Affiliate Marketing Blog by James Little

If you managed to catch yesterdays article focused around brand name bidding then you may remember that the second part of the article was still to come and on another hot topic in the affiliate industry - merchant de-duping.

For those of you that are unaware it’s potentially worth reminding us all what I mean by de-duping before going on to talk about how I feel that it’s a disgrace that networks let merchants get away with it.

Imagine for a moment the following customer journey€¦

A web user, who we’ll call Bob, decides that they are in the market for a widget and goes searching on the web for different widget reviews to find the right one.  After spending a long time finding what he feels is the right widget Bob eventually clicks on the link to widgetstore.com.  He decides that he is not going to pay straight away (maybe he does not have the cash till pay day, maybe he wants to check with his wife, Margret first - who knows).  A few days later Bob decides to go ahead with it but as he didn’t bookmark the widget review site he searches for widgetstore.com and clicks on their PPC advert.

Bob pays for the item and is happy to find out that his item will be delivered in just a few days time.  Bob is happy, Widgetstore.com is happy but all of a sudden the Widget review site owner is not.

What happened, I hear you cry?  Well the agency that looks after the widgetstore.com marketing has decided that the sale did not originate from the widget review site, even if the cookie triggered, they have decided that it was of course their hard work in bidding on the widgetstore.com brand name that got the customer into buying mode and rejected the affiliate sale for that very reason - makes their CPA look a little bit lower too.

I may use a little comedy above but the reality is far from funny.   As merchants and agencies €œget smart€ more de-duping is done both network and client side and it’s not just brand terms in my mind that are unjustifiably causing affiliates to lose out on commission.

Yes - we all know that the last click €œwins€ is an industry standard but the issue here is massive and brings more questions than answers, here’s a few that I have..

1)    Why should content affiliates who spend hours and hours every day writing quality comparisons like the ones on widgets suffer and lose out because of multiple activity occurring.
2)    What kind of response do you think you would get from google if you tried to claw back the valid fees because of de-duplication?
3)    Why should affiliate networks sit on their back and let this happen?
4)    Why do affiliates have to put up with this crap.

I work in an agency and would never dream of doing this.  Here is an example of how we work it.

We work on an affiliate campaign and a huge PPC campaign with a sports retailer.  As part of the reporting process we look for duplications of order numbers across both the affiliate and PPC campaign.

We report back to the client on this happening and explain (quite rightly) that affiliates should not be screwed over just because the customer was not in €œbuy€ mode.  We explain that if we were to start reversing sales then less and less content affiliates would be in business and eventually it would get harder to get the sales in the first place.

Report - do not punish!

So how does it get sorted?

I think networks need to take a stance here and stop letting the retailers think they can get away with this; perhaps there is a better level of tracking required to stop it from causing problems and perhaps the last click wins needs to be revisited.

At the very, very, very minimum I think that the industry needs to ensure that the situation above in relation to widgetstore.com does not happen - perhaps de-duping will never go away but it should not happen on the brand name level like it is now.

Ever since I can remember there have been some strong views in the affiliate marketing world about brand name bidding and the latest hot topic in the industry is merchants de-duping their sales and reversing potential commissions to affiliates.

As someone that runs an affiliate network and someone that has in the past run a few affiliate sites I’ve been meaning to jot down some works about both for a while now and have finally found a few minutes to do so.

So let’s start with brand name bidding€¦

My view is quite clear - as a merchant there are very few reasons to allow brand name bidding - the only ones I can think of are:

a) You have a brand that is not possible to get trademarked
b) You’ve been waiting for ages to google to protect your trademarked brand
c) You don’t rank in position #1 in the organic search results

I’d welcome suggestions for other reasons but if your network is suggesting you allow it there is one clear reason why; they will make money from it.

I’ll highlight two things I have seen that show why on earth this is so mucked up.

A client being bullied by his affiliates

We were talking to a client based in American who sells online software. This client allows affiliates to bid on their very well known brand name and we suggested that they do this themselves and stop affiliates from doing so.

I was shocked when the client said they had spoken to their existing network and some of the affiliates and were told that if the policy changed, a number of the affiliates would stop promoting them and they would loose sales; essentially he explained that he felt he was being held to ransom by his affiliates but because they needed the sales they would allow this to happen.

What kind of world are we in when a client is saying he is being held to ransom by his affiliates!!

A network back hander

I’ve made it quite clear on previous occasions that when I have done affiliate work (especially the limited PPC I have done) I do not work with any programs that I manage; I feel this is an ethical decision that I have stuck to for years.

While we’re talking of ethics, imagine my surprise when a very large network that we were working with suggested to me that if we allowed a small closed group of brand name biddings, they would suggest that I myself was on that group.

Obviously I turned this offer down but imagine that this is not the first case of it happening.

So who should bid on the brand?

There are two very simple things you should do here/allow here:

1) Either set up your own campaign on Google, Yahoo and MSN for brand terms and bid on them yourself - you won’t need a large budget for this
2) If you work with an agency (on a % of media spend rather than % of sale basis) then get them to setup the campaign to do this, it will work out a lot cheaper.

I’d welcome further comments and suggestions from affiliates, merchants, agencies or networks about other reasons to allow this but still find it strange that there are so many closed groups for brands that really don’t need to waste money in this way.

Make sure that you come back to the blog soon for part 2 of my rant about merchant de-duping of sales!

E-Consultancy are reporting that Kate Burns has joined Buy.at to consult on how to establish more agency relations. Kate has an impressive CV which includes being the first employee that google hired outside of the US and has also worked with Doubleclick, Altavista, and Yahoo!.

Kate Burns adds, “I want to help buy.at get agencies more interested in affiliate marketing and understand how they can profit from it. This is a complex channel based on relationships, delivery and technology”

Seeing as I am an affiliate director at an agency I have quite a lot to say about this matter but I will keep it quite brief.

I like the buy.at system. I like their backend. I like their tracking. I like their account management. I like them. But there is a but. Agencies can charge a lot; sometimes far too much and some of us try not to overcharge our clients - if you want to get us (and other agencies with similar views) to use the system all you need to do is change one thing, your setup fee.

I’ve ranted about this before so I won’t repeat yourself but it’s the only thing holding me back from putting clients on the buy.at network & from speaking to other people in the industry is their objection too.

Working for an agency that offers affiliate management I tend to be having quite a few programs come in. Rather than have a special deal with any particular network we look at each campaign on a case-by-case basis and try and decide where we feel our client will get the best exposure.

One of the things that really grates me in this industry is how different the setup fees and monthly fees can be, lets look at an example..

I have a program which has a budget set aside for commission of around £10k per month - it’s a recruitment company who are doing some really cool things online once their site is re-development and re-branded next month.   As part of this campaign we are looking to build a widget that will integrate with the network tracking.  The client, as well as spending hundreds of thousands of pounds online in their initial three month re-launch is also spending just as much (or even more) offline.

I find a network where we can integrate our widget fairly easily, start talking to the business development guy about costs and am informed that their setup fee is a rather hefty £5,000 - this is probably the second largest in the industry.

Interestingly this same network refused to take on a program I was working with just over a year ago which turned out to be a huge success, they later said that they realised they were wrong to reject it at the time but their fee structure means they are likely to make the same mistake again

Have networks really forgotten what they are there for?  Personally (perhaps incorrectly?) I have always seen a network as a facilitator, something that is there to offer a robust / trusted tracking solution and handle the payment to a large affiliate base.  So why are these fee’s so high?

On another scale, we’ve launched a number of campaigns on another network recently that have all gone really well where the setup fee is just £500 - a much more realistic amount considering they are getting paid rather well with their override.

Obviously there are different levels of service offered by networks but it always tends to stager me that the costing structure can be so different.