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  1. #1
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    I really don't get it. If a merchant gets traffic from an honest affiliate and makes a sale, then that's a sale. Dropping the parasite won't reduce sales from honest affiliates.

    Is it the invisible cookie stuffers that make the deal financially beneficial to the merchants? How can that be? Are they making more money even though they are paying unearned commissions? Or is it the competing ad pop-ups that feed more traffic and make more sales?

    I read the sales pitches from parasites, and they make it look so good. But I would think that savvy managers would be able to do their own analysis. If it really increases the bottom line, many will never change. If the reality is that clean merchants make as much or more money than those with parasites, there is an opportunity to get the word out.

  2. #2
    Moderator MichaelColey's Avatar
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    Follow the money, and you can usually figure out why things that don't make sense happen.

    Parasites never benefit the merchants.

    But sometimes the affiliate manager is compensated based on volume or growth of the affiliate channel sales. When parasites intercept traffic from other affiliates, it's a wash. When they intercept type-in traffic, search traffic, PPC traffic, and traffic from other online marketing, it increases the "affiliate sales", which increases the affiliate manager's bonus or compensation. That's why some affiliate managers embrace parasites.

    Some other reasons affiliate managers might allow the parasites:

    1) They don't know better.
    2) They don't realize that the affiliate is a parasite.
    3) Someone higher up in the company bought the sales pitch and required them to work with the parasite.
    4) The affiliate manager just doesn't care or doesn't have time.

    A knowledgeable, honest affiliate manager should know to avoid parasites.

    I think one key to fighting the parasites is to educate the right people. Affiliate Managers need to know the impact on other affiliates and other marketing channels. Other people in marketing and upper management need to know that their results are being skewed by the parasites.
    Michael Coley
    Amazing-Bargains.com
     Affiliate Tips | Merchant Best Practices | Affiliate Friendly? | Couponing | CPA Networks? | ABW Tips | Activating Affiliates
    "Education is the most powerful weapon which you can use to change the world." Nelson Mandela

  3. #3
    2005 Linkshare Golden Link Award Winner  ecomcity's Avatar
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    Your correct Michael and it is a oxymoron that any "incented" BHO could ever benefit a merchants bottom line. It's the network BIG LIE as many of those AM firms are operated directly by the networks and their DMA/IAB masters.

    It's a scheme to cookie every merchnat sale on the internet and the more loss leader coupons/rebates the less the merchant pool can make from even legit non-incented sales. Y-2005 is the year real affiliates and real AM's need to reach out to the actual merchant's management and educate them on cookie stuffers and BHO's, threaten pulling links, and pull the rug out from under the AM firms nixing legit affiliate sales.
    Webmaster's... Mike and Charlie

    "What have you done today to put real value into a referral click...from a shoppers viewpoint!"

  4. #4
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    Now I hate parasites as much as the next person well OK more but their are different appeals to them that can benefit a merchant.

    1) Consider whenu, gator or 180's model of popping up on a competitors domain when you dont have much traffic is very enticing for merchants and paying commissions on those sales is no less desirable than if they had used an "ethical affiliate" NO? Getting traffic is number one as most affiliates will tell you here and then hopefully, you can provide enough info and enticement for a purchase to be made.

    2) The appeal for others such as most top moxie apps, is purely the numbers they claim as membership, the BIG sales numbers the networks hype to them, and the hype of how "those users are so loyal" to either their sites or the parasitic software.

    What is unknown to the merchant is how much of that membership even knows they are a member (drive bys and security hole installations and hidden pops can keep users completely in the dark) or how much of the membership is shopping from the website or from the parasitic program.

    Hey, let me do drive bys of parasitic software and then claim commissions on everybody going to BIG merchants sites directly and I'll bet you I could have BIG sales numbers too.

    Ask yourself, if these companies members are so loyal and most even pay a referral fee for getting others to sign up, why would they need to resort to doing drive by downloads and installs via security holes? It doesn't make sense at all. You can bet that the membership numbers they report include those installed without consent and I'd speculate that thats the majority of their users in most cases.

    Cash back offerings has been hyped pretty successfully by networks and parasites that "it makes a parasites users very loyal". It's hype and a complete croc and since I recently provided and incintive cash back offerings site myself, believe me, I know what I'm talking about. The signup rate is absolutely horific but they do still make purchases and conversion rates are more than acceptable!

  5. #5
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    "When they intercept type-in traffic, search traffic, PPC traffic, and traffic from other online marketing, it increases the "affiliate sales", which increases the affiliate manager's bonus or compensation. That's why some affiliate managers embrace parasites."

    I know I've said it a million times, but it bears repeating.

    Any AM who "embraces" parasitic "affiliates" is EMBEZZLING from their employer, whether wittingly or not.

    Let's use the right word

  6. #6
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    OK, things are starting to make sense. Seems like the merchants probably don't do much of their own analysis before doing busines with a parasite. Also, there are merchants who automatically approve any affiliate application and get flooded with parasites.

    So it's ignorance, apathy, and AM pay scale. Not any real benefit. Maybe some other reasons like too busy to police their programs even if they wanted to.

    Educating merchants in that environment is a tough challenge.

  7. #7
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    Speaking from the merchant side of the fence, I think you will find that it is a combination of any of the following:

    * It's an education problem. There are so many merchants out there that have no clue that affiliates such as eBates and 180 are bad for their programs.

    * Many merchants outsource the day-to-day management of their programs to the LinkShares and CJ's of the world. Obviously, these guys aren't going to be the ones to bring this to the attention of their clients.

    * I'm sure that there are AM's out there who are aware of the problem, and knowingly keep their management in the dark in order to make their programs look good. You would hope they are the minority of this group.

    * In many cases, the Marketing group for a multi-channel retailer is responsible for the P&L of their website. I've spoken and emailed with a lot of these people about the problem with parasites, and they simply can't see the forest for the trees. They see one of their marketing programs putting up huge numbers, and they simply can't believe that it's revenue they would be getting anyway. I was emailing with the Director of Online Marketing for a fairly large retailer about eBates last Fall, and she said to me, "Well, your results look compelling (after we shut them down), but they make up too much of our revenue to just turn them off."

    You have to admit, there aren't too many people in that position who are willing to admit that they are throwing good money after bad.

    We made the very difficult call to not only cut those affiliates loose last year, but also fire the company that was managing the program for us.

    You guys are in a tough position as affiliates, but I think you're finally starting to see some public backlash. State legislation and action by the FTC can only help, and I am thrilled to see the groundswell of support that alternate browsers like Firefox are getting. Microsoft has to take some of the blame here for being the vehicle that many of these guys work through.

  8. #8
    2005 Linkshare Golden Link Award Winner  ecomcity's Avatar
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    Good summary there Finishline.....kuddos to this move.
    "We made the very difficult call to not only cut those affiliates loose last year, but also fire the company that was managing the program for us."

    Problem is that a handful of absolutely lazy AM firms handle the majority of merchant programs. They have gotten away for years without a bit of hard work or creativity necessary to guarantee their clients get ever increasing conversion differentials between generic traffic and targeted affiliate traffic. They have done this from day one courting e-mail spamming operations. Then come the SERP and browser spammers needing no more then the name of the merchant or a handful of coupons.

    They also work in cross purposes to the merchant employer by selling off the customer information to a slew of competitors without the merchant realizing the info peddling is a lucrative sideline. Merchant's are at fault for turning over running their trademarks, image and online sales operations to these AM firms. Firms, who do nothing more then pimp them to the Adwhores and spammers.

    Want to deny this?? Then name this group 10 major merchants who actually use payroll employees to manage their programs. The disconnect and chasm, between the actual merchant management responsible for P&L/Sales and their idiot smoke-n-mirrors marketing/advertising group, is the root cause of their getting raped by the Adwhores of the affiliate industry.

    Absolute fact: Merchants could fire their 3rd party hired gun AM firm tomorrow and not effect profits from online sales 1% for the entire year of 2005. Likely honest senerio is these firms milk the merchants Ad budget by stuffing every profit killing "incent" affiliate and cookie stuffing domain and BHO operators up the the butts of the dimm whit merchants. The shoppers would kiss the merchants and continue to buy if they removed the Adwhores "tricks for cookied clicks" from the equation. By year end they'd actually be ahead in their bottom line if they put an employee in charge of their program capable of marking "trickster" or "value-add" next to every affiliate in the program. Then reduce the "trickster's" commission rate to drive them out!

    Merchants listen up! Fire your AM firms if they can't guarantee affiliate traffic converts better, or at the same level, of generic site traffic. Your paying commissions for focused, filtered and pre-conditioned traffic BEFORE it clicks through to your site. All else is a crap shoot without toilet paper.

    You don't need to compensate me for this advice. Just firing the existing AM firms with a stranglehold on this corrupt industry would be compensation enough. My targeted traffic will automatically earn me a 400% increase in commissions as I'd expand my merchant base & sites.
    Webmaster's... Mike and Charlie

    "What have you done today to put real value into a referral click...from a shoppers viewpoint!"

  9. #9
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    I believe many of these merchants insist on
    keeping 180 because they do get them many sales
    that they otherwise wouldn't get. I've just been
    dealing with a merchant that has 180 as an
    affiliate, tried explaining to them how all they
    do is popup on others sites and steal the
    commissions of other affiliates, also just tried
    explaining to them yesterday that traffic they
    would normally get on their own and not have to
    pay any commissions on - that 180 is popping up
    on that also so they are having to pay
    commissions on those sales also where otherwise
    they wouldn't have to. But this merchant insists
    on keeping 180, they will not get rid of them.
    I think that is because 180 is also popping on
    all of their competitor domains, so that they
    are seeing sales here where otherwise they
    would not be getting these sales. I am no
    longer promoting this merchant, but it still
    affects me, because if I promote the competitors
    product 180 is still popping up and sending my
    traffic to this merchant instead. It's a win-win
    situation for the merchant affiliated with 180,
    and a lose-lose situation for this merchants
    competitors, and a lose-lose situation for me,
    and there is nothing I can do about it. 180 is
    popping up on this merchant's domain and also on
    all of his competition's domains. 180 is signed
    up with this affiliate program and stealing all
    of the commissions for themselves. I think this
    is how 180 makes most of their money, by
    signing up for affiliate programs themselves,
    they probably make much more money this way
    than through other clients using their services.

  10. #10
    2005 Linkshare Golden Link Award Winner  ecomcity's Avatar
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    Wayne you can safely post the merchnats name here and see if we can't pressure the real merchant management to fire the wanks for bleeding them dry.
    Webmaster's... Mike and Charlie

    "What have you done today to put real value into a referral click...from a shoppers viewpoint!"

  11. #11
    ABW Ambassador
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    I want to make sure I get my last check from
    them this month first. Don't want to piss them
    off and not get paid.

  12. #12
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    finishline, maybe an analogy from the physical world would help your friend understand the parasites.

    * One of his dealers sends a mass snail mail sales pitch promoting his products. eBates hijacks the mail truck and substitutes their own coupon and order address for the one in the mail piece. Pure theft. No actual change in expense for the merchant. He just sends the commission to the thief.

    * The merchant invests in an advertising campaign providing a toll free phone number. eBates cuts a deal with the phone company to intercept all the calls and forward all the orders thru it's own account. Now the merchant is paying commission on sales generated by it's own advertising budget designed for direct customer acquisition. Sales are falsely credited to eBates, who made no investment in the campaign. Customers made purchase decisions based upon the campaign. There is no change in the order rate. The merchant, however, pays unneccessary commissions.

    Would your friend understand or care about such an explanation?

  13. #13
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    Mike, I'm glad you said the lousy AM's were only a handful. There are several AM's that I trust. In fact, I have dropped merchants when they ended their relationship with one of my preferred AM's.

    If I find a new merchant to promote and it is managed by one my trusted AM's, I sign up immediately. Otherwise, I spend a little time researching the parasite vendor lists to check them out.

    There really are a few people in the industry trying hard to work honestly in a corrupt environment.

  14. #14
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    quote:
    Originally posted by raywood:
    finishline, maybe an analogy from the physical world would help your friend understand the parasites.


    Well, this was several months ago and I was participating in a private message group for online retailers. I simply shared my experiences with the group (as did others), how we tested on our end, what decisions we ultimately made, and the results we saw.

    I don't think analogies really make a difference at this level. It's all about revenue,or perceived revenue in this case, and most merchants will tell you that they "get it", but actually taking action is a completely different matter.

    I won't kid you here - I was more than a little nervous when we completely shut down what "seemed like" a hefty revenue stream, and you definitely need to have faith in your convictions to do that.

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