PART 1

Peter Koning: This is Peter Koning from Affiliate-Software-Review.com, and I have with me today Adapp Solutions. I have actually Peter Hamilton from AdappSolutions, who's in charge of their marketing and support. We're going to be talking about an exiting new offering that they have that has to do with creating affiliate networks. I'm not going to give away too much. There is also a cool offer that I noticed on their website, just today. It's a little contest that they're having, as far as the first network system that reaches a certain limit. We'll get to that during the call as well. So, anyway with no further ado, welcome to the call, Peter.

Peter Hamilton: Thank you, very much.

Peter Koning: I'm really excited, actually, about this call, because I've been running my Affiliate-Software-Review, sort of authority site, for a few years now. One of the most common questions that seems to come up quite often is, "How can I start my own affiliate network?" There really hasn't been, up until now, a lot of different options. There are a couple of big players out there that are running most of the large CT networks. And then there is a couple of small, sort of script vendors. There hasn't been really anything else.

So, I'm really excited about this call. I have a bunch of questions here for you. But before we get into the HasOffers platform, maybe you could tell us just a little bit about yourself and how you fell into this position. Then, tell us a bit about the company itself.

Peter Hamilton: Right. Sure. I've been working with web applications and online marketing now for about four years. I joined up with Lee and Lucas Brown about three months ago, to get started on this new platform that they wanted to develop. Lee and Lucas have started a technology-based company called Adapp Solutions, where they intend to provide many different applications that are web-based and possibly, also, downloadable for everyone who's involved in online advertising, whether that's at the affiliate level or if they're merchants, advertisers or even networks. Yeah, so we decided to get started first on introducing ourselves into the space by releasing a network application that is very accessible, user friendly and with a low barrier to entry.

Peter Koning: So, can you tell us a bit more? This is HasOffers.com you're talking about, obviously.

Peter Hamilton: Yes. Sure, yeah. With HasOffers.com the basic idea is that it's a white label system, fully-customizable, online application that can look like your brand and look like it's completely integrated into your website and your current network. It gives you all the tracking support that you need and abilities to manage affiliates and to manage offers - well, all the features you need to do those things efficiently and successfully, and to make sure that nothing is falling through the cracks. It also helps you to update and adjust your network in real time, because all of our statistics are coming through in real time.

Peter Koning: Now, most of my visitors who come to Affiliate-Software-Review are looking for the ability to start their own affiliate program. But this is really at a whole new level, isn't it?

Peter Hamilton: Correct, yeah. We definitely are targeting people, at the beginning here, that already have networks, people that are just looking for some other software solutions. As you said before, Peter, there are several other major players in the industry. Some of them are at fairly high cost, and there's a fairly sizable financial barrier to get into those things. And then, also, there's a scalable cost that's associated with using these other applications. We wanted to make something that people that have been involved in the affiliate marketing industry for a while, whether it is at the network level or as affiliates, can easily make the switch over to a new platform that is up-to-date, that is sort of stepping out of the Stone Age and moving us on to the next level, [laughs] and also doing it in a way that is at low cost to get started.

Peter Koning: The cost is low. I mean, it's free, is that correct?

Peter Hamilton: Correct. It's especially true because this beta phase, we wanted to make sure it was completely free to everyone. And people that signed up during the beta phase, it will always remain free. There will never be any additional cost for those people. We did come out with some new pricing structures, just recently--actually, yesterday--because we've found that some of the larger networks are really wanting the security and reliability of knowing that they have their own dedicated server for their system.

And in order for us to automatically implement that, we do need to have at least some cost. So we've created what's called the HasOffers Pro version. So, up to a million clicks, when people are not so worried about having a dedicated server, it's still completely free. And we decided people that are out a million or more are probably going to want that security and that level of reliability, so we've created that Pro version for people who are above that amount of click volume.

Peter Koning: OK. So, if you're on the free version, you're running off the same server as other free customers, I assume.

Peter Hamilton: Possibly. I mean, it depends on when you signed up and who came on at the same time and how much hardware we're throwing onto our system. We're obviously going to make sure that you don't have a problem. [laughs]

Peter Koning: Right.

Peter Hamilton: But just for the peace of mind for some of these larger networks, they like to know that they're on something that's dedicated.

Peter Koning: Yeah. If someone's doing like a million clicks, you can assume that even if their offers are converting pretty poorly, and they're maybe making even one cent per click, which is pretty sad, right? [laughs]

Peter Hamilton: Right. Right.

Peter Koning: That'd be like $10,000 a month that they'd be generating.

Peter Hamilton: Right.

Peter Koning: Even at that level, which is extremely conservative, at one million, they would easily justify paying up...

Peter Hamilton: Right. We really believe so. We're charging $799 a month for the Pro version. And it's not scalable, so once you've crossed that million-clicks-a-month barrier, you go to 10, 15, 30, it doesn't matter, you're still paying 799 a month.

Peter Koning: OK. And now, as far as the variable costs. Typically, at least if you're an advertiser and you're in a network, there is some fee that you pay based on the actual revenue that you do. Do you have any of that in your Pro version calculation, or is it strictly really just to justify the hardware costs and there is no variable cost based on revenue?

Peter Hamilton: There is no variable cost based on revenue at all.

Peter Koning: OK.

Peter Hamilton: Yeah, we think that that's not really necessary. And we want to introduce ourselves into the space in a really great light, and provide something that's really robust and helpful and not be trying to take our slice of the pie here at the beginning.

Peter Koning: Right.

Peter Hamilton: We really feel like we are a new technology in the space, and we want to create a great rapport, and we think this is the way to do it. We will, as time goes by, introduce new products, for affiliates and for advertisers themselves and for the networks, some that might be internal, with something like HasOffers or another application we create for affiliates. Or they might be totally external tools. And some of those will be paid, and some of them won't. We'll just continue to try to build our tool sets and increase the value of our brand and show people that we create fantastic technology for this space.

Peter Koning: Now, from everything I've learned over the years in this space, as you know, it's a huge industry. It's growing. It's probably one of the best-growth industries, even with the economy as bad as it is when we're doing this recording.

Peter Hamilton: Sure.

Peter Koning: There's big growth. But there's also a ton of different technology solutions. I mean, it's very fragmented. At least on my website, I've got over 90 different options. If someone wants to start an affiliate program, they can go with a network, they can go with a script, they can go with a hosted version. Now there's the sort of build-your-own-network niche that you're playing in. Of all those different solutions, is there sort of one area that you're really trying to carve out a niche in? Because I'm just thinking, if I'm in a software company selling some affiliate-tracking scripts, for merchants that want to just set up their own little private affiliate programs, is this a threat to me, or is it more of a threat to some of the bigger players that are out there creating affiliate networks for their clients?

Peter Hamilton: Well, there are a lot of things that go into having a successful affiliate network, obviously. And we think that the things like relationships with the right merchants and the right affiliates should be the things that make you succeed and the things that separate great networks from not-so-great networks. We don't think that, really, the technology should be the barrier. And to a large extent, it sort of has been, over the last several years. A lot of people that could very well produce fantastic networks aren't doing it because they don't really want to shell out the cash and also split up their piece of the pie, just for the platform.

So, yeah, it's important to us that those people are empowered. And we think that that's only going to enhance the industry, as a whole. It's going to allow those people that have created some new relationships with possibly new merchants that haven't even entered the space until now a place to put their offers, and a place for the great affiliates out there to come and snag those offers. And these networks that start up if they're new ones with new merchants, they'll possibly develop relationships with other networks and maybe get bought out. I think it all sort of adds to the overall value of the industry.

Peter Koning: You're not really taking away something, you're just building on to what's already there.

Peter Hamilton: Right. I like to look at it as similar to what happened to the music industry, with people being able to do recordings at home and not necessarily needing big record labels all the time. It hasn't totally destroyed the people that really have fantastic connections in the music industry. Those people are still very powerful and always will be. But what it has done is make a medium of finding out about so many new things out there -- new bands and new phenomena that are happening and the major players and see the phenomena happening and they can do something about it.

So it's not that it's creating necessarily more competition for networks but just providing more people with the opportunity to provide more offers and for more merchants to be reached and for more affiliates to reach those merchants.

Peter Koning: OK. That's the way I was thinking about it as well. That it's not really a zero sum gain. It's contributing to the overall industry.

Peter Hamilton: Right, right. And providing the technology to do things right is going to be important for everybody. It's going to be important for everyone. It enhances the trust of affiliate marketing as well; making sure that there's not some kind of shady scraping going on or some sort of manipulation of clicks. And having fantastic fraud detection and making sure that you know from both ends that the advertisers' numbers are matching up with the affiliate numbers.

Peter Koning: You mean there are shady things happening in affiliate marketing? [laugher]

Peter Hamilton: Oh no, I wasn't saying that. [laughter] Oh no, no.

Peter Koning: We'll get into fraud in a minute because I actually wanted to get some of your input on how a merchant can prevent fraud. I guess the one question I have is if someone is looking to set up an affiliate network - let's say they have some really good relationships with a few merchants; those merchants, they have products; they're converting well and maybe a couple of them have had their own private affiliate programs, and this person maybe knows some really good sources of traffic so they could approach those as affiliates - and they're basically ready to start up a network.

This sounds like it would be a really good solution for them because it's kind of cracking the chicken and egg problem that a lot of affiliate producers have. They can't really approach the affiliates because they don't have the networks up, they don't have the merchants in there. They don't have merchants because they don't have affiliates, right?

Peter Hamilton: Exactly.

Peter Koning: So this would be a great way to get started but I guess my question is: as you know and as you mentioned earlier it's not just the technology and it's not just the relationships either, there's other things you can do or other investments and plans they should have around your whole affiliate strategy. What kind of advice would you give someone that's got the ideas, they've got the relationships, maybe now they're willing to go ahead with your platform. What else do they need to do to really be successful in this place?

Peter Hamilton: Sure. Well I think in this industry testing goes a really long way. So if you have a relationship or a few relationships with some great merchants who have some interesting ideas for offers, help them test these things, possibly at no cost. Just get it started. If you have any kind of capital in that way that will help you tremendously to be able set up their offers on your system. Contact these affiliates that you have relationships with and say, "I want to try out these new things. I want to test this and see what kind of conversions we start to have." We can show these merchants, "This is a viable source of income."

If you can do that in any way, there are many different ways you can go about that in trying to test these offers. You are going to have to work with merchants to show them, "My network really can bring traffic. And you might have to be a little bit creative, and that is for a lot of people, sort of the hump. Trying to figure out how to build trust in that way.

From my experience so far, in talking with various affiliates, they are willing to play around with some of these things with you if they are going to become profitable.

Peter Koning: It goes back to the relationship because at the same time you are building trust and relationships with both the affiliates and with the merchants.

Peter Hamilton: Exactly, it goes both directions. And some of these affiliates might also be willing to work with you, knowing that they are going to be first in line for these offers as soon as the merchant is convinced that this is a really viable way of getting their brand out there. That is definitely a big part of the game. Trying to figure out how you can introduce these two people, the affiliates and the advertisers to each other in a way that shows both of them, "Hey, this is going to be a really valuable thing, lets try it out for a second and then lets let it go."

I would highly recommend that sort of thing, if you can get any offer on board and get some affiliates testing it out, or even using it and getting some great conversion on it. Then obviously now you have a whole base, a whole set of statistics you can show new merchants and new affiliates.

It is just getting that first one going and getting some statistics formed. You can't really argue with statistics. Trust definitely goes a long way, but if you can show someone some hard numbers they are much more likely to want to be a part of your operation.

PART 2

Peter Koning: We talked a lot about someone starting a network, and multiple advertisers, and affiliates, of course. But what if there is someone listening to this call that they are selling online, they wanted to start an affiliate program. Is this really the best way for them to go? They are not really interested in multiple merchants or a network, but they need some kind of tracking solution. What would you say to that group of people?

Peter Hamilton: At this point it may not be the best technology for them to use. You are speaking as an affiliate?

Peter Koning: No, really as an advertiser who just wants...

Peter Hamilton: Oh, as an advertiser.

Peter Koning: Right.

Peter Hamilton: Actually as an advertiser you definitely could use this system. Basically you would be your own affiliate network administrator/advertiser. Obviously our system makes it so that you can divide those roles, but you can wear both hats certainly. You put your offers up there and maybe you develop some actual relationships with affiliates, some actual handshaking relationships. Get out there and see who is in the space and who is bring lots of traffic to that, whatever industry, or whatever niche you are a part of.

You can also put a link to your network on your website. Affiliates that are looking for new offers, and if you are a reputable brand, and they see that on you site they are very likely to check it out. And they can immediately become an affiliate and see some of your offers and get things rolling.

It depends on what level of involvement you want to have. If you want to be your own network I think this software is more than capable of everything that you would want to be able to do.

Peter Koning: It also leaves the door open down the road. Lets say you get up and running, after six months you found some really good affiliates that are promoting your offer on your own exclusive network. You might then be approached, or approach a few other vendors, and in your space of complimentary products that those affiliates could also benefit from, and vice versa. At that point you would become a small affiliate network basically.

Peter Hamilton: Oh sure, you could definitely increase the number of offers, whether it is even competitors in your space, or if it is just people that have some things that are relevant. It is definitely a gateway to all of that. Say at some point, you, as a brand, you are running your own network but you decide, "We don't really want to be the one spending the time on this." You can always sell your network to another network and let it become part of something larger that way. It would be very easy to make that switch as well. There are an infinite number or directions you could go.

Peter Koning: Are there some accounts already up and running, actually with commercial traffic and commissions happening?

Peter Hamilton: There certainly are. We have not been given the go ahead to release those names at this point, just because we are just now coming out of beta. We wanted to make sure what our official position is on it. We want to hear from the networks that are set up, what they think, whether or not they would like to have their name out there associated with the White Label System, or not. For example, with DirectTrack you can look up networks with DirectTrack and find a nice little list of that. That has been the standard of the ways things have been done. Everyone knows who is on DirectTrack. But we are not necessarily sure that we want everyone to be directly associated to the technology in that way.

We really want to empower them to have their own network. And not for anyone to feel like it is being run by something else.

Peter Koning: Right, that makes sense. But I can envision at some point that there might be a voluntary directory that your networks might maybe want to sign up to.

Peter Hamilton: Certainly.

Peter Koning: One of the big questions and concerns in the affiliate industry is fraud. Where you have affiliates that maybe then sign up sub affiliates so they are kind of at an arm's length to where the fraud is really happening. What sort of anti-fraud system do you have in place, and what kind of advice do you give to your clients as far as catching fraud and preventing it?

Peter Hamilton: Right. Well, it's important for the advertiser to really be tracking what conversions are happening so that they can match up for each of those conversions that are called from an affiliate link. And our pixel tracking is a big part of that. We require, on every offer, for there to be a pixel in place so that they know exactly how many conversions are happening from their own tracking. [laughs] And if those numbers are not matching up and they're just seeing this huge volume from affiliates, but for some reason it's not really happening on their end, then obviously there is something a little bit bogus going on.

So, just keeping an eye on that, monitoring the conversions that you're having, whether it's clicks or click-throughs or impressions or whatever it is that you're following. We highly encourage for you to have your tracking pixels in place and be monitoring it on a daily basis.

Peter Koning: Yeah. And I guess it's a question of looking out for the irregularities, right? I mean, if an affiliate is converting maybe a little bit too nicely, [laughs] then that's probably someone that's entering the... There's no traffic that isn't converting, or it's converting too well, or it's not converting very well, there's just maybe a very high volume, right?

Peter Hamilton: Exactly. Well, if an affiliate is showing a conversion, well, maybe the click-through went to the page that an affiliate does get credit for. But maybe if it were a bogus click, then whatever product needed to be bought or whatever action needed to happen, maybe that didn't actually happen for some reason because there was some sort of fraud involved. Well, as long as the merchant, or the advertiser, [laughs] knows whether it did or did not happen in actuality, they can match that number up with whatever that click number is, or conversion number is.

Peter Koning: Right. And I guess one of the golden rules is just don't pay your affiliates until you're absolutely sure that you've got legit orders. That's what the numbers are based on, right?

Peter Hamilton: Exactly. And as an affiliate network, you don't want to get into a bind [laughs] where your affiliates are showing these fantastic numbers. And your advertisers are probably not going to want to pay for those numbers when they're not seeing the money rolling in. [laughs]

Peter Koning: Yeah. Or the money rolled in, but it's about to roll out again because of all the charge-backs or whatever.

Peter Hamilton: [laughs] Exactly, yeah. Yeah, if there's something like that, that's a huge problem.

Peter Koning: Yeah. OK. Before we wrap it up, is there any other advice you can give to companies who are either advertisers or entrepreneurs looking to start an affiliate network? Any sort of final words of advice you can give them, or little tips?

Peter Hamilton: Sure. I would just say experience is the best teacher. Get started, and give it a try. Get some offers up, and just sort of test out, see how things go. Test the waters. For a lot of networks, they're not going to immediately just explode, but there's so much information you can read to learn about what makes a great affiliate network. You can learn from the best affiliate networks, become members of some of those and learn how they do things, and learn how to offer great customer support to your affiliates and to your advertisers. If you're communicating with them and building trust, those are the building blocks of this entire industry. So, if you can test it out and play with it and spend time with it, there's really no reason why you can't have a successful network.

Peter Koning: Great. And tell us a little bit more about your contest that you're having. I was just on your site before the call and I saw it up there on one of the pages. I don't remember seeing that just a few days ago, so I guess it's pretty new. Tell us about the first 10 networks for that contest.

Peter Hamilton: Exactly. Well, this limited offer with HasOffers.com is targeted for people that are starting new networks. Those people who are able to exceed one million clicks per month will automatically be given an upgrade to the HasOffers Pro version which includes your own dedicated server and unlimited click volume for life. So instead of paying $800 a month for eternity on your network, that's going to be free. I did this just to encourage people to get started and get moving. It's definitely probably going to happen pretty fast. We already have some fairly large networks that are looking to go ahead and switch over. They would automatically be there. If you're looking to get started, you should do it now.

Peter Koning: Yeah. Even if you don't make the ten, like we talked about earlier, and if you grow it a little more reasonably, you'll have maybe a few networks that you're starting with. You don't have that cross landing. It doesn't really matter because when you hit that limit, you should be able to justify it anyway.

Peter Hamilton: Sure. That's a given. But, it is nice to not have that bill at all once a month. So, I guess it is probably most advantageous for networks that are already going, established, and doing over that amount of volume. If they were to switch over within those first 10 people, they'd never have to pay us a dime. Over the years that can add up. We just wanted to give some people some incentive to take advantage.

Peter Koning: That sounds like a great incentive. [laughter]

Peter Hamilton: Yeah. For a lot of people, that's rent. So, it's not a penny.

Peter Koning: Right. That's great. So, basically, how can people get more information about HasOffers? Just visit the website?

Peter Hamilton: Just visit the website at HasOffers.com. You can see the new pricing page on there as well. There's a sign up button on every single page of the website. You can sign up and get started. Within ten minutes you've got your own custom affiliate network.

Peter Koning: That's awesome. I already signed up last week. It was pretty easy to get in there and play around. I created an advertiser; I created a couple of offers. I was just in the middle of getting your listing updated on my site so people will be able to check out some of the features if they're comparing with other solutions. It was definitely easy to get going.

Peter Hamilton: Great. I'm glad to hear that.

Peter Koning: So, thanks so much, Peter, for taking the time today. Hopefully we can help you launch a few new affiliate networks and grow the industry further with HasOffers.com.

Peter Hamilton: Great. Thanks so much for your time.

Peter Koning: OK. No problem. Thanks, bye.