Marketing taps into our emotions, as Rory Sutherland shares in this great TED speech

Online any good idea that works well is quickly cloned by competitors. Both the larger competitors with piles of money AND those who are driven by money so much that they would sell their own mothers for a nickel.

This fierce competition for attention forces continuous (perceived) value add. Some of that is created through innovation and/or branding. But it also encourages sustainable margin creation by criminals through outright fraud. As long as there is an optimized conversion funnel, someone will step in and connect supply and demand. Take, for instance, the rise of fake security software:

“They’ll take your credit card information, any personal information you’ve entered there and they’ve got your machine,” he said, referring to some rogue software’s ability to rope a users’ machine into a botnet, a network of machines taken over to send spam or worse.

TrafficConverter.biz, which has been shut down, had boasted that its top affiliates earned as much as $332,000 a month for selling scam security software, according to Weafer.

I am not so sure if earned was the right word. Stole, maybe? But when the product is layer upon layer of fraud, it is easy to pay out a high bounty for customers, especially when you use their computers to set up bot nets to further spread spam.

Worse yet, any level of popularity or credibility you gain with a legitimate business needs to be protected because people will trade off it. Yesterday in our support section Brian Menhennett wrote

Hello
Do you know or know of a Mr ____ ___ who claims to be associated with seob____.net and takes money for search engine optimization in your name
If you do can you please advise me of a contact email address.
Kind regards

And, after hearing my response that I did not know the guy, I got this back

Thank you for your reply.

Unfortunately if I cannot find or contact ____ ___, whom I paid $10000 to do a SEO job that was not completed, then I have no alternative than to spread the word on a campaign of facebook, twitter, myspace and other social media pages and blogs to advise potential customers of the situation. Again, unfortunately, as your company name was used to procure the $10,000 contract so your company will be included in the campaign.

If you have any information on this person it would be greatly appreciated.

So people register similar domain names, point them at legit sites, and then start selling to people who can’t tell the difference. And then rather than taking the opportunity to learn from the honest person, such ignorant people want to smear your brand for their own ignorance and stupidity. As though lashing out at me will get him his money back or cure him of his ignorance.

For every person who wants to learn to earn and become an expert there are hundreds or thousands looking for free money. And so they buy hyped scams from career con men…the only people willing to service them selling a “dream” package (with no substance) at the price they are willing to pay.

A similarly polluting marketing strategy that harms legit sales strategies is the sell the “anyone can do it” angle. When you sell the story of “mentally ill blind grandmother who just got an 8080 computer last week accidentally unlocks unbelievable secret blueprint to make millions per month, working 1 hour per day, printing cash from the nursing home, with one hand amputated” there is a segment of the population that will buy into such pitches. And that type of desperate / gullible / greedy / intellectually lazy person is often the easiest to influence by advertising.

They are the 8% of the web that clicks 85% of display ads. And once they buy one scam they will buy another. And then another. They are caveman clickers who buy buy buy. They tend to have thousands of Dollars of revolving credit card debt and a pile of useless junk they don’t need. Debt slaves thinking that “this time is different.”

This is why Bing traffic converts better than Google does. And this is why AOL traffic often converts better than Bing does. Stereotypes can be bad, but demographics are visible in conversion statistics, just like they are in ad click-through rates. See the following chart built from millions of ad impressions and hundreds of thousands of ad clicks

Automated ad networks syndicate whatever ads have the highest yield. When a product is layer upon layer of fraud it is easy to pay out a high bounty for customers – so ads promoting scams deliver a high yield, and are thus distributed everywhere. This is why the Fox News article blasting SEO as a scam carried the following wonderful advertisements by scumbag affiliates who set up fake newspapers to carry fake advertorials

Where this becomes a problem for marketers is when you come up with an unbelievably good promotion that is honest. Why? Well people are going to become more skeptical of the altruistic offer, especially if they do not know you. We did one such promotion recently that failed because affiliates pushing offers like the above “security software” simply polluted the space with junk. A once remarkable formula now creates something that is either unremarkable or unbelievable – due to a proliferation of scams that (at first glance) look somewhat similar. A friend who launched a cool free software tool recently had the same problem – people asking “what’s the catch?”

The modern day robber baron bankers and slimy affiliates who whore out anything that makes a Dollar create an economic environment where people become more cynical and less trusting. Which makes it that much harder to give away value and hope for eventual returns to come in. If the publicity never comes then you just end up giving away money and getting nothing in return – a failed business strategy.

Years ago a professor did not want to link to one of my sites because he thought it was too pure with no ads. It was simply too good to be true. If I dirtied up the site with ads it would have been more linkworthy to him! And in the years to come, as the lines between media and advertising continue to blur, many people will become more like that savvy professor.

What is the solution? There are a couple options IMHO. You either need to dirty up your strategy to make it look less altruistic OR you need to be well known by the community BEFORE you launch a major promotion. Publishing becomes more about developing and maintaining relationships in the industry.

Online marketers will need to be good at 1 or more of the following to remain profitable…

  • promoting scams (or carry ads from 3rd party networks that promote scams)
  • building an economic reward system directly in the distribution channel (like the often hyped internet marketer product launches)
  • leveraging ego-bait marketing (a type of payment that costs ~ $0, except for when it backfires!)
  • mastering conversion and value-add sales techniques
  • becoming publishers who own media brands with strong user loyalty + affinity + distribution (even Google is recommending this, BTW)

More: continued here