Affiliate Marketing blog by James Little

This is mainly a post aimed towards merchants and agencies, but if you are an affiliate or network then hopefully you’ll find my first blog post in what seems like years an interesting read all the same.

So let’s get straight into it and be honest here – whilst the perception of affiliate marketing continues to increase (and rightly so) this does also mean, even with a strong approval process on your affiliate programme, that the chances of abuse or fraud get bigger.  Detecting it is challenging but it’s one of the most important tasks to ensure that you don’t pay out when you shouldn’t.

Lead programmes are often the most common problem but it really can affect everyone in the industry.  For example, a few months ago I was innocently browsing a bittorrent site and an advertising message came up saying “This site is brought to you by Sky Digital” – the whole page was taken over with the Sky site and further investigation showed it was an Affiliate on their buy.at programme opening the site in an iFrame (screenshot below).  I passed on the details to Helen and the affiliate was removed from the programme (and hopefully the network) the next day.

Imagine how negative this could have been for the Sky brand… You can almost see the headline “Sky Digital sponsoring illegal downloads”!

From a merchant and agency perspective it’s actually quite difficult to stop this kind of abuse, after all, not many networks give you the referral URLs of where the sales or leads have been generated to protect the affiliate from having their ideas of information stolen, but there are tools that you can use to help you.

Tip 1 – Lag time analytics

Most networks will let you pull of a report that shows the time between a click and a sale – this may be presented a number of ways, either with the actual time that the last click & the sale were generated or actually be displaying the “lag” time in seconds.

A suggestion of what you can do here is start to categorise your affiliates and look out for non-standard lag times.   For example the lag time coming from a voucher code will generally be very low (as it’s often the last place that a user comes before completing their transaction) whereas a non-brand paid search affiliate of a content affiliate will be longer.

If you start to see very short lag times for affiliates that don’t fit into the brand/voucher/incentive types then it may be inductive of an affiliate using adware/spyware or at the very least someone to check with your network to find out more about how they are driving the traffic.   Very long lag times may be where affiliates have been cookie dropping (like the example above) and be especially important for some of the larger brands – again, categorise and check up on it, often it’s not that the affiliate is doing anything  wrong of course.

Tip 2 – Checking Transaction Times

Is going against your programme terms abuse?  We’d say that it is and you can use transaction times to check out where this may be happening.

For example, if you see a high rate of out of office hours transactions coming from a particular affiliate then it’s likely that they are using a day-parted PPC campaign – not always abuse obviously but if you have tight PPC guidelines (that more and more merchants do have these days) and block brand then they may be doing this to make sure they are bidding on brand when you are less likely to be checking.

You can also look out for temporary increases in traffic and sales too – this could just be where an offer has been featured on one of the deal sites but it could also be that an affiliate has sent out an unauthorised email campaign and if you’re very brand conscious then this may be against your terms and conditions.

Tip 3 – Checking Conversion rates

Again, just like with Lag times different types of affiliates and different promotional methods will give higher or lower conversion rates – someone that comes from an incentive site is likely, for example, to have a higher conversion rate and grouping / categorising your affiliates comes in handy again here.

High conversion rates will often indicate brand bidding and very low conversion rates may indicate adware/spyware so its definitely another one to check.

Tip 4 – Using Analytics

You can use Google Analytics (or other analytics packages!) to get to grips with your inbound referrers – not everything will be picked up because the traffic comes from an affiliate network but as technology evolves more information is starting to be made available here.

Bits you can look out for include:

Referrals from Webmail clients (yahoo, hotmail, etc) means that one or more of your affiliates has either featured you in their newsletter or send a solus email out.  Not indication of abuse but if it’s getting lots of clicks then you should check to see if it is something that you have provided them with or been authorised to send.

When I worked client side for a gambling company we used a few incentive sites and the volume and quality was often low but manageable – one day an incentive site decided to feature us as their main offer without telling us and it cost us a lot of money.. It would have been nice for a warning so that we could have at least budgeted for it!

Referrals from Search Engines may well show that you have affiliates using paid search and sending the traffic direct to site.  One of our clients at AffiliateFuture recently noticed this in their google logs and as the affiliate was going against the Paid search policy they were removed from the programme and their commission was revoked but they were a “house hold” name in the affiliate industry.  Perhaps an honest mistake, perhaps a deliberate one.. who knows?

If there is traffic coming through with no referrer then it may well be affiliates masking their links and removing the referrer from the users session.  Some affiliates just don’t trust networks or merchants to see where their traffic is coming from but personally I always suspect that affiliates masking their links on purpose may well be doing something against the terms.

Tip 5 – IP Addresses

This tip really speaks for itself.  Check the IP addresses for transactions, if you are seeing multiple transactions coming from IP then you may have problems.   This could be that your network is using some advance technology (so for example with Veracitag on AffiliateFuture all these transactions show on the same IP address)  but often it is more likely a someone doing something dodgy.  We kick affiliates off our network daily for filling out multiple lead forms time and time again.  It must take them ages and I can’t believe they are stupid enough to think that they won’t get caught out but there are ebooks being sold on ebay which tell people to do this to earn additional income – scary.

Tip 5 – Check the sales or leads even after you have paid out

I’ve left this tip till last as its one of the most important things that you can do and really does show where there could be fraud on your programme, not just abuse.  This may be from an affiliate or it may be from an incentive site user but the outcome is the same.

As more and more networks and merchants look to improve the validation time and payout to affiliates this can lead to potential problems.

For example, depending on your sector you should be looking for an abnormal amount of chargebacks (gaming) and returns (retail and telecoms).  Validating quickly can lead to a stronger affiliate programme but as mentioned, it’s always worth checking for abuse here.

If you’ve got a lead based programme then you should really validate the email addresses and make sure you are not paying for bounce backs too – also check how long it is before a user unsubscribes, if it’s after the first email (or before) then they have probably signed up for an incentive and you should check if you are allowing this.

I’m sure there is plenty more of this but the overall advise is there for all to see.  You will get abuse, you might even get fraud.  Plan for it, be wary of it and make sure that if you’ve got an affiliate programme you’ve also got the resource and the systems to manage it correctly and check things like this.

Lots of readers of this blog may not have experienced Social Media Virtual currency platforms before, so I’ll give a quick overview, using Mafia Wars as an example.

Within Mafia Wars you’re able to use “Godfather points” to level up quicker, transferring them into topping up energy or gaining additional skill points – you get a certain amount when you start the game and can buy points using Paypal.

In addition to buying the points, you can also go and complete some CPA offers (taken from Affiliate networks) and depending on the offer and payment from the network, different points are available. So basically a glorified incentive site…

So now you have the background we’ll go onto what has happened in the past few weeks.   The Virtual currency community had a conference (Virtual Goods Summit) and Mike Arrington (Techcrunch Owner/Editor) went off at the now ex-ceo of Offerpal – a Virtual currency platform that work with the game developers.

His argument was that “most” of the offers available to the end users to get these points were “scammy” – using an example of a Mobile offer that charges a subscription of $9.99 per month; whilst I’ve never been a fan of mobile offers like this they tend to be heavily regulated these days and do normally display the details of the subscription in the terms and conditions, however these are typically ignored by the end user who is just signing up to get the free points.

The other point example that Arrington uses is Netflix (the US equivalent of Lovefilm) – saying that the quality of the users will be very poor and that they will look to get around their policy of one payout per user.

The Techcrunch article covers off all his points in more detail and is worth a read.  You can also see a follow up post by Offerpal which covers off most of the points raised.

Personally I believe that Arrington has raised some good points – but most of them have been raised badly.

Are kids stealing their parents credit cards or mobile phones and signing up for these offers?  Perhaps a small amount are, but I wouldn’t think that this is a widescope issue – the wider problem with ringtone style offers is that they are not clear enough about the costs and perhaps the developers (or the aggregators such as Offerpal) should be careful about which merchants that they work with in this sector.  Typically these offers are not scams but customers are often stupid and don’t read the terms like they should.

The Netflix example in my mind shows that Arrington doesn’t really understand the Affiliate / CPA market – companies like this are fully aware of what incentive sites are and work with them to ensure that the CPAs that they are offering work for them and are typically very analytical to ensure that this provides them with a positive ROI – Arrington seems to suggest that they don’t de-dupe correctly and states:

Netflix sees an overall lowering of quality and pays less for leads.

I just don’t buy in to that statement above – whilst incentive sites in general may affect over CPA advertisers it’s more the cookies that they are potentially taking rather than lowering the overall payment from them.  Whilst I don’t have much knowledge of the Netflix campaign that’s certainly the case with the Lovefilms of the world who understand incentive sites and their customers very well.

So what now?

All said and done the questions that Arrington has asked have indeed started to change the landscape – Facebook (and the game developers) have taken note of the comments and are now enforcing the FB Advertising Guidelines; meaning that a number of the offers have been removed; Gambling clients, Sweepstakes, Mobile offers, etc are no longer able to use this as an advertising channel for them.

It will now be interesting to see if these guidelines are continued to be enforced (as the guidelines have been out there since July 09) as a lot of the offers removed, such as the bingo ones, are big revenue earners for the game developers and companies such as Offerpal.

I’ve been thinking about starting a new affiliate project for a while now – not really with the aim of making a huge amount of cash out of it (though I can always live in hope), but more because I haven’t built anything new for a while and feel it’s about time to do so – like many others I enjoy the buzz of seeing those earnings come through from a new site for the first time which is reason enough.

So I’ve dug out a domain I purchased a while ago – FreeBingoCards.org.uk.   I’ve found in the past that .org.uk domains have ranked quite well; especially on MSN but it’s obviously a hugely competitive space.

The first stage when I start a new site is generally to brainstorm a few ideas on how I want the site to work, so here goes:

• Data capture will be an important part of the site, including the opt-in process so that I can market to these email addresses with offers in the future.
• After a user has signed up I’ll put together an auto-mail path – so I’ll get creative from a number of bingo sites and send a different email each week.  Gathering the email creative may take a while!
• Need to make a decision on if I use a CMS like Drupal for the site, or just build it in flat HTML… still undecided on this.
• After I’ve put the main template together, I’ll start by reviewing the top 10 bingo merchants based on their Hitwise or Alexa rankings.

The next step is going to be to put together a calendar with some deadlines of when I want each stage of the site finished – I often find that this helps with making sure that I stay on track with the timelines and can plan it around the kids parties and the TV schedule!

I’ll look to do at least one post a week on the blog with an update on this project until it’s live and then keep the updates going once I’ve started the link building and traffic generation.

Suggestions and feedback are always welcome!

This news is almost a week old now, but I’ve not seen it appear much in affiliate circles as of yet.  Back on 15th October there was a post on Search Engine Land about Yahoo announcing the end of their Paid Search Inclusion programme.

For the unaware, Yahoo offered two products – Search Submit Basic, which charged an annual fee, and Search Submit Pro, a CPC based programme.  Whilst it’s been free for spiders to come and crawl sites for a long time these packages allowed you to be a lot more flexible about your Yahoo search – allowing you to change items such as the descriptions and also by paying a CPC allowed clients to increase their organic search listings.

There are also a few very large affiliates who have built their model around this method and worked with a number of large blue chip brands in the Affiliate market space; essentially replacing the clients organic Yahoo listings with their affiliate links but increasing their overall rankings for some competitive search terms on a CPA basis – one of them was apparently TD and CJ’s second largest UK affiliate and responsible for huge amounts of revenue / commission.

I’m sure that these companies will find other channels to utilise and after the Microsoft deal was announced it was inevitable that it would happen but whilst a bit old school it’s a shame to see this advertising method come to an end and I do wonder what effect it will have with some of the networks that they will have generated millions of pounds worth of sales with.

I’ve not blogged in a while, but after a few people moaned at me at the rather excellent Expo about it, I thought it was time to try and get a bit more going again.

So I’ll start this with a rant.   As regular readers will know, as well as now working for a network I still operate a couple of affiliate sites which pay for some beer tokens every now and again – not as much as I would like, but with a wife, three kids and a full time job it’s difficult to find the time!

Anyhow – when I apply to programmes it is generally with the explicit aim of doing some revenue with them, perhaps I’ve purchased a niche domain and want to use them on this site for example.  I don’t sign up to every programme under the sun as some affiliates will do.

Today I received notification that I had been suspended/removed from one of the programmes that I am signed up to due to lack of activity.  It’s not the first time that this has happened but does lead me once again to ask why there is such a lack of understanding from merchants that do this?  Do the networks advise their merchants that it’s a stupid idea? I believe they should…

The only good reason I’ve ever heard for this is that some networks charge merchants on a CPM for their banners being displayed, and the costs for this are sometimes more than the commission being paid – but this is more of an issue in the states from what I understand.

I challenge anyone to give me another decent reason for this, especially for a retailer.

I would suggest that any merchant who has thought about doing this thinks again for the following reasons:

• Just because I’m not promoting you currently doesn’t mean I won’t in the future
• If you reject me, I will just use your competitors in the future and you’ll be the ones losing out
• If you communicate with your affiliates via newsletters then just by being signed up I’m likely to receive and read these looking for more opportunities – surely the more affiliates that read this the better

I’m all for rejecting specific affiliates if their harming your brand / reputation but just culling all the non-active affiliates really is stupid.

Not sure if anyone noticed but according to an article in the Telephraph on Saturday, Quidco is going to have a management buy-in this week by Michael Murphy, of friends reunited fame.   His appoinment as Executive Chairman has also been confirmed on their blog.

A lot has changed for Quidco over the past year – many people will remember the public falling out with Affiliate Window and whilst two very different sides of the story were told by each party it’s fair to say that despite some saying it would be the start of the end for Quidco they have continued to be the biggest cashback/reward site out there – double the size of their nearest competitor according to Hitwise stats.

There has also been a lot of new staff members – Tyson and Laura the two most recent recruits and both from buy.at.  There was also an advert in one of the big newspapers recently too so they are certainly looking at new ways of getting members.

Whilst it’s unclear what impact Michael will have on the business in the short term it’s fair to say that Quidco seems unstoppable at the moment and if the additional money & resource helps with more advertising then their possition as the most visited cashback site is unlikely to change anytime soon.

Hannah has been bugging me for a while to post these for almost a year, so here goes..

Clearing up the pile of papers on my desk I managed to find an old notepad and one of the things it contained was the 2008 Barbados awards!   These were written by a few of us on the flight back to the UK and the highlights of which cane be found below:

• Lord Lucan Award – Shaun (who disappeared for pretty much the whole week after a heavy second night out)
• Best use of Color – Sarah (for the sunburn)
• Best Piece of Art – MikeeT
• Best Celebrity Lookalike – Keith Bond for the Buddy Holly glasses
• Worse Driving Award – Lee McCoy
• Under the thumb award – Steve
• Diamond Geezer Award – Aldo
• Best Villain – The Worminator
• Dreams bed Award – Sinead
• Best Irish Accent – Siri
• Clean Nose Award – Joe
• Tourist of the Year – Keith
• Harbour Lights No 1 Fan Award – James
• Most Buoyant Award – Hannah
• Random Stranger Award – Chris
• Most reformed Award – Chris Frost (for not getting kidnapped again)
• Most disappointing performance – Tom Quinn (for NOT making it to the Ship every day)
• Pretty Boy Award – Lee McCoy

Make sure you head over to the refreshed AffiliateFuture blog to find out more about some of this years competitions to win a place on the trip in June!

I had the opportunity to visit Vegas for the first time a few weeks ago for the Affiliate Summit, where I was also lucky enough to speak (presentation will be online soon); previously I’ve only been on panels and whilst there was a small amount of stage fright it seemed to go well.

Vegas as a city was fantastic – the nightlife was amazing and the grandeur of the casinos was a world apart; even though I’d seen it on the TV before I was still mesmerised by the fact that New York, New York had a rollercoaster going around it!
Overall the conference was good – I was there for just two days but managed to get a number of meetings organised and continued to extend our relationships with affiliates over the other side of the pond – there were also a couple of UK representatives out there who it’s always good to catch up with. The only regret that I have is that I didn’t manage to attend as many of the conferences sessions that I would have liked (I think other than my own I got to two of them) but there is always next time for that.

One thing I did notice (and plenty may disagree with me) is that Vegas is the worse place ever to hold a conference! There are so many temptations that meant that visitors seemed to disappear quite early in the day – after visiting the Boston Expo I have to say that I felt this was better located and with the A4UExpo being completely out of the way from, err, everything, it tends to ensure that people stick around all day (and night).

The end of the conference also saw the first Affiliate Triathlon – a charity event where affiliates got the chance to test themselves against others in the industry, including, it seemed, me.

Someone had paid $100 to enter me without warning me in advance, meaning my name was read out after I’d already had a couple of beers and had another in my hand. Drink driving didn’t go my way and I ran over someone whilst competing in the bike race, whilst some managed to get 30 or so balls into the basket in the second test I only managed two and finally out of 5 go’s at hitting a golf ball to test its speed, only one registered and this was lower than everyone elses, even the girls. I finished last. Vengeance will be mine when I find out who registered me for this competition, that’s a real, 100% warning!

The next Affiliate Summit is planned for New York and if you want to learn more about the US market then there really is no better place. Thanks to Missy and Shawn for organising the event and for giving me the opportunity to speak.

As you may have noticed there has been a distinct lack of blog posts over the past few months because, quite frankly, I’ve had very little time – working late into the night and over the weekend seems to be commonplace at the moment but it’s all worth it in the end!

Life at AffiliateFuture is going very well – I’ve recently had a new guy (Sam) who has joined the team and is having a great impact; whilst there have been a few complaints about the interfaces there are some upgrades over the next two weeks which should see an end to these once and for all, which will be nice. Vegas for the Affiliate Summit was great and whilst I’ve yet to complete my write up there are a few blog posts that will be coming from that soon!

Family life is good but Connor has a tendency to cause my sleep deprivation; he only wakes once or twice a night, which is great but I’m definitely going to remember the long nights when Lindsey starts talking about number 4- something that is definitely not on the agenda for me! Our second youngest (Jacob) also started 5 days a week at the local state nursery before he goes up into Reception (full time school) in September.

Dietblog.tv is going to start again soon, once I have the info that I require from Rob B (if you’re reading this and wonder what that means Rob, it’s in reference to your tweet!).

Lastly I wanted to congratulate Matt Bailey for not only getting the IAB Chair but also for getting a blog up and running at last.

More posts to follow – don’t unsubscribe from the feed just yet!

It’s 9.30pm and the aim is to get to bed as soon as I’ve finished this blog post as I am absolutely shattered – I think ‘Expo Lag’ is worse than jetlag and I’m only 20 minutes away in a cab from the conference centre!

So – first things first, a few messages of thanks..

Thanks to Claire, Matt, Chris, Pete and everyone else from Existem for what was, in my mind, the best conference that I’ve ever attended – it’s a glorious thing that our industry has this event and the news of the European version to be hosted in April is very exciting indeed (though even with so much work getting done at these events, the trips away are going to get me divorced!).

Thanks secondly to everyone who turned up to the two panels that I was part of –I was just filling in for our sick MD on the first one (State of the Affiliate Nation) and hope that I did a good job of it, especially with such a huge turnout.   As for my second panel on voucher codes, Duncan made a comment earlier to say that he’d never seen it so busy that people were sitting on the floor and it’s just a shame we ran out of time so quickly and could not take any more questions.

Lastly a big thank you to everyone that sponsored the event, especially the evening parties, giving us all a chance to network – I’ve pretty much lost my voice now but it was absolutely worth it!

So onto the Roundup..

• I don’t want to discourage any other merchants from being innovative, but I think Sunshine.co.uk may already have a just cause to think that they will have another couple of A4UAwards in the bag next year!
   
• I wrote a whole post about the sessions I wanted to attend but only managed to two sessions outside of the ones I was participating in; I guess it’s always going to be the case, especially when I was described by a colleague as a “power-networker who doesn’t stop talking”.   Hopefully I’ll make a few more next year!
• I may have moaned about the lack of preparation time I had to think about the panel where I was filling in for Tom, but I secretly cherished being on another panel, especially one of that calibre;  not sure how it will come out on camera though!
• It was amazing to meet so many people that I’ve not had the chance to before, especially the likes of Doug and Kirsty whose blogs I read every day! 
• Affiliate Marketing is definitely changing – there were some big “traditional” publishers in attendance that last year may have dismissed Affiliate Marketing as a way of increasing revenue but are now actively engaging it.
• If blogging from an iPhone in the pub can get me linked to from e-consultancy and Search Engine Land then I have to do it more often!
• The cruise was good but needed more music earlier to get people in the mood, rather than sitting at the tables all night – a big thanks to DFDS and I’m looking forward to the free cruise already!
• The last night was the best of them all – I have one word to say to Tom Quinn from iPoints though – well, two words mate, Team Extreme!
• I said I’d blog it and I will – the only downer was the Sky VIP bar – I’m really against segregation and I was a little frustrated about it, even if I did manage to blag a way in!
• Can whoever has the photo of my kissing Aldo please burn it so that it doesn’t tarnish his street cred! 

That’s it for now – A successful year that I really enjoyed that was even better than my expectations, now I just need a new liver and a bit of sleep to get ready for the next one.  I’ll add links in to people’s names later etc later when I can function correctly!