Affiliates vs Merchants - Who Holds the Power?

54 comments

Morning all

I am starting to see more and more of this. A company signs up lots of affiliates, then the top two to ten affiliates become the program generating 90% of the companies online revenue. The company get sloppy and the only business they get comes from the affiliates. These affiliates all know each ather and in many cases are mates. They share information about the supplier, late payments etc. Then the supplier tries to play "bully boy" and tell the affiliates what they can and can't do.

I have seen this via friends when a company with close to £20 million annual turnover, started getting arsey, the 3 top affiliates moved suppliers and within 90 days the company went bankrupt.

Anyone care to expand on that?

DougS

Comments

Editing

Thankfully i dont have to do much of it, 'cept for nuking the odd drive by. Let's keep it that way please and leave the personal shit outside of TW - thanks...

This is more noise than signa

This is more noise than signal? I think the sexual references are in poor taste and out of line.

You said it, Haiko. Well don

You said it, Haiko. Well done. Welcome for now.

>>>Point blank

>>>Point blank, Haiko: What are the many value adds that you speak of other
than handing out a coupon and slinging them to the merchant? <<<

When the heck did I ever say that was a value add? Never in my lifetime on line
have I said a coupon is a value add!

I've actually said that cart designers are idiots for adding manual coupon boxes
in the cart ... do your home work jeffy boy!

>>Part II of my question: Why are affiliates screaming bloody murder over this
AdSense change? Why? Why I ask? Because they can't just sling! Let's cut the
hypocrisy and just come clean.<<<

Those that were bit slinging should complain, but I don't see a value add with
what they did, they arbitraged, it made financial sense and now google changed.
Put it back in your pants dude!

>>> There just aren't any quality content sites out there participating in
affiliate marketing. <<<

OMFG you said that? Man, the cold musta brain freezed ya man! Take a shot of
espresso or something!!!!

>>>They get PAID for their traffic on CPC. Period.<<<

Um... the major ones I've seen get a slot fee, CPM and CPA

>>>Affiliate marketing is 90% slinging and the rest is uPromise, eBates and all
the other villains out there who dare to have a download that supposedly
over-writes the slinger cookies.<<<

Oh God, this is a set up but I luv ya for it Jeff. Those darn downloadables
cookie interceptors, the whores of organic traffic and click stream interlopers
are not the solve all bro ... they are F'in the merchant / affiliate contract
and soon enough it will be addressed and resolved ... without your spin d00d ...
reality, numbers and action so watch your Vaseline -- you just might need some
more for "recommending" them.

>>>Why are affiliates still grasping at straws with the so-called "parasiteware"
issue when the REAL issue is plain as day?<<<

Straws? The redirecting and contract violations of these 'super affiliates' you
support is clear as day, clean those rose colored ones.

>>>The real issue is value of traffic.<<<

That the parasites and thieves can steal? D00d, the real value is SERP listing
for the terms that people search for , pre-selling and linking to the buy page
... not intercepting the freakin link and sending the end user to the merchant
FP ... get a grip and take it easy with the cool aid!

=====
NickW,

>>>I did want to Welcome Haiko though, so, welcome to Threadwatch Haiko! Do go
and introduce yourself here - and btw, im soooo pleased you finally got round to
dumping infopoop and gettting a decent bit of usability at ABW - it's a fine job
mate..<<<

TY, I shall!

Infopoop is a truly deplorable service and I am truly glad for finally dumping
them. After the move, even with the headaches, I truly feel that I was doing a
dis-service to my member base by using that service - Good Riddance!

======

>>>I see you too will participate in the mud slinging.<<<

Mud sl;inging? d00d, your the slinger and supporter ... wake up!

>>>If I said that my comments had a vested interest in them, what harm is in
that? Don't yours? <<<

Don't worry we know! More than you know, it's quite obvious!

>>>Yes, it's about money. Actually, no, if you can sell my stuff that's not
good. If life were that simple we could all just say "if we kill all the
terrorists out there, that's good... right?" This completely ignores the costs
involved. If I can sell it for less by not using an affiliate, THAT is good.<<<

Once again, I must use the d00d and not dud nomenclature ... ummm CPA is the
lowest cost acquisition model and now you are proposing and supporting a system
where the merchant relies on ebates or the like who overwrite their PPC or
organic traffic or PPC listings and getting the CPA for the sale ... d00d not
using an affiliate? How about getting screwed by the affs you support? not once,
nor twice but thrice ... just about every time? How much does that cost? HMMM?

>>>It is about money and if I can sell it without an affiliate, for less, I
will.<<<

Sure, but what about the model of the industry? CPA (cost per acquisition) ...
why are you even discussing AM?

>>>Sometimes things happen frequently and people get booted out because they
stifle good discussion. I'm not going to mention any names or sites, of
course.<<<

Your B*t buddy banned me, yeah and? You not gona be here, we know who/what you
are :D Sometimes we just like to laugh at you, instead of responding ... ever
think of that?

=====
>>>Affiliate marketing sucks. Yes it does. The only people who push it are those
with an interest.<<<

Interest in earning, that is!

=====
>>>The site is live yet my company, today, does not actively engage in program
management or advisory services to merchants.<<<

HMMMM :X

>>>In fact, the only client we're working with at the moment is an affiliate.<<<

Thought so!

>>>So, there's no vested interest in anything, today. <<<

Anything and everything you do is for a vested interest! I know better!

>>>My friend David Lewis (also appearing at Revenews and a large affiliate)
continues to suggest that I invest my time in. He's right. Considering my
background I should try and help to improve things. <<<

Improve? Nah, stay as the mutt and jeff hand job show, it's funnier - your
"transparency" is amusing!

>>>Also, I will point out that today I throw stones at what I once helped to
create (for those who care to read the bio and the blogs). I simply don't see
the moster that I helped create always moving in the right direction and, hence,
I will be critical of it.<<<

Frankenstein, lives ... He might come back and haunt you LMFAO!

====

>>>If i can sell your stuff - surely that's good?<<<

Hell yea!

=======

>>>>From our experience assuming your traffic is of good content, targetted and
you have a good deal with a merchant. Then the order of making revenue for us
is:

affiliate deal
adsense revenue
banner deals<<<

Go hybrid and get all three and slotting fees - you can get them if your site
gets enough traffic!

=========
NickW,

If I crossed the line, just put me in my place please. Thank you for allowing me
here, great site!

Haiko the blogger?

Hey Haiko -

It's great to see that you are embracing blogs as a means for folks to interact. Can we expect ABW to evolve into this direction?

DougS I use Adsense and sp

DougS

I use Adsense and sponsorships. Didnt say it all has to be CPC. :)

Merchants love the sponsorships. Maybe it is my niche (cars) were brand matters. I dont know but i dont do affiliate deals. period.

real content sites getting advertising $

Can I beg to differ here

From our experience assuming your traffic is of good content, targetted and you have a good deal with a merchant. Then the order of making revenue for us is:

affiliate deal
adsense revenue
banner deals

If you talk to google and have large volumes of traffic they will serve adsense type banners in a deal that is based on displays but not click through's. But this type of deal is no good if you know how to manipulate ctr etc using adsense.

DougS

affiliate stuff or ppc

I'd love for our suppliers to take our traffic on a ppc deal, as yet they won't....but you have me thinking as I know they are more than happy to buy it from overture etc:)

especially as it relates to traffic that is tied to a branded term............I do not disagree with you here, but traffic that is not tied to any single brand but more to an industry sector is of great value to many competitors

DougS

[quote] As a "small time"

Quote:
As a "small time" affilate and not currently affiliated with anything i can offer little other than this: Isn't the point of aff. marketing $$$'s? It seems to me that all the back and forth about quality content and value is missing the point somewhat. If i can sell your stuff - surely that's good?

I think jeffmols point is that the people with real content dont do affilitae programs because they can get advertising $$$.

Quote:
If an affiliate can reach a niche you can't, or they can reach it more cost effectively than you can - why would that not be good? I agree you don't want 57 affiliates all competing with you for traffic but if you pick them carefully and don't just sign up anyone who's interested then it can be profitable for both of you.

That was the other thing that turned me off to affiliate programs. Most merchants want to get hundrds and thousands of affiliates and they dont care about quality. I did not like being another number that may or may not get paid.

>>using affiliates in this ma

>>using affiliates in this manner tends to inflate costs associated with traffic that would otherwise had found its way to the advertiser site.

well that's the crux of it isn't it? if clients will reach you anyway then it's better they don't go via affiliates obviously. However it's rare that any one company can effectively market worldwide, across all demographics and in all languages.

If an affiliate can reach a niche you can't, or they can reach it more cost effectively than you can - why would that not be good? I agree you don't want 57 affiliates all competing with you for traffic but if you pick them carefully and don't just sign up anyone who's interested then it can be profitable for both of you.

commissions or no?

Quote:
The site is live yet my company, today, does not actively engage in program management or advisory services to merchants

Do you get commissions as an affiliate jeffmol?

Nick, I suppose I did mis-re

Nick,
I suppose I did mis-read your intent.

The site is live yet my company, today, does not actively engage in program management or advisory services to merchants. In fact, the only client we're working with at the moment is an affiliate. So, there's no vested interest in anything, today. That will change of course and frankly it will change to having a vested interest in seeing things progress such that performance advertising improves. My friend David Lewis (also appearing at Revenews and a large affiliate) continues to suggest that I invest my time in. He's right. Considering my background I should try and help to improve things.

Also, I will point out that today I throw stones at what I once helped to create (for those who care to read the bio and the blogs). I simply don't see the moster that I helped create always moving in the right direction and, hence, I will be critical of it.

Indeed, Doug. You and many others have this approach. I have recently come to learn of "audits" that clearly demonstrated that this "fear of competitors swooping in" and stealing traffic is mostly unfounded... especially as it relates to traffic that is tied to a branded term. Furthermore, using affiliates in this manner tends to inflate costs associated with traffic that would otherwise had found its way to the advertiser site.

I agree somewhat

jeffmol

I think there is some truth to what you say. I think merchants do hold all the power and that is why i no longer do affiliate deals. I run a very narrow nich site on a brand of cars.

I got tired of all the issues and booted all those deals for CPC ones. It was scary at first because I worried I would bring in nothing. I was wrong. They came back and they paid. Now I make more and it is predicatble. I believe affiliate marketing has so many holes that any site worth it's salt wont bother with it. I don't see high quality sites doing those deals.

So now I know I have good traffic and merchants will pay for it. Affiliate marketing was just another method to weasel out of paying for what merchants have always paid for that being advertising or maybe it is just a lower rung for new webmasters who dont know any better to get involved in those schemes.

So I agree with your satement in an earlier post. Affiliate marketing sucks. Yes it does. The only people who push it are those with an interest.

keep the arguement going

Jeffmol

This is the sort of discussion Nick wants on this site, it has great value.

Regarding the latest adsense changes, I was worried about them but do applaud google on what they did. We do ppc stuff for some of our PLC partners and saw all our traffic go up, the duplicate url's of competitors were all removed and we rose in the places where our merchants were not showing. Hence adding to the value of the results by giving the customer more choice.

With my merchant hat on, I must say though I do disagree with your views. Our concern is that our branded merchant sites do rank well organically and in ppc, but we could be beaten by our competitors, hence we reward our affiliates to compete against us......its a nice backup.

Hopefully meet you at Stanstead as we probably have something we can help each other with:)

DougS

Hi, Nick: I see you too will

Hi, Nick:
I see you too will participate in the mud slinging. I'm sorry... have I ignored your comments? Am I as rude as you'd make me appear?

If I said that my comments had a vested interest in them, what harm is in that? Don't yours?

Yes, it's about money. Actually, no, if you can sell my stuff that's not good. If life were that simple we could all just say "if we kill all the terrorists out there, that's good... right?" This completely ignores the costs involved. If I can sell it for less by not using an affiliate, THAT is good.

It is about money and if I can sell it without an affiliate, for less, I will.

Also, let me say right now that if anyone here is looking to chase my comments right outta here, that's fine. I'll go but it won't be because we didn't, at one point, intend on having a good discussion. Sometimes things just happen. Sometimes things happen frequently and people get booted out because they stifle good discussion. I'm not going to mention any names or sites, of course.

eh?

Quote:
I see you too will participate in the mud slinging. I'm sorry... have I ignored your comments? Am I as rude as you'd make me appear?

I think you read too much into my comments jeff - i just wondered how much of your argument was due to your business model - i had a brief look at your site and although i didn't delve much past the about page and a couple more the first thing that came to mind was "aha! now i get it.." - am i wrong?

I dont think i made you appear rude at all - feel free to carry on as you were :)

Many issues...

To me it sounds as though your arguments may be fueled by a vested interest in them - would that be fair to say jeff?

As a "small time" affilate and not currently affiliated with anything i can offer little other than this: Isn't the point of aff. marketing $$$'s? It seems to me that all the back and forth about quality content and value is missing the point somewhat. If i can sell your stuff - surely that's good?

Or is that to simplistic? Feel free to carry on as if i'd not spoken heh....

I did want to Welcome Haiko though, so, welcome to Threadwatch Haiko! Do go and introduce yourself here - and btw, im soooo pleased you finally got round to dumping infopoop and gettting a decent bit of usability at ABW - it's a fine job mate..

Hi, Haiko. I see your defens

Hi, Haiko. I see your defenses are up. Not that they ever come down :)

I suggest you either offer something up (i.e. a counter-point) or remain transparent. Everyone else here is offering viewpoints and thoughtful dialog. Only you come here to attack and... friend... only you see me "lauding" eBates and hoping that the little guy gets screwed. I don't mind the little guy being King but those days are slowly coming to an end and what we're discussing here is why.

Point blank, Haiko: What are the many value adds that you speak of other than handing out a coupon and slinging them to the merchant?

Part II of my question: Why are affiliates screaming bloody murder over this AdSense change? Why? Why I ask? Because they can't just sling! Let's cut the hypocrisy and just come clean. The slinging is over. There just aren't any quality content sites out there participating in affiliate marketing. They get PAID for their traffic on CPC. Period. Affiliate marketing is 90% slinging and the rest is uPromise, eBates and all the other villains out there who dare to have a download that supposedly over-writes the slinger cookies.

Why are affiliates still grasping at straws with the so-called "parasiteware" issue when the REAL issue is plain as day?

The real issue is value of traffic.

You've gotta love the "mutt" and "Jeff" Show!

It is always amusing to see how they always shoot down joe blow affiliate and always laud the ebates and push for merchants to consolidate down their affiliate base to these type of affiliates. While cute, I find it pathetic and waaay off base to say average Joe's traffic is useless, there are many value ads that the pre-seller does besides bit slinging to the the merchant, but I guess Jeff will never understand that as he sees typo-squatters and parasites as the solve all super affiliate.

I'm glad there are people who see that such is a short sided and left handed position to take, not to mention the harm to you and your brand that undermining, debasing or otherwise ostracizing any potential member of your sales force is nothing short of asinine.

Massive Charade or Effective Strategy?

Alright, Porter, I'll bite on this. I'm sitting here sipping my morning tea reading the Wired peice... again and again. I keep shaking my head, asking myself "Doesn't this mean that what we've done (in building an industry) is a massive charade?" How can it not be when so much of it rides on search and so few affiliates have strong content... or add any value at all? I am beginning to think that affiliate marketing is ONLY good as a testing bed for "lesser" and/or un-proven traffic sources... potential partners who, in the end, an advertiser will pay for clicks but for now they can't justify it....

Chris, I'd say 72% is pretty

Chris,
I'd say 72% is pretty impressive.

http://insurance-canada.ca/market/other/eMarketSEM200306.php

Check MarketingSherpa for an equally mortifying up-to-date version. There have been other similar studies.

Doug,
I find your comments to be telling. You obviously are more sophisticated in your approach. The free branding... it's not worth the lack of control trade-off (to those who bother to actually understand WHY this is so!). What is a positive brand experience one day can turn into a negative the next and the advertiser has no control. Also, Google has spoken loudly and clearly and agrees with what I've been saying for over a year now - affiliate SEO is the enemy. In fact, they've extended it to include paid search too. This is war and I don't simply suggest between affiliates and Google. It's beyond that now IMO.

Your example is spot-on in terms of where there's value for *you* in affiliate SEO. Outside of that example there's almost none. We seem to agree.

"In fact, anyone with a Web marketing program doesn't track anyt

I'd beg to differ

Many don't.

DougS

time for beer

Some points here from your arguemnet

affiliate SEO is pure garbage - isn't this great for a merchant then, branding at no cost. We also track our campaigns and admittedly we do see sales occur not on the initial visit, but we see a huge amount of sales happen within one hour of us sending the visitor, whereby the keyword they came from was "old kettle for sale" and they purchased a new washing machine. This is an exageration, but it is an area where ourselves and "some" other affiliates do add value by putting the brand names in front of the customer when they did not know a particular merchant operated in this area.

There are few affiliates who offer a merchant something they can't do themselves or get on their own - and few plumbers who can really fix my boiler properly, but find me a good plumber and he is worth his wait in gold. I do agree here, many affiliates do ride on the gravy train, but there are some who can deliver substantial "new" business to a company. A company may be able to do this themselves, but the good staff that learn will leave and use the skill elsewhere. There will always be the "upstart" merchant who is willing to play to knock of the guys in the ivory towers and use the guys with the new skill.

Affiliate scum is here to stay as someone will always want to "steal" your traffic.

DougS

*Blink*

Quote:
"In fact, anyone with a Web marketing program doesn't track anything"

*Blink* *Blink*

Really?

Affiliates are so clever with

Affiliates are so clever with Google. See what one did just there? I'm sitting here this morning reading this http://www.wired.com/news/culture/0,1284,66374,00.html?tw=wn_tophead_6 and wondering to myself how much of the entire affiliate marketing world can be explained away in this single page?

Macklin:
It meshes perfectly. Ask a merchant. I've asked dozens. Nobody likes paying for customers they "already have." (their perspective)

Also, this is not about what I feel. This is about the billions of dollars in data I've peered into and dozens of merchants I've spoken with. That's what I stand on.

I'm not pushing anything to affiliates. I'm simply pointing out some facts and giving my opinion. AdSense is a better deal if you've got decent content or eyeballs. Affiliate marketing sucks.

Doug:
Why is it that the first thing affiliates and networks try to do when "pushing" the concept of letting affiliates run free is SCARE ME into believing all this hogwas about my competitor gaining advantage. Pure puffery. Fact is, my competitor can have all of the *overpriced* (commission-laden) traffic that he/she wants. I have Coremetrics or Omniture or whatever... and it tells me over and over that affiliate SEO is pure garbage. The fact is (I'll spare you the links) that virtually every marketer with an affiliate program doesn't track squat. In fact, anyone with a Web marketing program doesn't track anything so we can sit here and shoot mouths off about what's good or bad for marketers all day long and it doesn't really matter!

ukgimp:
I hear you. What I'm suggesting is that affiliate marketing isn't what it's all cracked up to be when you TRACK IT. There are few affiliates who offer a merchant something they can't do themselves or get on their own.

Keir:
I'm hearing you also. You rally for outsourcing. Fine. There's value in that but simply saying "affiliates can help you move faster and in places you may not have strength in" isn't enough for me, personally. You have to show me that there's value beyond that and, again, I've seen case studies and done audits myself where it does not add up. Affiliates add expense and when you outsource you give up *significant* control - especially to affiliates. The Web is different than my plumbing in that affiliates have control over servers and search returns that I will never be able to *control* without getting a lawyer involved or singing a more serious legal agreement with affiliates - which is becoming more common.

Sean:
I like your style. You're not the first to make such an offer or suggestion!

So Molander

So Molander, do you still feels this is true.

"This confirms that cash-to-cause, rebate and loyalty sites are really the powerhouses for the majority of retail categories," Molander says. "These are the affiliates that you cannot afford not to work with."
SOURCE

How does that mesh with your comments about merchants not really wanting to pay folks like ebates in your posts above?

Are you pushing PPC payment to affiliates now because there's quick easy money in them there hills ?

I'm always amazed at how some

I'm always amazed at how some merchants still believe they are doing me a favor letting me join their program.
Affiliates should be treated as business partners.

I feel like I've seen and done it all in affiliate marketing.

I remember for one merchant I was supplying 60% of their business, and then one day sending me monthly wires was too much effort so they stopped and started sending me checks with 90days terms. At that time I was in Australia so by the time check arrived, was banked and then sent back to the US to be authorized the 90 days had passed.
I stopped using them and 10 staff lost their jobs.
Now I felt bad, but then I just moved to a new merchant and have been with them for 12 months now.

Recently I've been working for a fortune 100 company.
In their case 100% of their sales come through affiliates - although these are mostly 'real world' affiliates.
To me the way they conduct their relationship is the way of the future for online affiliates.
Not only do the affiliates tell the merchant to “jump”, in these relationships affiliates also demand additional help like “pay for my advertising in advance”.
I have seen this happening online but it is very rare.

The power is in the traffic and the merchants who figure this out will survive.

To me the biggest offenders are the affiliate networks. Having worked on all the sides (affiliate, Merchant, Network) I can tell you the focus is on Advertisers.
As a merchant I get taken to lunch, phoned or emailed weekly, Christmas presents - the works.
As an affiliate I get nothing, except I do get banned every now and then ?

Online markets like Adult, Dating and Gambling often pioneer online marketing tactics - when it comes to affiliate marketing they are the only one who offer what I think is an appropriate level of support.
Merchant/Networks wake up and get a reality check, the power has moved and you don't have it!

poacher and game keeper

We are both.

We act as a merchant in some respects and allow our affiliates to do anything they want, even bid on our brand names. We'll take the traffic from anyone and if they are cleverer than us then great we are happy to reward them, be it ppc or revenue share.....aslong as we make a bit. Affiliates we love them all:) More the merrier please.

As a good size affiliate to some plc's, if we turn off there traffic we have the ability to effect the share price. When I ring/email our plc merchants I expect them to say "how high do you want me to jump". Not whinge about some trivial shit. We have the traffic they do not, be nice to me or go away, I'll send my traffic to your competitor. I've heard the plc's say it all, we can do what you do, great roll it on, I'd like a laugh.

Jeffmol, your competitor will have some clever affiliates, you won't know what they are doing, but they will be taking traffic and sending it to your competitor. It shouldn't be the only tool in your arsenal but it should be one.

DougS

If Affiliates were not needed

There wouldn't be aff programs. Of course there are going to be people working on the merchant side who can do SEM, woop-te-doo. That doesn't mean all of them can or want to. You can argue all day about "should" but that is just imposing your opinion on someone else, what works for you doesn't necessarily fit anyone else.

>>You're not needed after all!

Jeffmol

Are you suggesting that no merchant needs their affiliates or should give a shite about them?

I cant help thinking you are missing the point, the aff's own the traffic, quite often the merchant site is so poor in gaining traffic it would never pay for itself on its own.

In steps the aff's and provide traffic/customers.

Keir has a very valid point regarding compannies not being able to do it themselves and frankly not caring. Moving away from technology, lets take plumbing for example, I could learn it, but that would take a number of years and the job may still be botched. So what do I do, I call my mate the plumber, who comes out does the job. I make him a cup of tea , ask him about his latest woman ete etc and at Christmas I give him a bottle of wine. Now when I ring up I get a better response . "yeah, i'll come round now" ....not 3 days from now.

"Go away plumber you're not needed after all!" - I dont freaking think so!

It is about relationships, treat people right and it usually comes back in droves.

Jeff - I don't understand...

"To say that merchants need affiliates because they can do things that merchants cannot do themselves is NOT a reason to work with affiliates. It's a reason to be embarrassed that you're not doing what you should be doing! (i.e. search marketing)"

It may be OK for smaller merchants like yourself to say that but do you think the bigger players have the time or inclination to do eveything themselves? No, they don't want to get involved in all areas of search engine marketing. They want to outsource it to professionals. It's better for business. Let's them concentrate on their core business. How many FTSE 100 or Fortune 500 companies do you think are jack of all trades? Probably none, all big businesses focus on their core business and outsource the rest.

You want me to name something the merchants can't do themselves? OK, how many big corporate merchants want to get involved in dirty black-hat cloaking and nasty shit? Not many....but they still want the traffic don't they?. Solution - outsource to affiliates. They couldn't give a damn where the traffic is coming from as long as it is....

On a side note, I have one of two things I am thinking of affiliating out myself (making sure not more than 20% of total revenue as correctly pointed out by Buddha above). We know SEO/SEM and could do all the work ourselves but that is a very narrow view-point. You can't cover all bases. Therefore I would CHOOSE to work with affiliates to give greater breadth of SEM. Plus, I would treat them with the level of service and respect they deserve in order to maximise both our revenues.

few good affiliates and your own marketing dept

= covering all the bases = good partnership = everyone happy.

Looking in the mirror and yelling "Grrrrrr, I'm a tiger" al-la Alan Partridge isn't as satisfying as looking your bank manager in the face and yelling "told you so".

okay, but...

* If affiliates spent all their time re-inventing the wheel to squeeze a little more out of each click, when would they have time to add value?

* AdSense offers the necessary fluidity, but are you aware that many publishers earn more per click with affiliate programs than AdSense?

. . .

But you've got me curious, what kind of cash would it take for you to come down from the ivory tower and try your luck as an affiliate scum?

Sean, Nope. You read it ri

Sean,
Nope. You read it right. Let me know if you have a better idea. It seems to me that anyone with any kind of valuable, quality content or an audience charges for access. Heck, even affiliates are glomming on to AdSense. Why? They prefer to always get paid rather than a "maybe." A list of maybes actually: Maybe the transaction won't get dropped by the "trusted" third party solution, maybe the merchant won't reverse the sale/action... maybe maybe maybe.

seobook,
I'm not trying to play games with words first of all. My point is that most affiliates do not add value that is otherwise in-accessible by the merchant. What I am bringing into question is the value of an affiliate and suggesting that it is not offering value unless it offers something that **the merchant cannot access on its own**. Essentially, this takes SEO/SEM out of the discussion.

There is a big difference between ACCESSING and POSSESSING an audience. Anyone can access. Not everyone can possess. It's the difference between eBates.com and an affiliate who uses SEO or for that matter SEM. Anyone can do it (yeah, yeah... I know, affiliates are smarter... get over it... that's just not true). Do you think merchants enjoy paying for access to those loyal to eBates and earning cash back? Not really. How about uPromise or SchoolPop? Yeah, they probably do like that for the PR value. Similar with Boxtops4Education.

These mega-affiliates aren't really affiliates at all if you think about it. They're strategic partnerships that have more to do with branding and retention of customers on a "turf" basis. If they're not there, a competitor can easily step in and have access to all those customers who are loyal to their kids college fund, school or their wallet in the case of eBates.

If you're interested, we've had some rather interesting discussion around similar "value" issues here using the Google/Geico suit as a springboard.

>The only affiliates that add

>The only affiliates that add value are those who have original content or an audience that cannot otherwise be accessed.

don't most affiliates that make sales access an audience and add value

?

>> If I were an "affiliate" I'd charge for my traffic. Period.

Jeff, I must have mis-read your last post. Surely you are not saying affiliates should be setting up custom CPC deals with every merchant?

"Hence, my point, merchants d

"Hence, my point, merchants do NEED affiliates because they can do the things that they cannot themselves"

Name one, please.

Sean,
I am speaking broadly. From a merchant's perspective, true "affiliates" (sites working on pure performance versus, say, PPC) are looked at as "lesser" (after all, their traffic is worth not even a click). This cannot be argued. The only affiliates that add value are those who have original content or an audience that cannot otherwise be accessed. Simply stating that affiliates add value because a merchant doesn't do something themselves is nonsensical. To say that merchants need affiliates because they can do things that merchants cannot do themselves is NOT a reason to work with affiliates. It's a reason to be embarrassed that you're not doing what you should be doing! (i.e. search marketing)

There are many reasons why affiliates, generally speaking, are not the right route. Example: control. What control does a merchant have over an affiliate? None. Zero. Nada. Why? They're "lesser" marketing partners who will take what they can get... regardless of quality of traffic.

If I were an "affiliate" I'd charge for my traffic. Period. To hell with merchants who won't pay. Do you think Froogle will remain free forever? HA!

If I can't get a PPC for my traffic, I'd look in the mirror and yell "loser!" Wouldn't you? The only people who would respond "no, I would not" would do so because they cannot - they're arbitragers.

MIssing the Point

Think you're missing the point Jeff. Arbitrage PPC is only one very small aspect of it. My traffic comes from lots of different sources. By the term 'merchant' I simply mean anyone that supplies the goods. By the term 'affiliate' I simply mean anyone that takes a % of the goods the 3rd party 'merchant' supplies. The merchant is good at supplying the goods, the affiliate is good at getting the punters to the door. The only point I was making was that anyone who is giving another company extremely large volumes of sales every month should be looked after and treated with respect. If they're not, the affiliate flicks a switch and sends it to a more forward-thinking competitor who has greater foresight and is interested in building long-term relationships.

(to clarify a point, I don't expect to have the right to 'exploit' someone's brand name. I have brands myself. If I pay for PR, marketing, etc then I am building a brand and I too would be cautious about letting people use my brand in certain ways. I too am actually against the lazy brand-bidding PPC affiliate who only bids on brand name and brings no other value to the merchant. The usage of brand name I refered to above was in a much more sophisticated manner than that and was something the merchant seemed incapable of doing themselves. Therefore, as an affiliate, I added value. Hence, my point, merchants do NEED affiliates because they can do the things that they cannot themselves)

re: day job

Jeff, are your comments for arbitrage affiliates, or all affiliates?

Experience w/ both

I have experience managing an affiliate program with a few thousand affiliates AND as a affiliate marketer. 1st, any business that relies 90% on affiliate sales is a poorly run business. Affiliate revenues should be less than 30% fo total revenue for any company above 7 figues IMO. Just like affiliate marketers should diversify their rev streams, "big businesses" should diversify as well.

When I first started managing the affiliate program, I didn't "get" it as well. I agree that most affiliate managers could do better.

quick to change ...

... but it takes some time to compare conversion rates, comissions, ... and I usually go for "never change a running affiliate code" ;)

1st email

The 1st email which causes me to change anything I let slip,the Second email that causes me to change anything ... the change is usually to a new merchant :)

DaveN

Traffic on ... Traffic off (it quick to change than it is to type)

MrMackin.... worth a Try

:-)

Sorry ukgimp There is no w

Sorry ukgimp

There is no way an affiliate manager stays in biz if he/she were to do THAT

But I have heard stories about AMs that do it.

>>different methodologies

Care to share :-)

>Spreading the risk... It

>Spreading the risk...

It is amazing all the different methodologies used by affiliates in my programs.

Mikkel deMib Sv...

You didn't have the right affiliates......fact....if you do seo/sem yourself.

We have clients who are very highly ranked merchants, who do very nicely out off affiliates. Spreading the risk it is called.

DougS

Some merchants are odd

But then some affiliates are too. Merchants start thinking "these guys are making money off OUR hard work" but so do affiliates. It's a symbiotic relationship and only works really well when both sides realise.

DeCal

Welcome to Threadwatch DeCal, do introduce yourself here...

Brian, that's spot on. I think this is a problem with companies just not getting the point of affilate marketing - some do and some dont but when your business hinges on it, you better damn well learn...

As someone that manage the co

As someone that manage the company side of this for a large brand I must say that I do not entirely agree. I do agree, that most merchants do mess up - often, and I do agree that merchants should treat good affiliates with the deepest respect and honor for their work. But I do not agree that affiliates should always be allowed to bid for the merchant brand and in fact, I don't think it is always wise to go for SEO/SEM-affiliates at all. With this particular brand in mind that I work for we found that it was better, for many reasons, to get full control of SEO/SEM by handling it ourself. With a 2500% increase in search traffic I think we did right :)