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  1. #1
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    Incentive Sites
    Could someone please explain to me the pros and cons, mainly the cons, of allowing incentive sites into a SAS program that Iím getting started.

    Iíve always been on the affiliate side and my sites have always evolved around content, along with product pages. So I have no experience on incentive type sites. Iíve searched through previous posts, but I just cant get a good understanding on why some have problems with incentive sites and others donít.

    I would appreciate someone providing a clear explanation on why I wouldnít want incentive type sites in my program. BTW, my program will be selling products for a commission if this matters to someone who wants to help with an explanation.

    Thanks for any feedback on this.

  2. #2
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    I think it's mainly because users coming from incentive sites are just 1 time, low quality users. Meaning they will probably never go to your site again, unless they get paid for it again.

  3. #3
    Lite On The Do, Heavy On The Nuts Donuts's Avatar
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    Give us an example of what you mean by incentive site... the term gets used in several different contexts... bho / loyaltyware, coupon sites, pay-per-view, etc...

  4. #4
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    Donuts,
    I'm not sure of how the different examples you mentioned work, but I was thinking of a site that for example offers cash back. So I quess if I offered a 20% commission then the incentive site would then turn around and offer their member 10%, etc. back as cash. Does this example make sense? And if so what would be the disadvantage to me as a merchant, or also any disadvantage to my other potential affialites.

    I'm basically wondering how it would potentially hurt me and I also dont want to tick off any other potential affiliates by allowing an incentive site that is frowned upon by other affiliates into my program.

    Thanks

  5. #5
    2005 Linkshare Golden Link Award Winner  ecomcity's Avatar
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    Incentive affiliates, in all forms, are the absolute worse offenders in abiding by netowrk or merchant TOS. At the root of every commission con-game run on this industry was a core group of sleazy incentive affiliates. I've studied and commented on this very observation since 1998.
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  6. #6
    Lite On The Do, Heavy On The Nuts Donuts's Avatar
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    For me, the issue isn't the money back or whatever else they use to persuade a customer to become interested in learning more about buying from you, it's where that customer was when the event happened. As someone new to money-back incentives, I'm guessing you're picturing ethical people like yourself using money-back as a persuader. In practice, most money-back incentive programs are software download programs under the guise of "making it easier for the customer to remember or enable use" - but these software apps are triggered when someone lands on your site. Most often they are triggered to do the "reminding" during the check out process. In so doing, two things are lost / hurt:

    1) Your own efforts to get this visitor to visit (email, direct mail, branding, ppc add, seo, referral program, etc) no longer gets credit for the sale - the money-back application's cookie will make this sale report, and appear, to be from efforts they made. Their efforts consist of getting junk on everyone's PC then firing off a cookie as they buy. Generally, their efforts do not include relevant content, timely discounts and offers, ppc ads, community bridges (like blogs) and other "building" type activities that affiliates perform. What they do is not customer acquisition, but you will be paying them a customer acquisition commission. This will injure your in-house ROI.

    2) If there was a third party that brought the customer to you (like an affiliate or advertising partner), they are not rewarded for what has occured. When the reward for buying traffic is lessened, so is the appeal of your program. And it will suffer as affiliates come to realize you don't convert well.

    To us, marketing means bringing you interested buyers. To you, you'll pay a commission if we point them your way. To money-back apps, they just want to pluck credit for the sale at the buying moment (or just before) and technology has made this easy and prevalent.

    If you want to pay a commission for someone who's in the middle of checking out, you can choose to do that. That choice has far reaching repercussions for your other partners - folks who believe they will be rewarded for bringing you buying traffic - in my opinion, the last people you want to demotivate - because they are the people that bring you targeted traffic - and you should focus on paying the right person for their contribution to your success.

  7. #7
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    Quote Originally Posted by Donuts
    For me, the issue isn't the money back or whatever else they use to persuade a customer to become interested in learning more about buying from you, it's where that customer was when the event happened. As someone new to money-back incentives, I'm guessing you're picturing ethical people like yourself using money-back as a persuader. In practice, most money-back incentive programs are software download programs under the guise of "making it easier for the customer to remember or enable use" - but these software apps are triggered when someone lands on your site. Most often they are triggered to do the "reminding" during the check out process. In so doing, two things are lost / hurt:

    1) Your own efforts to get this visitor to visit (email, direct mail, branding, ppc add, seo, referral program, etc) no longer gets credit for the sale - the money-back application's cookie will make this sale report, and appear, to be from efforts they made. Their efforts consist of getting junk on everyone's PC then firing off a cookie as they buy. Generally, their efforts do not include relevant content, timely discounts and offers, ppc ads, community bridges (like blogs) and other "building" type activities that affiliates perform. What they do is not customer acquisition, but you will be paying them a customer acquisition commission. This will injure your in-house ROI.

    2) If there was a third party that brought the customer to you (like an affiliate or advertising partner), they are not rewarded for what has occured. When the reward for buying traffic is lessened, so is the appeal of your program. And it will suffer as affiliates come to realize you don't convert well.

    To us, marketing means bringing you interested buyers. To you, you'll pay a commission if we point them your way. To money-back apps, they just want to pluck credit for the sale at the buying moment (or just before) and technology has made this easy and prevalent.

    If you want to pay a commission for someone who's in the middle of checking out, you can choose to do that. That choice has far reaching repercussions for your other partners - folks who believe they will be rewarded for bringing you buying traffic - in my opinion, the last people you want to demotivate - because they are the people that bring you targeted traffic - and you should focus on paying the right person for their contribution to your success.
    Donuts,
    This was the exact type of explanation I was hoping for, Thank you so much. I completely understand now and will be choosing to not allow incentive sites.

    Do you and other affiliates prefer to see ďno incentive sites allowedĒ written in the merchant terms of agreement section at SAS?
    As an affiliate Iíve never paid much attention to this in the past, but I will in the future. Now as a merchant, I think it would be beneficial to be right out in the open with this; does it make sense to add this to the merchant terms of agreement so everyone can see it?

    Thanks again for the explanation.

  8. #8
    Defender of Truth, Justice and the Affiliate Way
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    Just a point to clarify for stragglers who may wander into this thead. Since this was posted in the SAS forum, I am assuming this is a SAS merchant. Being on SAS, the software end of the incentive site debate doesn't really factor in here since Brian doesn't allow those types of incentive sites into SAS to begin with.

    Just didn't want anyone maybe misinterpreting and thinking SAS was now allowing that into their network.

  9. #9
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    Quote Originally Posted by Kellie aka Ms. B
    Just a point to clarify for stragglers who may wander into this thead. Since this was posted in the SAS forum, I am assuming this is a SAS merchant. Being on SAS, the software end of the incentive site debate doesn't really factor in here since Brian doesn't allow those types of incentive sites into SAS to begin with.

    Just didn't want anyone maybe misinterpreting and thinking SAS was now allowing that into their network.
    Thanks for the clarification Kellie aka Ms. B.
    And yes, I am a very new SAS merchant; Iíll be announcing the program soon. Itís good to know the software type incentive site is not allowed into SAS.
    So if an incentive site is not software driven, are there any other negative aspects that I should think about either for myself as the merchant or for my potential affiliates?

  10. #10
    The slot machine that IS paid! Billy Kay's Avatar
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    deleted by billy
    i was too rude

  11. #11
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    What exactly is a software driven incentive site? I thought there were only ppc, ppv, ppl, etc.

  12. #12
    Lite On The Do, Heavy On The Nuts Donuts's Avatar
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    Kellie - excellent point! The way I read threads (new posts) I often forget which forum I'm in. I love SAS for the screening they do, as Kellie pointed out.

    Hans - "What exactly is a software driven incentive site?" - here's one example:
    http://forum.abestweb.com/forumdisplay.php?f=168
    (that area of ABestWeb is dedicated to exposing parasitic applications)

    Emione - you'd be wise to consult with the folks at SAS for guidance on posting yur terms. I assume they have templates for you to start from and in any case, you can review the many other SAS merchants' policies for ideas.

  13. #13
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    Thank you to everyone for all the feedback, Iíve got good points and comments to take into consideration from both sides of the isle.

  14. #14
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    If I were a merchant, my main concern about cash-back merchants would be this: Do they really add value? Wouldn't many of these customers and orders have been yours anyway, without having to pay a commission? Even if the merchant doesn't use a BHO to take the sale, there's a pretty good chance that the customer was going to buy from you anyway.
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  15. #15
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    I came across this thread in Google, i am very supprised that you havnt had any Incentive sites drop in and defend themselves. (that kind of looks like most are as you discribe)

    I on the other hand am not in this game to rip merchants off, we run a network of very sucessful incentive sites, Namely cashback sites, and have just launched our new model which is the first of its kind, this is a price comparison site that also gives High cashback, Typicaly 90% of the commission received.

    The main area were merchants suffer with Cashback sites is on lead or veiw programmes were the user does not have to make a purchase to trigger a commission, or were the commission is higher than the initial payment the user has to make to trigger the commission.

    This works in the Merchants favour if their aim is brand recognition and the Cashback Affiliate has their own abuse monitoring in place (but though this can give the merchant what they want in the short term it will not give them value for money in the long term)

    Where the merchant is offering a percentage of the sale, the merchant is quite safe, as commission is only paid for the sale the merchant is after, and at the price the merchant has decided the sale is worth.

    As for adding value to the user, the user is in effect saving money on their purchase, as Cashback sites become ever more popular increasing the percentage of online sales going through this sort of site. forward thinking merchants will start to realise, that they do not need to spend money on sales and promotions as incentive sites are already in effect giving the consumer a sale price.

    The incentive affiliate still has to promote their site, adding content blogs seo optimization, just the same as any other affiliate, the diffence is that we feel that buy giving something to the user, encourages them to return each and every time they need to make a purchase.

    The down side of this to a Merchant that does not want to work with an Incentive site is the user that wanted to buy from that merchant tends in 80% of cases use a similar merchant that will work with the incentive site and so receive Cashback

    Through our sites we drive over a million sales a month and work very closely with our merchants, should they ever have a problem we bend over backwards to work it out, in return our merchants do the same with us.

    As with everthing else, whether something is good or bad depends on the people involved and the morality with which they conduct themselves, Take each site on its own merit and make indervidual decisions

  16. #16
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    C-Plus, I think Michael Coley's post just before yours is exactly on point. I agree that many price comparison sites add value for merchants, but my experience is that few incentive sites, even those configured or promoted as price-comparison sites, actually bring new customers to merchants (or recapture customers who might otherwise have been lost). Instead, 90% or more of all incentive sites, and perhaps 95% of transactions credited to incentive sites, probably represent no value-added for the merchant).

    Part of the problem is that many of the "bad actors" in this space try to disguise the real nature of their businesses, and falsely claim to be another kind of service. The "parasites" are awful in this regard: they claim to be price-comparison sites, rating services, shopping malls, etc. in order to collect affiliate commissions when in fact they did not contribute ANY value to either consumers or merchants.

    Even assuming that everything you say is true, and that you would provide genuine value to a merchant -- if the merchant asked me I'd probalby still recommend that they exclude your "incentive site" because if they accept ANY incentive sites, then they will need to increase their compliance costs, and some prospective affiliates will assume that any merchant who accepts any "incentive" sites will also accept (or be tricked into accepting) "parasitic" affiliates.

  17. #17
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    I totaly Agree, nearly every Cashback Site going promotes itself as a price comparison site, and if a site promotes itself as something its not, then merchants shouldnt allow them to promote their programme, but i am talking about the honest incentive sites, that do more for their members. this thread seems to forget they exist.

    Our New model i mentioned, is an actual price comparison site down to product level. offering reviews of merchants and products. though it is possible to earn cashback from us, with this new site we have down played that side of the site, and it is only mentioned in 2 small text links on each page, The site is open for everybody to use but only members can earn cashback.

    On top of that we have designed the site so that merchants that do not wish to be incentivised can still be promoted on it, those merchants are hidden from logged in members along with all their products, so it isnt possible to earn cashback from those members.

    We work with a number of merchants on our cashback sites that do not usually work with cashback sites, although this isnt the norm it does testify to the reputation we have amonst the merchants we deal with, and underlines the point that each site should be taken on merit there are good and bad publishers in every style of affiliate marketing, some styles admitedly atract more of the bad than others, but that doesnt mean they are all bad.

    The other point you raised that if a merchant wasnt on an incentive site they would have in 95% of cases got that customer anyway, This doesnt follow as i said in my first post that we have found that in 80% of cases if the merchant they want to buy from isnt on our site , they buy from one that is.

    This means the merchant has lost that sale completly, and if the new merchant doesnt mess up the order and has a good follow up customer service they may have lost that customer forever. the customers will always go with whats best for them, if they find that certain merchants are never available through Cashback sites then they find another merchant that is and can provide the same service or product.

    The only merchants that this may not affect are merchants that sell their own brands of products, as these wont be available from other merchants.

    But if someone wants to buy an Indeset Washing Machine they have a multitude of merchants to chose from, why would they buy it from a merchant that isnt promoted on a cashback site, when there is another 4 - 8 merchants that are, from whom they can receive cashback.

  18. #18
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    I think whether a person would have made a purchase through a particular merchant regardless of whether they were on the cashback site is largely dependent upon the size/reputation of the merchant and the ability to buy the same products elsewhere.

    For example, I recently added a merchant that sells the exact same products at a comparable price as about 15 other merchants in SAS/Linkshare/CJ. But I added the merchant because they posted on ABW and seemed to be doing a solid job of launching "the ABW way." My members had never heard of the merchant before and were not even looking to buy this particular type of product. But I did added the merchant and did a little promoting. Within a few days, I had sent about 10 sales. These were DEFINITELY not sales that the merchant would have gotten in any other way--even through SEO or PPC.

    On the flip side, I think there are some merchants that would be 90% likely to get the sale without my coupon or my cash back or whatever. And those tend to be the merchants that only pay me about 1-2% anyway and I don't promote very heavily.

    I don't like to jump in to "defend" cashback sites because I truly don't trust a whole lot of them. But I do think there are some pros depending on the merchant and products involved.
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  19. #19
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    Another factor that's always put me off working with incentive sites, be they cash back, percent to charity or the odd percent to God sites out there is that there's no transparency and no guarantee that any money goes anywhere.

    If somebody comes to me through one of these programs, spends four grand and either doesn't get paid their chunk, or can't find any record of their "contribution" who are they going to be pissed at? They'll likely come to me wanting me to pressure the program "I'm participating with" to send their check or find out if God really got paid. When you add in the questionable value and frequent software angles, I'm just not at all interested.
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  20. #20
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    As you brought up the Charity angle, i will explain how this is done one the site we have that supports charities.

    We do not add charities to our site, they must register themselves, the get there own account and can log in to see what donations have been made, when and how much, unless the user donated anonymously they can also see by who.

    We do not automatically take donations from members, members receive their full Cashback value and when claiming a payment get asked if they would like to donate. if they do then they choose the charity they wish to donate to and how much.

    they then proceed to complete their claim and receive a payment for their full cashback value less their donation amount.

    the charities also get given and affiliate link and receive a guaranteed payment for each member they introduce that reaches their cash-out level.

    Our system is totally transparent across the board, we have also joined the charities fund-raising professional body for the UK. these monitor members to make sure everything is as it seems.

    We do run a similar site in the US, but the US cash-out have a professional regulatory body to monitor fundraisers so that is lacking on the US site

    regulatory. I do agree that so many Cashback Sites do have a bad reputation that is totally deserved, in the UK it isn't for BHO's though, its for abuse of the merchant offers, or folding the site and disappearing with the users cashback.

    Then again there are a lot deserve a good reputation but are living in the shadow of notoriously bad sites

    As i mentioned on another post, each site should be judged on its own merit, and not just dismissed out of hand because it is an incentive site

  21. #21
    Certified Affiliate Manager sunshiner's Avatar
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    Wow, I'm really surprised to see the lack of knowledge of some of you concerning incentive sites. You've sort of bulked all incentive sites into the same catergory which isn't true. I haven't seen any posts from affliate managers working with loyalty sites and I'd be curious to see some feed back from them concerning whether or not they think they are getting quality traffic from the loyalty sites they are working with.

  22. #22
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    > "You've sort of bulked all incentive sites into the same category which isn't true." <

    Right.

    But the cost of "policing" all the sites that claim to be legitimate incentive sites, in order to identify the parasites who use incentives as a cloak, is too high for most affiliate managers to justify, when compared to the likely income from the legitimate sites.

    This is the same reason why many merchants reject affiliates from certain countries. It's not that all webmasters from Korea or China or Nigeria are unethical or dishonest, but that there are enough fraudsters from those countries that it's simply too costly to conduct necessary compliance checks.

    Likewise, a sweeping ban on "incentive sites" (or on the use of pop-up ads, or on the inclusion of affiliate links in emails) isn't an indication that no legitimate marketers can ever use those techniques ethically -- it's just an acknowledgement of the reality that abuses are so common that it's just not worthwhile to allow the practice (because of the reputation costs and compliance costs created by those who won't follow rules).

    Affiliate managers must make lots of broad, sweeping decisions, because otherwise they'd need to spend more time than is justified by the money involved. They need to "bulk similar sites into a category" and make decisions based on that category.

    Legally, ethically, and morally, of course, certain types of categories should never be used as "filters" to lump people together: race, ethnicity, gender, sexual orientation, religion, marital status, name or surname, etc. Even those who don't care about legality must still recognize that these categories don't provide any valid or useful benefit in separating "good" affiliates from "bad" affiliates.

    The affiliate manager's TIME is a commodity that must be managed; if it's wasted on constant compliance checking, then the merchant's legitimate affiliates lose out.

  23. #23
    Affiliate Manager Howard Gottlieb's Avatar
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    OK. I will play devil's advocate and defend the incentive site model - which by the way can and does work, does not require black hat tricks or down loads and does in fact add value to the merchant.

    I can only speak for the shopping portals that we have built (both our own and private labeled for others).

    Administrators of the third party portals report that their members remain loyal to stores within their shopping portal. A feeling of indebtedness or appreciation for the support (ie cash back) is created with these sites, insuring repeat traffic to the same merchant.

    Since a few of the incentive model detractors were coupon sites I will say that incentive sites add at least as much value an many of the coupon sites. I do not believe that a shopper is browsing Coupon Site A, sees a coupon code for $50 off a computer and then decides to purchase a computer unless they were there looking for a computer in the first place. Quite possibly a shopper in the market for computers will search for a coupon and then complete the purchase. In this case the coupon site added no additional value to the merchant assuming the coupon was available through the merchant in the first place. In fact, one could argue that the coupon site simply costs the merchant needlessly.

    People shop at incentive sites because that get "coupon like" savings on EVERY purchase. The better incentive sites make sure that they keep current with coupon codes and promotions offered through the merchants so that the shopper not only gets their cash back but ALSO get the savings from the coupon or deal. So a good incentive site serves the same purpose as a coupon site.

    I can tell you that there are plenty of shoppers that will opt for Merchant A over Merchant B because Merchant A participates in the incentive model.

    I remember a discussion here about a well known footwear merchant that decided to start an affiliate program. The company, though, offered a lower commission than some of the general line shoe merchants that happned to offer that manufacturer's products. Affiliates ridiculed the merchant for the low commission and said they would simply sell the brand but do so through the full line shoe retailer.

    You need to give shoppers at least as much credit as these affiliates. If they can go to store A and get 5% cash back or store B and get no cash back, where are they going? You get the same obvious answer in both A and B offer coupon codes too.

    If the incentive site creates a loyal base of shoppers that will shop preferably at stores found on the incentive site I say great value is received by the merchant. They get shoppers who will in most cases limit their shopping to stores on the incentive site.

    That to me is adding at least as much value as a coupon site and probably much more.
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  24. #24
    Certified Affiliate Manager sunshiner's Avatar
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    Quote Originally Posted by markwelch
    > "You've sort of bulked all incentive sites into the same category which isn't true." <

    Right.

    But the cost of "policing" all the sites that claim to be legitimate incentive sites, in order to identify the parasites who use incentives as a cloak, is too high for most affiliate managers to justify, when compared to the likely income from the legitimate sites.
    .
    That could very well be true. But, is it also worth their time to lose out on the good loyalty sites? Some legitimate loyalty sites can send a merchant thousands of dollars of sales and hundreds of loyal customers in a years time. I guess only the affiliate managers can answer this question for me.

  25. #25
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    sunshiner, you're absolutely right that this must be a judgment call by the affiliate manager. And there is a very real "opportunity," in that there are some incentive sites out there with a lot of traffic, and they could drive some new business to merchants. One merchant may decide "no," and in fact that decision might create an opportunity for a competing merchant who says "yes." But by saying "yes," that competing merchant accepts some extra compliance costs, and potentially alienates non-incentive affiliates who choose not to work with merchants who accept incentive sites.

    I have some "very strong opinions" about what I will and won't accept as an affiliate, and those opinions have led me to refuse to do business with certain merchants and certain affiliate networks. This creates an "opportunity" for other affiliates, who are willing to promote those merchants and who may well benefit from the lack of competition from affiliates like me who won't work with the merchant. I don't view those affiliates as "unethical" or "evil," though I think some of them as misguided.

    It's important to note that few affiliates will exclude merchants simply because they accept "incentive sites" -- instead, most of us look for merchant engagement with specific "incentive sites" that we consider to be "bad actors." For example, a number of affiliates won't work with merchants who affiliate with UPromise. Some other affiliates may limit their efforts on behalf of merchants who affiliate with eBates. But few merchants can invest the time to "pick and choose" which incentive sites will alienate other affiliates, and which will not.

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