First, congrats to VCLK on yet another great quarter. I typically listen to these calls live, but missed this one. Thankfully seekingalpha has a transcript.
As I read through it, besides the finance stuff which grows less and less interesting in proportion to my VCLK holdings, a few things stand out.
1. The Link Management Initiative was actually discussed on the call, raised during the Q&A session.
That alone says a lot as to how much visibility this move got in the industry, even in the financial sector. It says even more that Jim had a good response at the ready…
Let me speak to link management, this is in reference to commission junction. What we have started to do is try and get our publishers to move their tags over to their JavaScript, because we believe that over time that it is going to be demanded more and more on the advertiser side. We are not mandating it, however, and it could take a considerable amount of time to do such a migration.
We got a response loud and clear from our publisher that they are not willing to do this on a wholesale basis, but we believe that over time, maybe it takes a year or two, that this will be the way that the market will go. So we are going to be patient with it. Right now, we are just working with our publisher on a one-to-one basis, and eventually I would anticipate that we will get there over time.
They got the message.
2. Some interesting positioning of affiliate marketing numbers going on here:
Affiliate marketing worldwide represented a 23% increase year over year, excluding eBay, and 16% growth worldwide overall. While the decrease in eBay was larger than we expected, the remaining 1,500 clients in affiliate marketing were growing quite nicely.
The three primary reasons for the eBay reduction were lower negotiated prices effective in January, different payouts to publishers, which are now being paid for performance post-sign-up, and eBay’s decision to buy more of their own keywords themselves versus through our affiliates.
eBay is a big client, and their decline is bad news for CJ and VCLK. Are they heading for the door?
And a decision by Ebay to buy more of their own keywords? I don’t remember reading anything about that one. Was there some policy change? anyone?
3. The recent google affiliate massacre was NOT mentioned.
I think it will be mentioned next quarter. The Google Adwords Landing Page Quality changes HAD to have hurt — bad. Q3 may not be quite so rosy.
We expanded our search engine marketing services department based on our own proprietary technology, and believe that it will produce additional revenue growth for us in the second-half of the year.
Maybe with a large number of affiliates out of the way, the search engine marketing services are more valuable than ever. These services would not have been affected by the Google Adwords Quality Score changes, as they link direct to the merchant.
Quarterly calls and reports are always interesting, and an many cases revealing. Sometimes you have to read between the lines, but worth fighting off sleep to get through them.
