The following question was posed recently to me by a merchant:
Last month we announced we are closing our in-house Affiliate program and migrating everyone to Affiliate Network X. I was shocked at the outcry of our community who are under the impression Network X is full of parasites. This camp of unhappy people glean most of their information from AbestWeb which has a lot of posts on this issue and they are now debating the issues on our (The Merchant) forums which is stirring loads of panic. Assuming we can control the true *bad* parasites, we still want to partner with companies like Upromise and eBates - but even some of their methods of come under fire. I was wondering how you view their shopping toolbars? Do you believe they in any way hijack commissions from your company? My understanding is the number of people using this applications is very low, but who knows.
My response:
Good question! The simple answer is that we factor in any losses like this into our ROI calculations, so even if they do affect us, we maintain margin. I know that this doesn’t answer your question, but it helps explain why we don’t feel the heat. Also, I find that affiliates are often the most paranoid people around (which is what makes them so good!). We even did studies on anti-spyware cookie crunching which showed that the whole thing is blown out of proportion, once you actually run the numbers through the revenue loss calculator the effective loss of revenue is negligible at worst. That said, all networks have their pro’s & con’s and no single network, like Network X can be singled out as a problem.
I would suggest being creative and offering things like extended cookies for SEM affiliates and shorter persistent cookies for Toolbar distribution companies like Upromise - that would even things out quite a bit in the minds of the affiliates. At the end of the day, the market share that those individual companies have is not big enough to impact any one affiliate’s campaigns, unless they’re fighting over branded head terms - in which case, it’s probably not the affiliates that you want in any case!
These are my view… what are yours?
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Comments On This Post
April 15, 2007 at 10:52 am
These are my views:
1) The study on anti-spyware cookie crunching (washing) has nothing to do with loyaltyware and bringing it up just adds more confusion to a topic where a lot of confusion already exists.
2) That question posed to you by CP seems to be floating around a bit. Maybe if the Affiliate Team over at CP asks around enough, they will eventually get the response they are *wanting* to hear and ignore all the factual information they have been repeatedly provided. And they won’t have to grossly misrepresent the answer to their question “they in any way hijack commissions from your company” when they are shown evidence, which is what they did on the CP forums after viewing my video tutorials on loyaltyware. The answer to the question, of course, is yes. CJ’s TOS allows “technology” partners to redirect the any traffic to the merchant’s web site except traffic from other affiliates using CJ network links or afsrc=1 on server-side links. It is allowed and is considered compliant. CP just keeps ignoring that fact.
3) “we factor in any losses like this into our ROI calculations, so even if they do affect us, we maintain margin.”
I realize that many merchants and managers approach the issue from this perspective, so you aren’t alone with this approach. It’s not an approach I particularly care for however. It’s still not without problems.
First is, from my own personal experience of speaking with merchants, many don’t have the backend analytic systems in place to adequately assess the *true* ROI associated with a particular loyaltyware affiliate. That is they can’t truly back track on the data and determine exactly which sales from say their PPCSE campaigns were redirected by the loyaltyware and also received a commission. Unless the merchant can do that type of in-depth analysis, they can’t truly assess the ROI and make sure they are witihn ROI margins.
Second is, it just doesn’t seem to make for a particularly healthy affiliate/merchant relationship. The merchant seems to be helding somewhat hostage and forced to accept the adware part of the affiliate’s business model. That’s not exactly how I personally want the Affiliate Marketing channel to be represented to merchants.
And while ulimately it is up to a merchant on who and what kinds of practices they want to allow into their affiliate channel, the issue as it applies to CP is a bit different. So while you or CP or any merchant may crunch numbers and reach a decision on whether you are within acceptable ROI margins, there’s a twist with CP. And that is because CP is passing the cost onto their shopkeepers as well. Shopkeepers will be required to pay 20% of their mark-up on affiliate sales! They don’t have the luxury of determining if *their* ROI magin is maintained or not. They can either pay on the traffic or they can opt-out of the CP marketplace, hence losing all the other traffic they normally receive from the marketplace. Not exactly appealing options for many of the CP shopkeepers.
4)”the market share that those individual companies have is not big enough to impact any one affiliate’s campaigns”
Your data source to back up that statement? Hopefully not the cookie washing study…since that’s apples and oranges. I’ve never seen any such data published showing exactly what the impact is. I’d be interested in seeing just information.
But in reality is not the impact from individual companies, but rather the cumulative impact of all such companies. And not just loyaltyware companies, but all adware companies playing in the affiliate marketing channel. I just put out a study showing almost 40% of the top online retailers domains minimally being targeted by just *one* adware application with 20 million installations. And while that certainly doesn’t show specific impact in dollar amounts, I do think those numbers are significant. And I can’t imagine there not being an impact. And with CP seeming to have such a hard time grasping loyaltyware, I can imagine them trying to police that kind of behavior in their program.
You did ask for views.
April 15, 2007 at 12:52 pm
These are my views:
1) The study on anti-spyware cookie crunching (washing) has nothing to do with loyaltyware and bringing it up just adds more confusion to a topic where a lot of confusion already exists.
2) That question posed to you by CP seems to be floating around a bit. Maybe if the Affiliate Team over at CP asks around enough, they will eventually get the response they are *wanting* to hear and ignore all the factual information they have been repeatedly provided. And they won’t have to grossly misrepresent the answer to their question “they in any way hijack commissions from your company” when they are shown evidence, which is what they did on the CP forums after viewing my video tutorials on loyaltyware. The answer to the question, of course, is yes. CJ’s TOS allows “technology” partners to redirect the any traffic to the merchant’s web site except traffic from other affiliates using CJ network links or afsrc=1 on server-side links. It is allowed and is considered compliant. CP just keeps ignoring that fact.
3) “we factor in any losses like this into our ROI calculations, so even if they do affect us, we maintain margin.”
I realize that many merchants and managers approach the issue from this perspective, so you aren’t alone with this approach. It’s not an approach I particularly care for however. It’s still not without problems.
First is, from my own personal experience of speaking with merchants, many don’t have the backend analytic systems in place to adequately assess the *true* ROI associated with a particular loyaltyware affiliate. That is they can’t truly back track on the data and determine exactly which sales from say their PPCSE campaigns were redirected by the loyaltyware and also received a commission. Unless the merchant can do that type of in-depth analysis, they can’t truly assess the ROI and make sure they are witihn ROI margins.
Second is, it just doesn’t seem to make for a particularly healthy affiliate/merchant relationship. The merchant seems to be helding somewhat hostage and forced to accept the adware part of the affiliate’s business model. That’s not exactly how I personally want the Affiliate Marketing channel to be represented to merchants.
And while ulimately it is up to a merchant on who and what kinds of practices they want to allow into their affiliate channel, the issue as it applies to CP is a bit different. So while you or CP or any merchant may crunch numbers and reach a decision on whether you are within acceptable ROI margins, there’s a twist with CP. And that is because CP is passing the cost onto their shopkeepers as well. Shopkeepers will be required to pay 20% of their mark-up on affiliate sales! They don’t have the luxury of determining if *their* ROI magin is maintained or not. They can either pay on the traffic or they can opt-out of the CP marketplace, hence losing all the other traffic they normally receive from the marketplace. Not exactly appealing options for many of the CP shopkeepers.
4)”the market share that those individual companies have is not big enough to impact any one affiliate’s campaigns”
Your data source to back up that statement? Hopefully not the cookie washing study…since that’s apples and oranges. I’ve never seen any such data published showing exactly what the impact is. I’d be interested in seeing just information.
But in reality is not the impact from individual companies, but rather the cumulative impact of all such companies. And not just loyaltyware companies, but all adware companies playing in the affiliate marketing channel. I just put out a study showing almost 40% of the top online retailers domains minimally being targeted by just *one* adware application with 20 million installations. And while that certainly doesn’t show specific impact in dollar amounts, I do think those numbers are significant. And I can’t imagine there not being an impact. And with CP seeming to have such a hard time grasping loyaltyware, I can imagine them trying to police that kind of behavior in their program.
You did ask for views.
April 15, 2007 at 3:36 pm
Hey Kellie
Ok - let me clarify some things very quickly:
1. I was responding on the basis on mid size loyalty sites like uPromise & eBates with smaller groups of thousands of toolbar users - not those with millions - I think that sort of practice would definitely affect everyone’s business.
2. The cookie report was referenced on the basis that there was panic in our sector, and the numbers just didn’t add up. I’m not comparing apples with oranges, but I am saying that often - the paranoia is unfounded.
3. Your views are greatly appreciated, and I’m no expert on this subject. If in fact there are toolbar players with 20 million users that are overriding our cookies, then we have a more serious problem than I anticipated, and I will raise it with the appropriate industry representatives!
Thanks again!
V
April 15, 2007 at 4:48 pm
Hey Kellie,
This is a very interesting report!
http://www.affiliatefairplay.com/contextual_adv...
V
April 15, 2007 at 5:36 pm
Hey Kellie
Ok - let me clarify some things very quickly:
1. I was responding on the basis on mid size loyalty sites like uPromise & eBates with smaller groups of thousands of toolbar users - not those with millions - I think that sort of practice would definitely affect everyone’s business.
2. The cookie report was referenced on the basis that there was panic in our sector, and the numbers just didn’t add up. I’m not comparing apples with oranges, but I am saying that often - the paranoia is unfounded.
3. Your views are greatly appreciated, and I’m no expert on this subject. If in fact there are toolbar players with 20 million users that are overriding our cookies, then we have a more serious problem than I anticipated, and I will raise it with the appropriate industry representatives!
Thanks again!
V
April 15, 2007 at 6:48 pm
Hey Kellie,
This is a very interesting report!
http://www.affiliatefairplay.com/contextual_advertising_impact_study.html
V
April 16, 2007 at 6:55 pm
If the “effective loss of revenue is negligible at worst”, why did you suggest a “shorter persistent cookies for Toolbar distribution companies like Upromise”? How short would you suggest would be fair to all parties and, most importantly, why?
April 16, 2007 at 8:55 pm
If the “effective loss of revenue is negligible at worst”, why did you suggest a “shorter persistent cookies for Toolbar distribution companies like Upromise”? How short would you suggest would be fair to all parties and, most importantly, why?
May 24, 2007 at 7:18 pm
What do you think about Upromise??…
I wanted to know what any of you all thought about Upromise. Do you think its a wise decision or not so wise?
Thanks,
Quintin……
May 24, 2007 at 9:16 pm
[...] Play who is the EXPERT on who’s doing what in the parasitic/contextual/adware marketing space. Vinny Lingham’s Blog » Can parasite affiliates massively affect other affiliates? __________________ Your Partner in Success, Linda Buquet :: Affiliate Management Consulting, [...]
May 24, 2007 at 9:18 pm
What do you think about Upromise??…
I wanted to know what any of you all thought about Upromise. Do you think its a wise decision or not so wise?
Thanks,
Quintin……
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