[Greg Rice]

If you’re wondering why some of those affiliates, whose site is perfect for your affiliate program, aren’t interested in joining with you, take a good look at your current affiliates and policies. You could very well have affiliates who are known to get a commission that rightfully belonged to another affiliate. And that “perfect” affiliate may know this and not want to work with you.

This usually happens with affiliates who use software to get credit for sales (notice I didn’t say earn sales or promote merchants). Common names for such affiliates are software affiliates, loyalty affiliates, toolbar affiliates and parasites. Now, not all affiliates in this class are the issue and it’s not always easy to tell them apart. As a merchant or affiliate program manager you need to know who these affiliates are, what they’re doing and how damaging they can be to your affiliate program and your other sales channels.

Basically, here is how it works. The toolbar affiliate runs a loyalty site and promises their users a rebate, savings or donations to a charity of their choice if they buy from certain merchants. They then encourage the user to install their toolbar so they can “remind” them they can earn their rebate, savings or donation when they are on the merchant’s site.

Now, this software is watching where the user goes on the Internet. Yes, they are spying on their users and the users likely don’t even know. If the user goes to your site (assuming this affiliate is in your affiliate program), the toolbar can, and usually does, set their own affiliate cookie for this visit. So why is this bad?

It’s bad for your other affiliates because the toolbar sets the cookie even if the user clicked through from their sites. If the user, with the toolbar installed, visits one of your affiliates’ sites, sees your products or ad and clicks through to your site, the toolbar can set their own cookie. The first affiliate just lost a commission even though they led the user to your site. Maybe that affiliate was using Pay Per Click advertising to promote you. In this case it’s not only a lost sale but has now cost the affiliate money. Can you see why affiliates wouldn’t want to work with you?

It’s bad for you too because the toolbar affiliate can get credit for sales that you created. If one of their users goes directly to your site, the toolbar affiliate can set their own cookie and you will pay them a commission. Worse yet, the toolbar affiliate can earn a commission on your own advertising, including PPC. So you just paid 50 cents or $1.00 or whatever for that click, the toolbar affiliate sets their cookie and you then pay this affiliate for the sale. This also skews your own reporting because the sale is credited to the affiliate instead of your ad or PPC.

To add insult to injury, and lower your ROI, what if your affiliate program network (that "trusted" third party) had their own parasite that was doing this to you? They charge you a monthly minimum fee, a fee on affiliate commissions, they are also an affiliate so they're earning commissions and the fees on those commissions, and to top it all off they are earning fees and commissions on your direct traffic and your own PPC campaigns. Too unreal? Not really, read this thread.

You may be thinking “Why on Earth would I even want someone like that in my affiliate program?” This is the typical reply I get when I explain this to prospective clients. I bring this up with prospective clients because we do not work with parasites and want the client to understand this. If it’s a live program, we will clean house so clients need to know this up front. You may be surprised to find numerous affiliates just like this in your program. Some have been around for quite a while and new ones pop up all the time.

You need to be able to identify these affiliates because other affiliates know who they are and usually avoid programs who allow toolbar affiliates in. What can you do? Here are some tips:

• Go through your current affiliates and find the loyalty/incentive affiliates. Check out their site and even do a search for them on Google, Yahoo, etc. See what people say about them, then add the word “toolbar” (“Affiliate Name toolbar”) in your search and see if anything new comes up.
• If you are the company owner or CEO and have an affiliate manager, don’t just ask the manager to do this but check it yourself. Some managers allow these affiliates in because it makes their program look good (remember, this affiliate is also being paid on your own organic traffic) or, if they get a commission on affiliate sales, because they earn more money. If you find toolbar affiliates in your program, ask your manager why they were approved. Just because you hired an independent affiliate manager does not mean these affiliates aren’t in your program. There are numerous companies out there that not only allow this but encourage these affiliates to join.
• Be informed. Hang out where your affiliates hang out like ABestWeb.com, the largest affiliate forum out there. There are other forums out there but you’ll get the truth here.
  
  
  
  
• Don’t ask the toolbar affiliate if they are in compliance with network and ethical standards. I can tell you now the answer will always be “yes”. Sometimes they may say they had a “bug” or “glitch” in the past but that has been fixed now. These bugs and glitches often show up during the Christmas shopping season. Coincidence? Do your own research and judge for yourself.

Affiliates are business people and deserve to be treated as such. If they lead a visitor to your site and you make a sale, they want to get paid and rightly so. You made an agreement with them, via your affiliate program terms, that states they will earn a commission on referred sales.

Parasites and toolbar affiliates may very well cause you to break this agreement. How? A normal affiliate promotes you, a visitor comes to their site, sees your products, clicks through to your site and they buy something. When this happens, your agreement states this affiliate earned a commission. If you have parasite/toolbar affiliates, they likely will get credit for the sale so you won’t pay a commission to the first affiliate, even though they match all requirements necessary for a commissioned sale.

The more affiliates are exposed to parasites, the more they will avoid programs who accept them. With an affiliate program, you are always striving for that win-win and when you achieve it your program will grow. If you allow one affiliate to take away commissions earned by another affiliate you do not have a win-win. Affiliate marketing is big business. In what other business relationships would you allow this to happen and think your business partners would still want to do business with you?

[xeroxcopy77]

This is very informative. Thanks for the info!
-------Kristen

[Greg Rice]

Originally Posted by xeroxcopy77

This is very informative. Thanks for the info!
-------Kristen

You're very welcome, I hope it's useful.

[Bill]

Great post, Greg. You did a fine job of laying the cards on the table and explaining how the games are played. I will forward this thread to an old friend of mine who works in marketing with a big perfume company - unfortunately a company who is in bed with all the crooks. Their Aff Mgr must be earning a sweet bonus based on aff sales.

[Greg Rice]

Originally Posted by Bill

Great post, Greg. You did a fine job of laying the cards on the table and explaining how the games are played. I will forward this thread to an old friend of mine who works in marketing with a big perfume company - unfortunately a company who is in bed with all the crooks. Their Aff Mgr must be earning a sweet bonus based on aff sales.

Thank you sir. I hope it makes a difference in at least one program.

[Geno Prussakov]

Great (and important) post, Greg.

I'd like to add three more points to the practical tips you have outlined above:

(1) Fight such affiliate behavior on the pre-recruitment phase by spelling it clearly out in your affiliate program's Terms & Conditions that you do not work with such affiliates, and stand against such affiliate behavior. It will do two things for you: (i) tell a toolbar affiliate that they are not welcomed in your program, and (ii) reassure the good affiliates that you are serious about this business.

(2) Give preference to affiliate networks that are known for their anti-parasite stance (I would recommend looking at ShareASale, AvantLink and buy.at in the U.S., and PaidOnResults and buy.at in the U.K.).

(3) Remember that just as it is with any other affiliate program's Ts & C's violation, an affiliate that wasn't doing it when they initially signed up with your program, isn't guaranteed from starting doing it when they are already in your program. Active policing is key.

Also, to re-emphasise the point that Greg has already made in passing, not all "loyalty affiliates" are bad (downloadable software is the red flag). If you are not sure, ask.

Geno

[ChrisMiquel]

Greg and Geno,

Thanks for the great information. I have not been to active on ABW lately because I've been working on a clients new site which is performing very well. I am just about to start developing the affiliate program for this site just in time for the Affiliate Summit in Vegas. So information like this is very good for me, is there a standard affiliate policy template any of you guys know about that can be used as a shell for my affiliate program.

Thanks,

Chris

[Greg Rice]

Great points Geno, thanks for adding that.

Chris, I don't know of any template. Look at many terms for existing programs and create your own based on what you liked and didn't like. Just don't copy anyone's though I've seen this done and it really makes the program look cheap when the terms are word for word of a competitor's terms and sometimes the competitor's name was missed in the copy and still showed. Not good. I created one and use it for a template for my other programs, just changing the necessary info.

[David S.]

Just wanted to thank Greg and Geno for some great info here, thanks guys!

[Greg Rice]

Originally Posted by David S.

Just wanted to thank Greg and Geno for some great info here, thanks guys!

You're very welcome. This is what ABW is all about, teaching and learning

[surfinsarah]

thank you for this Greg, very helpful!

[Mike Rawlings]

Great info for any Merchant!