EQUTE — Projections from the marketing research company Forrester say that affiliate marketing will continue to thrive in the down economy.

Their projections say that the affiliate business will grow in double digits in 2010 and become a $4 billion industry by 2014. Most of this revenue will be paid to affiliate marketers, though affiliate networks will continue to grow.

The research says that PPC and search marketing will continue to be the dominant venue for affiliate marketing campaigns — social media isn’t expected to grow much at all. Industries favoring affiliate marketers will be financial institutions, retail stores and online education, according to the Forrester report.

This shouldn’t be a big surprise to anyone in the industry, but such projections could help foster an environment where businesses will think more about letting their brand loose for affiliates. As the industry continues to work out the kinks — flogs, shady re-bills, garbage products — with help from Oprah and the FTC, it will be even more attractive to bigger brands.

So keep up with your affiliate marketing, this skill set could be priceless when big businesses figure it out and actually start spending good money on good affiliates.

Thanks a lot to Geno Prussakov over at AM Navigator for putting out some key numbers from the pricey ($499) report.

EQUTE — The uproar over flogs or fake blogs continues, but who is really responsible for them?

I liken the current Federal Trade Commission crackdown and all out Oprah war on flogs to the banking crisis. Both bring up the question of where is the regulation and who should be doing the regulating?

All along the way from the fake blog to the CPA action, people could have stopped and said, “Well, this doesn’t seem right, maybe I should stop.”

The affiliate marketing writer cold police him or herself, but when it’s a matter of livelihood, are they really going to stop when their storefront site is getting hammered by Lucy’s Juicy Diet and Wally’s White Teeth? Adding pressure to make more commissions from affiliate managers also pushes them to follow the path that works. Sure, one could ask if everyone were jumping off a cliff, would you? Affiliates would likely answer, “Sure, if we’re landing in a big pile of money.”

Then there is the networks, they might throw a line or two into their 40-page terms of service about fake blogs and trademarks. But beyond that, they don’t have the time or resources to wonder where each link is coming from — especially if that link is bringing in money for them and their advertisers. Adding regulation at this point seems logical until you think about how many thousands of new landing pages pop up every day for everything from acai berries, Obama grants, Google money, teeth whitening and all the rest. Unlike entities like Facebook, affiliate networks aren’t going to set up an expensive lander submittal process that would only succeed in making them less money.

Then there is the advertiser, the one visible person that gets a negative image in the eyes of the consumer if they catch on that what they’re reading is a flog. Some advertisers have sought out flogs and stopped them, but more often than not, even the advertiser isn’t going to be eager to cut themselves out of the profit. Perhaps they could send that free trial offer to reviewers and bloggers — which some do — but that means more overhead and putting a lot of trust in the blogger’s hands. If they are hawking acai berries and colon cleanse anyway, do they even want people telling the truth?

So where does that put us? Nobody wants to lose money by quashing flogs altogether, but nobody really likes them. It’s not an easy question to answer, and in the sea of dubious information that is the Internet, aren’t flogs exactly what everybody expects to find?

EQUTE — ValueClick is in some hot water over its allegedly shady business practices.

According to a class action lawsuit put forth by investors, ValueClick knowingly hid “the willful and ongoing violations of federal law governing the conduct of the advertising and promotion business that lie at the heart of ValueClick’s business operation.”

The lawsuit comes on top of Oprah and Dr. Oz’ lawsuit against the slew of acai berry advertisements featuring their likenesses and is another blow to the market of affiliate marketing.

ValueClick allegedly violated the CAN-SPAM law and the FTC act by pushing pop-up ads, “free” gift offers and gleaning private information from unsuspecting consumers.

The company also, allegedly, hid all the shady practices from investors despite the fact that they knew they were being or would likely be investigated soon.

ValueClick has offered up a $10 million settlement in response to the lawsuit.

The affiliate marketing industry won’t see a huge upheaval or likely even any immediate results. But this type of bad business does make the industry look unprofessional and keep advertisers — and their money — out of what can be an incredibly valuable and legitimate business.

Advertising networks are at the front lines of these types of shady offers — and if they don’t see what is going on, they are not paying attention.

Big name advertisers and their money will flow toward the professional networks that keep free diet pills and info-mining contest offers out of their business model.

Oprah, Dr. Oz and the state of Illinois are fighting back against the rash of online advertising hijacking their names, and it could send ripples through the affiliate marketing industry.

Illinois Attorney General Lisa Madigan filed a consumer fraud lawsuit against three suppliers and an Illinois-based affiliate marketer on grounds that their promises led them into a shady rebilling scheme without explaining the terms of their “free trial.” For anyone who doesn’t know, these rebilling schemes lure customers with a trial offer, asking them only to pay shipping, then billing them early or making it nearly impossible to cancel after their trial ended.

Madigan said the tactics took advantage of online shoppers.

“For thousands of dieters, the quest for a miracle product has become a nightmare,” said Attorney General Madigan. “Far too often, consumers end up losing their money — not weight — in these deals.”
Harpo, Inc., producers of “The Oprah Winfrey Show” and “The Dr. Oz Show,” along with Dr. Mehmet Oz, also filed a massive trademark infringement complaint against 40 Internet marketers of dietary supplements, including acai berry products among others.

The lawsuits come after an investigation into consumer complaints that revealed the deceptive practices of these companies.

“The acai berry supplement sales programs are among the most aggressive that we have seen using misleading sales tactics to scam consumers,” said Madigan. “Consumers should always be skeptical and educate themselves instead of blindly believing any endorsement claims. Also, consumers need to be very wary of weight loss and health claims that sound too good to be true.”

Neither Oprah Winfrey nor Dr. Oz has ever sponsored or endorsed any acai berry or dietary supplement product. Oprah also put a warning on her site saying as much.

Consumers should be aware that neither Oprah Winfrey nor Dr. Oz are associated with nor do they endorse any açaí berry product, company or online solicitation of such products, including MonaVie juice products. Attorneys for Harpo are pursuing companies that claim such an affiliation.

She also mentioned that neither she nor Dr. Oz endorsed resveratrol, another popular weight-loss/superfood supplement.

There is a lot of skepticism about how much these lawsuits will really be able to do to punish affiliate marketers who spouted the false or confusing claims, but it could still mean some big changes in the world of internet marketing.

There are a lot of internet marketers that say this is just what the industry needs, a sort of culling blaze to clean up all the debris littering the industry. But whether or not these lawsuits have any effect in the long term is purely speculation.

Professional advertisers hope it will put an end to shady rebilling offers and bring legitimacy to the remaining marketers, but in reality, these types of schemes have been around for decades. There will always be an advertising network with a few of these type of offers because no matter how unpopular and unscrupulous, they make money.

The lawsuits should have marketers thinking about how to find more sustainable methods of making money. Instead of jumping on the latest diet pill fad, perhaps this will have good marketers who once pushed bad offers thinking about making legitimate profits.

For the rest, these lawsuits won’t likely change much of anything. Marketers will take Oprah’s name off their acai berry sites and ads and wait for the next fad.