5 Major Mistakes Affiliate Managers Don’t Want to Make

I was recently looking for clean Affiliate Programs for a couple of my niche sites and in a few niches, I was not able to find a single program that didn’t either work with adware, coupon sites poaching the shopping cart by ranking for trademark or url + coupons or trademark bidding (which includes bidding on Trademark or Url + Coupons).  When looking through one program I was already promoting, I found a ton of things that can take away from the company’s bottom line and cause financial damage.  Here are 5 of those things that are major errors that some Affiliates and some Networks will try to get you to fall for so they can make money, even though your company will almost always lose on these.  This program did not have all of this happening, but I did take screen shots for the first three and the Manager is making an attempt at cleaning the program so he gave me permission to share some of what I found so he can be aware of it as well.  If he does clean the program and his company allows him to help them save money, he can easily take over his niche and grow his program like crazy.  He sounds like he is ready to make the program a pure value adding one which means I’ll be going active again soon and recommending it to people, if they do clean it.

1.  Allowing Affiliate Remarketing.

This was a shocking one for me.  I didn’t have any toolbars or anything else installed on my computer at the time.  When I clicked through my links to the merchant, I found a banner for a coupon site on the top.  I couldn’t figure out what was going on.  I eventually talked to the Affiliate Manager and after a lot of talking he told me what was going on.  Here is a screen shot of what it looks like when I go to the site and why this is bad for any company that falls for “Affiliate Remarketing” on your actual site.

What happens with this is that someone clicks from the Affiliate site who is given permission to do “remarketing”.  When the person goes to the Merchant’s site, even on the first time, not the second time, the Merchant displays a coupon and branding for that site as well as a coupon code for that site in the header on all pages.  Although that sounds good, especially for the Affiliate, here is why it is not only bad for every other Affiliate, but also the company.

1.  You had to be invited in by the Merchant.  This was not made public and I don’t think other content sites that have value adding traffic were invited.  When I clicked through my own link and saw this coupon site on the header with a custom and potentially trackable coupon code, I freaked out and thought I had adware installed on my computer.  This caused me to pull all links from the merchant.  Why would I refer my traffic that they don’t have access to without me, just to have my traffic shown another site so the other site can take credit and I lose the sale when I actually earned it.  Now they lost me and anyone else who doesn’t want to lose their sales that saw this as a partner who sends new visitors, customers who wouldn’t have found them without us or customers who were looking for a specific costume with us.

2.  The AM made the argument that I am all about first click getting the sale.  Although I agree, the sites that I found that had access to this (I don’t know if it was all of them or who all of them are) were the same ones that rank for their trademark or url + coupons or coupon codes, etc…  This is horrible and not the partners you should let remarket, especially on the merchant’s site.

When I send my traffic and they see the coupon code box, they leave to find a code and the coupon sites can now place their cookies, meaning I lose my sale to them.  At the same time they now have their “Affiliate Remarketing banner” (which isn’t actual remarketing) appear on their site for a long period of time and my traffic will now be exposed if they come through my site again for another term I rank for and I will lose my sale.  This could also potentially happen to any other Affiliate that sends them valye adding traffic and the value adding partner loses their sales.  This is not first click gets the sale.  This is the person who poached the cart had their cookie set, replaced a value adding partner and now gets any traffic from the partner who sends the customer.  If you’re a blogger and have a loyal following and recommend something, those sales add value that came from your new post.  You may now lose those to the site that poached the coupon code box and can lose your commissions.  This also happens with any previous customer the parent company paid for with PPC, is currently paying for with PPC, etc…  It is not actual remarketing and any merchant that does this is hurting themselves and their partners who aren’t invited to do this.

Affiliates have their cookie life and that is what we rely on.  Other Affiliate’s traffic shouldn’t be exposed to other partners on the Merchant’s site and potentially have their cookies overwritten.  I am sure if they have a PPC, SEO or other marketing channel managing their program, they would be furious about this as well when they realize they are losing sales if this partner now has their banner and takes credit from their channels.  The executives should also be mad because they are paying and losing money on sales that they shouldn’t be and they now no longer have the money they could have invested in bringing in new customers and growing their business.

Remarketing is when you tag a person and then show ads across other sites to bring them back and make a sale.  (That link takes you to a post about remarketing and what adds value) The sale needs to be made right when the banner is clicked.  If it is not then the person could come back at any time and any other channel and you continuously lose money until the banner disappears and the cookie is gone.

Affiliates have a cookie life and this is what you get credit for when the user comes back.  By not displaying ads on other sites and just letting them poach your own customers on your site, you are not doing remarketing and losing money to poached sales.  You also chase away value adding partners like me and if the person clicked the link to set the banner on a trademark or url + coupons or coupon code, the sale was probably never value adding (check the original time from click to sale on the original sale and you’ll see the majority of them are probably much less time than a regular shopper and none of them add value.  If it came from a toolbar it will probably show a normal shopping time period or look like an actual referral or sale.)  and you will always lose money and sales because of this.  That is also why this is not remarketing or adding value to your company.  Instead it just makes money for the Affiliates you allow to do this and the Networks.  You lose money and lose partners like me.

3.  Cookie life and other channels.  Affiliates rely on cookies and don’t need a banner on the Merchant’s site.  The ads should be served on other sites to bring the person back and the Affiliate with the remarketing should be paying for the ads shown across the other sites.  That adds value.  Now no matter how the person comes back (The merchant’s own paid PPC, Email List, SEO efforts, etc…) the Merchant may have to pay out and lose more margin on every sale that this banner causes the shopper to set a cookie from by using the code or going to the partner’s site (If they give credit based on the coupon code used or a cookie is set when leaving to visit the partners site).

2.  Adware.

One thing I told the AM about when we were talking was the adware in the program.  I agreed to take a screen shot of an active application and post it.  I just wrote a very long and detailed post about this on @Sugarrae‘s site that I encourage you to read.  You can find it by visiting her site and search for Affiliate Adware.

In this example you’ll see that I blocked out all of the brand logos and names so the Affiliate with the adware is not able to be known.  I typed the merchant’s name in directly into my browser and when I got to the website, the toolbar activated and said that there were coupons available.  It also tries to get me to click to see them.  When this happens I go to their site and by clicking on links, reveal links, etc… or just by clicking on the toolbar with some applications, a cookie is set.  In some cases the toolbar may automatically redirect and set a cookie, in others when I click on the see coupons the cookie is set and other times it takes me to the Affiliate’s site before I get to the merchant’s website.  By doing this it looks like the customer was actually referred by the partner, the cookie would be set like a normal value adding referral and the time to sale would look normal.  The only way to catch it is to know which Affiliates have them and test each of their adware applications.  This toolbar activated from a direct type in to my browser which means they never referred me but because of the way I interacted (with some toolbars you don’t have to do anything).  Depending on the toolbar the Affiliate will get credit for the sale and the channel (PPC, SEO, Direct type ins, other Affiliates, etc…) will lose the sale.

3.  Allowing Trademark Bidding + Coupons or Coupon Codes

This is something that is almost always over looked.  When Merchant’s think of trademark bidding they think of their main brands and urls.  What they don’t realize is that by adding coupons or coupon codes, they have now given an ATM machine to Affiliates that won’t add value to them by doing this.  If someone is searching for your brand or trademark with an extension like coupons, discounts, vouchers, deals, coupon code, etc… they already know about you, are already ready to shop and are a customer.  They are probably also in your shopping cart already.  By letting Affiliates bid on these terms you now lose money on print or offline advertising and every other channel as well as current customers.

The costs per click on these terms are dirt cheap and the conversion rates are extremely high because the person is ready to check out, and all you are doing is losing margin for the Affiliate commission, network fee and coupon given to the customer.  If Affiliates like me who send customers you wouldn’t have without us see this, our cookies will be replaced by this and we won’t want to work with you because we don’t want to lose our sales.  Allowing this adds zero value to you and actually costs you money.  If you rank your own sites for these terms and don’t allow anyone to bid or rank for them, you’ll still have the same amount of sales from these searches and you’ll have more money to actually spend on salaries, bringing in new customers or anything else your company needs.  You should never allow your partners to rank for your trademark + coupons, coupon codes, etc… and you definitely do not ever want to let them bid on these terms.  It is instant money for them with no work and is not adding any real value to you in my opinion.  It is also pretty easy to prove as well, especially if you are on a network like share a sale.  It is also very easy to get competitors who may be bidding on these to stop so when they give you that as an excuse, don’t listen.

4.  Coupon Based Tracking

One thing that seems like a good idea but can actually be bad for your company is coupon based tracking.  All of your content sites, etc… have to rely on cookies, so why should coupon sites get special permissions and have a serious advantage.  If your shopping cart or program credits Affiliate’s based on coupon codes, depending on the cart this could overwrite another Affiliate’s cookie and steal their sale since the cart knows to set the cookie or credit the Affiliate based on the code, especially if the person just saw your coupon code box and left to go find a coupon.  If the person came from a PPC ad you paid for then went to find a coupon and entered it, you now just lost even more money for the sale because of the commission, network fee, etc…  By doing this you may be hurting your self by not crediting the proper Affiliate or even the correct channel.  If you replace all top ten results for trademark or url + coupons with your own sites and non Affiliate sites, you’ll still get all of the sales and you won’t have to lose money on commissions, network fees, etc…  Your Affiliate channel may tank if it was just this type of theft because you no longer allow poaching, and if you remove the adware in your program, but your total revenue should increase since you aren’t paying out on sales you would have had anyways.  You should also in theory have more money to spend elsewhere if you do it the right way.

5.  Mispellings of urls and trademarks

This one is something Affiliates will do.  They will buy misspellings of your url or bid on them.  Misspelling campaigns take seconds to create and buying your url’s misspellings doesn’t add value since the person was typing in your url anyways.  Many of the people who buy the urls will do a redirect or cloak their links so it is very hard to catch.  You have to know who they are in order to catch them or figure it out by testing the misspellings.  Many will also show you a different url or not want to tell your their strategies.  If an Affiliate won’t share their sites or strategies, or uncloak their links, chances are they are not doing something that adds value and you probably shouldn’t be working with them.

Some Affiliates and some Networks don’t always have your best interest in mind.  When they tell you how to increase your sales, it doesn’t always mean it will grow your revenue stream.  It just means it will grow the Affiliate channel and may poach from others or sales you would have had without the Affiliate channel.  Other times they can give you really good advice.  The problem is that they are awesome at pitching why you should let them do things like place pixels, allow adware that only poaches from you and even bid on trademarks + extensions like coupon codes.  They make a ton of money off of this.  By thinking about what is actually happening, watching how and when the cookies are being set and also knowing what to look for, you can then determine which channels it may have an effect on and if it is actually good for you or if it will just poach sales from other channels and give credit to Affiliates that didn’t actually earn or help with the sale.  I am very excited that the Affiliate Manager I spoke to is going to work on cleaning his program and if he does, I will be very happy to not only add him back to my sites, but I’ll be happy to replace many of the other programs that compete with him.