Affiliate marketing at the Internet Retailer conference

Any site owners or others experienced in affiliate marketing care to interpret / comment on this?

http//www.csestrategies.com/cse/2008/06/live-blogging-f.html[]http//www.csestrategies.com/cse/2008/06/live-blogging-f.html

[quote5caa4e5b7b]Jun 09, 2008
Live blogging from Internet Retailer Conference

Here at IRCE, I'm in a workshop around affiliates and along with 80% of the attendees, I'm sitting here with my jaw open because instead of offering ways to maximize your affiliate business, this workshop has essentially been a 90 minute rant about what scum-bags affiliates are and tons of data that are essentially telling retailers to scale back or do extreme policing of their affiliate programs.

Why the anti-affiliate sentiment?
I decided to cover this topic on CSE strategies, because with ChannelAdvisor's ShoppingAdvisor product, we've seen more and more retailers going direct with their top affiliates, and keeping the bottom-tier affiliates in affiliate networks for closer management. Retailers seem to be separating the wheat from the chaff.

Barbara Hurd from Harry and David talked about how they are fighting affiliates that are doing bad things like saying they have a H+D coupon code, but then send people to competitor's sites.

Vickie Updike from Miles Kimball - pointed to some research they did that showed affiliate drove only 17% NEW orders for them. In other words, 83% of the affiliate orders were essentially coming to MK were intercepted and MK had to effectively pay for orders they would have gotten anyway.

George Michie went on a rampage and talked about the bad guys and their tricks such as

li PPC fiends - these guys violate your affiliate rules and do things like buy your keywords at night (night pirates), or use geo targeting to avoid your corp HQ and buy in other regions. You can catch these, but it's tough.
li Coupon sites - these guys are trained by the consumer press (today show mentioned twice - evidently Matt Lauer is big on coupons)
li Domain squaters - they buy things like plasmatvs.com and do lots of SEO and then charge for traffic to a bunch of affiliates.
li Loyalty programs - eBates kind of programs essentially want to take an affiliate % from traffic you should be getting - avoid them.

What's a retailer to do?
At the end of the day, the panel seemed to be saying that it's time to drop the hammer on affiliate programs, cull out the bad guys and focus more on Web 2 kinds of activities like blogs, user-generated-content, etc.

On the culling side, one of the panelists likened finding your 'good affiliates' like trying to find the good guys in prison.

Ouch - nuff said.[/quote5caa4e5b7b]

This is another reason why our fellow friend posting about creating a freebie site should not... Thanks for the interesting article. I myself have seen this going on for a while. It's another sign of how things are going downhill like they have for the last two years.

liwaits patiently for Tyler to appearli

[quote69a2c64f28]Here at IRCE, I'm in a workshop around affiliates and along with 80% of the attendees, I'm sitting here with my jaw open because instead of offering ways to maximize your affiliate business, this workshop has essentially been a 90 minute rant about what scum-bags affiliates are and tons of data that are essentially telling retailers to scale back or do extreme policing of their affiliate programs.[/quote69a2c64f28]

There are tons of scumbag affiliates, but to say an advertiser shouldn't be policing their own ad campaign (or to imply that they shouldn't be required to do so) is stupid. Admin does it with his advertising campaigns and ad-buys for FC, TSJ and I do it for LucroCash.

[quote69a2c64f28]Why the anti-affiliate sentiment?
I decided to cover this topic on CSE strategies, because with ChannelAdvisor's ShoppingAdvisor product, we've seen more and more retailers going direct with their top affiliates, and keeping the bottom-tier affiliates in affiliate networks for closer management. Retailers seem to be separating the wheat from the chaff.[/quote69a2c64f28]
The opposite is true as well. If you're a good affiliate,and drive good profitable, reliable, repeatable traffic, you can go direct (cut out the middleman affiliate) with the advertiser. In some cases the advertiser ends up paying less, but you earn more, because of the overhead built into offers.

For example, if I'm promoting JB's Correction Fluid as an offer on my site, and I get that offer from Ted's Affiliate Network, I might get paid $10 for every new qualified lead I drive to JB's website who buys a product. Ted is getting paid $15 a lead by JB (because he can promise 10K leads a month), and passing that $10 on to me, and keeping the $5 as profit. Some of those 10K leads are fraudulent, garbage, or otherwise not profitable for JB. If I'm providing 2K of those leads to JB (through Ted) and my leads are great (not fraudulent, garbage, and profitable) because of my fraud prevention measures, I can talk to JB directly, and promise the same number, or more (if he pays me more, and I can then afford to generate more leads) of the same quality, he may pay me $13 for every new lead. JB pays less, but gets better quality leads, I earn more per new lead.

[quote69a2c64f28]Barbara Hurd from Harry and David talked about how they are fighting affiliates that are doing bad things like saying they have a H+D coupon code, but then send people to competitor's sites.

Vickie Updike from Miles Kimball - pointed to some research they did that showed affiliate drove only 17% NEW orders for them. In other words, 83% of the affiliate orders were essentially coming to MK were intercepted and MK had to effectively pay for orders they would have gotten anyway.[/quote69a2c64f28]
This is an entirely different subject, and has been a problem for a very long time. It's hard to police, and more often than not the person promoting the offer has no idea it's happening, they just see their leads not converting.
[quote69a2c64f28]
George Michie went on a rampage and talked about the bad guys and their tricks such as

li PPC fiends - these guys violate your affiliate rules and do things like buy your keywords at night (night pirates), or use geo targeting to avoid your corp HQ and buy in other regions. You can catch these, but it's tough.
li Coupon sites - these guys are trained by the consumer press (today show mentioned twice - evidently Matt Lauer is big on coupons)
li Domain squaters - they buy things like plasmatvs.com and do lots of SEO and then charge for traffic to a bunch of affiliates.
li Loyalty programs - eBates kind of programs essentially want to take an affiliate % from traffic you should be getting - avoid them.
[/quote69a2c64f28]
PPC is going to be around for a very long time - it's supremely profitable arbitrage at it's finest. Blackhat (brand keyword buys, etc) techniques will always be around, because people are greedy, and clever (though that doesn't make it right). If I was a big company, I would hire a PPC expert as a consultant to look for blackhat kinds of stuff going on.

Domain squatting is illegal, per the SCOTUS decision, and enforceable, if you can track down the offending party. What the author described is not domain squatting though, that's PPC advertising, and there's nothing wrong (imo) with that at all.

[quote69a2c64f28]What's a retailer to do?
At the end of the day, the panel seemed to be saying that it's time to drop the hammer on affiliate programs, cull out the bad guys and focus more on Web 2 kinds of activities like blogs, user-generated-content, etc.[/quote69a2c64f28]
The culling of the affiliate programs has happened already, and will continue to happen. IMO, the problem is that many advertisers don't understand what their buying when they go the CPA route, then they get pissed when they get garbage leads, because they don't understand how those leads are generated, what a realistic ROI is, and who to choose as their publisher.

[quote69a2c64f28]On the culling side, one of the panelists likened finding your 'good affiliates' like trying to find the good guys in prison.
Ouch - nuff said.[/quote69a2c64f28]
Yes, but making money is never supposed to be as easy as brushing your teeth.