Affiliate Nerd Out

Success Stories of Affiliate Marketing: Big Publications And Scrappy Affiliates with Jim Nichols

January 24, 2024 Dustin Howes Season 1 Episode 63
Affiliate Nerd Out
Success Stories of Affiliate Marketing: Big Publications And Scrappy Affiliates with Jim Nichols
Show Notes Transcript Chapter Markers

Unlock the secrets of affiliate marketing's evolution with me, Dustin Howes, and marketing maestro Jim Nichols. This episode isn't just another industry rundown; it's a treasure trove of insider strategies and the bold concept of 'stratocution' straight from Jim's agency, Exclamation Marketing. We tackle the David and Goliath saga between plucky affiliates and publishing powerhouses, revealing how the balance of power is shifting and what it means for innovation and diversity in the market. Plus, get the scoop on how big-name companies are making waves in the affiliate world, mirroring the organic food market's consolidation – a trend that's shaking up the status quo.

Ever wondered how AI is rewriting the rules of content creation? We've got that covered too, examining the implications for authenticity and the partnership scale for major brands and solo entrepreneurs alike. As platforms like Amazon evolve, we dissect the challenges and opportunities lying in wait for smaller businesses. And with AI's influence on content stretching into FTC territory, we talked about the murky waters of regulation, ethics, and the future of commercial versus editorial content. This is a candid look at the digital tightrope walk between innovation and integrity, one that all content creators, big and small, must navigate.

Looking toward the horizon, we forecast what's next for affiliate marketing. I'll show you why niche market leadership could be your golden ticket and how early adoption of new channels like Reddit can catapult your affiliate programs to new heights. We also touch on the burgeoning relationship between technology and commerce, allowing for seamless customer transactions. It's a thrilling time for affiliate marketing, and this episode arms you with the foresight to adapt, innovate, and potentially transform from a small affiliate into a major industry player. Let's ride the wave of change together – because in the affiliate marketing cosmos, the only constant is innovation.

For more tips on how to scale your affiliate program, check out https://performancemarketingmanager.com

Dustin Howes:

Hey folks, welcome to Affiliate Nerd Out. I'm your Nurturator, Dustin Howes. Spread that good word about affiliate marketing. You're gonna find me every Tuesday and Thursday here 12, 15 Pacific Time on LinkedIn Live, so please put it on the calendar and stop on by to say hi. My guest today, jim Nichols, is gonna be here talking about big publishers, scrappy affiliates and the David versus Colliott Festival that we have going on in affiliate marketing. Jim, welcome to the Nerditorium, sir.

Jim Nichols:

Hey, I wish I could call myself a nerdinator or whatever your exact term was. I've been kicking around in affiliates since about 1999. So one of the first people there. I think my background's a little bit different than a lot of people in affiliate, because it was never my entire focus for work. It was always like a little piece of what I did, and so what that, I think, makes me broadens my perspective a little bit about the industry. There's lots of people who, I think, know more about the industry, but where I come from is how the world views it from the outside and how internally we can help people better understand the market.

Dustin Howes:

Well, I mean, I came up with a nerd because I am a nerd. What do you call yourself, Jim?

Jim Nichols:

Old.

Dustin Howes:

No.

Jim Nichols:

I'm, you know, I feel like I'm an OG of affiliate. I think I've been to like 17 affiliate. Summits have done just dozens and dozens of programs in a variety of different industries, from B2B to, of course, beauty, apparel and, you know, home goods. So big range, jeez.

Dustin Howes:

And look at this Like I didn't even. I barely introduced you and we've already got questions coming in. We will get to them here shortly, jim, but we want to finish with our introductions first. I don't want to be rude. Thank you for the question, whoever that was. We are going to have live Q&A, so please jump in there into the chats. If you'd like to be in Jim's seat and come be our my guest here, go to dustinhowes. com, slash nerd and fill out a form and let me know what you want to nerd out about and our question of the day for those audience members. We would love to hear from you, our affiliate entrepreneurs being crowded out of the space of affiliate. Jim, hold your thoughts. We're going to get to them here shortly, but without further ado. Jim, who are you? Well?

Jim Nichols:

I am a 30-plus year veteran of marketing. I actually got started in marketing pre-digital, so that ages me a bit, but have spent most of my career working at agencies, but also on the publisher side and the network side. My most recent industry job, prior to founding my little agency, was as CMO for partner eyes, so really trying to help increase the market share of that brand in the US and then grow its presence globally. I think the key component of my career that's a little bit different than for a lot of affiliate is, honestly, I'm a big brand guy. I've worked with a lot of very large companies in large industries and have had to live the battle that we all have of getting senior marketing managers or senior marketing leaders to care about this industry and view it as more than a necessary evil or a sidebar to the marketing industry. So I hope that I've made a contribution there and that's really my goal over the next several years of my life is to really elevate affiliate and the way that people think about it.

Dustin Howes:

Well, I really like what you're doing over there. You always have your finger on the pulse in this industry and I appreciate every conversation that I have with you in the PMA. We're both board members, we're both. You're even more voice-dressed than I am out there about your opinions and I love that about you. I want to learn more about your company. Please tell us about exclamation marketing First name origin story. How'd you come up with this?

Jim Nichols:

Sure, I love marketing that's loud and brash. To be honest with you, I feel like the whole world thinks that people are watching for their next move, and the reality is, nobody really cares what you're doing. The only way to grab attention is to be loud and to make sure it resonates with that audience, and so, to me, exclamation and that exclamation point really delivers on that. My business is what I call stratocution, so I spent a lot of my life doing strategy and go to market development for digital companies to help them position themselves in a world where everybody thinks everybody's the same.

Jim Nichols:

And what I mean by stratocution is, you know, when I started in marketing, we would spend a year thinking about talking about doing something, or we would spend a year thinking about what we were going to do in the one 30-second commercial we were going to produce that year, and there would be at an agency, there'd be like eight of us in meetings for a year until the last nine weeks before we needed to go live, and then we somehow had to scramble and shoot that ad. The world isn't like that anymore. The world can't wait for that, and so to me it's like let's get a strategy together in a couple of hours, get it executed and see how the market reacts. If the market reacts, well great. If not, we start making changes. But I don't think there's any substitute for just being out there and letting people react to what it is that you're doing.

Dustin Howes:

Beautiful and I love the word stratocution. That's a lot of fun making up words. I mean, that's what the nerd at Tori it is.

Jim Nichols:

And it's a term that people really understand and what I find a lot of what I work with. There's a A and B stage startup. So early funding rounds right, and what I see immediately when I talk to a CEO is people are like yes, that's what I want. I want what we're doing to make sense, but I want it to be out there trying to do something. I cannot deal with another Venn diagram right Of the circles and the squares and the whole bit right.

Jim Nichols:

What people want is emails out the door, sales decks, developed sales meetings booked and then adjusted optimization, just like we do in affiliate. Yeah, nobody gets it right the first time out, and so better to get the first time out in a week than in six months.

Dustin Howes:

All right, so exclamation marketing what do you guys do and who are you serving out there?

Jim Nichols:

Sure. So half my business is in affiliate, so I actually work with a couple of the networks to help them tell their stories. I have a big business in writing award entries as silly as that probably sounds, but awards are very important in our industry to establish companies' credentials in specific markets. I also work with publishers to help them tell their stories a little bit more effectively. And then, outside of affiliate again, I work with a lot of A-stage media and Mar-Tech startups, as well as customer experience startups, to really help them figure out a message that's distinctive and something that people notice and care about. I feel like so much marketing is invisible, especially in B2B. A-u is a B2B SaaS expert I'm sure can respond to that, but so much of it is just wallpaper Right, and so hopefully I'm able to help the clients that I work with tell their stories in ways that are more meaningful.

Dustin Howes:

Excuse me, Usually I put my.

Jim Nichols:

That's okay. You got the flu, or you had the flu man.

Dustin Howes:

I'm coming off the ASW flu. It was a rough one this year. Almost every conference I go to, especially of that size, I always come home sick with something. But this one was next level epic like 104-degree fever and chills, and it was a gross one. But we're on the mend, we're getting here. I want to get to that question of the day before we get into our main topic here. So let's jump in. Jim, what is your honest take on how AI content generation going to affect the smaller affiliate sites out there? Great question.

Jim Nichols:

So I'm gonna start with the negative.

Jim Nichols:

I usually would start the positive, but in this case I think there's a danger.

Jim Nichols:

The big fear that I have about AI is that it's gonna cause this explosion of lousy content out there, and what that's gonna mean is consumers can't find the good information that's available, especially from smaller affiliates, who may not have the SEO juice that they need in order to rank higher, and so there are gonna be a lot of companies that are just and there already are a lot of companies just producing DREC, and so consumers are going to these websites, finding crap and then becoming frustrated, and where I see a potential issue is that may reduce the number of places that they look for information.

Jim Nichols:

They may go exclusively to a wire cutter or a reviewed or something like that. Not that there's anything wrong with that, but on the entrepreneurial side, there's lots of people who have very, very distinct perspectives, and I don't want them to get lost in the noise, so I'm a little concerned about that. On the positive side, I think the key is going to be making it more efficient to field and measure programs. There's so much manual work still in this industry, and if we can streamline some of that then those entrepreneurs can do what they do really well, which is to innovate.

Dustin Howes:

Yes, totally agree on the concept of the negative Like. There is already a lot of garbage out on the internet that was AI generated and you can read it. Or one of those key tips to look for in an article are dips, dives and delves, Like. If you read those words, you can almost automatically recognize that this was an AI generated piece of content, and I stopped reading when I catch one of those words because it'll be in the first couple of paragraphs, I guarantee it Really.

Jim Nichols:

I'm going to have to look at that. You know what I've?

Dustin Howes:

looked for those pages.

Jim Nichols:

Like awesome websites are putting FAQs at the bottom of the page for SEO juice, but if you read them, the sentence structure is always absolutely the same, so you get like tell them what you're going to tell them. Here are the five points that you tell them, and then here's the summation of the five points and what you told them. And so it's this incredibly repetitious cycle, but I love this. Dips something delves and dives.

Dustin Howes:

Dips, dives, delves, yeah, the three B's there Watch out for them. I don't know why AI loves those words so much, but it is pretty consistent. So, moving on here, trisha, what a wonderful opportunity to hear from one of my favorite people. What perspective will we talk to? Jim? Well, first off, trisha Rood, like, how about your favorite two people?

Jim Nichols:

Well, see, this is what really excited me about this podcast is that I really feel like you come from a different direction in this industry, right, Like fundamentally I'm a big brand guy that worked advertiser side or agency side, working to deliver enough scale for it to matter to a large company, right?

Jim Nichols:

And I feel like you definitely have that experience in your background because it's so diverse. But your spirit is different than mine in that way, in the sense that, like you know, you're fine in a way you are. You know, I always say to people like I get interviewed a lot by Wall Street firms about find out about the partnerships industry and so forth, and I'm like always bet on affiliate people because they get it done right, they make it happen and, like affiliate people have this knack for making the impossible possible and making the possible quicker right.

Dustin Howes:

And you have that in a big way.

Jim Nichols:

You know. Like you know, I can tell you what a lot of big companies are thinking about, but I don't have that in my background, so that's why I was excited about this conversation.

Dustin Howes:

Well, and I was excited to have you on. Your experience in this industry is legendary and I've heard so much about you and have always heard your opinions loud and clear. And let's get into it, jim. I want to give you our topic of the day and I want you to explain why you came up with this concept of big pubs versus scrappy affiliates. There is a concept that you want to go through here today.

Jim Nichols:

Go ahead and explain, sure, so actually, the impetus for this topic was work that I did many moons ago in the organic food industry. So if you know organic food, I'm sure some of the people who listen to this will. It was this industry, cottage industry, created by a bunch of people who looked at the food industry and said you know what? I want to do something different. I want food to be food. I don't want it to be all additives. And so they created quietly this multi-billion dollar business that was sold in special stores, that was separate from the rest of the food industry. The industry, big companies, the industry started looking at their business and they said well, my margins, especially for center store stuff like food in a box or in a bottle, our margins are bad. Retail margins are bad. But wait a minute, look over here We've got this market. That's high margin, high growth. We got to get in on that, and so large companies like General Mills, calox, conagra bought up the organic food brands like one after another, and so that industry is now really dominated by big food companies. There's nothing wrong with that. They are able to improve distribution and so forth. But what happens to the little guy? And so I saw a big pair or I see a big parallel between that process and what's going on in affiliate.

Jim Nichols:

Here, the big margins and fast growth are about our ROAS right that you get 18 to one average ROAS, I believe in this industry, which is insane.

Jim Nichols:

The only thing that gets that kind of level is a houseless email where you're only paying for the distribution For sure, and so what I see are large companies saying, hey, I want a piece of that.

Jim Nichols:

And so now affiliate is 20% or roughly, of many merchants investment and spending and, if you're doing it right, and major brands are representing a bigger and bigger and bigger portion of all this. So my fear is that big likes to work with big right. So big companies like to work with other big companies because they feel understood and it means fewer partners that they have to do in order to get scale. What I worry about is that what makes this space amazing is that entrepreneurial spirit that is part and parcel of you, but of also thousands of other people in this business who just transform media and transform social and search and all these other markets with their energy. My fear is that large companies will crowd all of that out in favor of a few big media organizations, and so I hope that we can find a way for both groups to work together and for big companies to understand what entrepreneurs are delivering that's different than what might be able to be delivered by a huge publishing house.

Dustin Howes:

Yeah, and it is a hard balance for brands out there that want those big publications more than anything. They know the difference maker that they can be. But if you just alienate from the scrappy affiliates out there, you're missing out on some big opportunities in the future. Those scrappy affiliates might become monster affiliates years down the line and if you build a relationship with them today, that relationship can flourish in years to come. So they shouldn't be ignored by any means. But your concept is that affiliates entrepreneurs essentially are being crowded out of this space. Now tell me more about this theory that you have.

Jim Nichols:

So my suspicion I don't have data right, but my suspicion is well, actually I do have some data.

Jim Nichols:

So private equity firms are buying up agencies, companies are integrating multiple pure play digital publishing houses, so that there are several media companies in our industry that have 20 or 30 different vertical publications so one about home improvement, one about apparel and one about beauty and that's all great, that's fantastic, but if you are operating your own site, my fear is that those people will collect more and more.

Jim Nichols:

The groups, the polling companies and so forth are going to capture a larger and larger share of the market, and what that will mean is that these small publishers just simply aren't able to get the attention of the large brands that are really going to dominate in the industry. When I also think that if we look at what's happening in the OPM space in affiliate margins are declining For most agencies, they'll tell you that there's been downward pressure on fees, and what that means typically is that when you, an agency is a very simple machine, if you will, it's a dollar in, a dollar out. We take a little bit, but basically that's how it works. If you reduce the fees coming in, you have to reduce the level of innovation and number of partners that you work with in order to make that business economic. Does that make sense?

Dustin Howes:

Following, so what?

Jim Nichols:

that means is, eventually, if the fee goes low enough. This is what happened in the regular media space that I operated in. You know, when I started in advertising, we made about 18% commission on what we're spending TV, radio, print et cetera. By the end of my time in conventional media, that commission rate was down at the two or 3% level. What that means is you get less experimentation, fewer options. You're going to put more money into network TV because it's easy. Three people can buy a billion dollars worth of network TV, but it takes 300 people to buy a billion dollars in digital. So if you look at that formula, eventually the pressure is going to be stronger and stronger to work with fewer larger organizations. At least that's my fear.

Dustin Howes:

I got you and you know the bigger publications have a bigger budget as well, so they can make a good piece of content that already or ranks organically pretty quickly and on the on top of that they can Buy ad spend to get more traffic to that and and feed the beast when the scrappy affiliates out there are hoping on organic or social, to get that free Advertising to their page or maybe email at the very last possible like level. That's a really so I'm sorry, go ahead. That's about all ahead.

Jim Nichols:

It's a great example, I think, because SEO the major media companies in in many categories and affiliate everybody's so good at SEO that, like, we reach a certain point where, no matter what you do, the order is the order. Right. We can move you from eight to seven or seven to nine, depending on what you're doing. But what if you're a small publisher that has a relatively low Google score? Right, but amazing content? In theory, they're gonna rise over time. But if you think about the way that Google rankings typically work, which is the number of links out there and so forth, it's gonna be very hard for an entrepreneur to break in.

Jim Nichols:

I look, for instance, at the bed in the box business, right, which exploded over the last ten years. Right, there are some amazing entrepreneurs that have made a ton of money developing review sites and explanation sites for that business. Is that opportunity out there in the future in new industries? I hope it is, but I fear that what's gonna happen is large media companies are gonna dominate there and the smaller that and smaller players are gonna have more difficult time hitting the critical mass.

Dustin Howes:

Yes, yes, and totally agree. The guys that were on the forefront of that, that started making that content early and they started ranking on Google. They got paid out because that industry blew up like it was cool. Now this next industry the one I have envisioned is AI like the use of AI for businesses and making those suggestions out there to businesses is going to be a big, booming industry, and it's one I'm in front of right now.

Dustin Howes:

It's the one I'm creating content. I'm building content for B2B SaaS products that that business kids can use to improve their workflows, and AI is a big portion of that, and so I'm trying to get that real estate today and Hopefully it benefits me in the in the future and I can start living that affiliate dream. But, like the only edge I have right now, compared to Other big publications, my entrepreneur spirit is utilizing AI wherever I can to help me generate more content, whereas the big publications are still behind the times in this or using their internal Employees to make all of this content, and their workflows are much slower than what I can pound out in terms of content.

Jim Nichols:

I think it's really interesting because you know, it's this all-or-nothing world in which we operate and you're rejecting that model, right? So it seems to me like there are AI websites where stuff gets published without any review, right, and they're trash because Trash. If you think about the way AI works, it's like how do I learn from all the rest of the world? So if you do that, you're going to get average or below average content, because most content is average or below average, right? The flip side of that is to say, okay, no, we don't want to have AI play any role in what we're doing, we want to be pure, right? And the challenge there is how do you keep up with trends? How do you keep up producing these things? And so what's interesting to me, intriguing to me, is how you're trying to combine those two. Right, it's using AI to help facilitate production but, at the same time, ensuring the high quality that that personal intervention makes possible. Yes, and, and you know, that's what I'm trying to do.

Dustin Howes:

Yes, and and you know that's my stick as well for the reviews that I'm doing I'm a human and I am a business owner and I'm making authentic Content based on my experiences with these products. So I sell a software package that is Expressing that. And, yes, I use AI in different kind of capacities, not necessarily in the content per se, but it is helping. Expanding my reach with AI is where that really kicks in, after I write the article myself right and edit it thoroughly. So I think the the bigger Companies out there that aren't using that, eventually they're gonna start Firing people and start adapting to this AI and, like start creating more garbage content. Do you think that could be like the future of the big publications?

Dustin Howes:

Well it could be Okay.

Jim Nichols:

I think that the big publications are really conscious that the only thing they have is their brand equity and credibility, right, and so that's why they're taking this kind of all or nothing approach to AI. Right, it's like no way not in the production of our content, because they want to assure people that what they're doing is authentic and original, and so forth. What, what I'm intrigued about and this is why I think entrepreneurs are so important in this space is that you're rejecting both boxes. Right, you're rejecting pump it out AI, ai, ai. There are websites publishing 600 articles a day. Right, they're over here.

Jim Nichols:

And then you got ones over here who where it's gonna take three months to publish one review article of a product, right? Surely there's a way to combine those two or at least to use AI for amplification. Right of, if you produce one high quality piece of content, right, how do you get the word out about that? How do you get links pointing toward it? I think those are incredible, incredibly valuable areas for AI to pursue. I'm sure you're doing that, so you know more than I do about it. I can only think about it. You know Intellectually, you're doing it.

Dustin Howes:

You're doing it so I Am doing it and and, yes, I am mixing those, both of those worlds, and trying to make a good happy medium spot in that, in that space, and that's where I'm winning, but I'm not winning like big pubs are. I'm not living that dream yet and I hope to get there one day. But why, in your opinion, are big pubs winning over the smaller entrepreneurs today?

Jim Nichols:

Well see, I come back to big likes, big right. And we like them for practical reasons because, again, if you're a large brand, you don't want to deal with 18,000 partners right. If you can find 18 that can give you the same level of audience, right. And Obviously there's nuances to this. I'm oversimplifying that issue. So. So that's number one, but there's also a lot less risk in working with 18 versus 18,000, right. Fortunately, ai is helping on the compliance side too, so you can work with more, more publishers and so forth, safely.

Jim Nichols:

The other reason I think that they're doing well is that there's a lot of concern out there that Many affiliate sites are pay-for-play right, and we both know there are many sites like that right. That you know. Oh, what a coincidence. This review site puts this Bed that offers the highest commission at the top of the list right, but the really, the real entrepreneurs in this space don't do that right, they're offering something that's unique and providing a different perspective that a large, that a large publication simply can't do, which I think is really valuable.

Jim Nichols:

And if we think about your B2B SaaS space right, it's very difficult for most publications to specialize in an area like that, right. It's just. It's just not going to work for them, but you can be the leader in that space because you're taking it out early and developing that bank of content now. So the way entrepreneurs have to do this is by constantly Re-invent, re-inventing what they're doing, what they're doing. I think, right, that large publications are always going to be followers, because they have to be right. In order for Something to be profitable for a large publication has to appeal to a lot of people. Well, you know, are there a lot of people for whom B2B, saas, affiliate content is appealing? I'm sure the number is growing, but I think probably a lot of people don't know it's out there.

Dustin Howes:

Right, they're using G2 as their primary way of learning about things, which is notorious for selling the top spots and and selling leads like.

Jim Nichols:

I didn't know that. So I knew that they did sell the leads. I didn't know that. I thought that that was like a.

Dustin Howes:

You know that the ranking was ultimately determined by the ratings, but Well, I guess I'm not sure Ranking could be, but, like you know, you can't easily go to that brand's welt, them being a customer. So what I mean by that, they create the list and then they reach out to all those companies and say, hey, we want to pitch you on the top and we want to make it an easy lead form, phil, to come see you. And if they say no, we don't want to do that, they stay in that free model. But the ones that do say yes, they get the leads that are coming to all of those.

Jim Nichols:

So there is a totally good yeah.

Dustin Howes:

Yeah, so model. I mean, they're smart, they know what they're doing. It's just it's not as authentic as I wish the internet would be.

Jim Nichols:

I'm also concerned about the way that Amazon is changing, because I think Amazon and Amazon only brands were a great place for entrepreneurs to be, but it seems like it's easier and easier for large companies to work with Amazon than small ones because of the way that the logistical costs get applied. It's very expensive to have Amazon do your fulfillment, especially if you're small fry if you're a challenger brand so. I think it's also going to stifle innovation.

Dustin Howes:

For sure. All right, We've got another question here. Trisha asks how does the rise of AI-generated content and jive with the FTCs increased focus on going after reviews that are not genuinely from users who use the product? I wish we could pop a third screen up here with Trisha because she's a lawyer, right.

Jim Nichols:

I think this comes back to this issue that a lot of content out there is going to be crap produced by machine, without human oversight, without human involvement, and I hope the FTC, frankly, does get more aggressive about it. I'm not super optimistic because I think government tends to move slower than fraud. I feel like we're always passing laws that would be great if they had been passed three years ago, when the issues that they're confronting were originally raised.

Dustin Howes:

What do you think this to me is a really interesting one for you.

Jim Nichols:

As somebody who's really sorry, I'm going to switch the turn the tables on you.

Dustin Howes:

I obviously I follow FTC rules as much as possible and sometimes it gets forgotten on pieces of content. Luckily, I have affiliate managers come to me and recognize that and help me realize where I did miss it. Trisha, feel free to drop the link to the PMA's discussion about whether content is owned by the publisher or the AI generated content like itself. That was a really good bit by the PMA and very eye-opening.

Jim Nichols:

This is really interesting because a lot of those FTC rules are about influencers. Right To me, the FTC is reacting to the idea that there are influencers that are paid to play. What we've almost moved on to at this point is influencers that don't exist, influencers that are computer generated. I believe in what the FTC is trying to do and making sure that people who endorse things actually believe in them and use them. I do believe in that, but I think honestly, it's going to be fake influencers?

Dustin Howes:

How are you going to capture them? Who's going to pay for those fake influencers? I don't know.

Jim Nichols:

No, no, there's consolidation now in the influencer network space, but there's going to need to be some curation there. Part of that is going to be AI curating AI or trying to uncurate it.

Dustin Howes:

I guess I don't want to put a big target on my back, but if FTC was to go after smaller folks just trying to make a living, it would scare a lot more people, I feel, in this industry. If they go after those giant publications, that could raise a lot of awareness. But I just don't see a place where they're going to go after somebody that's making $5,000 a month off of commissions right.

Jim Nichols:

I agree with that. I also think that people are making $5,000, their intent is generally positive. If you're making $5,000 a year in influencers because you love to write about a topic, it would not be a good use of your time. To apply AI like create an AI infrastructure to make $5,000. It's going to be a bigger issue is bigger voices. When we start seeing celebrities pumping out content via AI for their endorsements, that's going to be a very different thing. I don't think the FTC is really trying to get people. Patricia may disagree with this, but to me, what they're saying is we all know what we're supposed to be doing. Let's do that. I think about third-party cookie deprecation. We all get oh my God, oh my God about it. Well, we did this to ourselves by opposing the data. Let's figure out a way that we can deliver value to the customer in an authentic way.

Dustin Howes:

Imagine yeah, off topic here, I think we beat that up enough. Mark my words In 2024, some celebrity influencer is going to get their account hacked and somebody is going to turn AI on to show their face of promoting some brand that they are not actually promoting. It will look a video will look like they are promoting this. I anticipate it going viral. I anticipate somebody making a complete joke out of it. In fact, a brand that won't make any sense for that person. I love it.

Jim Nichols:

I love that idea. I think we're already seeing if you're a political junkie just seeing Trump denying that he did certain things over the last few years. It's all deep fake. It's all deep fake videos. We are going to be in for several. I don't know how it ends, but we're going to be in for several years of what on earth am I looking at, is it?

Dustin Howes:

real, not real.

Jim Nichols:

I have no idea.

Dustin Howes:

All right, charlie comes up and says what comes first, the article or the ad? Oh, chicken egg. I like it, charlie. Do the big pubs prioritize editorial content or potential ad earnings on the content, or do they choose to create? I'll answer this while you think about them. As a creator, I pick a topic first that I am enthusiastic about. Then I start writing that content and then I do the research on the brands that I think would really be a fit as a good suggestion for this. Usually it's a top three situation. If I already have a brand in place that I really like, I'm always going to bring into alternatives to that as well. I do my research on top of it and then I go and join their affiliate programs individually. That brings up the point of networks. I don't join networks to join networks. I joined networks just to go join that one program that I want to be a part of. Necessarily. That's my methodology. I don't know if you have something different in mind.

Jim Nichols:

Well, if we think about this space, this idea of commercial content, a lot of the major publications at least don't offer ads that they delivered. I'd reviewed, for instance. You read a reviewed review. There aren't ads in it. It's supposed to be about the content itself. That, I think, is going to change over time as we get more used to the idea of this space. I think right now companies are trying to move relatively slowly and saying let's not take down the wall between editorial and commerce, let's keep it there Over time. Companies are constantly looking for more and more ways to make money. The more money that Google and Amazon and Metta suck out of the industry, the faster companies are going to have to move.

Dustin Howes:

Beautiful. I love it. All right, Jim. Moving on, let's talk about how small brands and publishers can compete in this new world. What are your thoughts on this?

Jim Nichols:

Well, it's funny because I'm looking at the list, I have a little list that I made.

Jim Nichols:

I'm looking at them and I almost say look at your business, your personal business. To me, the keys are having a unique target and vertical. For instance, for you it's B2B SaaS. There aren't 127 people vying for those dollars. The next one to me is we are focusing on the specialty or niche audiences that if an audience is huge, it's going to be very hard for an entrepreneur in today's environment to become one of the leaders in that space. It doesn't mean that they couldn't have a good business.

Jim Nichols:

But attracting big audiences is what publications do. Right, large publications, do you know, serving emerging verticals. So so I look at affiliate. Auto, b2b, cpg would all be great places for entrepreneurs to be, to figure out how to serve those better, to be a first mover in a new channel. I'm kind of intrigued by what's happening in Reddit, as we see more and more affiliate programs kind of Organically penetrating the world of Reddit. That, to me, is an example there. I'm excited about tech integration like integrated commerce. So entrepreneurs are gonna probably be the first ones that move on Allowing a customer to transact on their pages, right. I just think big companies will be slower to do that. Because big companies are slower.

Dustin Howes:

Yeah, lots of red tape, like make those things happen where small entrepreneurs can get it done in a day.

Jim Nichols:

Yeah, exactly, exactly, and and don't need. I'm not saying that there's a security risk, but they don't need to send this to a security team that has no idea what affiliate marketing is and we'll take seven months to you know. Here's the here's. The review of this particular technology will come out of the tower.

Jim Nichols:

Yeah you know, and then to me it's like it's about high quality content, right, and how do you produce content that people are gonna want to do? So Long form is something that I think large publications do well. Video less well, right. Short form content less well. I could see someone really coming in and developing a new way of delivering content that could really catch on with people. That would that would spark interest. So it's working around the edges, which is what entrepreneurs are always doing. I just think it's gonna be a little harder. I was a long answer, apologies, but no, I think it resonates really well.

Dustin Howes:

The small brands should be working with the smaller publishers and growing with them and and that's going to be they're not gonna be difference makers immediately, but you can grow that trust with them and their audience and then keep Replicating that audience as well.

Dustin Howes:

I you know you want diversification in your affiliate program with the you do you have, like I it is it is much harder to work with a hundred affiliates it give you one sale than it is to work with one that gives you a hundred. But the satisfaction of that and the gambling aspect of it is something that appeals to me a lot more, because one of those A hundred affiliates might turn into a monster that sells a thousand a month in the future. So Really I would rather gamble working with the smaller and publishers in that kind of capacity.

Jim Nichols:

And you know we've been talking about small publishers. But I love your point about small brands, right, that, like, suppose you could now launch the 119th bed in a box company? Right, do you want to be at number 119 on that page, because I'm guessing a lot of people won't get down to that, right? But if you've got a niche and you can find partners that are in a similar niche, right, you can be number one. You can get past the huge brands and say you know what for you, for you customer, this is the perfect product for you, and that partner will be able to work more closely with you because, frankly, you'll have time to deal with them.

Jim Nichols:

That's the other thing we have to think about in all this. Right, if you have, if a large brand has 400 partners, they're gonna pay attention, strong attention, to what 10, 15, 20, right, all the rest are gonna get a monthly newsletter, right, which is a very different thing, whereas a smaller Entrepreneur can say I care about all my brands. I really want to bring focus to them and help them. And here's an original idea for you the first bed made of you know, I don't know oat flakes.

Jim Nichols:

This is you know, this is, this is how we can tell a story that's really powerful and will resonate with my audience. It's just so exciting about creators, but you don't need to be a creator to do this. You can be more of a bonafide publisher.

Dustin Howes:

That's a great recurring revenue model there, and oat flakes bed that you can eat. So you can, yeah, just warm it up every day. I.

Jim Nichols:

Some sanitary issues. But you know, what do I know? What do I know? I guess the point to me being you know, that's what small brands should do, but I think also large brands should be constantly looking out in the world, and or their agencies and networks should be looking out in the world and saying, wow, this thing over here, that, that that Dustin's doing, that's unique, that's different. It may not be huge yet, but we should try it right. Or, you know, here's somebody that's playing with you know, I don't know what six second TikTok videos, right, that's really doing something interesting. Like you need to be trying those things, and I think if big brands do that, they're gonna see a lot more potential in this market and can also test a lot of things that you can't test with a conventional media program. That's what's great about. Affiliate is a little little experiments. You know is are so easy for us to do and someone like you is gonna make sure that those Experiments go well.

Dustin Howes:

Yeah, well, our thing today. With scrappy entrepreneurs out there and my sponsor the day is me. I Created a new package, dustinhowse. com slash sass package. This is me doing B2B reviews authentic, and it is a package that I sell for a flat fee plus affiliate commissions. If you are a B2B sass product or a sass product in general in the AI space, hit me up, take a look, see if it's of interest to you. Outside of that, jim, this has been a pleasure, like we ran out of time, but how do we connect with you moving forward here?

Jim Nichols:

but you can. You can send me an email at Jim at exclamationusacom and I respond quick. I'm usually sitting right here, so you know, it's my own little entrepreneurial world, right, if I'm awake I'm working. I'm sure that sounds very familiar to you. But again, jim at exclamation USA.

Dustin Howes:

Awesome, and my lesson of the day that I picked up here is entrepreneurs and scrappy entrepreneurs out there are not going to be killed by big pubs. Like I think the concept of big publications not adapting to AI will change this year and AI will eliminate some of those jobs in big publications and then that is just going to breed more Entrepreneurs, because those people that have been working at those big publications a long time are going to become those scrappy affiliates and Go out there and attack niches, and so I think it's it's gonna be a turn. Like big publications are going down, well, scrappy affiliates are going up this year. I'm confident it. I'm rooting for him at least.

Jim Nichols:

I Think we all should be not the going down part, but the going up part, absolutely. How about everybody going up, rising?

Dustin Howes:

tides. How about that shit? That's it All right, join me on Thursday 1115 this is a double episode, weirdly enough 1115 me and Kristen big-time Evans is gonna do a Affiliate Summit recap. Join us for that. At 1115, year on LinkedIn live, and then at 1215 I'm gonna be hanging out with Jacob at beehive and talking newsletters. So stop by for that Without further ado. Jim, really appreciate you being here. Thanks for being in the auditorium and we'll see you out there next time then.

Jim Nichols:

Thanks for the opportunity. Really appreciate it. Love that your perspective awesome.

Dustin Howes:

Take care y'all. Bye.

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