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  1. #1
    ABW Ambassador
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    January 17th, 2005
    I'm soliciting other publishers' experience about the life cycle of an affiliate program. Here's more or less the way I see it:

    (1) Kick-off stage - fat commissions, lots of glitches, few returns and cancellations, limited competition. Lots of incentives .... easy money.

    (2) Early maturation stage - fat commissions, but growing number of returns and cancellations. Earnings per click are starting to slide. Publishers keep pumping out more promotions to maintain their slowing revenues.

    (3) Late maturation stage - commission rates cut, cookies cut, reported sales slow, returns and cancellations grow higher, earnings per click fall further, cost/effort to maintain commissions is no longer worth further promotion ... the party is over folks and for a limited time you have become the merchant's cash cow and they have sort of become your cash cow.

    (5) Abandonment - with the merchant's (advertiser) marketing people focussing elsewhere, their affiliate program continues to deteriorate and serious publishers abandon their program.

    (6) Life cycle from kickoff to abandonment is 1 to 3 years, unless the merchant fumbles the kickoff whereby it's a dead program from the start.

    Let's hear it from the rest of you.

  2. #2
    Domain Addict / Formerly known as elbowcreek Thomas A. Rice's Avatar
    Join Date
    January 18th, 2005
    Heh, did we get up on the wrong side of the bed, Whiz?

    I think the life cycle rises and falls with the quality of AM that's in place, overseeing it. A few exceptions, though, since if the leadership is bound and determined to kill it, there's not much an AM can do.

    - - - - - - - - -
    I will FOCUS on my goal, and I shall NOT be denied.

  3. #3
    Moderator MichaelColey's Avatar
    Join Date
    January 18th, 2005
    Mansfield, TX
    I've worked with several programs going on five years now, and for the most part that's not what I've experienced.

    Regarding commissions, I have seen this SOME, but not much. Also, some started with higher introductory commissions, which were intended to be temporary. Most commission declines I've seen have come as a result of the shifted emphasis from customer acquisition to profitability in the past few years. I've also seen some INCREASE their commissions.

    Regarding cookie durations, unreported sales, and returns and cancellations, I've seldom had a problem with these factors becoming less favorable as affiliate programs mature.

    EPC is one metric that I watch very closely, and I haven't seen any significant decline in it over the years for most of the merchants I work with.

    Perhaps these are bigger issues with lower quality merchants, but they haven't been issues with most of the merchants I've worked with.

    Michael Coley

  4. #4
    2005 Linkshare Golden Link Award Winner  ecomcity's Avatar
    Join Date
    January 18th, 2005
    St Clair Shores MI.
    As a program matures their AM is tasked with SEO/SEM to offset the commission expense. Merchants then institute diversion tactics well published by the likes of and various network seminars. Soon the goal for dud programs is to make sure the targeted affiliate traffic shows worse conversion ratios then general un-targeted traffic sources to judge diversion success.

    Merchants by nature do not like to pay any outside sales force as if it were a sign of weakness in their internal efforts.

    Mike & Charlie ...

    If they won't adopt and feed a bird ..flip them one! BBQ some Gator and remember to flush WhenU..

  5. #5
    Affiliate Marketing Consultant Andy Rodriguez's Avatar
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    January 18th, 2005
    Sunny Miami
    Excellent thread...I will post from my personal real world experience later....

    Mike is not far off base either.

    More later..
    Affiliate Program Management
    and Consulting Services
    P: (305) 412-3512
    C: (305) 785-4524
    AIM: AffiliateDoctor
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  6. #6
    ABW Ambassador
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    January 17th, 2005
    I modify my original presentation to say that a dedicated AF manager can stretch the life cycle, so long as the AF manager stays and executive management supports them.

  7. #7
    ABW Ambassador
    Join Date
    January 17th, 2005
    "if I was a merchant", the life cycle would be to start the program, partner with parasites to build customers, when a large customer base was achieved, kick out the parasites, come to abw and tout "we have seen the light" to get more promotion where I wouldn't have to pay a commissions due to 1-800 sales, reversal manilpulations, cookie and or reporting manipulations.

    As more and more companies with a large customer base sees the number of "existing customers" that they repeatidly pay commissions on, they will have to strongly consider dumping the parasites at some point. It's insane the amount of commissions they are allowed to get from bookmarks, merchant email campaigns and direct type-ins.

    OS was the closest thing to this model I've seen (fogdog, is a close second but has remain uncommitted to completely toss out parasites so far - despite "a limited test run").

    Parasites are good for initial growth but screw you "big time" once you reach a certain saturation level.

    ** Have you asked for change? **

  8. #8
    Resident Genius and Staunch Capitalist Leader's Avatar
    Join Date
    January 18th, 2005
    From what I've seen, there are a few categories of merchants and cycles.

    Some do as in Whiznot's first post. These are the easy ones to spot, and by the time they officially die I have usually let their pages sink to the bottom of Google.

    Others stop after his Stage 2 and just close up without dragging things out with all those cuts.

    Then, there are the merchants who come in with baloney low commissions and excuses of varying plausibility. These are almost certain to screw their affiliates, the only question is when!

    Others start out with a high commission, low reversals, good creatives, etc. And then one day they SUDDENLY turn into crooks with no warning whatsoever and turn off their tracking switch, initiate diversionary tactics, and start reversing like mad!

    There is also a unique category I would call "progressive nit picking." These are places that seem to be trying to lose affiliates on purpose. They progressively add more restrictions, more hurdles to getting paid, and each restriction is more onerous than the last. These usually drag on with this malarkey for about a year after they start such tactics, and then bluntly close their program on those who were willing to tolerate the nonsense. Personally I'm long gone from a nitpicker way before they close up, but I pay attention to how long they remain operating so I can get the pleasure of watching them roll over and die when they finally do!

    But then there are the good ones who don't mess with their commission, leave the Switch alone, and don't reverse unless the item really was returned. And they do it year in and year out without messing up.

    And there are some REALLY GOOD ONES who do all of the things in the previous paragraph, plus have an exemplary commission and long cookies.

    If the market changes so that these good ones can't keep paying as high of commissions they make ONE reasonable adjustment, while staying honest. But there is no "progressive program rot" with a truly good merchant.

    Sometimes good ones will close up, but before they close they will stay honest. The lack of warning signs can make the closure of a good program be a surprise! But I'd rather be surprised by that than with the bogus reversals and sabotaged tracking of a crook.

    There are more types but these are some of the ones I've come across a few times.

    It's the most wonderful time of the year!~Old Christmas Song

  9. #9
    Full Member
    Join Date
    January 17th, 2005
    I'll add to the lifecycle:

    After abandonment, merchant realizes the SERPs are full of affiliates pointing to other merchants, hires a new AM to undo harm done, and then there's a short period of effort from the new AM, which may lead to:

    1. A short term effort that withers from a lack of real committment and/or bad karma

    2. A decent resurgence in the program that pulls somw affiliates back in the fold.

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