries, they were not actually linking out to the business sites.

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They were linking out to the content pieces written by- Yeah... these publisher entities. And from there, you would then click on and further lead out to... And again, maybe it's now and maybe it may change eventually.

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Who knows? Because these algorithms will keep updating.

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But, you know, they're leaning on original good quality curated content to provide the right answer as opposed to them, the, you know, the GPT is really taking on the burden of providing the, you know, correct business recommendation.

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They're kind of putting the onus on the content editorial. Y- yeah, I noticed that, that too with Search- I don't have access to Search GPT yet. But, you know, I think a lot of times we do-- I think that's a good point.

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Like, we sort of leap to the worst case scenario, right? And it's like AI is gonna take over everything. Too soon. They're just gonna give the answer.

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But the reality is people are gonna want a trusted review of a lot of... Like, I was just doing some searches before this recording for, like, best trail running shoes, right?

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And like you go to Perplexity and go to Google with AI overviews and, you know, ultimately, a lot of traffic is gonna g- is still gonna get pushed to review sites.

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I think that to me, what I see as a likely outcome is it becomes more of a winner-takes-all game. I don't know, being on page two or page three is kinda, like, not as valuable a- anymore.

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Like, I just see when, when, for instance, the Search GPT thing, you know, they... Y- you wanna be one of the top citations. Right. Like, I think in a citations- Right...

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world y- you wanna be- There's only space for two or three... it's, it's, right, it's not winner takes all, but it's, it's a podium sort of game. [chuckles] Yeah, exactly. It's a podium. That's right.

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But no, I feel like, you know, uh, I think these, again, like I said, you know, the, the pipes of traffic will keep shuffling.

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Someday it's gonna be Google, someday it's gonna be social, sometimes it's, now with the onset of AI, it's gonna be AI. But I feel...

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And no matter how these pipes change in the future, and as our devices change and all these, you know, different interaction and modes change, as technology evolves, there'll always be some new pipe.

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But content, you gotta stay, stick to original content. If you keep producing high quality original content, I don't think you're going out of style anytime soon.

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So when you say stick to high quality original content, I mean, does that mean not trying to do something else? What does that mean, like, operationally? Stick to your DNA, you know?

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I, I think what, what publishers try to do sometimes is they expand, try to expand categories onto newer categories where they-- which is not their strength and DNA.

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And like, when you try to do some of that is where you kinda, you know, bleed a little. But I think if you just- Okay... stick to your core. I could name a few names right here. [laughs] Sure. I'll hold off.

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I've, I've said it. I understand what you mean, because again, the incentives are such, and I think that this could be a great opportunity for incentives to be changed, right?

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Because like when we talk about the, the coupon subdomains, I don't blame anyone for, you know, seeing an opportunity and going for it. Yeah. Because those incentives are, you know, set up. I mean, I think anytime...

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Look, Google's got a very difficult job. Running the internet's a hard job. Oh, yeah. Has a lot of benefits. Has a lot of fringe benefits, I gotta say.

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[chuckles] But, you know, look, they-- anytime, you, you know, Google will complain about, come on, you set the incentives, people respond to the incentives.

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And you could see with all these changes going on that the incentives, and I think this would be the ideal outcome, that the incentives are such that the, that publishers can not just focus, but thrive on doing what they're best at and are, are unique at, which is providing high quality content in areas in which they have particular authority and expertise.

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I think a lot of times within affiliate, the incentives have been for, for publishers to stretch the bounds of what is they have plausible authority to be, you know, writing about.

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Because they have, they have a site reputation for X, and they're stretching X to include Y, Z- Yeah... Q, several other letters. [chuckles] Yeah, exactly. And that's where the problem begins.

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But I feel like, I mean, on the subject of AI, right, I do wanna ask you, so like how do-- so there's AI being used for even, you know, content and content production, right?

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So and I feel like some publ- I, I've kind of seen that some publishers have started leaning on, okay, well, you know, for, for original editorial content, we'll lean on, you know, our, our human writers, but then for all this affiliate stuff, let's lean towards AI to make them, make, make AI write this.

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I feel that's where- Yeah... you know, those pub- those publishers I feel in, in the due course of time, I think will fail. I feel like you cannot outsource something that you don't want to do [chuckles] to just like AI.

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Just say, "Hey, AI, why don't you just write this affiliate content for me?" Yeah. I mean- Right?... uh, well-Okay. I'll put more of a finer point on it.

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[chuckles] If you're outsourcing the actual production of content as a publisher, close it up. Yeah. What are you doing? Yes.

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I- what I don't understand is AI should be used to find broken links, not to rizz up your business. AI should be d- do-- 'cause there's no expertise that publishers have in doing that. It is- Exactly...

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absolutely necessary. It is in- it is critical.

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You have to be operationally excellent, and I think that a lot of whether it's through AI or different types of machine learning technology, there's lots of different ways to use these technologies for these internal operations.

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I don't think, and we saw this with the AdVon, and I understand people going down that path. I do think AI can be used to like, you know, A/B test headlines to understand- Right...

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you know, back catalog things you can link. There's all kinds of different things. But the reality is, you know, there's the old sort of American Western expression, you gotta dance with the one you brung.

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And if you're a publisher, content is like what you brung to the dance, so. [chuckles] Exactly. Exactly. Yeah. So I, I feel like that's something that just shouldn't happen. I mean, I, I think of it this way, right?

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Like, if you, if you are a review site, how do you out, how do you just get an AI to write a review? 'Cause the AI is just gonna reproduce from what others have written out there.

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So really speaking, this is exactly what Google doesn't want you to do, right? Like, they don't want you to reproduce content from somewhere else.

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They want you to write original content, put your own view on it, and, you know, yeah, I feel like that's where AI shouldn't really get in. But now the process of production, right?

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Like from, okay, what are, what are the hottest new products selling? Like, tell me what they are, tell me what the products are, and then you take the products.

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So you could u-use AI in the process of generating that article, but not actually writing the article.

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So, like, there's various other things behind it, like the, the links behind it, the images, or like, "Hey, tell me what ten people are saying on this site and that site."

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Like, you could get summaries, and AI could help you, help you get a sense or a view of it, but it shouldn't be actually writing the content, and that's where things start going south, if you ask me. Yeah.

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And I don't know if you see this. Do you see a scenario where...

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'Cause I think we're in-- I think about a lot of these like mega trends, and I think one of them that we've been living through is this, this shift from like institutions to individuals, institutional brands to, to creators, influencers, et cetera.

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And also this shift from, you know, it to authenticity, right? And I, I-- my, my general belief is the pendulum always swings too far in one direction, and then it just corrects, and then just- Yes, exactly...

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so that's just. And I, I think you can-- I'm starting to think about that we might see a shift back a little bit from individuals. I see because what happens is everyone gets greedy.

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That's [chuckles] generally one of my other beliefs in life- [laughs]... is that everyone gets greedy, and everyone overdoes it. It, this is- Yes... not, this is not an affliction of, this is a hu- human condition.

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And I think a lot of that is happening and, and AI is going to really put pressure on that.

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As, you know, we have these AI influencers, as influencers themselves, honestly, really stretch the bounds of their own sort of authority in areas, and they become, you know, I think you see evidence of some of the, the backlash against, against this happening right now.

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And I think that for...

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You can see a, a world where a lot of the advantages of institutional publishers really become, come to the fore a little bit because when you're talking about having like real authority, when you're talking about having really tested the products, et cetera, and when you're talking about a world where it's all about the podium, then you're, you're less battling with the, the super long tail for a lot of publishers because they can have original photography.

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They can have, they can have economies of scale that allow the, you know, Dotdash to have these massive test kitchens, et cetera. So I don't know.

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I mean, it c- it could n- it could end up like being a case where, you know, quote unquote, "legacy publishers," what did you call them? It's a nice- The old guard. The old guard. Content publisher. Yeah, the old guard.

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Yeah. Yeah. Vintage, if you will. Where they can, you know, really use the advantages that they ha- have to compete better in the marketplace. 'Cause the incentives could line up where they do better. I fully agree.

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I fully agree. Now just if they looked at...

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Now if they really wanted to operate with an affiliate though, they just need to pay more attention to the details of the operations behind it, and they'd all, they'd all have a whole new view.

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I think the whole old guard or new guard or any kind of publisher entering affiliate, they just need to pay so much more attention to their operations because that's where the big success really lies. Yeah.

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Like today, you know, you, you o-often hear, "Oh, well, you know, yeah, we tried commerce. It didn't work out." You know, there's so many panel sessions where people discuss the pros and cons of commerce.

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Specifically, you see this done by the legacy publishing businesses, and they're all s- a lot of them are struggling through it. And I'm like, "Yeah, well, not, well, of course you're struggling through it."

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Well, of course there's the general problems of, yes, the Google problem and the traffic problem and just, you know, the mindset shift from CPM to CPS.

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Yes, you're dealing with all of that, but if you really did a good job, produced it well, executed it down to every little minute detail taken care of, and don't leave any loose ends, you could make significantly more money.

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You can s- a lot more money and your view would change to that, and I feel like no one's talking about that. Everyone's just- Yeah...

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su-superficially talking about, yeah, whether it works or doesn't work, broadly speaking.

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But no one's getting into that, "Oh, well, I certainly saw, you know, three X, five X more revenue by just fixing all these different problems.

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And, you know, we all had a very wrong view to the way we were looking at it. It should be looked at this way." So-Yeah. Yeah I mean, that's- Yeah, I mean, I think that's, that's exactly it, right?

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I mean, when you look at, like in the publishing world, like a Red Ventures and a Ziff Davis, you know, they're different types of publishing companies, and that's why I think, like you're saying, Dotdash Meredith is interesting because they straddle the two worlds.

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And I think that- Right... the, the question ends up being-- 'cause it reminds me of, like, early in my career, I covered, you know, there was, there was the digital agency.

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There were web shops at the time, and they were trying to get business from the big brand agencies, the Saatchi & Saatchis. And- Right...

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you know, they were specialists in, in, in all the executional details of digital marketing at the end of the day, right? Razorfish and stuff. Right.

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And then the traditional agencies were really, you know, they had the big brands, they had the, the creative directors in the fedora and the riviera and whatnot, and they had the deep client relationships.

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And the question was always, they're going to the same place, but who's gonna get there first and whose strengths are gonna win out in the end, right? Right.

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And I kind of feel something similar in that there's a lot of digitally native businesses that are digital marketing businesses at the end of the day.

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I mean, I look at Red Ventures and I'm like, that, that's totally different animal than- Yeah... Conde Nast. Just totally different. But they're all competing now in this.

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And so I think the, the question ends up being who has the bigger competitive advantage? I mean, my belief is if, if you're expert in digital marketing, it's, it's better than if you're ex- you've got an amazing brand.

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I, I am not saying that there's not a lot of advantages to having an amazing brand, but they're not as great as just being really good digital marketing experts. Right. Right.

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And actually, you know, you mentioned the Ziff Davis group. I feel like the...

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you know, that's, that's amongst the twenty percent of the industry that got it right, and that's one of the publishing-- 'cause I believe they recently acquired CNET from Red Ventures, or what was that?

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Which is kind of ironic 'cause CNET once acquired Ziff Davis. Oh, okay. So yeah.

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So yeah, I mean, I think from what I know of their affiliate business [laughs] is that they've got a very, very solid product backbone behind their business that's actually fueling a lot of their affiliate stuff, right?

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And because they paid so much attention to that level of detail, Ziff Davis, I feel like they're doing a, a good job at their operations.

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And I feel like, of course, there's always scope to optimize, but my point is, they've got the broad strokes right when it comes to affiliate. Okay.

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So to wrap things up, give me sort of what are sort of three trends in the affiliate space that you see in the next year or two?

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Well, I see this big, hot new trend of the over- the, you know, the overlap between or the intersection of influencers and affiliate that's emerging quite a bit. Mm-hmm. So I would say that's number one.

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Number two is, uh, you know, well, another hot topic within affiliate publishers is always Amazon, 'cause that somehow just drives a big chunk of revenue for most publishers, and I don't think that surprisingly is going away anywhere anytime soon.

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Feel like a lot of publishers will continue to, to depend on Amazon, and I... and that's just... I don't know if in my lifetime that's gonna change or in our lifetime [laughs] that's gonna change.

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So yeah, that's more of a constant if you ask me, not really a trend that I'm seeing.

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But yeah, just like a belief and, and facts that just continue to stick on, and Amazon does a great job at what they've done with their affiliate business. They're only making it bigger and stronger and bolder.

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And I feel like I've heard there's some changes coming about there every now and then, so I feel as Amazon ruffle, you know, changes some rules, some feathers will be ruffled and, you know, there might be some shifts that come about.

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Outside of that, well, one of the-- I mean, I don't know if this is necessarily a trend, trend, but I'd say it's more like a, a misnomer or a popular mistake that most affiliate publishers make.

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When I say affiliate, I mean really at the intersection of content and affiliate, like that, that part of the world, is they get obsessed, like publishers get obsessed with CPS.

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By that I mean, you know, they think that the North Star for any specific deal, it could be, let's say, I'm trying to strike a deal for maybe Lowe's or a Walmart or, you know, any merchant, and my, you know, publishers get obsessed with, "Oh, I need a ten percent commission.

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I need a five percent commission on that sale."

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And they get so stuck with that that sometimes they oversee the fact that ultimately you're not really getting paid that five or ten percent because, you know, there's, you know, there's returns and then there's, you know, by the time the click goes from your website to the actual merchant, you know, clicks drop off, and then there's networks in the middle that do their own rules, and then there's, you know, cookie windows and cookie life cycles are different across different networks.

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You know, they get stuck in the... They, they get myopic about the fact that, oh, a seven percent commission is better than a five percent commission or is better than a one dollar CPC.

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And this is where I feel like the publishing community just gets...

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loses their direction or loses their North Star because what you really gotta look at as an affiliate publisher is that, "Hey, my role as an ops person, an affiliate, is to make the most money out of every click that's leaving my website."

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Now, whether that's a seven percent commission, five percent commission, or one dollar CPC, what's gonna make me the most revenue out of every person leaving my site?

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And that math, surprisingly, is rocket science for a lot of affiliate publishers. It just-- They just can't get- Yeah... the math right. They think that seven percent is better than five percent.

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Now, superficially or at a high level, yes, but then if you look behind the math, sometimes the five percent could actually yield you higher revenue than seven percent because the, the five percent network is probably, you know, have- has a lesser invalidation rate and has a, a larger or a longer cookie duration window and can just do better tracking versus network A.

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Yeah. And that's where you may make more money from network B or you may actually make even sometimes more network, more revenue from a one dollar CPC.

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But the point is-This is where like the North Star is kind of fuzzy, and I feel like that's a trend. Or let's just chase the highest CPS.

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That's a big trend amongst, you know, content and affiliate publishers, and I feel like that's-- and it's not necessarily wrong.

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Some-- The-- You know, I'd say five out of ten times you may get it right by just going with the highest commission rate, but you just gotta figure out how to, you know, what one's-- which one's gonna make you more revenue?

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Ask the right questions, play around, experiment- Yeah... and you will see one emerging far higher than the other. Yeah. Sometimes what I've seen, like I'll give you a classic example.

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Columbia Sportswear, a merchant on a popular site that we work with, now the publisher was going after just, "Oh, I want the highest CPS percentage.

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I want a three or a five or a ten percent," versus, you know, someone's giving me a two dollar CPC. And they just got so stuck with the fact that I want to go after CPS.

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But then when we actually played the different scenarios out for them, one was yielding-- You know, basically, the CPC deal ended up being a hundred X higher in terms of EPC, earnings per click, versus the CPS deal.

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We're like, "Do you see now that chasing the CPS was actually just you're, you were just going nowhere with it? The CPC deal is gonna make you a hundred X more revenue."

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Now suddenly, if you start making fifty, ten, fifty, hundred X more revenue out of every outgoing click from your website, the way you look at your business, the dynamics of your business, it changes.

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And you're now suddenly one of those publishers that's making- Yeah... a million dollars more in revenue. And suddenly commerce is now a growing- Right. Now suddenly from being passive income, it's the rising star.

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You know, that's the difference between- Yeah... good ops and bad ops. Yeah. And just like, I mean, that just completely reminds me of how it used to be that like, oh, direct sold is way better than indirect sold.

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CPM is way better than any kind of performance bet. And it's not, not necessarily [laughs] like- Yeah...

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you know, it's, the math is the math and, you know, the math can, can tell you different answers, um, you just- Exactly... you gotta do, you gotta do the work. [laughs] Exactly. Thank you. Okay.

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Lavine, thank you so much. Yeah. This was really great. Really appreciate you taking the time in August. Oh, thank you. Thank you so much for your time, Brian, and enjoyed this. Absolutely loved it. Thank you.

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