Podcast Summary: Always Be Testing - Episode #72 Optimizing Publisher Earnings with AI | Cornelius Frey, CEO, NucleusLinks

Host: Tye DeGrange
Guest: Cornelius Frey, CEO of NucleusLinks
Release Date: February 18, 2025

Introduction

In Episode #72 of "Always Be Testing," host Tye DeGrange welcomes Cornelius Frey, CEO of NucleusLinks, to discuss the revolutionary role of artificial intelligence (AI) in optimizing publisher earnings. The episode delves into how AI-driven tools are transforming affiliate operations, enhancing performance marketing, and providing significant revenue boosts for publishers.

Company Background and Growth

Cornelius Frey begins by outlining the growth trajectory of Affinity, the holding company behind Opinionary and NucleusLinks. Since its acquisition by Affinity in Mumbai one and a half years ago, the team has expanded from 30 to nearly 50 employees, emphasizing a strong European presence in Berlin.

"There are now, I think, closing in on 50... growing with our team based in Berlin... conquering ambitions all out of Berlin." (00:43 - 00:52)

Affinity operates seven business units, including ad networks and a suite of SaaS products aimed at enhancing publisher operations. Frey highlights Opinionary's role in driving first-party data conversions and introduces NucleusLinks as an AI-driven operating system for affiliate operations.

"We are running, you know, in total, seven business units... One of them is opinary helping publishers drive first party data conversions by engaging their users more meaningfully on site. And the other one is Nucleus Links." (01:14 - 01:23)

AI in Affiliate Operations: NucleusLinks’ Mission

NucleusLinks is designed to address inefficiencies in affiliate operations that publishers face daily. Frey explains that many publishers unknowingly lose significant revenue due to manual operations, broken links, and suboptimal network engagements. NucleusLinks leverages AI to automate link optimization, ensuring each click is directed to the highest-earning network in real-time.

"Publishers don't even know how much money they're bleeding in manual operations... and how much opportunity there is once you bring in the power of AI." (02:25 - 02:46)

Use Cases and Operational Efficiency

Frey provides concrete examples of how NucleusLinks benefits publishers. Whether in the coupon space, buy now pay later (BNPL) services, or content publishing, publishers often miss out on up to 20% of their revenue due to broken links or inefficient network management. NucleusLinks automates these processes, significantly enhancing revenue per click (RPC).

"There's something we've built that allows you on a per click basis to get the highest yield... picking the best highest earning network." (03:59 - 04:00)

Moreover, the platform reduces the time affiliate operators spend on manual tasks, freeing them to focus on strategic partnerships and business growth.

"Up to two thirds of their day are spent manually creating links, fixing links, finding new deals... optimizing relationships." (05:27 - 05:35)

AI-Driven Testing and Learning Algorithms

A significant innovation of NucleusLinks is its continuous A/B testing methodology. Unlike traditional A/B testing that might compare two networks, NucleusLinks performs constant testing across multiple networks to feed its AI-driven learning algorithm with real-time data.

"We do constantly... send test clicks to all those networks to inform our learning algorithm with constant data input..." (06:57 - 07:00)

This approach allows the AI to predict and adapt to the best-performing networks based on various parameters such as merchant, region, and user type, facilitating a dynamic and responsive affiliate management system.

Impact and Results

Frey shares impressive results achieved by NucleusLinks, noting significant uplifts in publisher earnings, sometimes exceeding 25%. Specific examples include major search shopping players achieving over 100% uplift.

"A win for us is 25% plus... sometimes have a big search shopping player who just came on board, they're getting 102% uplift." (08:37 - 08:46)

These outcomes underscore the platform’s capability to unlock substantial hidden revenue for publishers.

Onboarding, Pricing, and Trust

NucleusLinks offers a streamlined onboarding process, leveraging APIs to automate link creation and reduce setup time to just a few days. Publishers can start seeing results within two to three days, supported by a 30-day risk-free trial.

"We can be up and running producing those kind of lifts within two to three days... a 30 day completely risk free money free trial." (09:46 - 10:00)

The pricing model is outcome-based, charging only a portion of the uplift generated, which minimizes risk for publishers and aligns NucleusLinks’ success with that of its clients.

"We only ever take money from the uplift we create and never more than 30% of the new revenue that we've created." (10:58 - 11:00)

Frey emphasizes the importance of transparency in AI operations to build trust among publishers, ensuring they understand and have visibility into the AI’s decision-making processes.

"They want to know which networks are winning out... where broken links are taking place." (13:58 - 14:04)

Market Insights and Adaptation

Frey discusses recent changes in the publishing industry, particularly the impact of Google’s search algorithm updates in Europe. He observes that while some publishers struggle, others adapt by focusing on content quality and diversifying their strategies.

"There's a pragmatism with which that's being dealt with... building unique tech to help them do it." (18:10 - 18:15)

This adaptability reflects a broader shift towards resilience and innovation in the affiliate marketing space.

Mergers & Acquisitions and Future Growth

Looking ahead, Frey outlines NucleusLinks’ ambitions to pursue strategic acquisitions and enter public markets in India, a region he views as ripe with entrepreneurial energy and growth potential.

"India is going to be another one of those places going to be building consumer and enterprise products for the world market." (25:12 - 25:18)

He highlights the criteria for M&A opportunities, focusing on profitable, culturally aligned businesses that solve meaningful problems in the affiliate space.

"The numbers need to be right... people... solving a meaningful problem in a meaningful market." (25:46 - 25:50)

Personal Insights and Recommendations

Cornelius shares personal interests, including his passion for music and fatherhood, as well as his current engagement with Yuval Noah Harari's latest work, reflecting on the relationship between information and truth in the AI era.

"Information doesn't equal Truth automatically... more information doesn't automatically mean more truth." (29:55 - 30:05)

He recommends resources like The Economist's primer on large language models and Benedict Evans’ reading recommendations to deepen understanding of AI.

"The Economist ran like an eight week primer... Benedict Evans' reading recommendations on the topic give me more than I have time for in a typical week." (31:15 - 31:37)

Strategic Advice for Publishers

Frey advises publishers to maintain a clear, differentiated strategy rather than chasing every new trend. He stresses the importance of authenticity and a focused approach to building user trust and maximizing revenue.

"Don't be stuck in the middle with an undifferentiated, unclear thing. Be clear what you do. Stand for it, tell the story and do it." (34:04 - 34:14)

Conclusion

The episode wraps up with Tye DeGrange commending Cornelius Frey for his insights and the compelling offerings of NucleusLinks. The discussion underscores the transformative potential of AI in affiliate marketing, offering publishers a pathway to significantly enhance their revenue streams through intelligent, data-driven strategies.

"Cornelius, you nailed it. It's been a pleasure to get to know you more and learn more about what you're doing." (34:37 - 34:40)

This comprehensive summary captures the essence of the conversation, highlighting key points about AI integration in affiliate marketing, operational efficiencies, market adaptiveness, and personal insights from Cornelius Frey. It provides a clear and engaging overview for those who haven't listened to the episode.