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January 12th, 2014, 02:50 PM #1Critique of CJ Coupon white paper
Here are my comments on this paper from CJ advocating coupon affiliates: http://engage.mediaplex.com/rs/media...port_Final.pdf
1) Major Conflict of Interest: Not only is a couponmountain owned by CJ, but CJ as a network benefits even more from third-party coupon sites. Retailmenot for example, claims to have 2% of all online ecommerce during the holiday period and CJ is getting a cut of this. This is an enormous amount of commission revenue. From their public filings, in 2012 retailmenot had about $150m in revenue, assume that CJ handles about 30% of that: assuming retailmenot gets a 6% commision this translates to $150/.06 = $2.5b in sales. Assuming a CJ network fee of 2.5% implies CJ is making about $2.5b*.02 *.3 = $15m from retailmenot alone! It's for reasons like this that we treat the tobacco research from philip morris with skepticism ;-)
2) Irrelevant stat #1: "43% of shoppers compare prices." Since most coupon searches are 'brand + coupon', most shoppers have already decided to purchase at a particular merchant, coupon sites operate in a different part of the purchase funnel (They're in the part of the funnel where you're just about to lose the sale once the customer sees there might be a coupon available).
3) Sample Bias: 1,000 shoppers at couponmountain are already coupon users so it's no surprise 98% find coupons an 'essential' part of the shopping process. If I were to survey members of the NRA, I'm sure I'd find 98% support conceal and carry gun permits.
4) Assertion that coupon sites help customers compare offers from different retailers. Like most coupon sites, couponcabin gets 90+% of their traffic from 'brand + coupon' terms (only 5% of couponmountain's traffic comes from people who start their search at couponmountain according to alexa). Retailmenot has an even lower number (only 2.5% go to retailmenot first) so it's clear that customers are not going to coupon sites first, looking for a deal and then going to the merchant.
5)Assertion that coupon sites help introduce customers to new brands. See point #4 above, most people are already searching for a particular 'brand + coupon' so they're not looking for a new merchant. However, you'll notice most of the brand + coupon landing pages on coupon sites do have competitors listed - so in this sense they are, but it's also a good reason for a merchant to take steps to ensure customers who are about to make a purchase do not wind up on a coupon site.
6) "Research that shows that even high income shoppers use coupons". This is an example of how couponing online is broken. The whole point of coupons is to segment the marketing into customers who are less sensitive to price from those who would only purchase with a coupon. This is why grocery stores make people cut coupons out of the newspapers: high income people won't bother with this task. This statistic suggests the retailers are giving up margin unnecessarily (in addition to wasting commissions on affiliate sites).
7) "Key Takeaways: Retailers should view coupon sites as customer-acquisition and retention tools": Per my earlier point that 90+% of customers coming to coupon sites are getting there based on brand + coupon terms (and are most likely existing a retailer's checkout process), the coupon site should not get credit for driving a new customer since the retailer already brought that customer to their site through other marketing channels. Also, when looking at the data it's likely you will find a large number of new customers used a coupon from an affiliate, however, they didn't originally come from the affiliate, so you must compare %new customers using coupon codes with % new customers coming in through other channels to see if they are different. Even better look at the number of coupon affiliate customers that first entered your site through the coupon affiliate. I'm certain that every IR500 retailer will show less than 10% were new customers coming from coupon affiliates (hence my recommendation to set their commissions to 10% of your base rate)
There's a lot more wrong with the white paper, but I think I made my point... It's a propaganda piece that would never survive the peer review process.
January 12th, 2014, 03:40 PM #2
Are you saying that CJ should not work with coupon sites?
Or are you saying that CJ should not own and/or have financial interests in coupon sites?
If a content site with original writing displays a coupon code within
a paragraph of text or with the text code or with a graphic containing the coupon code along the left or right side depending on the layout, is that site suddenly a coupon site?
So should all coupons be banned? Some coupons be banned?
I just took a look at Coupon Mountain. It looks like a list of the latest coupons on a variety of products.
That is the type of site I wouldn't want to make.
I like to write and when affiliate merchants provide me with a product code
that displays an attractive picture of the product I would incorporate that
into my site somehow.
Getting back at coupons: as long as the same codes are available to me so
that I can place the code adjacent to the product, then the playing field is level and I hold no grudge against coupon mountain or retaildot.
If other affiliates are striving to copy a site like Coupon Mountain, good luck to them
Toolbar sites or sites where visitors unknowingly download some code that will direct them back to the downloaderee scare me more than coupon sites.
As long as CJ makes those coupon codes available to all then let them pitch coupon sites to affiliate merchants/retailers.
Last edited by Rhia7; January 12th, 2014 at 03:47 PM.
January 12th, 2014, 03:52 PM #3
January 12th, 2014, 05:05 PM #4
- Join Date
- April 6th, 2006
chris7530, you seem to have personal vendetta against coupon sites.. posting TOS violations and now giving your opinion on published documents.
Care to explain why..? Are you an affiliate or a merchant..?
You mentioned in another thread that you used to manage an in-house program for a large ecommerce site
I'm just curious why the attacks in the past few days.
January 12th, 2014, 05:09 PM #5
- Join Date
- April 6th, 2006
And just in case you're wondering, no I'm not a coupon site.
Like every part of affiliate marketing there are good and bad players - whether it's content (scrapers), coupons, or loyalty programs. Don't even get me started on software.
However when I see a TOS violation, I report it to the merchant, and it usually gets addressed. I don't join a forum and make it my first post.
Last edited by teezone; January 12th, 2014 at 05:16 PM.
January 12th, 2014, 05:19 PM #6
January 12th, 2014, 05:23 PM #7
January 12th, 2014, 05:43 PM #8
January 13th, 2014, 02:39 PM #9
January 13th, 2014, 04:56 PM #10
January 22nd, 2014, 01:21 PM #11
Bottom line, coupons and coupon sites make merchants money. If a few bucks off the already inflated price is what it takes to make the average consumer feel like they got a deal, then so be it. Offering coupons is a fine tuned system. Most merchants are fully aware of how to benefit from coupons and coupon sites. Coupon or not, it still sells for much more then what it's worth.
For consumers: It's buy now so I can get on my way and let me save a dollar if I can.
Coupon sites and like services exist forever. It's unfortunate that they hijack hard earned referrals. But common, it's really what drives most online sales. It's a business model making people billions. At the end of the day, its all about simplicity for the average consumer. Not many people out of this forum will ever care about an affiliates struggle to sell a product.