Episode #20 – The Performance Marketing Spotlight with Yonatan Dotan

Marshall Nyman [00:00:01]:
Hello and welcome to the performance marketing Spotlight. I’m your host, Marshall Nyman, founder and CEO of Naimo Co. Each episode I will be bringing you someone with deep experience in the performance marketing space where they will highlight their experiences within the industry. Today I have Jonathan Dotan, VP, channel partnerships at Impact. Welcome to the podcast, Jonathan. Thanks, Marshall.

Yonatan Dotan [00:00:27]:
Great to be here.

Marshall Nyman [00:00:28]:
Of course. Happy to have you on. Well, let’s just jump right into it. Can you introduce yourself to the audience so they can get to know you?

Yonatan Dotan [00:00:35]:
Sure. Hey everybody, my name is Jan. As Marshall said, I’m the vp of channel partnerships@impact.com. Been in that position for a few years. I live in Nashville, originally from Israel, moved back and forth a whole lot throughout my life and have been in the space for, gosh, coming on ten years now.

Marshall Nyman [00:01:01]:
How did you get your start in the space?

Yonatan Dotan [00:01:05]:
It depends how far back you want to go. If you want to go really far back. I went to college, I studied business, I managed a few bands while I was in college and thought I was going to go into music management. And then at some point in time, everybody needed websites, all the bands, and we didn’t have money to pay anybody and so I said, oh, maybe I’ll figure it out. And then that careened me down a path of web development and took me totally out of that world. But let’s see. So college, after college I went to the military, and then after the military I was completely broke and so got the first job I could find, which was as a part time HTML webmaster and part time SEO account manager at a brand new marketing agency in Israel that all scaled up pretty quickly. So within a few years I was the head of an SEO department there, which was like 35 people and had gotten a lot of specialization and a lot of depth in the world of SEO.

Yonatan Dotan [00:02:09]:
But affiliate was totally this unknown mystery world to me that it just sort of occasionally collided with. And then at one point of time there, I met one of my future co founders, Jonathan, while I was in Israel. And he was working on sort of a side hustle where he had some affiliate websites and he asked for my help on the SEO side of things. And in sort of true entrepreneur hustle, side gig kind of fashion, I started helping there. And what we were doing is really we were running just straight up black hat websites, buying expired domains and redirecting them and all that kind of stuff. But we were promoting a bunch of different categories and affiliate and it all took off until Google caught on and slapped us down. But in that sort of brief moment of glorium, we got to the point where we were promoting thousands of different products across, at the time, hundreds of different affiliate platforms, because there were major platforms, all the little one off platforms and white label platforms and all that kind of stuff. And at some point in time got to the point where we know, maybe this is the problem, just this difficulty of data.

Yonatan Dotan [00:03:29]:
And that’s what really kicked off affluent and the whole rest of my career thus far.

Marshall Nyman [00:03:35]:
Awesome. Well, I can’t say music is not a good way to get started in the industry because that’s how I got my start too, going to a concert. So guess working with some bands was the same start as me.

Yonatan Dotan [00:03:47]:
Totally.

Marshall Nyman [00:03:49]:
So you started affluent in 2016. Will you tell us what affluent is and why you created it?

Yonatan Dotan [00:03:55]:
Yeah, sure. So affluent is an analytics platform specifically for the affiliate marketing world. Our main client type is affiliate marketing agencies, and it allows them to aggregate all of their data from across all their clients, across any platforms that they’re using into one analytics suite. And one of the really big selling points for agencies is that it automates client reporting for them as far as how and why we started it. So it goes back to that origin story of we were running all of these affiliate websites, we had a spreadsheet that we called the Spread Beast, which had over 1000 unique logins to different affiliate platforms. And anytime that we wanted to see how much money we had made the previous week, we would have to log into literally coming on a thousand platforms, pull a little bit of data out from each one, aggregate it, all of that kind of stuff. And that’s what led us to start affluent. So initially, affluent was actually a platform for publishers to do exactly what we needed to aggregate all that data.

Yonatan Dotan [00:05:00]:
We built up the platform, we had a bunch of free users, all of that kind of stuff. We weren’t charging anybody yet. And then from our connections in the affiliate space, we had a lot of agency connections. We showed a few of them the platform and a couple of them said, hey, this looks really cool, can you make it for us and we’ll pay you for it? And that was like, oh my God, somebody’s going to pay us moment. And so we pivoted to become an agency platform, and that’s what we are still today.

Marshall Nyman [00:05:30]:
Awesome. What was it like building the company from the ground up?

Yonatan Dotan [00:05:36]:
Looking back, is totally a rose tinted glasses kind of exercise. So I try and keep myself honest on that one. And it was amazing. Sort of the flexibility, the ability to just build, the ability to decide what we’re doing the technical side of things and getting super deep into how things are built, making things a nice experience, getting those first sales, all of that kind of stuff, I mean, that was all really amazing. Pretty early on, my wife Emma joined as the third co founder in the company, helped us scale things, and we had such a good unit and such a great early team. The other side of it is starting. It was immensely stressful. I mean, there was a four year period where there was really not a day off.

Yonatan Dotan [00:06:31]:
It would see sort of mornings to evenings and weekends, and every time we tried to take a day off, there’d be some bug, but there was nobody to fix it, so we would have to dive into it and all of that kind of stuff. I think it’s that mixed bag, really. I miss the days of being a startup, and I’m also glad not to be in one at the moment.

Marshall Nyman [00:06:54]:
That’s definitely the life of an entrepreneur.

Yonatan Dotan [00:06:57]:
Yeah, for sure.

Marshall Nyman [00:06:58]:
At what point did you know you had a viable product?

Yonatan Dotan [00:07:03]:
It’s a good question. I think there are probably a couple pivotal moments. There were the first moments where somebody started paying us, but I wouldn’t say that we were at all sort of resting easy at that point. At that point, we realized that we really needed to go after agencies, and we started going really hard and started getting sort of the first few clients. I think for us, one of the moments is when we signed our first longer, bigger contracts, when we got contracts with agencies that wanted to sign on for two years to lock in a better rate. But we’re paying us $4,000 a month, something like that. And at that point in time, I started to sort of believe internally, like, oh, God, this is actually valuable to people. And then the other thing I’d say is potentially just the reaction that we would get when demoing.

Yonatan Dotan [00:08:03]:
We built a niche product. We built something that really solved a specific problem. And so as we sort of got our feet under us with demoing and we’re talking to more agencies, we would do these demos, and you would see sort of the faces, or you’d see the reactions, and you’d get those moments of like, wait, I have to pull this other person in to see this kind of thing. And I think that maybe the full answer to the question is that there wasn’t like, one moment, but it was sort of the building up of those little things that got you more and more confidence over time.

Marshall Nyman [00:08:37]:
Why was there such a need for a product like this?

Yonatan Dotan [00:08:41]:
Yeah, totally. So if you think, particularly from an agency’s perspective. There’s a number of different platforms in the space. And in any event, an agency might be managing ten clients, 50 clients, 200 clients, and every single one of those clients is a separate account. And so if you think of really just like the most basic things, like an agency that wants to do monthly reporting for their clients, it’s kind of the flip of the problem that we have in the publisher side. They have to log into 200 different accounts, they have to create reports in every single one of those accounts. They have to export all of it. They have to put all of it in sheets or excel or whatever and format it and add narrative and all of that kind of stuff.

Yonatan Dotan [00:09:27]:
And so as an agency scales, it just immediately gets to the point where you’re spending dozens and dozens of hours per month, per week, whatever it is, on just that reporting task. And then in addition to that, there’s the whole difficulty of analysis across portfolios, trying to take learnings from one client and apply them to another, and all of that kind of stuff. And the product just really specifically addressed those needs in a very robust way.

Marshall Nyman [00:10:00]:
As an agency owner, I definitely enjoy being able to log in and seeing all the accounts at one time versus having to log into multiple accounts. So you’re definitely speaking to me on that one. And I think just as far as the team goes, they like the automation, the amount of time that they are able to reduce from spending on reporting, which is a lot of time, it can definitely become cumbersome. So I know our team definitely finds a lot of value in using the product. In 2021, impact acquired affluent. What led to that acquisition?

Yonatan Dotan [00:10:33]:
Yeah, totally. So I mentioned, like four years without taking a day off. But after that, we’d finally gotten to the point of time where the team was large enough and established enough that we could take a vacation. And so after four years, we were like, okay, we’re going to take one week off, we’re going to go to Mexico, and we’re going to spend an entire week not thinking about work and sort of recharge and refresh. And so flew to Mexico. And then when we got there, really just as we got into the Airbnb, made the mistake of opening my email and saw the email at the top was an email from impact saying, hey, let’s talk, making it clear that this was an acquisition conversation. And so it was extremely, extremely exciting. But it was also like, oh, I guess the first vacation is going to be spent thinking about work.

Yonatan Dotan [00:11:24]:
So they reached out and we started talking, and our thesis changed a little bit over time with applaud. When we started the company, it was very clear that there wasn’t going to be any sort of major player in the affiliate space. There were going to be a ton of different platforms. Everyone was going to have a little piece of the pie and it didn’t look at all like there would be any sort of consolidation or anything like that. But even just over our time at Apple and we really saw that changing, we saw impact becoming a larger and larger and more robust player. And when they started the conversations with us, it became clear that actually a lot of the vision was aligned. That impact as a company is really leaning into agencies as an actor and how we can prop them up and how we can make them more prominent and support them with tools or processes or co marketing or whatever it is. And Applin fit very nicely as a piece of that puzzle in making sure that that actor also has the technology that they need in order to succeed.

Marshall Nyman [00:12:34]:
You’ve now been at impact for three years in three different roles, just starting a new one recently. Tell us about your different roles and what you’re currently focused on in the new role. Sure.

Yonatan Dotan [00:12:44]:
So first year was spent mostly just on applaud, getting situated inside of impact and helping to continue to run the business. After about a year, Emma took over managing applaud and I became our vp of agency solutions, which functionally means or meant that I oversaw all of our relationships with our agency partners. And so that’s all of those things. Making sure that we’re collaborating, figuring out how we can win business together, figuring out how we can enable agencies to grow. There are so many benefits to us to impact of working with agencies. We find that agency managed brands grow faster. Things like they churn less, they have fewer pending approvals. Really, like any metric, anything that you look at, we see agencies as really a highly beneficial actor.

Yonatan Dotan [00:13:46]:
And so I’ve been in that role for about two years and then just recently became the company’s vp of channel partnerships, which is a little bit of an expansion of role. So still overseeing agency relationships, but now also seeing our tech partnerships and the company’s referral program or our internal partnerships program, which I’m really very excited about.

Marshall Nyman [00:14:09]:
What has been your favorite part of working at Impact?

Yonatan Dotan [00:14:14]:
So impact, I think it is a unique company, it’s a large company, it’s over 1000 people, but there’s a really tremendous appreciation for the entrepreneurial spirit and I think I’ve seen things here that I don’t think happen at a lot of other companies. Impact has made several acquisitions over the past years, affluent trackonomics, activate media, rails, press board, and other ones before that as well. And one of the really remarkable things is that the founders, the entrepreneurs at the helms of those organizations have all stayed on, which is actually not that typical of an outcome. It tends to be that company gets acquired, founders hang on for the minimum period of time, and then they move on to their next ventures. But Impact has done a really great job holding on to them and it’s created really a tremendous entrepreneurial spirit inside the company. And it can be a little bit of a best of both worlds kind of thing, where you get that entrepreneurial spirit, but also in a company that’s large enough and influential enough that they’re able to really lean into it and provide those leaders with the resources that they need and all of that kind of stuff, which makes it a really nice place to work.

Marshall Nyman [00:15:37]:
What are some of the biggest challenges you see in the performance marketing industry?

Yonatan Dotan [00:15:43]:
Yeah, so it’s interesting. The industry is changing a ton, and there’s a lot of opportunity in that one way. Affiliate is expanding to be closely related to PR, to influencer, to marketing on Amazon, to all kinds of other things. I sort of see it as becoming a model rather than a channel. But also all of the change does bring challenges. One of the ones which I’m sure other people have talked about, and I don’t think I have anything particularly smart to add, but AI is changing the field a lot. And it’s not even necessarily the field of affiliates specifically, but the field of publishing and how search engines and even just browsers are going to work and how people get at information. And I think that’s one that nobody really knows where it’s going to end yet, and it’s changing a lot.

Yonatan Dotan [00:16:41]:
Another one of the challenges I see is that expansion of affiliate is amazing. It’s opening up all these opportunities. We’re very far from the days of affiliate all being sort of just like very specific types of publishers and it’s content sites and again, pr and influencer and all that kind of stuff. One thing that I see is that is happening at the same time as a sort of like economic crunch and everybody looking for cost savings. And I see this a lot on the agency side of brands want more. They want to work with influencer, they want to work with premium content, they want to work with all these unique publisher types and all of that kind of stuff. But they’re also trying to figure out how to pay less for that. And I think that makes for a little bit of an interesting dynamic.

Yonatan Dotan [00:17:34]:
And it’s kind of a historical remnant of one of the issues of affiliate being seen as sort of like a siloed channel rather than being compared properly to the whole marketing mix and all of that kind of stuff. And that goes into a little bit of why I think I see the future for us as being more of a model than a channel. It’s a way to derisk your investments, or it’s a way to find the appropriate balance of risk between brand and partner. But then it’s a way to tap into traditional affiliate, into content, into PR, into influencer, into Amazon, into partners like tv scientific and rocked and sort of all of these other spaces. And then the final thing I think is with that much going on, it can also be a little bit difficult to find focus and really sort of stay on message to communicate what the channel can deliver.

Marshall Nyman [00:18:31]:
Absolutely agree with you on most of those points, and I definitely see affiliate as less of a channel and more just of a means to running marketing. Any predictions on the future of performance marketing or maybe where things are headed in the space?

Yonatan Dotan [00:18:45]:
Yeah, I think we’re going to see a lot more of that. So to expand on it a little bit, we’ve seen a lot more conversations coming up with PR teams who are doing their work. But now the partners that they’re reaching out to are asking for affiliate links as part of the deal with influencers. We’re seeing this growth of performance influencers or some kind of a hybrid where what we call post plus seeing a real expansion into Amazon with partners like Levanta, which are super interesting in the space. One thing that we are betting on is we acquired a company called Sasquatch at the end of last year, which is essentially it’s a referral friend technology. And so this is betting on sort of the next concept being your clients, being your partners as well. So Sasquatch, if you think about what they are, it’s like, let’s say you have a peloton or something like that, and you go in and there’s the refer a friend section, and you can refer a code to your friends and then you get discounted product or free swag or all that kind of stuff. And so Sasquatch has been running those types of programs for years, and one of the really interesting things in there is you’ll look at the clients that send referrals, you’ll get a ton of clients who have sent a code like that to one person, and then you’ll get a handful who have sent them to like 80 people or something like that.

Yonatan Dotan [00:20:17]:
And then really that becomes sort of like a recruiting base for influencers, for affiliates, all of that kind of stuff. So again, my main prediction is just we’re going to continue to see this type of expansion into all sorts of different areas, the ones that we’ve talked about and ones that we haven’t even thought about yet.

Marshall Nyman [00:20:35]:
Yeah, I think the industry has grown a lot, so now it’s at the point where it has to kind of figure out ways to continue to grow. It’s not just going to kind of continue to grow the way it did. So looking to expand into influencer PR and some of that other stuff that you’re talking about is how the channel is going to continue to grow. So really great insights there. Final question, what has been your favorite part of working in the performance marketing space?

Yonatan Dotan [00:21:00]:
So I feel like I’m going to be wildly unoriginal here, but I was working in SEO before, as I mentioned, and that was a job where I could sit behind a computer screen for three years and never talk to anybody and still be perfectly adequate at doing my job. And then the shift into affiliate, into the world of partnerships, I should say, really has been such a welcome change in that it is impossible to make progress without talking to other people. And that makes it great, it makes it collaborative, that makes it much more of a rising tide raises all boats kind of industry, and it’s been a pleasure to be a part of and.

Marshall Nyman [00:21:39]:
Makes us a little bit less worried about AI replacing us. For now, a big thank you to Jan from impact for joining the podcast this week. Some great insights in his background and how you can leverage impact and affluent for your affiliate programs. What is the best way for listeners to connect with you?

Yonatan Dotan [00:21:59]:
Probably LinkedIn. Jan Dotan, you can look for me there.

Marshall Nyman [00:22:04]:
Perfect. Well, thank you to Jonathan for joining today. If you’ve enjoyed this content, please give us a like and a follow. Thank you for joining. I am Marshall Nyman, host of the performance marketing Spotlight and founder and CEO of Naimonco, signing off. Thank you and have a great day.