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  1. #1
    Moderator MichaelColey's Avatar
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    Progress Against Parasites!
    At ASW11, I talked to several people about parasites, and I made a statement that I think has a lot of merit: We have been steadily making progress against parasites.

    On the surface, it might not look like it. The big networks have restricted parasites, but by doing so they have legitimized them. This has been unchanged for years. The worst of the parasites have been virtually eliminated (thanks to Kellie and Ben, especially!), but the "compliant" parasites continue to prosper.

    So what has changed that makes me say we've made progress? The emergence and growth of ethical, parasite-free networks. Companies like ShareASale.com, AvantLink and buy.at have provided an option to the parasite-infested networks. And these networks have grown and prospered. Recently, they've started attracting larger merchants as well.

    I think this is only the beginning. I predict that several things will happen in the next several years:

    1) That these parasite-free networks will continue to grow much faster than the ones that have embraced parasites.

    2) Many more of the larger merchants will move to parasite-free networks.

    3) That one or more of these parasite-free networks will move into the "third largest network" spot (if not higher).

    4) That one or more of the older, parasite-infested networks will realize the error of their ways and eliminate parasites. (No, I don't know of anything coming, and I don't expect this anytime soon.)

    So what do you think?
    Michael Coley
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  2. #2
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    1) That these parasite-free networks will continue to grow much faster than the ones that have embraced parasites.

    They look like they're all growing because this business continues to grow. Parasites are just one issue tho. For these up and coming networks, parasite free, great but don't hang your hat on that issue alone. Because they also need to get with it in other areas if they really want to compete.

    2) Many more of the larger merchants will move to parasite-free networks.

    In 2010, do you have any examples of a major merchant that moved from one of the major networks to one of the newer parasite free networks exclusively? Not saying there haven't been any, I just can't even think of one. I think some might open up on other networks but still stick to a major if they're there already. Also wanted to add, it is the merchants who decide who they let into their program. So they can be parasite free on any network, even the infested ones.

    3) That one or more of these parasite-free networks will move into the "third largest network" spot (if not higher).

    Anything is possible but if we're looking at the top 500 internet merchants, where people actually shop. CJ, LS, GAN are pretty dominant. So I don't see this happening anytime soon.

    4) That one or more of the older, parasite-infested networks will realize the error of their ways and eliminate parasites. (No, I don't know of anything coming, and I don't expect this anytime soon.)

    No. For the simple reason what's a parasite to you, might be a star to them. And above you just mentioned "compliant" parasites continue to prosper. If something makes a network money, they're not going anywhere.
    Last edited by Trust; January 14th, 2011 at 07:05 PM.

  3. #3
    Moderator MichaelColey's Avatar
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    Great questions, Trust.

    Quote Originally Posted by Trust View Post
    1) That these parasite-free networks will continue to grow much faster than the ones that have embraced parasites.

    They look like they're all growing because this business continues to grow. Parasites are just one issue tho. For these up and coming networks, parasite free, great but don't hang your hat on that issue alone. Because they also need to get with it in other areas if they really want to compete.
    Some of these parasite-free networks are seeing growth rates of up to 100% year over year. As near as I can tell from public information from the "big" networks, they're seeing significantly slower growth rates (single digits). The parasite-free networks are definitely on the radar of "big" networks. I talk regularly with people at most of the big networks, and they frequently ask me why affiliates like the other networks. I always point them back to several things: policing of unethical behavior, participation on ABW, affiliate-friendly policies, escrow and fast payment cycles, etc.

    And I totally agree that they need to focus on other issues (trademark poaching, exclusive coupon theft, cookie stuffing, merchant fraud, etc.) as well. Many (but not all) do focus on those other areas, too.
    Quote Originally Posted by Trust View Post
    2) Many more of the larger merchants will move to parasite-free networks.

    In 2010, do you have any examples of a major merchant that moved from one of the major networks to one of the newer parasite free networks exclusively? Not saying there haven't been any, I just can't even think of one. I think some might open up on other networks but still stick to a major if they're there already. Also wanted to add, it is the merchants who decide who they let into their program. So they can be parasite free on any network, even the infested ones.
    I'm not sure when these programs joined or if these are still available elsewhere, but these big merchants are on parasite-free networks:

    AccuQuote on buy.at
    Checks Unlimited on ShareASale
    eCampus.com on ShareASale
    KEEN on ShareASale
    Land of Nod on ShareASale
    LifeLock on ShareASale
    Melissa & Doug on buy.at
    RIU Hotels on buy.at
    Rockler on ShareASale
    Sierra Trading Post on AvantLink
    TaxAct on buy.at
    Thane on ShareASale
    Viator on ShareASale

    Quote Originally Posted by Trust View Post
    3) That one or more of these parasite-free networks will move into the "third largest network" spot (if not higher).

    Anything is possible but if we're looking at the top 500 internet merchants, where people actually shop. CJ, LS, GAN are pretty dominant. So I don't see this happening anytime soon.
    They are for now, but ShareASale, AvantLink and buy.at are all closing the gap pretty quickly. I'm not saying that I see them catching up quickly, but I think they'll get there.

    Quote Originally Posted by Trust View Post
    4) That one or more of the older, parasite-infested networks will realize the error of their ways and eliminate parasites. (No, I don't know of anything coming, and I don't expect this anytime soon.)

    No. For the simple reason what's a parasite to you, might be a star to them. And above you just mentioned "compliant" parasites continue to prosper. If something makes a network money, they're not going anywhere.
    And that's exactly the problem. They're promoting the parasites as some of their best performers. As merchants become more educated and see that they're being fed lies, this strategy will backfire on them. When affiliates have a choice (and I recognize that some types of affiliate sites do and others don't), we'll choose to work with the networks that best represent our interests.

    The first "big" network that takes this brave step, IMHO, will reap big rewards in affiliate loyalty.
    Michael Coley
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    "Education is the most powerful weapon which you can use to change the world." Nelson Mandela

  4. #4
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    It's easy to see those kind of growth rates when you have a small amount of merchants to begin with. 10 --> 20 100% growth rate. CJ has like 2500 merchants. I don't expect them to go to 5000 in a year.

    Most of those merchants you listed are in fact on other networks. Some like Checks Unlimited who are only on one network, made that move many years ago. You have a merchant like Sierra Trading Post on the big bad LS network who are available on Avantlink but you're not supporting them there. I check the site in your sig and your links to Sierra Trading Post are thru Linkshare, not Avantlink.

    "we'll choose to work with the networks that best represent our interests." Change those links.

    That's another problem I touched on. Avantlink have some merchants on CJ and I can only use them on CJ because Avantlink are closed off to things like PopShops, GoldenCan etc. So it wouldn't make sense for merchants to be exclusive to them, when they're closed off to tools affiliates use. And I'm not sure how competitive they can be when they're pretty much cornering themselves into being an Outdoors niche affiliate network. Just look at the new merchant announcements, subforums there. Outdoor, outdoor, outdoor. They can still grow, but not a threat to the majors.

    Buy.at, less than 70 U.S. merchants. That's not closing the gap quickly on networks with 2000+ merchants. And they have a lot of the same merchants on top of that. They have a long way to go to compete.

    As far as your last comment. What argument are you going to put up if those affiliates are all opt in adware, that consumers knowingly want and download vs. past years when it was a little different? If it's not breaking any laws, consumers are ok with it, they're not going anywhere.

    If these new networks truly want to compete, they need to get with it. They need to be more open to tools, they need to me more aggressive in getting merchants (go thru the top 500, target those who don't have a program), they need to round out their offerings etc.
    Last edited by Trust; January 15th, 2011 at 12:39 AM.

  5. #5
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    Tried to add something but the forum was screwing up. Buy.at, was checking and they first posted here in March 2007, so they've been around for almost 4 years. 4 years - 70 U.S. merchants. CJ has 34 new merchants in the last month alone and over the holidays when it's usually slower for new signups. That is not closing the gap quickly.

    Even some of the stuff you said about big networks asking you why affiliates like other networks better and affiliates will choose to work with networks that best reflect their interest etc. Even our own ABW polling doesn't reflect what you just said. The one in 2009 - http://www.abestweb.com/forums/showthread.php?t=129246 Affiliates are still picking CJ over Avantlink and Buy.at.

    "As near as I can tell from public information from the "big" networks, they're seeing significantly slower growth rates (single digits)"

    Not true either, at least not with CJ. 34 merchants in the last month x 12 = 408 a year. That's more than single digit growth.
    Last edited by Trust; January 15th, 2011 at 03:50 AM.

  6. #6
    Moderator MichaelColey's Avatar
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    Quote Originally Posted by Trust View Post
    As far as your last comment. What argument are you going to put up if those affiliates are all opt in adware, that consumers knowingly want and download vs. past years when it was a little different? If it's not breaking any laws, consumers are ok with it, they're not going anywhere.
    Even with totally "compliant" toolbars, they are still negating cookies and intercepting type-in, AdWords, and other traffic. Most affiliates don't like that, and most merchants (if they realized what's happening) wouldn't be so excited. Of course I'm happy that drive-by installs and direct interception of affiliate links are essentially eradicated, but I think we need to go much further.

    Quote Originally Posted by Trust View Post
    "As near as I can tell from public information from the "big" networks, they're seeing significantly slower growth rates (single digits)"

    Not true either, at least not with CJ. 34 merchants in the last month x 12 = 408 a year. That's more than single digit growth.
    I'm talking about revenue growth, not growth in the number of merchants. I'm trying to find a VCLK earnings conference call transcript, but I think that's one place I remember hearing about slow growth.
    Michael Coley
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    "Education is the most powerful weapon which you can use to change the world." Nelson Mandela

  7. #7
    Defender of Truth, Justice and the Affiliate Way
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    I was reading a 2-part post by Jeff Molander a few weeks ago about the obstacles for merchants with an affiliate program pointed out by Wayne Porter years ago and the state of those obstacles today. Several of the points centered around compliance issues, including adware. While I didn't totally agree with Jeff's perception of the currnet state of some of those issues today, it did get me thinking about how much and in what ways things have changed.

    After thinking of specific cases where there has been improvement and then immediately thinking of a countering case repeatedly, I finally arrived at the conclusion.....

    The more things change the more they stay the same.

    The big networks have restricted parasites, but by doing so they have legitimized them.
    Of course legitimizing was pretty much the point of the whole COC thing. I've also always thought that some of the "restrictions" put in place so the software could be "compliant" actually made the software more of a potential threat to other affiliate's traffic than how the software behaved prior to the COC.

    The flip side to that is more and more merchants are becoming educated as to how traffic and sales are being driven by affiliates. An increasing number are not just blinding accepting "compliant" and "legitimate" at face value but questioning what exactly are they paying a commission for. There is still definitely room for more education, but I'm talking with more and more that get it and don't like it.

    Ultimately, this may well be what makes the major networks eventually re-evaluate their policies which allow affiliates to cannibalize merchant's traffic instead of bringing unique traffic to the merchant as the performance-based model indicates.

    A few other areas I've seen some progress in, but still require quite a bit more, which can significantly improve compliance issues in the industry (not just parasites) include:
    • Companies investing more in their compliance departments/efforts. This includes resources in staffing, technology, developing protocols & procedures, ect
    • Giving compliance departments more autotomy to do their jobs (probably one of the ones that needs the most work with regards to having compliance be truly meaningful)
    • Sharing of information between companies
    • Compliance being more about the quality of the product instead of PR
    • Compliance efforts being run in tandem with Quality Assurance efforts (another area that needs much work yet but can have a very significant impact)
    • More choices for merchants and affiliates (i.e. market influencing policy and delivered services) IMO this has always been one of the most under utilized realities for shaping policy in the industry. So while this may be under utilized, the opportunities have increased.
    • A greater understanding by a wider range of people of the techniques being used by the not so honest. It's hard to fight what you don't understand.
    Overall, as the industry has grown and matured there really isn't much of a choice but to start taking compliance more seriously.

  8. #8
    Analytics Dude Kevin's Avatar
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    Trust said: That's another problem I touched on. Avantlink have some merchants on CJ and I can only use them on CJ because Avantlink are closed off to things like PopShops, GoldenCan etc. So it wouldn't make sense for merchants to be exclusive to them, when they're closed off to tools affiliates use. And I'm not sure how competitive they can be when they're pretty much cornering themselves into being an Outdoors niche affiliate network. Just look at the new merchant announcements, subforums there. Outdoor, outdoor, outdoor. They can still grow, but not a threat to the majors.
    I respect your right to spend your time as you choose, and getting involved with another toolset might not be in your best interest overall, but I believe Avantlink has the best toolset out there. Personally, I have no need to use Popshops or anything else. I made a $40 investment in a Wordpress datafeed plugin, and as a result, have no need to pay monthly fees etc.

    Granted, I am fortunate that Avantlink caters to my niche better than any other network. Avantlink is NOT currently in a position to fully meet every affiliates needs from a merchant standpoint. I get that.

    My takeaway is that if more merchants DID work with a technically savvy network like AL, we wouldn't need to add layers of cost to the channel, like supporting 3rd party datafeed scripts that lack technical knowhow, proper affiliate and merchant support, and, quite frankly, acceptable uptime.

    I hope that SAS and Buy.at take a serious look at the tools Avantlink has provided. If they choose not to, I hope that merchants choose to instead.

    (Sorry AvantLink... I know I said that backwards from your perspective, but it's my initial reaction)
    Kevin Webster
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  9. #9
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    "I respect your right to spend your time as you choose, and getting involved with another toolset might not be in your best interest overall, but I believe Avantlink has the best toolset out there."

    For sake of argument, let's just say they have the best affiliate toolset known to man. This does absolutely nothing for me because when I make a page, I want all the products to flow together nicely. When I make a page for a specific product, I like to use different merchants to give shoppers a choice. Great toolset, nice, for those that want to use it. But I use PopShops.

    Part of being affiliate friendly is listening to your customers. When there was a thread on this awhile back, ( http://www.abestweb.com/forums/showthread.php?t=115570 ) it's pretty clear affiliates wanted them to open up to tools affiliates use like PopShops. Avantlink is the only network that doesn't, all their competitors do. Like I mentioned before, there is a merchant I get daily sales for on CJ thru PopShops, that are also at Avantlink. They can have those sales if they ever decide to really get competitive. And what is it we're all here to do? Make money. It opens up the merchants on the network to many more affiliates that find products/merchants thru those tools. I lost count of how many new SAS merchants I added last year by using PopShops alone.

    It's always been very simple, listen to your customers.
    Last edited by Trust; January 20th, 2011 at 11:39 PM.

  10. #10
    Analytics Dude Kevin's Avatar
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    That's fine, Trust. I was attempting to make it clear I wasn't trying to sway you. Just giving my opinion.

    And in the process, calling out AvantLink and merchants a little bit.

    Your points are certainly valid. I would just add that it's my personal opinion that monthly fee datafeed procs aren't necessary, if we all chose to get our act together. That's all.

    A unified datafeed structure might be a great tool, but I work in another industry that deals with them (product feeds) too, and it's even worse. In fact, it's MUCH worse.
    Kevin Webster
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  11. #11
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    Merchant thoughts?
    I believe you all have valid points, but what does the merchant community think? I want to know if it is still a hot topic for them. I just saw that AMEX has launched a toolbar called inSite. Is it because they are doing it "ethically"?

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