Are Internet marketing “gurus” just a den of thieves? And is Internet marketing itself now on life support as a result of their unethical business practices?

The reason I ask these questions is because recent events have forced me to ask them.

Internet marketing “gurus” are being called out left and right, new advertising rules are going into effect, people’s merchant accounts are being terminated without notice — it’s probably the biggest shake-up to hit Internet marketing since the first big “Google slap.”

Let’s take a look at some of the “recent events” I’m talking about:

Event #1: Perry Belcher “Retires”

Here’s the short version: Perry Belcher sold fraudulent health supplements through his company called Selmedica. When it was discovered he was committing fraud, authorities seized Belcher’s assets, auctioned off his home, cars, and other possessions, and gave him a 10-year probation.

In what appears to be an attempt to side-step the terms of his probation, Belcher partnered with Ryan Deiss to promote products on the Internet again. “Get Money from Google,” “Social Media Blueprint,” and other programs followed.

But after much dogged persistence by Salty Droid, Perry Belcher pulled the plug on all his online businesses, deleted his Twitter account, and announced his “retirement” from Internet marketing. (Or, more accurately, forced retirement.)

Event #2: Eric Graham Fails to Deliver

Eric Graham is known as the Conversion Doctor. He helps people improve the conversion rates of their web sites. In the past, I’ve been impressed with Eric, and even went to an event in Denver specifically to meet him. (That’s where I got the picture at right.)

Anyway, I was surprised to learn that over the last year or two that Eric has continued to make big promises, but — according to the testimony of multiple customers — has not delivered fully on those promises. Worse, he has denied refunds and not honored his own guarantee, which he features prominently in his sales process.

I wouldn’t even have been aware of these issues had not Fred Black written in detail about his own unsatisfactory experiences with Eric Graham. I respect Fred and his work, so I take this issue fairly seriously.

Turns out, Fred is not the only one who’s spoken out against Eric Graham. There seems to be a pattern of negligence. “By the mouth of two or three witnesses every fact may be confirmed.”

Event #3: StomperNet Descends into Chaos

Ken McCarthy (an Internet marketer who has my utmost respect, by the way) introduced Brad Fallon to the Internet marketing community back when I still had a job.

I bought the first “Stomping the Search Engines” program, listened to it in my car, and used what I had learned to build a site that’s been cranking out $20 to $70 a month for more than five years now. The methods described in the program worked for me, so I thought highly of Brad — at first.

Well, Brad went on to partner with Andy Jenkins and formed StomperNet. They did a big launch, claimed to make millions — and from the outside, everything looked peachy.

Here’s what I found interesting: With the exception of giving Brad Fallon his initial credibility, I don’t think Ken McCarthy ever promoted him again. I had always wondered why.

Now I don’t wonder so much.

Andy Jenkins (no saint himself) ended up suing Brad Fallon. They haven’t paid affiliates from the first StomperNet launch. And now Brad has sued his own wife (Jennifer Fallon) over ownership of their wedding favors business. (Oh, they’re getting divorced, too. No surprise there I guess.)

And just so you know I’m not making this stuff up, you can read all about the StomperNet shenanigans on Salty Droid, links to legal docs included. (Warning: Strong language.)

Event #4: New FTC Rules Go into Effect

On December 1, 2009, new FTC rules went into effect. As you may know, these new rules were a backlash caused by “flogs” — fake blogs — being created and multiplied by certain Internet marketers.

The new rules say that if you feature testimonials that include specific results, then you must also prominently describe what “typical” results are. Disclaimers like “Results not typical” are no longer sufficient.

For an in-depth review of the rules, what they mean, and how you should respond, I recommend listening to the Easy FTC Compliance Seminar posted on Robert Skrob’s blog. (There’s also a handy PDF download in case you prefer to read.)

Event #5: Visa & MasterCard Crack Down on Merchants

On January 14, 2010, I received notification from PowerPay (my merchant account provider) that Visa and MasterCard is cracking down on what they consider “brand damaging” business practices.

Behind the scenes, Visa and MasterCard provided merchant account providers with a master list of “worst offenders.” Merchant account providers were told to immediately terminate the merchant accounts of these worst offenders — or face $100,000 fines per infraction.

As you can imagine, faced with $100,000 fines, merchant account providers acted swiftly. And a client notified me on January 16 that the merchant accounts of four major Internet marketers had been terminated. (It’s probably no surprise that three of the four have been targeted by Salty Droid.)

What Does It All Mean?

First of all, let me say that I think there are many Internet marketers who’ve crossed the line and should not be followed, supported, or endorsed. Enough is enough.

Let me also say that I believe there are many ethical Internet marketers who deliver fair value for a fair price — and do not engage in high-pressure sales, deceptive marketing methods, or the outright fraud I’m now aware of.

What this means is this:

• You must choose your mentors and teachers in the online space wisely.

• You must be especially wary of outrageous, hyped-up claims. (If it sounds too good to be true, it probably is.)

• When possible, you should get a second opinion from someone you trust when you’re tempted to spend a large sum of money for an event, coaching program, home study course, etc.

• And, possibly most important of all, you must protect your reputation. Because, in the end, your reputation is the most valuable asset you have.

Internet marketing is not going away. The Internet will continue to be a marketing medium. But how that medium is used will most definitely change — possibly more dramatically this year than ever before.

Ultimately, I don’t think there’s any reason to panic. But you should certainly be proactive about complying with the new rules and making sure you’re dealing with reputable online business owners. (This advice is as much for me as it is for you.)

Really, it all boils down to these three things:

1. Guard your mind.
2. Guard your wallet.
3. Guard your reputation.

Simple, for sure. But as most principles go: easier said than done.

-Ryan M. Healy

P.S. So far, my 4th business prediction for 2010 — “The End of the Internet Marketing Guru as We Know Him” — is happening a LOT faster than I expected.

P.P.S. Would love to get your comments on this post. Were you already aware of these issues? How do YOU think all these changes and revelations will affect Internet marketing?

P.P.P.S. In case you are interested, here are the new merchant account terms as spelled out by Jud Smith of PowerPay:

PowerPay cannot accept merchant applications for products and/or services employing “Negative Option” enrollment, in addition to the following practices:

Marketing models that employ “Free-Trial”, “Deferred Billing” and/or “Shipping Only”. Customers must be receiving a tangible good or contracted service in exchange for charging of payment cards. Incentivized discount offers are acceptable when the cardholder is receiving something in exchange for payment, however we will be unable to support accounts engaging in hidden or delayed charges and ‘free’ offers that are not truly free.

“Cross-Selling” and “Up-selling” business practices. All sales should be directly between the business entities (merchant) processing the transaction and the cardholder, with cardholder authorization for all purchases.

Per Payment Brand guidelines, the use of multiple merchant accounts, billing descriptors and merchant processors may be viewed as an attempt to avoid chargeback monitoring programs and is prohibited. Perceived non-compliance has led to termination of processing relationships. PowerPay will review the business consideration for opening multiple merchant accounts to ensure compliance with Payment Brand guidelines.

Transactions generated from internet traffic and all other lead sources must be managed and monitored for potential fraud using an approved system. Third Party service engagement may be a requirement for account approval.

The FTC has recently published guidelines regarding “Negative Option” enrollment programs and is taking a very aggressive position against merchants utilizing/employing this business practice. Recommendations take in part from the FTC’s website may include but are not limited to the following:

Material terms should be disclosed in a clear, concise manner. Unnecessarily long or inconsistent terms are viewed as an attempt to mislead the consumer.

Terms should be disclosed in a conspicuous manner, clearly placed and labeled on websites in a location that indicates the importance and relevance to the transaction. Fonts and colors must be easy to view.

Material terms must be disclosed prior to completion of the transaction and before a financial obligation is incurred by the consumer.

Customers must provide affirmative consent to any offer, examples include a mandatory “I Agree…” statement checkbox, where the customer is acknowledging the Terms and Conditions of the offer and consents to be entered into continuity program as a result of completing the transaction. Pre-checked boxes do not qualify as affirmative consent.

Merchants must not discourage or make difficult in any way the disclosed cancellation procedures and all cancellation requests must be honored in accordance with the stated terms of the transaction.

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Doesn’t matter what market you’re in, you’ll always be competing for the attention of your prospects and customers.

They’ve got a million things going on… oh, and they just got distracted by thing number million and one. (Was it a new email, a text message, an IM on Skype, an incoming tweet? Whatever it was, they’re probably not paying attention to you!)

But imagine for a moment the prospect of witnessing a man brandishing a red hot poker in the middle of a mall. You’d ignore everything else — for a few minutes, at least — to focus all your attention on him. You’d be compelled to find out, “What’s going on here?”

On Saturday, I published a post that got a lot of attention. I even rewrote the post (prior to publishing it) to get less attention, if you can believe it. And still, it’s quickly become one of the Top 5 most popular posts I’ve written on this blog.

And that got me to thinking. What made it stand out? Why was that one post so popular when many others I’ve written haven’t been popular at all?

With that in mind, here are three keys for getting people’s attention in hyper-distracted markets.

Red Hot Poker #1: Controversy

Hardly anybody can stay away from a good controversy. That’s one reason my post was so popular: It speculated about Perry Belcher’s real reason for retiring from Internet marketing.

Is there a controversy among your prospects? Or is there a subject most people consider controversial? (It will probably be different in every market.)

For instance, if I were a doctor, I might publish my thoughts on the recent universal health care legislation. And if I were a dentist, I’d be all over the fluoride controversy. Just the mention of it — for anybody who is “in the know” — can raise the temperature of people’s emotions like boiling water in a tea kettle.

This is the power of controversy if you are willing to step up and put yourself in the middle of it. A good controversy is like the proverbial train wreck: It’s hard to look away.

Red Hot Poker #2: Challenge Tradition (or, Tip a Few Sacred Cows)

It’s time to go cow tipping!

Is there something in your market that’s always been done a certain way — but you feel could be done better? Or is there an accepted dogma that you could challenge and perhaps even overturn?

If so, you may have a ripe opportunity for getting people’s attention.

And right now, I can think of no better example than the JK wedding dance. For years, wedding parties and brides-to-be have solemnly marched down the aisle to the alter of holy matrimony.

Then, one day, a couple decided to do it differently.

They danced.

And they got the entire nation’s attention. (If you haven’t seen the JK wedding dance, go watch it. I tear up every time.)

Red Hot Poker #3: Piggyback on Popular News

Probably the most familiar form of “piggybacking” is holiday sales. Everybody in the U.S. knows when Halloween, Thanksgiving, and Christmas happen. It’s an easy way to piggyback on what’s already on everybody’s minds.

But you can piggyback on other news events, too.

For instance, tax day on April 15. The Superbowl. July 4th. These are all predictable events that you can bank on.

But there are also unpredictable events as well. Many times you can get better results from piggybacking on a big news item that pops up unexpectedly.

For instance, when the movie Dark Knight was suddenly popular, lots of smart marketers piggybacked on its success. Same thing when Barack Obama beat John McCain in the 2008 presidential election.

The key here is twofold: You not only want to capitalize on what your market is already thinking about… you also want to be entertaining. By combining these together, you have the perfect recipe for getting — and keeping — your prospects’ and customers’ attention.

(Hint: Any news items that show up on Saturday Night Live or become jokes on the late-night shows are usually things you can piggyback on to get your market’s attention.)

And with that, you now have three ways to get your market’s attention as if you were brandishing a red hot poker. Of course, what you do what that attention once you have it is up to you. ;-)

-Ryan M. Healy

P.S. What techniques do you use to get your prospects’ and customers’ attention? Share by leaving a comment below.Similar Posts:

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Perry Belcher has just announced he is retiring — not from Internet marketing, per se — but from the business of teaching Internet marketing.

Now, I don’t know Perry Belcher, and I don’t know Ryan Deiss either (although I did share a table with him at a Big Seminar dinner one year while I talked with Scott Boulch prior to his release of “The Death of Adsense”).

Neither do I know Perry’s true purpose for “retiring,” but let’s take a look at what Perry actually says.

On October 1, 2009, Perry Belcher writes, “Today I decided to end my career as an Internet marketing trainer.”

Okay, fair enough.

But you know, there are a few other Internet marketing “gurus” who have claimed they were either leaving Internet marketing for good, or that they were doing their last seminar ever (or whatever).

Mark Joyner and Matt Bacak come to mind.

Way back in 2003, Mark Joyner announced he was leaving Internet marketing. He put together a product bundle of all the software and info products he had ever created, sold it for a discounted-but-still-expensive price, and disappeared for a while.

But it wasn’t long before Mark was back. He created Simpleology and wrote three books: The Irresistible Offer, Simpleology, and Integration Marketing. These books have enjoyed strong sales due in no small part to the Internet marketing community.

Now let’s take a look at Matt Bacak.

Back in 2008, he announced that he was retiring from Internet marketing. He even registered a domain: MattBacakRetires.com. (Although you’ll find that the content that was once there has been deleted. If you doubt, you can type in “Matt Bacak Retires” into Google and you’ll find articles like this one that still link to the dead site.)

Matt Bacak’s “retirement” was attributed to the “fact” that some of his students had ripped off his system and begun competing with Matt directly. To “stick it” to these so-called thieves, Matt announced his retirement… and that you could get his $5,500 seminar for just $1.

Great story, but did Matt really retire? Not exactly…

I’m writing this post on Friday, October 2, 2009. And guess what Matt Bacak and Mark Joyner are doing together?

They are hosting a seminar on December 4-6, 2009. It’s called Survival Tactics for Tough Times, supposedly a repeat of a seminar Mark Joyner did in 2002. Here’s a screen shot:

So two well-known Internet marketing “gurus” who publicly “retired” are now uniting to teach… Internet marketing??

There’s even a video on Facebook right now with Matt Bacak announcing this new seminar. Here’s a screen shot in case he deletes the video at some point…

Here’s the thing. I know we don’t have a large sampling here, but it seems IM “gurus” have a bad habit of retiring… and then coming back a year or two later. It also seems these “Internet marketing retirees” are birds of a feather who flock together — particularly at seminars in warm-weather locales.

Which raises the question: Will Perry Belcher do the same thing? Will his retirement “as an Internet marketing trainer” be a temporary thing? Is this just a gimmick so Perry can create scarcity… then come back in a year with something new?

I hope not, mostly because I’m tired of the whole “I’m retiring, now I’m back” schtick.

But let’s turn for a moment to why Perry is retiring right now. He says:

Secondly, while there are a great many people who have shown me a great deal of love, there are a few that have shown a heavy dose of hate and anger, partially because of my past. This group has unfortunately been much more vocal and harsh.

While I can take reasonable criticism, today I have concerns for my safety and the safety of family.

What is this “past” that Perry is talking about?

In a nutshell, Perry Belcher used to run a “health” company called Selmedica. He sold a number of supplements for a variety of health conditions. Unfortunately, the products were dubious (at best), and he used false advertising claims to sell them.

Long story short, he was arrested by local authorities, his assets were seized and liquidated, and he is now serving a 10-year probation.

Some people get upset when you bring this up because they claim Perry has “paid his debt to society.” Well, I guess that depends on how you define “paying your debt.”

Biblically speaking, if you steal from others — theft seems about the best description for defrauding people of money — then you must pay back double the amount you stole to make restitution and restore the victims of injustice.

If you pay back double what you stole, you have then paid your debt to society and ought to be treated like anybody else.

Going to prison, serving probation, having your assets seized and liquidated — these are man’s ways of doing justice. And while they are unpleasant for the criminal, they do nothing for the victims.

But that’s really just a side issue at this point.

Getting back to Perry’s stated reasons for throwing in the towel — among them “a heavy dose of hate and anger” — I think the real reason is Salty Droid and his acerbic brand of investigative journalism.

Salty Droid writes a blog dedicated to exposing Internet scammers, and he’s devoted a great deal of space to writing about Perry Belcher. Here’s a screen shot from October 3, 2009:

With Salty Droid on the loose, I wouldn’t be surprised to hear that Internet marketing itself was retiring!

Unfortunately, Internet marketing is like crack; it’s a hard habit to break. So don’t be surprised when Internet marketing comes out of retirement to host a seminar in a (warm weather) city near you.

In the mean time, Perry Belcher’s legal problems (and Salty Droid problems) bring up a timely reminder: be careful who you associate with on the Internet. It is all too easy for people to jump to conclusions (read: guilt by association).

Your thoughts? Sound off by leaving a comment below…

-Ryan M. Healy

P.S. Apparently, Howie Schwartz also announced his “retirement” from Internet marketing on August 21, 2009. We’ll see how long it lasts. My guess: He’ll be stage-speaking at IM events within 2 years.
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