Season 1 | Episode 1

The trouble with Google with Michael McNerney

Publishers Playbook podcast series

Jerrid Grimm chats with Michael McNerney, the founder and publisher of Martech Record, about the affiliate and performance industry. They discuss the challenges publishers face, such as Google algorithm updates and the introduction of Google AI overviews. The conversation covers topics such as the impact of Google’s monopoly, the role of creators in content consumption, the convergence of performance marketing and branding, and the importance of storytelling in affiliate marketing.

Episode transcript

Jerrid Grimm (00:34.254)
Mike, welcome to the show.

 

Michael McNerney (Martech Record) (00:36.259)
Jared, thanks for having me. Very happy to be here. Good to see you again.

 

Jerrid Grimm (00:39.15)
I know. I’m excited to have you on the very first episode of the Publishers Playbook. The reason I obviously wanted to have you on is you are the founder and publisher of Martech Record, which is, if listeners don’t know already, is like the voice of the affiliate and performance industry as far as I’m concerned. And I think that you have a really good 30 ,000 foot view into this industry, how it affects brands and agencies and publishers. So I thought we could. we could have this first episode and spend some time talking about like the big topics that are affecting the industry, especially from a publisher’s perspective. But before we get into that, I’d love for you to explain what MarTech Record is in your own words and why you started it in the first place.

 

Michael McNerney (Martech Record) (01:27.299)
Well, I appreciate you calling it the voice of the industry that helps validate my co -op board application to the apartments. I think I called it the voice of the industry. Slightly exaggerating, but now the board has some evidence. So I appreciate that. yeah, my background, as I try to tell anyone, is not in affiliate marketing or commerce content. I’ve never run an affiliate campaign.

 

Jerrid Grimm (01:45.486)
It’s real.

 

Michael McNerney (Martech Record) (01:57.347)
in my life, much to my kind of embarrassment, I’m going to have to set up a campaign and get a brand just to kind of, so I can stop saying that. But my background’s in trade publishing. I spent a good portion of my career at McGraw Hill. And at the time they had a portfolio of trade publications that covered big global markets like aviation and energy and construction. And I was one of the very weird people who just thought this was the most interesting. business and I liked it because it was useful. You know, the information we published was like pricing information. We published the price of oil every day, right? Things that were useful, I found particularly interesting and it makes you wonder like, how do you publish the price of oil? And so I got, I dug into our products when I was at McGraw Hill and you know, I’d always wonder like, how do we, how do we come up with this information, right? And it always came down to the same thing. It was just trust. People trusted McGraw -Hill for a variety of reasons. One was hundreds of hundred years of publication. The other one was accuracy. One was just having to journalists. But, you know, what we did was really simple. It was just find a piece of information that would help someone do their job and put it between a transaction and help people kind of make decisions a little faster in these industries. And. I happened to be kind of running their digital media business. What I like to say is the very wrong time to have that job. It was really when, you know, the eyeballs were going online, but the money was not. And so, you know, my job was to solve that particular problem during a time period where it really wasn’t very solvable. And the big reason it wasn’t solvable, there were some cultural reasons, but, you know, technology wasn’t there yet. There just weren’t…

Jerrid Grimm (03:38.062)
Hmm.

 

Michael McNerney (Martech Record) (03:52.355)
good pieces of technology to enable you to make money from good content online. There weren’t great subscription tools, programmatic really even hadn’t like kind of taken off. There was, at least in the B2B space, there definitely wasn’t kind of affiliate commerce content. It was more in the consumer space at the time. And so, the job turned into a lot of laying off salespeople and shutting down printing plants instead of kind of the sexy, growth jobs that a lot of people in media have had. But it was still kind of an industry I really loved. And so fast forward a few years and I ended up getting recruited by a company called Partnerize, which is a affiliate marketing platform, I’m sure you know. And I had no idea why they were calling me. I mean, really no idea. And I didn’t know what affiliate marketing was, but kept talking to them. And over the course of months, I started to kind of realize, like, this is a really interesting way.

 

Jerrid Grimm (04:35.478)
Mm -hmm.

 

Michael McNerney (Martech Record) (04:52.547)
to monetize content. And this is before kind of commerce content and mass media had really adopted affiliate. But I could see where it was going because I’d struggled so much monetizing content and in many ways failed to do so in a prior career. And so finding anything that would have been helpful was just interesting to me. And so I took the job and I dove in and spent the first six months of my time at Partnerize trying to learn as much as I could about the industry. And what I mainly learned is it’s really hard to learn about the industry. I literally had to fly all over North America and talk to all sorts of different people. Sarah Bundy comes to mind and John Clayton comes to mind. And all these people were incredibly helpful. And what I loved about the industry was everyone was just incredibly kind and helpful and supportive of a new person entering this industry and learning. And… So I loved it, but at the same time I was sitting there going, this industry is really interesting. It’s going to grow. I could see that big commerce media companies were going to adopt this way of monetizing content. But I can also see they didn’t have any resource to go understand what the best technology was, what services they should be using, what the price of things should be. And it suddenly hit me that I was like the one person in the world who knew how to run a trade publishing company and knew something about affiliate marketing. And so. When I last partnerized, I started MarTech Record with that kind of simple goal, is how do we provide little pieces of information that help people do their jobs just a little bit better. That was a long answer, sorry.

Jerrid Grimm (06:32.59)
Yeah. Well, that’s no, that’s great because when I, you know, I didn’t come from the affiliate industry either. I came from advertising, right? I came from branded content and years of working either as like a publisher or building software for publishers. And the way that I got to know about the affiliate industry was more tech records. So you can imagine like you didn’t, you needed yourself, you created something for like a problem that you ran into, which is always the best way to start something. so what is it that you.

 

Michael McNerney (Martech Record) (06:49.763)
great.

 

Jerrid Grimm (06:59.918)
As like, I don’t think you can consider yourself an outsider to the affiliate and performance industry anymore. Maybe the way that you did when you first started them. But how, so this is one thing that I’ve struggled with and I think other people have as well as how do you define the world of even just let’s call it affiliate, just the traditional world of affiliate. Like is it, what makes it different? Is it that it’s the business model is cost per acquisition?

 

Michael McNerney (Martech Record) (07:07.491)
Let’s try it.

 

Jerrid Grimm (07:29.07)
Is it that these two parties are working together to help refer sell products? Like, is there a way to purely define the affiliate and performance industry in your opinion?

 

Michael McNerney (Martech Record) (07:39.459)
I mean, I think it’s just distribution, right? Like affiliate is really another word for it is distribution as you are finding a partner to distribute your product and execute a sale, right? And if you go back to kind of, you know, the old four P’s of marketing, right? One of them, one of them was a D, which is distribution. I think they, I think they use place as the four P, but it was distribution, right? And.

 

Jerrid Grimm (08:03.79)
Yeah.

 

Michael McNerney (Martech Record) (08:05.891)
That’s what affiliate is. It’s finding distribution partners. And if you this is not a new concept, right? It’s something that existed well before digital you found partners who were strategic who understood how to sell your product who had an audience or buyers and you Train them and pay the commission, right? That’s that’s not any different than what affiliate is and you know affiliate now has a lot of different names to it, right? But it’s all

All of it is you executed a sale and you have a partner who’s distributing your product.

 

Jerrid Grimm (08:37.038)
Yeah, that’s actually a very like clean way to think about it, which I think that’s helpful when you do have a bunch of names. You have like, is it partnerships? Is it affiliate? Is it performance is like, there’s a lot of names. There’s always, I’ve been in advertising long enough to know that every segment of the marketing world, renames itself every like six to seven years, I would say. Right. Yeah. Yeah. Yeah.

 

Michael McNerney (Martech Record) (08:58.819)
Well, it’s always serving somebody’s needs, right? I mean, affiliate keeps getting redefined because the word affiliate for whatever reason continues to have a stigma, right? And so different channels, when they execute affiliate, whether it be social or email or PR, kind of create new names for it and are able to charge more. So it’s marketing.

 

Jerrid Grimm (09:25.358)
Definitely. Well, that’s cool. I’m glad you created Martech Record because it basically was like that, you know, on the matrix where she puts on the helmet and learns how to fly a helicopter in like five minutes. Martech Record was my like learning helmet for the, when I first got into this space. So, so I’d love to touch on some of the, you know, you know, this industry really well. I’m starting to know it a lot better. There’s some people who have been in the field for like 20, 30 years and there’s, there’s always some big topics that are affecting people more than others. I thought we could touch on a,

couple of those today and just get your thoughts on them. I’d like to start with, you know, it’s not even the elephant in the room. It’s like the, it’s bigger, whatever is bigger than an elephant in the room. It’s like the octopus in the room. I would say it’s the, it’s the octopus in the room because it has his tentacles into everything, which is Google. So let’s start off with, I read this, the study that was done by affiliate summit, which is 83 % of publishers said that the Google algorithm updates are a top challenge for them.

83%. I don’t think 83 % of publishers have ever agreed on anything except this, right? How do you get 83 % of, I can’t get 83 % of my family. Yeah. Misread the question. They misread the question. So, so there’s a few things like to unpack there. The first one is, you know, somewhat recent. Google had this site reputation abuse policy. They make updates to their spam.

 

Michael McNerney (Martech Record) (10:34.69)
Who is a 17 % that’d say it’s not?

Thank you.

 

Jerrid Grimm (10:51.886)
updates pretty regularly, but this one, you know, hit a very specific part of the partnership world, which was they updated in March and put into effect on May 5th, this concept where if a website was hosting third party content with little to no oversight by the publisher itself, that they would essentially like D rank or D index or

penalize that content. And some examples that they use was, Hey, you’re a big media publisher and you also have a coupon section where you recommend coupons to your audience. Or you might be a publisher and you have a sponsored content section, right? And specifically they’re looking at where this third party, this content comes from a third party. So, Hey, I, you know, I’m a big publisher, big domain authority. Google’s already linking to me all the time. So, Hey, maybe I’ll, you know, kind of stitch on.

a section on here, where I could provide, you know, it can be useful information. It could be like, Hey, he’s a deal on some stuff. Here’s some interesting thing about a company, but really it looks like Google is being very specific and saying if the publisher doesn’t have, and I’m not sure how they even figure that out, right? Like, was it a staff? Was it a freelancer? Was it a third party? that they would start penalizing it. And we did see effects of this. I, and I know, you know, there’s publicly available information here, like Forbes shut down there.

 

Michael McNerney (Martech Record) (12:06.499)
I don’t think they know.

Jerrid Grimm (12:18.542)
coupon site just ahead of May 5th. I think Wall Street Journal did something similar. There was a few publishers that just closed down their coupon or sponsor content sections, probably to avoid any potential that this would have effect on their primary content area sections. Right? So I don’t know. I don’t know what your thoughts are on that. or if you feel like it’s, is it a big deal or is it a very specific thing that’s happening to a few players?

Michael McNerney (Martech Record) (12:49.219)
I think it is a big deal. I mean, first let’s like raise up a level, right? And just acknowledge that, you know, Google is a monopoly that controls access to publishers most valuable asset, right? And so anything they do is incredibly important to most publishers, unless you’re incredibly niche and have, you know, more of a community. So most publishers in the affiliate space, you know, rely on Google to stay alive. And so for that reason alone, it’s very important. Yeah. Then let’s also acknowledge that, you know, part of Google’s job as kind of the, you know, the arbiter of traffic in this industry is to try to find quality content and is to guide users to quality content. And so I think on the surface, you know, it’s a good thing, right? And if you read Google’s press release, they couch this as they’re protecting the reputation of sites and whatnot. So I think that it’s easy to see why someone would be like, this is a good idea. Now, I would agree that it’s a good idea if I thought Google had taken any nuance whatsoever to this approach.If they had actually gone in and done any kind of investigation around what the processes were at these publishers, how they acquired third party content, how they were monitoring it, and then reacted based on that, I think that you might be able to defend some of their actions. Instead, they took just a giant hammer to the industry and said, if you have third party content, you’re violating whatever. These rules are. Now, let’s also acknowledge something else. There’s nothing inherently wrong with third -party content, right? You can go back, you know, well before the internet and, you know, publications often use third -party content to enhance, you know, their publication. And they did that for a number of reasons, but one of them is it’s expensive to produce content in a newspaper. And if you can acquire some content a little bit cheaper, that helps you fund quality content in journalism.

Michael McNerney (Martech Record) (15:11.843)
I mean, things like the Associated Press are an example of third party content, right? So like the, the, the idea that third party content on its own is what’s causing problems is a little absurd. And they reacted as if all third party content is awful. Right. now it’s also just talk about the publishing business model, right? It costs a lot to write good content and create good content. And it’s really expensive these days to get traffic because Google owns traffic. Right. And so.

 

Jerrid Grimm (15:16.27)
Thanks.

 

Michael McNerney (Martech Record) (15:41.859)
In order to run a quality publication and get quality content, you have to have some high margin products. Like you have to. And one of those is coupons and classifieds, which are gone because of Craigslist, right? And so there’s nothing wrong with getting coupons via a third party, right? Now, if you’re not monitoring that, if the coupon codes are all crap and if you’re just doing it to get as much content on your site as possible, then that might be a problem and Google should be. Trying to figure out how to identify which third party content is good versus which is not. But that’s not what they’re doing. They’re just kind of blanket statement that third party content is no good. So I think the kind of idea that as Google, they should be helping to identify what’s quality and what’s not is correct. I think that blanket statement that third party content is to blame is…frankly shows it demonstrates that they’re monopoly. Because they don’t, you know, monopolists don’t have to have nuance, right? Like we have no competition, right? And so, you know, they don’t have to really think through this, right? And if I was being much more cynical about it, right? I would be looking at this and saying, well, they’re a monopolist. They got to find other places to drive revenue, right? Coupons look pretty good, right? Why don’t we just flip a switch and turn off the coupon industry and then we will move into this industry, right? Now,

 

Jerrid Grimm (16:45.87)
Right.

 

Michael McNerney (Martech Record) (17:06.851)
Are they actually doing that? The percentage of revenue. The TAM for Google on coupons might not be there yet. But eventually they’ll move into that industry. And this is a good first move for someone who’s trying to take the industry out. So.

 

Jerrid Grimm (17:14.766)
Yeah.

 

Jerrid Grimm (17:22.062)
I think you highlight, I think you highlight the core issue here because let’s think about like your news publication online and you go back, let’s say even 20, like 10, 15, 20 years, and you would have had that as a paper print newspaper. And inside of that, you would have had coupons and you would have had classifieds and you would have had comics, which is like what I read when I was a kid all the time. And that was all provided by third parties. It wasn’t provided. It’s not like the staff was doing all of the. Cartoons, right? You have my Calvin and all of them. Yeah, I mean, so you had all of these like expert providers inside of your bundle, which was the newspaper. The difference there was you had control of distribution. So you deliver them. I mean, I’ve delivered newspapers. So the distribution was like 12 year old kids walking around the neighborhood, dropping off newspapers at six AM. So you controlled your distribution. And I think the biggest change here is if you don’t have control of your distribution, which is very difficult to do when you’ve got these big.

 

Michael McNerney (Martech Record) (17:50.883)
Yeah, that’s a great example.

 

Jerrid Grimm (18:19.502)
platforms, whether it’s social media like Facebook or Google. So yeah, you’re all of a sudden you’re relying on the moves of somebody else that directly affect your business and they just notify you. They’re like, Hey, on May 5th, we are going to be making this change. It will affect you or we expect that it will affect you. We won’t know exactly how it’s going to, but it will affect you. So you have that as like this, this big challenge. So I think that the, what I’ve seen from this

 

Michael McNerney (Martech Record) (18:31.459)
Yeah, sorry.

 

Jerrid Grimm (18:48.014)
industry is that it adapts really well. It’s like it, it takes a lot of punches, right over the, over time. And it really tends to like be able to, to bob and weave a little bit, get back up. and so this is probably going to be another one of those where the industry kind of adjusts around that idea. there’s also, you know, Google also controls, you know, the way that cookies work on the internet. So that’s another area where you have. Google that controls like the technology that underlies it. I know that affects a lot of the industry because how you attribute, right? Like how you follow a user around from site to site is based on third party cookies. Now there’s been some pretty good innovations around that, some server to server, first party data where that’s not quite as reliant. The interesting thing about third party cookies is that I think I’ve been in digital for…10 years and I think for 10 years there’s been a threat that the third party was going to be gone and it just gets pushed down the road because it’s like fundamental to the way that a lot of the internet and the marketing industry works and attribution. So I wouldn’t be surprised. I’d like to do, we should do a bet on like whether Google’s actually going to deprecate that. I mean, Apple did it, but they, they kind of Apple gets to do whatever they want. So they’ve got their own, you know, full stack. So I don’t know if you have any thoughts on the third party cookies. To me, it’s just like, hey, this is going to be punted down the road again. So it’ll slowly, people will be able to make little changes where by the time they remove it entirely, Google does, maybe it won’t be as drastic as let’s say if they would have done it three years ago. I don’t know if you have any thoughts on that.

 

Michael McNerney (Martech Record) (20:29.347)
Yeah, I don’t have a whole lot of thoughts on it. I mean, partly because I’m really not an expert on this. There are people who are just so much kind of more in the weeds and smarter than I am on this. However, what you said earlier about this industry being adaptable is absolutely correct. Right. One of the things I really love about the affiliate industry is kind of the lack of pretension in the industry. Right. It just gets things done. And like, maybe I’m naive, but I find this a kind of an irrelevant.  It’s like at the end of the day, like partners and affiliates are going to find ways to get traffic and execute sales. Right. And, you know, if the third party cookie goes away, they will find a replacement and already have in many cases, you know, find a way to do that. You’re seeing a lot of the big media companies are setting up their own kind of little wall, or shouldn’t say little walled gardens, but their own kind of ways of tracking first party data. on some levels, you know, These partnerships, I think what’s underrated about affiliate is these partnerships are personal, right? They are developed using platforms like Impact, but they still require people to know each other, right? And for that reason, those partnerships will continue. If the third party cookie goes away, the person at brand X still knows the person at publication Y, and they will get it done. And that’s what makes this industry a lot different than search and social where people are just high frequency trading all day. Like, you know, no one at, you know, the brand X knows anyone at Google. I mean, maybe if they’re big enough, they have like, you know, an account guy or whatever, but that person doesn’t even know what’s going on really. Like, you know, and so, you know, affiliate is this wonderful place where everyone knows each other because they have to, right? Like to build these, you know, every relationship on some level is a little bit bespoke.

 

Jerrid Grimm (21:57.006)
Yeah.

 

Michael McNerney (Martech Record) (22:19.459)
and that requires the brand to know the publisher. And this kind of makes an old school publishing in a lot of ways. And so like, yeah, some cookie is gonna go away. That doesn’t mean that relationship’s going away. And they’ll find a way to measure it and they’ll find a way to kind of acknowledge the value that these partners provide.

 

Jerrid Grimm (22:37.774)
That’s good. And that’s actually, you know, does help position why this space, this affiliate performance space is, you know, fundamentally different than a general, like advertising upper funnel. Let’s get some impressions on some ads where it is making a big effect there because it’s all about targeting your ad to this user that did some stuff before. Whereas, in this space, I find like, Hey, I’m doing reviews of, you know, you do reviews of software. Someone else does reviews of laptops. Someone else does reviews of mattresses, right? And the people that are. paying attention to that content are probably into mattresses. They’re probably in the purchase funnel of buying mattresses. You don’t have to know much more than the fact that someone’s reading that piece of content where those reviews are happening. Well, let’s, let’s shift over to something that has been, you know, probably the biggest news that Google has released that everybody knows about, right? Like I think the, you know, site reputation, abuse policy, me and you know what it is, but you got to dig, you got to dig to find that. Right. I mentioning it to like,

 

Michael McNerney (Martech Record) (23:11.115)
Yeah.

 

Jerrid Grimm (23:37.198)
my wife the other day and she’s like, what are you talking about? The site reputation, abuse policy. Well, yeah, exactly. Can you go back to your basement office please? Right. But Google announced.

 

Michael McNerney (Martech Record) (23:41.251)
You nerd.  Yeah. Yeah, this isn’t the thing that’s going to come up in front of Congress, right? This is like, it means a lot to you and I and everyone listening here, but your local congressman is not going to bring it up.

 

Jerrid Grimm (23:50.542)
Yeah.

 

Jerrid Grimm (23:59.31)
I’m not going to dig into that. Definitely. No, but there was a big announcement, which is Google AI overviews and just, you know, set the stage in case anyone didn’t see what that is or hasn’t experienced it because now it is out in the wild is this idea that, you know, Google says Google will do the Googling for you, which essentially means they’re going to use, you know, their gen AI, their large language models and the way that they can create, you know, answers to questions so that when someone types something in, whether that’s like, What’s the weather going to be like next week in this place I’m going to visit or like, Hey, what would be a good travel itinerary for me? I’m going to New York next week for IPX. So what would that look like? but it could also say, Hey, I’m, you know, buying something for my dad for father’s day. And I’m curious what you think might be like four great items for a fisherman, something like that. Right. And then Google AI will essentially these AI overviews will. say, Hey, here’s this fishing rod. Here’s this, you know, tackle and here’s this net or whatever. Right. And we recommend these and here’s where you might be able to buy them. Or maybe it doesn’t link to anything at all, which I think would be the part where people get concerned is all right. You’ve provided the answer, but you’re not linking to any sort of source or next step. I know that this is still brand new. Like we’re like a month into this. It’s supposed to be released over the next year or so. What are you hearing from people that you talk to on first of all, what they think might happen, good or bad, like is this positive or negative for publishers? And then secondly, that what is actually happening? Sometimes the gap between what you worry is going to happen and what actually is happening can be quite, quite separated. So in the conversations you’re having or what you’re hearing in the, in the industry, do you feel like this Google AI overviews is You know, the big meteor coming for the publishing industry, or is it like just a nothing burger and hey, it’s going to be a little feature the same as other features will have an effect, but we’ll move on.

 

Michael McNerney (Martech Record) (26:02.731)
it’ll be a big thing. I mean, there’s no question. Right. and I, I think there’s kind of, so I think it is a big deal right now because publishers are starting to actually do deals with these AI providers, right? Like Reddit’s doing deals with ChatGVT or OpenAI. other people are following, right. And there’s a general sense that you better take the money now or, or your toast, right? And I think a lot of that comes from getting burned, you know, over the last 20 years, you know, if you worked in publishing, you know, from the nineties to today, right? You got screwed by Google and Metta over the years, you know, deals that they set up that ended up being not very favorable to publishers. And so there’s a little bit of like, well, they’re offering money now. I better take it because, you know, what are my options going to be if I don’t write, especially if my competitors are right. They’re going to use the content to feed the machine. So it’s a little bit of a existential crisis, I think. And I don’t know if it’s actually that bad or it will be, but I can’t talk about smarter people than me figuring these problems out. I don’t pretend like I have any idea what the long -term outcome will be. But I do think, at the end of the day, people are ignoring kind of a basic fact is that Google or whatever tool will be the…running our lives in the future requires content and it requires an audience. Really, Google is a middleman here, right? Just kind of feeding audience to content and vice versa. And so an audience are actually humans and humans have a way of creating demand and you have to have a good product, although you could argue Google has a crappy product right now. So I think that one, consumers are going to dictate, you know, what they want and that’s going to have some effect on the product. And second is these things need content to surface and that has to come from somewhere. And I find like the kind of funny to think about right now, right? If you think about like where AI content comes from, right? Over 25 years, Google has created these algorithms and SEO people have just responded at every…

 

Michael McNerney (Martech Record) (28:25.507)
every algo update to like reformat everyone’s content. Right. And so, you know, all of the, all AI is reading is 20 years of SEO people just trying to track Google. Right. And like that is what, you know, there was results are based on. And so, you know, and, and by the way, the latest of which a lot of which has been created by AI. Right. And so, you know, there’s a lot of reviews that, you know, we, as we know, are AI created in the first place. And so we have this very existential. challenge where these AI machines are reading content created by AI that was created to meet the needs of the Google machine. And so at some point, the content is going to have to improve and that’s going to have to be done by humans. And so this is where I also look to the commerce and affiliate world and I have some optimism. Because this is the last industry left with people.

 

Jerrid Grimm (29:02.126)
Yeah.

 

Jerrid Grimm (29:13.774)
Yeah.

 

Jerrid Grimm (29:25.07)
Yeah, well I.

 

Michael McNerney (Martech Record) (29:25.379)
who are actually producing this stuff. And so, you know, I think there’s huge challenges in terms of who controls the pipes, right? And the people who control the pipes make all the money. And if they continue to control all the pipes, it’s going to be hard for content providers to run a profitable business. And that’s concerning. But I do think consumer demand will win out at some point and quality will have to improve. And I should also say the nice thing is it’s not just Google, right? It’s all these other AI.

 

Jerrid Grimm (29:50.574)
Yeah.

 

Michael McNerney (Martech Record) (29:54.179)
providers, which means Google finally has competition. And competition is good.

 

Jerrid Grimm (29:59.118)
people are going to want whatever gives them the best, you know, answer or solution to whatever their need is. I mean, I decided that I was going to get into woodworking over the last six months, which is like a very my, I made this call. I made this clock actually. and if you take all of the stuff that I bought into account, that baby is a thousand dollar clock sitting right there, right? And value.

 

Michael McNerney (Martech Record) (30:11.843)
I get to see some very nice hardhanger behind it. Is that your… is that a new piece? Or the clock?

 

Michael McNerney (Martech Record) (30:24.163)
You gotta talk to my brother. Same thing. Same thing happened.

 

Jerrid Grimm (30:28.846)
Well, so when you get people like me that are going to get into woodworking, you all of a sudden I’m buying, you know, a table saw and I’m buying a planer and I’m buying a router and I know nothing about any of these. So I’m looking for like, I gotta find this out. And I found when I was looking for it, I was looking for people that use the tools, right? I was actually looking for someone that had used a planer before and I’m just watching this guy like, you know, or, or this woman that is a woodworker and is using this planing like Hey, this is why I like it because it does this thing and I don’t think that you’re ever going to get that from an AI type review. So I’ll take the, what’s the opposite of devil’s advocate? Is it like an angel’s advocate? Like if you take the positive side of a situation, I’m not sure I’m making that up. Let’s, copyright.

 

Michael McNerney (Martech Record) (31:11.651)
I think you have a good point. So we recently, at Martech Record, we host live events. We have four this year. We have one in LA, two in New York, one in Chicago. And we’re talking about where should we do an event next year? What new place should we do it? And we landed on Denver. And the reason is a lot the same reason you kind of just described finding a planer, right? Is the show is not an outdoor show. It’s not explicitly going to be about outdoors. But…I like Denver because it’s a lot of outdoors brands and outdoor brands often are bought by kind of nerdy people who need who need to really do some deep research, right? They go into the YouTube, they watch how people use it. You buy Paris, like, you know, people who climb and ski and all these things, and that forces the content to be good, right? Like, You know, these people aren’t going to read like some SEO best of list and be like, I’m going to get a pair of K2 skis. Like, right. You know, like they’re, they’re going to read dozens and dozens of articles and they’re going to, you know, probably follow someone on YouTube and probably follow someone via social and like, and you know, they’re going to develop strong opinions from some authentic people. And I, you know, this obviously brings us into like the roles of creators and where that will go and all of that. And so. So that’s why we’re doing Denver next year is because I looked at that and said, this is where there’s some quality content and it’s more of a proxy for the whole industry.

 

Jerrid Grimm
Yeah. I mean, it sounds cliche, but quality content that serves a purpose should always, you know, be the thing that people are after. And I think that’s probably going to happen. And, you know, when we talk about all this stuff around Google, it’s really the fact that it’s just the traffic. a high percentage of traffic can come from that source and now you have to play by that third party’s rules instead of your own, right?

 

Michael McNerney (Martech Record) (33:55.379)
Yeah, it’s a monopoly. And this is why monopolies are bad for, you know, overall consumers, right? Is because they don’t have to improve, right? And they kind of won the game and you know, kudos to them for winning the game. But you know, this is why monopolies are a problem is because they don’t have to improve their product, right? And this site reputation abuse is a very good example of this. It’s where they’re thinking, here’s a problem. We’ll fix it. Sledgehammer approach. If they had a really tight competitor, They’d be much more nuanced about this, right? They’d be figuring out like, is Forbes doing this wrong? Is New York Times doing this wrong? They’d go be doing interviews. They’d be like, hey, partners, tell us how you do this. Show us what’s… Instead, they’re just like, click a couple buttons, whole industry gone, right? And so I think it’s a monopoly problem. And…

 

Jerrid Grimm (34:24.526)
Yeah.

 

Jerrid Grimm (34:30.03)
Right.

 

Jerrid Grimm (34:42.958)
Yeah.

 

Yeah, and I think maybe we’re going to see that monopoly as far as like ways people find out something is going to change. Like I’ve already started experimenting with like other ways to get information, whether it’s like perplexity or chat GPT, or, you know, I might even just go to like forums again. Like I wasn’t a Reddit person and all of a sudden I’m like on Reddit sometimes I find myself, right? Which can be a real wormhole. Yeah.

 

Michael McNerney (Martech Record) (35:09.731)
because of Google and their servicing.

 

Jerrid Grimm (35:12.654)
But I’ll just find like, hey, I want to talk to some people. That’s why the creator economy is so huge now, right? Because you’ve got people that are really experienced with it. So I think.

 

Michael McNerney (Martech Record) (35:18.851)
Yeah. I mean, we both know, right, that Google is an incredibly bloated organization, right? Like, and so it’s good that there’s these competitors coming in. It’s a little bit of an existential crisis that they’re all AI. And AI is, you know, supposedly going to like destroy the world. But it’s, you know, a kind of more day -to -day level good that Google’s getting competitors.

 

Jerrid Grimm (35:43.758)
Yeah, definitely. And there’s like a couple of positives actually out of this. I think one is there is this idea that, Hey, if you know, Google or a search engine surfaces 70 % of the answer for you as a user, and then you can make like an immediate buying decision with just like a couple extra piece of information. So maybe I find out the names of like six planers. I like that I’m using planers. This is an example. I usually use like blenders. I’d like to use wood planers instead.

 

Michael McNerney (Martech Record) (36:06.115)
Yeah.

 

Jerrid Grimm (36:10.222)
I have these ones and then I dig into it. Like I’ll spend some time. It’s a $500 item. I’m going to spend enough time figuring out like which one works, which one, what people vouch for, which ones they don’t. So that’s one positive is maybe, you know, it’s higher. It’s even higher intent traffic that comes to you, which is really important. And then the other side is these open AI deals that we’ve seen, which means these AI platforms and search platforms see value in high quality premium content, or they wouldn’t be paying for it. and they’re starting to pay more and more publishers. So maybe there’s a way for publishers to monetize their archives of information as well as like have a reason to be producing more. Even if it is like in a way feeding the AI machine, it doesn’t mean it has to be a hundred percent of revenue. Like the best, I think it’s Brian from the rebooting that says the best form of revenue for a publisher is all the forms of revenue for a publisher, right? So it just might be another way in. So let’s move from Google, which we could.

 

Michael McNerney (Martech Record) (37:01.57)
Thank you.

Jerrid Grimm (37:08.558)
probably have six or seven episodes on and I am going to dig in deep. And you know, Glenn Alsop from detail .com who does some great pieces on what’s going on. I’ve been talking, I’ve been talking to him a little bit about this and he said, you know what? He’s been in the space. He’s been in the, he’s in the SEO space. He’s like, it’s just another day with Google, right? It’s the, it’s affected the affiliate industry more recently, but it’s been affecting other industries all the time.

 

Michael McNerney (Martech Record) (37:15.971)
Yeah, incredible. Great.

 

Michael McNerney (Martech Record) (37:33.155)
Yeah, yeah, it was not, you know.

 

Jerrid Grimm (37:35.054)
It’s not new. Google Maps comes out. That makes a big effect on like, you know, where traffic is going to stores. So it’s all kinds of different things. So I want to go from, from this idea of Google and AI into more of this idea, which I’ve been hearing a lot about is this idea that performance is eating media and eating the internet. And what that means, especially for like me and you that came from more of a different space. I personally came from advertising. Right? My original, like my career was based on wanting Angela Power’s job from who’s the boss, which you know that, right? I wanted to be a marketer. Yeah. Yeah. So, so I see that like, and when I first wanted to get into marketing advertising, it’s cause I wanted to make the Apple 1984 ad, right? Like I wanted to make the old spice ads with the guy on the horse, right? Like that was what I wanted. And then as I, you know, my career kind of built through there,

 

Michael McNerney (Martech Record) (38:09.251)
Yeah, you and I both. We both started at the… Yeah, yeah.

 

Jerrid Grimm (38:32.91)
I really liked this idea that you could do something that influenced people to buy products. Like I like the business side of it, right? And performance was always that. And more recently we’re seeing that some of these more upper funnel type advertising are trying to tie themselves into conversion outcomes. There’s this idea like, Hey, if you’re going to buy $20 million of advertising, you better show that you’re generating 20 million times X of. revenue for the company or else what are you really doing? But something that’s really interesting that I’ve seen is this retail media networks that are coming up where everybody is turning into a publisher as long as they can. And it’s around this idea of, hey, we’re close to the sale, right? So, you know, Home Depot has their own called, Orange Apron, Chase Bank has one. Amazon of course has like a massive one. It’s expected that this space is going to be 166. billion dollar industry, which is just absolutely massive. Even like Costco is getting is building themselves a really United Airlines announced one to like.

 

Michael McNerney (Martech Record) (39:36.803)
United Airlines is doing it now. Customize ads on your seats.

 

Jerrid Grimm (39:43.214)
Yeah, everybody is an ad network is essentially what’s happening. And I think this is a really great proof point for the industry that, Hey, you know, the thing that we’ve been doing for a very long time, which is tying outcomes to efforts, right? Like you’re going to put some marketing budget against this. You’re going to put some time against it, but you are going to drive sales and that’s guaranteed, which has always been like a key part of the affiliate space. I see a lot of the rest of the advertising industry start to. come into that space. Now that’s good. It’s validation for the space. It also introduces brand new competition if you’re on the publisher side, because all of a sudden, you know, you’re now possibly fighting over budget with people that used to give you the budget or that used to just be sites. How do you see this world of retail media or performance based, you know, media that has been traditionally just retailer sites? bank sites, et cetera. How do you see that fitting into the affiliate space?

 

Michael McNerney (Martech Record) (40:48.131)
Well, first, look, I think any time you see e -commerce growth, that’s positive for the space. You look over any trend period, there is a pretty close correlation between e -commerce growth and the growth of the affiliate space. So it’s not a bad thing for the affiliate space. Though I do think the things you point out are true. One is that the more people who get good at what I would call distribution, which is what retail media is, the more likely they are to look over at affiliate and go, guess, that’s like distribution too. I’ll just take that over here, right? And so I’ve been saying this for years about a number of different industries, performance PR, the performance side of social is, there are now people who understand some of the technical aspects of affiliate.

 

Jerrid Grimm (41:27.918)
Yeah.

 

Michael McNerney (Martech Record) (41:42.627)
that didn’t before that may want to come after your budget. Right. And so as I said about Google competition is good. Right. And so I think that one that’s competition to look, I think it’s actually getting back to the core of marketing. Right. If you go back pre internet, you know, there’s a brand manager, you know, they were in charge of the ad that was on TV, where the box out of the supermarket, what the price of this was. Right. Like, you’re figuring out how the promotions work, right? And the internet kind of blew all that up and put it into silos. And so suddenly you had like people not talking to each other, running all these different channels, right? And it’s starting to come back together. And I think retail media is somewhere where like you can highlight that it’s coming back together. Like brand managers are owning that distribution channel opening, owning the pricing in that channel, the promotion, the placement in that channel. And so I think that’s probably a good thing for marketing. It also in some ways is a complete competitive against Google, which is a good thing as well. And if you’re an affiliate marketer, I think you should be thinking about, you know, what are the skills that I need to be able to compete with different channels. I hate the word channels, but you know, people who have different skill sets. And, you know, to me, affiliate marketers are wonderful at relationships, wonderful at setting up these deals, you know, wonderful at maintaining those relationships. They’re not great at telling stories about brands and thinking about

 

Jerrid Grimm (43:08.43)
Hmm.

 

Michael McNerney (Martech Record) (43:10.019)
the real value of brand building and storytelling. And they like to make fun of all the brand guys for not really doing anything real all day. And there’s some truth to that. But at the same time, brands are really important. And as Angela Bauer knew that, right? And I started my career at Ogilvy. I spent five years at big agencies doing branding. And there’s definitely some truth to the criticisms of people sitting up there and just making Super Bowl ads and not having to measure it.

 

Jerrid Grimm (43:38.318)
Mm -hmm.

 

Michael McNerney (Martech Record) (43:40.099)
But at the same time, just think about your own behavior when you buy toothpaste. You buy the brand that you trust and you’ve used forever, and it’s really important. And so I think as these channels start to collide, as e -commerce becomes the driving force of sales for most industries, these skills are going to have to come together. And if I’m an affiliate marketer, I’m thinking about how I gained those skills, understanding how to build a brand. that a creative team can take and turn it into a logo or a brand or an ad or whatever it may be. And if I’m someone sitting on the brand side, I’m thinking, how the hell do I learn e -commerce? How do I understand how to drive sales? But I’m not thinking about affiliate. I’m just thinking e -commerce. And if e -commerce is driven through all sorts of different mechanisms, it’s distribution, like we talked about in the beginning. One way is retail media. What are all my retail media options? And you’re making the same decisions people made.

 

Jerrid Grimm (44:21.006)
Yeah.

 

Michael McNerney (Martech Record) (44:38.979)
30 years ago, you’re choosing the partners that align best with your pricing strategy, right? The positioning of your brand. And those partners could be Wirecutter, they could be Walmart, they could be United Airlines, right? The difference is there’s just a lot more options than there were back when it was like, do we do a Kmart strategy or do we do like a Nordstrom strategy or whatever, right? But the fundamentals the same, right? It’s who’s my target audience, right? Like, What does the product look like? What are my price of that? And who are the people who could help distribute my product to that audience in the best possible way? And those questions remain the same.

 

Jerrid Grimm (45:20.334)
Why? I mean, what gets me excited about this space is advertising globally is like a $600 billion markets, right? And that is mainly driven on an impression based model. How many eyeballs are seeing my ad where it’s whether it’s on TV or, or on a website or anything else. And that’s this massive, massive amount of focus for most companies is how they market themselves. And then you have the affiliate or, you know, more performance based industry. which is a fraction of that $600 billion, call it 12 to 20 billion, whatever it depends on which report you read. I’m excited about this idea that this $600 billion budget is now starting to look more at an outcome base, which makes sense, right? Like it’s not that hard to get an impression on the internet. What’s hard is figuring out if it’s actually a human or if it’s a bot or anything else. But…

 

Michael McNerney (Martech Record) (46:15.139)
or creating a digital campaign that anyone remembers. We still don’t have the basic tools to create good ads online for the most part. When’s the last great campaign you remember that’s not television or print based still?

 

Jerrid Grimm (46:18.062)
Yeah, exactly. Because it’s an impression. Yeah.

 

Jerrid Grimm (46:28.494)
Yeah, exactly. So if you have this huge amount of focus of companies in the way that they market and it’s moving towards this idea that everything should have like, not just measurement, meaning like how many impressions did my banner ad get, but how many sales did it drive? How big was that average order value? Did the customer return? Is it a new customer that is extremely different than the way that that $600 billion market has acted in the past. And if you can get those players, thinking about it, I think the affiliate industry is just very well educated and experienced in how that works. I’ve even seen at some of these retail media networks, the people running them are from the affiliate space because that is one of the core skillsets. So that’s what, for me, I’m very bullish on this space. I know that there’s a lot of existential things going on. There is like Google might change that traffic up Facebook. you know, removes news sources from theirs whenever they feel like it. That’s what’s happening in Canada. But I think the bigger view is, is that this whole marketing space might be moving towards an outcome based at least a portion of it, a larger portion of it. And so I think, I think that’s really exciting for publishers of all kinds.

 

Michael McNerney (Martech Record) (47:42.755)
Yeah, I actually look at it almost the opposite way, but with the same outcome, right? And that is, like, measurement’s always fuzzy, right? Like, you know, I remember, I was at Ogilvy when we created the first banner ads, like, that we knew about. And I remember thinking, like, we all talked about it. We’re like, now we’re going to know everything. Like, now we’ll just, we’ll know everything that ever happens online. Like, well, no, we all know.

 

Jerrid Grimm (48:05.358)
Right.

 

Michael McNerney (Martech Record) (48:09.667)
And that is, it’s never gotten any easier than it did, than it was the first day. Right. And so, like it just seemed obvious where like, we’re going to be seeing that someone clicked and then we’ll just know and we’ll tell the client, they’ll pay us money. And we’re still at the phase of the famous Wanamaker, you know, quote of like, I have my ad dollars work. I just don’t know which half. And, you know, we’re better at attribution models and we have a lot more data. but I’m not convinced like we really know, you know, and so.

 

Jerrid Grimm (48:14.222)
Right.

 

Jerrid Grimm (48:28.686)
Right.

 

Michael McNerney (Martech Record) (48:39.427)
Though I want to push you on that and say, outcomes are going to be the same, but the affiliate marketers, right? I’ve got to get better at going after the same budgets because what they’re doing is building a brand often, right? And let me, you know, so a lot of these reviews that are being read are affiliate relationships, right? People are reading on average, you know, I forgot where this piece of data come from, but like eight reviews per, you know, purchase of something, anything over a hundred dollars, whatever, wherever it is.

 

Jerrid Grimm (48:54.894)
Right.

 

Michael McNerney (Martech Record) (49:09.347)
And most of those are affiliate relationships. And you know what happens when people read eight reviews? They have an impression of a brand, right? They feel something about that brand, right? But the affiliate teams are getting any credit for this ephemeral stuff that’s going on, right? They’re only getting credit for the sale. And the reality is, so I think the other way around should probably happen is the affiliate teams should be figuring out how to say, hey, hey, hey, wait a minute. It’s not all data, right? Like I can tell you that…

 

Jerrid Grimm (49:15.246)
Yeah.

 

Michael McNerney (Martech Record) (49:36.835)
X many people read this review and now feel something about this brand. Pay me for that, right? And so, I don’t know. You gotta get those brand guys some credit on selling something that’s been measurable.

 

Jerrid Grimm (49:44.878)
It’s a good point. That’s a good point. I think it’s, I think it’s the proof point that says that these worlds are starting to, you know, blend together when you’ve got affiliate marketers thinking, Hey, I am actually creating a ton of brand awareness, right? I should start tracking and, and maybe, you know, talking to my, my affiliate marketer brand partner about this. And then you have brand marketers like, my God, I could track sales off of this stuff and really prove that, you know, this, this ad, this Superbowl ad that I spent, you know, $12 million on, drove some sales. So I do think these two things, that’s, that’s exciting though, because it does mean that the space is going to grow and evolve and it’s going to, because it was quite siloed. You and I both know this. So this is a, I mean, this is a, go ahead. No, no, go ahead.

 

Michael McNerney (Martech Record) (50:30.435)
Yeah. I think too, sorry, go ahead. I was going to say, you know, we had a great event in LA in February and one of the speakers was a woman named Charlotte Mostad who’s the CMO of health aid kombucha. And, she, before, you know, we put her on the panel, I was talking to her and she said, I just want you to let you know, we only have 3 % of our sales that are digital. And I was like, why, why are you on this panel? Why are we thinking about this? She said to me, well, listen, I put my affiliate person on my brand team. And you know why? She’s like, when people walk in that store, they better understand the story of gut health, right? They’re not gonna buy my product unless they’ve gone and they’ve read, you know, reviews about how to improve your gut health, right? And that’s affiliate marketing, right? What she was talking about was branding, right? You know, she has, she drives like point something percent of sales from affiliate marketing and that affiliate person sits right on the brand team and their job is to tell the story of this product.

 

Jerrid Grimm (51:28.59)
Mm -hmm. Yeah.

 

Michael McNerney (Martech Record) (51:30.883)
And so there’s someone who understands how to mix these, how to push these silos together, or just ignore the fact that there are silos, right? Tell a story, get products distributed through partners, they work together and you kind of can execute.

 

Jerrid Grimm (51:45.614)
I love that. I think that’s a perfect place to kind of wrap up this idea of like big topics that are happening. We’ve got Google, of course, is like the octopus in the room. We’ve got, I’m really trying to brand that as octopus in the room. Not right. You can see how hard I’m trying to make that a thing. Yeah. And then we’ve got, you know, third party cookies, which may have a lesser effect. They’re probably more in the, in the platforms and how they do attribution. We’ve got Google AI overviews happening, J and AI content being produced. And this idea of like,

 

Michael McNerney (Martech Record) (51:57.027)
I want you to help like the right article matter. We’ll do it.

 

Jerrid Grimm (52:14.19)
Is performance eating media or is performance, you know, moving up funnel is up funnel moving down funnel kind of that idea. So I’d love to, you know, this is a performance marketing affiliate industry podcast. So as a final piece that I’d like to do on each episode, we’ll kick it off with you is, is something I’m calling like favorite product, which is a bit of a steal from another podcast I listened to, which is people versus algorithms. They do a favorite product as well. But I want this to be specific. we’ll even put, maybe we’ll even put an affiliate link in the show notes when that that’s about as meta as you can get. So I can kick it off. My favorite product is HubSpot. I used HubSpot forever when I was running PressBoard, which is the company that was acquired by Impact Hub became part of this industry. And there’s two things I love about HubSpot. One is your small company. You do not have time to be working in your CRM and then trying to hook it up to your. CMS where you produce content and then getting your one customer success person you have when you’re starting a company to be able to talk to people. So for me, HubSpot is just, you don’t have to think about it. You don’t have to stitch anything together. I love it for that reason. And then I actually love it in the affiliate space because I think they give something like a 30 % commission on the, on the first year subscription, like 30 % commission on a full year of it. So. I’m not going to make any commissions off of this. We will. We’ll put a tracking link in there, but I’m not going to be making the affiliate commission. But HubSpot is my favorite product as a user of it. They used it for, you know, I still use it today. So about 10 years. What about you? Do you got a favorite product?

 

Michael McNerney (Martech Record) (53:54.915)
Well, is your clock for sale? Are you selling those? Should we pump your side hustle? Because I want one of those.

 

Jerrid Grimm (54:01.454)
You should, mate. Limited edition. Limited edition, we’re going to do 10 clocks. I got to pay off that planer and the table saw I bought, so they’re $100 each.

 

Michael McNerney (Martech Record) (54:08.419)
Let’s do it. Yeah. That seems like a bargain. No, I was going to use them. I do love the clock, by the way. But I have a much lower tech answer. And that is the way I get everything done is still in my Moleskine, which I probably once every month or so I have to buy a new one. This is the year of the dragon version on Amazon. I’m a dragon. So I got the year of the dragon version, which is I believe this year. And if it’s not written down in here, it’s not going to get done for me. So I still haven’t figured out a way to.

Jerrid Grimm (54:32.654)
Beautiful.

 

Michael McNerney (Martech Record) (54:44.227)
I use all my digital tools to plan. I still write it down and then check it off. And I even write things down that I’ve already done so I can check them off. It’s very satisfying.

 

Jerrid Grimm (54:54.51)
Nice. Hey, well, you know, the act of writing is, is part of remembering, right? I’ve always, I have notebooks. See, I don’t, I didn’t ever look back at my notebooks. I just write notes in them and then I pile them because I don’t, the only thing I’m not a very like cluttered person except with notebooks. I’ve kept every like notebook that I’ve had for at least, 12 years now. So I have a cupboard that just full of old notebook. I don’t even know why I’m keeping them.

 

Michael McNerney (Martech Record) (55:02.883)
Yeah. yeah. Nice.

 

Michael McNerney (Martech Record) (55:19.587)
We moved in 12 years because…

 

Jerrid Grimm (55:21.646)
I do, I move the box of these notepads. I don’t get what I’m going to do with them because I promise you there is like 1 % of the information there is useful and the rest are just like notes.

 

Michael McNerney (Martech Record) (55:29.891)
kind of go into your library, the presidential library that they built for you.

 

Jerrid Grimm (55:33.454)
Yeah, for sure. It’s just a bunch of notebooks with scribbles in them. That’s right. And my handwriting looks like a, you know, seven year old writing with their left hand when the right handed. So, well, it’s great. Well, like I’ve loved having you on here. We’ll have you on again, let’s say in a period of time, we’ll see if things have changed. You know, we’ve made, we’ve made some, you know, thoughts on what’s big topics and you know, this is good as I do, which is that always changes. We might be back here a year and we’re like, that wasn’t such a big deal or that was a huge deal. So.

 

Michael McNerney (Martech Record) (55:35.843)
your nuts. Yeah.

 

Michael McNerney (Martech Record) (55:42.755)
I should really read.

 

Michael McNerney (Martech Record) (55:52.099)
Yeah.

 

Michael McNerney (Martech Record) (56:02.275)
Yeah, we’ll, we’ll, we’ll find out shortly. I think so. Thank you for having me on and I’ll see you at IPX next week.

 

Jerrid Grimm (56:05.166)
Yeah. Yeah, sounds good. All right, thanks. We’ll talk to you soon. Bye.

 

Michael McNerney (Martech Record) (56:10.979)
Right. Later.

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