Calling affiliates the “lifeblood of the online porn industry,” Wall Street Journal writer David Kesmodel surveyed the commercial and legal concerns for the Internet business model popularized by the adult entertainment industry.
“You have 10,000 people trying to push your product for you," James Seibert of HotMovies.com told the Wall Street Journal. "It's the ultimate guerilla marketing.”
“The entire industry revolves around this relationship,” XBIZ Publisher Alec Helmy said.
While Kesmodel’s article highlighted the upside to affiliate marketing, including a section on how mainstream companies such as Payless Shoes are adopting the model, he also focused on the legal issues that grow out of an extremely competitive affiliate landscape.
“Affiliates are also responsible for some of the things that frustrate Internet users,” Kesmodel said. “Because competition is fierce and affiliates get paid only when they get a user to click through to a porn site, affiliates often use aggressive tactics. Some have been behind massive spam campaigns, while others design websites that ‘trap’ visitors with a never-ending stream of popup windows.”
According to Federal Trade Commission attorney Jon Kraden, who Kesmodel interviewed for the article, government prosecutions under the 2003 Can-Spam Act serve to put affiliates as well as paysite owners on notice that illegal tactics used to drive traffic will not be tolerated.
Setting aside the legal issues borne out of a competitive affiliate environment, Kesmodel also fixed his attention on the day-to-day business of marketing adult content online.
“Affiliates have been so successful at driving traffic to porn sites that purveyors spend a good deal of time and money keeping them happy,” Kesmodel said.
According to his interview with Vivid Entertainment Group affiliate manager Vivid Mike, 60 percent of the site’s 100,000 unique daily visitors come from affiliate-generated traffic.
“We spend a lot of money getting new ones and keeping existing ones as well," Mike said, adding that he had taken several affiliates to Nobu for dinner at the recent XBIZ Summer ’06 Forum in Las Vegas.
Clark Chambers, who manages affiliate programs for OlderWomen.com and AuntJudys.com, confirmed to Kesmodel that in addition to commissions ranging from $5,000 to $8,000 per month for top affiliates, expensive gifts were also a common practice to lure affiliates capable of driving the most traffic.
“Mr. Chambers, based in Los Angeles, said he recently sent a $3,000 TAG Heuer watch to an 18-year-old in Moscow who runs a handful of affiliate websites,” Kesmodel said.
