Sometimes you just need to change the rules to stay on message. So when a panel of affiliate marketing experts and consultants convened Tuesday to discuss their industry and how it can evolve and mesh with Web 2.0 ideas, we had to know more.Joy Culbertson, a member of our production team was on hand at the Web 2.0 Expo in San Francisco to give us the play by play on this one. Her friend Lisa Picarille was a panelist. Marc Levin was the session moderator for the panel which also included Stephanie Agresta (Affiliate Karma), Cam Balzer (DoubleClick Performics), and Sam Harrelson (Sam Harrelson Consulting).

Affiliate Marketing is a business model based on earning revenue by driving traffic to Web sites. The industry is comprised of publications, networks, and online marketers. What follows is her report:

Though often thought as innovators and risk-takers in the internet marketing world (for example, they were the first industry to buy-up domain names for profit), Affiliate Marketers are also challenged with a "scrappy" reputation and a branding problem. To attract and recruit more affiliates, some marketers are rebranding their companies using euphemistic titles such as "Performance Marketing" etc.

And some are working to gain (potential customer) trust and legitimization by moving into new, more personal areas of the Web, such as podcasts, video blogs, and other social media interaction.

Panelists gave an array of examples of marketers who have successfully tapped into Web 2.0 technologies to gain revenue.

These include retailers:

Also services:

Still, Many on Web 2.0 sites and communities are not expecting (or happy) to see an ad presence on Facebook, twitter, other outlets.

Most Affiliate Marketers, even with the bad rep as "the scrappiest marketers on the Web" can utilize Web 2.0 technologies to gain revenue, but it needs to be done in a wise and responsible fashion. Marketers need to choose content sites and communities that are related to the product they represent, and establish a trust with community members. They need to get personal and be personable. They need to be tactful, entertaining, and innovative. Hidden, masked or suspicious search affiliate-types need not apply.

Companies should consider a "Community Evangelist" expert or consultant to help identify which sources are the best fit to tap into, and innovate and develop new apps (such as Facebook apps) that can entertain target customers. When an audience member asked what kind of applications would work well for Affiliate Marketers, Cam Balzer gave an example of a product data feed to a storefront app on Facebook. Something that could match a data feed with a Facebook profile. Or a generated birthday wish list. One panelist said "viral growth comes out of personal connections".

All panelists agreed that online merchants should embrace social media and establish a presence now. Marketers used to traditional metrics should look beyond the clickthrus and rely on other "metrics" such as "how many Facebook friends" you have or cookie duration. The big winner in linking Affiliate Marketing and Web 2.0 technology could be the innovator who figures out the metrics and ROI.

Likewise, publishers, networks and other companies should not overlook Affiliate Marketing when creating and fostering business. A panelist quoted Jason Calacanis (Weblogs, Mahalo and more) from his keynote at Affiliate Summit, saying "Affiliate Marketing is a $3 Billion industry that no one in California is talking about."

As one panelist said, Affiliate Marketing was Web 2.0 before Web 2.0 was a term.

As a post script to this:

Q: How do you know you are at a Web 2.0 session?

A: When the jumbo screen is displaying a twitter page of the moderator of your session, and he is twittering about moderating a session at Web 2.0

Fair enough, Joy. Thanks for passing this along.

As a side note, we're on Twitter too. You can get all our headlines by subscribing to our InformationWeek Twitter feed, selected headlines on iwpicks (temporarily suspended; we'll resume updates next week), and you can also follow me on Twitter.