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Home » Marketing Insights, Specials

Epic Fails: Who is Next?

Written by pacelattin

May 13, 2012 # 1:18 pm # Marketing Insights, Specials # 10 Comments

5

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Last week Epic (fka Azoogle) confirmed with Performance Marketing

were indeed closing down, unable to pay their publishers and affiliates. This would be 

the biggest failure of an affiliate network since COPEAC’s demise, leaving many people 

in the industry wondering what network would be next. Many affiliates are rightly 

concerned that these developments signal that other networks may be about to fail.

The stories about Epic are disconcerting: the staff of Epic including Matt Mirman, who basically ran the 

network, was completely left in the dark about the company’s future. The board of Epic never told them 

anything, but at the same time many of the top executives including Don Mathis, the former CEO, separated 

parts of the company to form a new entity called Kinetic Social, leaving many to believe they knew the time was 

near for Epic’s complete failure.

The same problems that plagued COPEAC eventually caught up Epic: they were owed tens of millions by nonpaying advertisers and faced significant cash flow problems. As soon as publishers started talking about the 

issues, it was probably only time that they would be unable to survive. Without the cash flow from the other side 

of the business: the display and social, it was hard to save the company.

This comes only a few weeks after the announcement that Adteractive was going under, leaving many CPA 

networks with major unpaid bills.

Affiliates should be very concerned. Many networks are paying out before they are paid, have little cash 

reserves and worse, do not have a long-term business plan on how to make money besides brokering offers.

This is obviously part of the CPA game, but it’s a very dangerous game for those companies that have a few 

core advertisers and affiliates that support them.

What are the major issues plaguing the industry that will cause problems?

1) Enforcement Actions

The FTC has made it clear that networks will be held accountable for more and more things, including the 

actions of their affiliates. Combine this with more and more various State Attorney General actions, legal costs 

are going up.

2) New Credit Card Rules

Hundreds of offers have been pulled because of new rules about re-billing that go beyond weight-loss offers. 

Membership based sites that bill the credit card monthly, are facing strict new rules and many card processors 

will not give merchant accounts to these companies. This is one of the issues that caused Neverblue’s parent 

company to go bankrupt.

3) Education Offers Dying

The EDU industry was huge for almost a decade. New regulations by both the US Department of Education and 

the schools themselves, have made it almost impossible to promote EDU offers like they used to be. Several 

EDU companies have already bankrupted, and expect more.

4) Desperation

Too many networks are desperate for unique offers without checking credit worthiness or doing basic 

background checks on companies. This means that they are working with companies that may not pay them, and 

then not be able to pay affiliates.

Who do you think will go out of business next?

Like

2

Epic Fails: Who is Next? Page 2 of 11

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Written by pacelattin

Pace Lattin is one of the top experts in interactive advertising, affiliate marketing. Pace Lattin is 

known for his dedication to ethics in marketing, and focus on compliance and fraud in the industry, 

and has written numerous articles for publications from MediaPost, ClickZ, ADOTAS and his own 

blogs.

There are ten comments. Join the discussion.

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10 Comments

• David says:

May 13, 2012 at 2:56 pm

Wow, I didn’t know there were so many problems in this industry. This is very interesting. 

As I mentioned before, I have always kind of wondered about whether I was getting paid properly or not.

David recently posted..How I Failed With My First Rental Property And Turned It Into A Loser...

Reply to this comment »

• Zara says:

May 14, 2012 at 5:28 am

Pace, very nice article and great analysis. I am lucky that I am accepted in top affiliate networks and 

therefore am always paid on time! 

Reply to this comment »

• Blackberry 10 says:

May 14, 2012 at 10:44 am

I guess EWA is next in line.The reason is 98% of the offers they run are brokered from other 

networks.when most of the BIG networks fail/have cashflow problems ,it will have a ripple effect on the 

networks which broker the offers(Like EWA).The effect has already started.I have the experience in the 

recent months how EWA is missing payments and failing to send payments on time (Most of those 

promoting EWA offers will agree with me)

Already Neverblue (parent co filed for Bankruptcy),Clickbooth (with yahoo lawsuit),CX Digital are in 

deep trouble ,may follow the suit soon

Blackberry 10 recently posted..BlackBerry 10 leak details screen-sharing, video apps and more

Reply to this comment »

◦ Jemin says:

May 14, 2012 at 11:41 pm

True. Waiting on EWA payment as we speak.

Reply to this comment »

Epic Fails: Who is Next? Page 4 of 11

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• Sad Affiliate says:

May 14, 2012 at 10:55 am

I vote that Neverblue will be next to fail. Their parent company can’

don’t pay.

Reply to this comment »

• NotSurprised says:

May 14, 2012 at 1:20 pm

I’m thinking CB then NB

Reply to this comment »

• Byrl Lane says:

May 14, 2012 at 3:29 pm

This is what ends up happening. Definitely not for everyone. I wonder if the CEO received a golden 

parachute when he departed. 

The FTC is cracking down on these guys but what are they going to do to make to the other guys pay up. 

It seems like they being impartial by not persuading both parties to hold up their end of the deal.

Byrl Lane recently posted..Mom runs over 3-Year-Old Daughter’s Back with a Van

Reply to this comment »

• EPIC failure.. says:

May 14, 2012 at 8:24 pm

Don Mathis will pay for the mess he has created.

Quit talking about EPIC. Talk about Don Mathis. He is the crook behind all this.

Reply to this comment »

• Kate Brown Wilson says:

May 14, 2012 at 10:32 pm

At first I really don’t get the main point in this article but as I have read it briefly it shows that there are 

many problems we don’t know about the industry,I really admire your courage in sharing this for me to 

know.

Kate Brown Wilson recently posted..condor 

Reply to this comment »

• john says:

Epic Fails: Who is Next? Page 5 of 11

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May 15, 2012 at 10:44 am

probly justin beiber lol

Reply to this comment »

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