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  1. #1
    Moderator MichaelColey's Avatar
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    How Much Do Parasites Affect Affiliates?
    (I split this thread out from April Blue's - Where did my sales go)

    Quote Originally Posted by waytogo
    traffic higher, clicks lower, not all are affected

    that means probably, somebody or something is targeting your websites and stealing commish


    on second thought, it's being discussed that merchants themselves are the ones being targeted. so the merchants you're promoting may be the ones affected.
    That's a common complaint, but it's dead wrong.

    I know nobody wants to hear this, but it has to be said... (And I should point out that in no way do I agree with parasites or condone their use. But their impact on us is drastically overstated.)

    Parasites almost always target merchants, so they affect all of a merchant's traffic equally. That's actually not entirely true, because some parasites follow the Code of Conduct and stand down from directly intercepting affiliate links (although they may overwrite affiliate cookies at a later time if the infected user returns directly to the merchant or through a non-affiliate link). So affiliate traffic to merchants is affected the same or less than merchant traffic in general.

    Now consider this... If HALF of a merchant's sales was credited to parasites, wouldn't that get an incredible amount of attention within the company? If even 20% of a merchant's sales was credited to parasites, I think merchants would be up in arms.

    I recently had the opportunity to talk to an Affiliate Manager who took over a heavily infected affiliate program. By his own account, every major parasite was heavily entrenched in the program. He shared some numbers with me. Guess what percent of the merchant's sales was being credited to parasites? Parasites were being credited with 5% of the merchant's sales.

    Parasites are a real problem. They don't deserve 5%. They ruin the credibility of affiliate programs. They ruin the customer experience for infected users. They make consumers not trust online stores. They make merchants wary of affiliate programs. But they're not the reason for major drops in affiliate performance. Even if a program could be twice as infected as the one I found out about, affiliates are still getting credit for at least 90% of their sales and should only see 10% lower conversions than if the program were clean. Affiliates who blame parasites for their poor performance are deceiving themselves.
    Michael Coley
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  2. #2
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    Michael, I can't thank you enough for this post!! I've been trying to understand the impact of parasites but everytime I read about it, I end up utterly confused (and totally suspicious that my sales are being hijacked).

    Your explanation helps me feel MUCH better about the whole issue.

  3. #3
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    Each time I'm talking to an Affiliate Manager, I'm hearing the same story.
    "Parasites are credited with 5% of the merchant's sales."

    Yes, 5% FIVE PERCENT EACH

    Some have even the gut to complaint. I was expecting much more from them. Yes, I agree, many AMs are dissapointed by these parasites. They were expecting much more (from each of them). Anyway, do you trust MOST AMs. I don't. A few are honest and hard working, most don't know shit, a few are thieves.
    Most can't recognize a parasite, so 5% is not a real figure.

    I'm sure the Parasites are one of "the reason for major drops in affiliate performance."

    How many parasites do you have now? 1, 10 no, I'll say hundreds, may be much more because I'm adding also bad affiliates using 180Solutions, mygeek..., cookie stuffers or others.

    So, 5% for each major Parasites, 1% for smaller ones, add everyting. How much is left out of 100%

    Now, add the side effect of these Parasites, spyware, adware, ruining the customer experience... It's damaging for the affiliates.

    Affiliates who blame parasites for their poor performance are deceiving themselves.
    These affiliates are newbies, they are the first victims of these CROOKS, because they don't know better. They think working with major companies is going to help them. They don't know which merchants are infested or not. They make basic mistakes.

    If Parasites were taking only 5% of my earnings, I'll be working right now with ALL of these crooked merchants. (I can get private deals to top that) Up to 20%, I'll be considering it's the cost of doing business. EVEN the networks are taking 30% for a loosy job.
    In my humble opinion, for some verticals, for some merchants IT'S MUCH More.

    Michael, 5% Get Real!

  4. #4
    Analytics Dude Kevin's Avatar
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    Interesting. So the true effect of parasites is more psychological than physical.

    That being said, theft is theft.

    From the merchant viewpoint, it's possible than to conceive that 5% of what you are paying out in commissions is unearned (perhaps more or less depending on who is in your affiliate program.) That's also assuming that ALL of the parasites are dropping cookies on direct type ins, etc.

    But even at 5%:

    (these are rough numbers... they will vary by merchant)

    40% markup on goods.

    x% goes to the affiliate

    x% goes to the network

    x% may got to an OPM

    The 40% evaporates pretty quickly. So if costs in the channel could be reduced by that unethical 5%, the ROI is much stronger.

    So what Michael has done here, IMHO, is redefined the way affiliates look at how parasites may or may not be affecting their earnings on the most basic level.

    And he also points out that the real danger is to the credibility of the industry, and how that has a more circumstantial effect on affiliate earnings. Any money that goes out unearned drives up the COA unneccesarily, and in the long run will effect commission levels, and the willingness of good merchants who aren't running affiliate programs now to potentially start them.
    Kevin Webster
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  5. #5
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    What you're seeing here is the effect of "dialogue". Go to all these Affiliates Summits, discuss with all these crooked companies, networks, bad actors. YES, they are all there and are ALL telling us the same story.

    Parasites, well it's just 5%.
    What's the big deal!

    Believe what you want. I know what I did to keep the same income.

  6. #6
    Analytics Dude Kevin's Avatar
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    Again, I'm not saying dialogue will save the planet .
    Kevin Webster
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  7. #7
    ABW Ambassador thecool's Avatar
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    When confronted, more that one AM has told me if they didn't work with parasites, particularly Upromise, they feared they would see loss of sales to their competitors who asssociate with the parasites. Hogwash! Since most of the merchants that I had from Perfomics joined with Upromise, I have lost more that 80% of the revenue I was making with those merchants. I have been slowly replacing them with merchants that are not so associated and my revenue is growing again. 5% is AM propaganda to cover there actions. 123inkjets is a prime example of the impact that parasites have on merchants. When 123 booted the parasites and before affiliates could or would rejoin to take up the slack, sales dropped drastically causing them to let the parasites rejoin their program. I actually had some sales during that period. The parasite problem is much greater that just overwriting affiliates cookies.

    Gene
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  8. #8
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    I used the word "dialogue" to make you react. I'm not picking on you.
    What I mean is:
    Just say loud enough and everywhere that Parasites are costing Affiliate only 5% and everybody is going to believe you.
    No need to call Eliot to rescue us, no need to go after the Parasites.
    Imagine just to track our links and send us a check is costing us 30% of our income. 5% more or less, forget it, everybody is beautiful, let's kiss everybody, peace and love with Parasites.

  9. #9
    Analytics Dude Kevin's Avatar
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    Certainly, if that number is well above 5% (which again, will vary from merchant to merchant), then the problem does start to have immediate revenue implications as opposed to circumstantial ones.

    All of the programs I have studied have been through SAS, so the numbers will look much better than if they were with "inferior" networks or independent. (I study SAS because I feel the most comfortable recommending them to merchants.)
    Kevin Webster
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  10. #10
    Analytics Dude Kevin's Avatar
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    You're not going to offend me in any way Zeus... I value your opinion as much as anyone elses. This is a deep and complicated issue, as well as being monumentally important. Any discussion on it is bound to be spirited.
    Kevin Webster
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  11. #11
    Defender of Truth, Justice and the Affiliate Way
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    MC...5% of the Merchant's total sales or 5% of sales through the AM channel? There's a difference between those 2 numbers right there. For that particular Merchant, how much of their overall sales were attributed to the AM channel? This varies widely from Merchant to Merchant.

    I see many Merchants making the mistake of only looking at the commissions paid to a particular parasite when they've either dropped them or when they are comtemplating dropping them. The picture is much bigger than that, it's been my personal experience in talking to many merchants over the years that many either do not know how to or do not have good back-end analytics in place to be able to assess the full impact. I had one Merchant tell me recently (and they've posted this publicly elsewhere and can elaborate here further if they wish) that with just one parasite they dropped from their program, the total % being brought into the AM channel wasn't terribly earth shattering. However when they dug deeper, they calculated the cost to their business by this one parasite to be around $17k/quarter. That's not chump change.

    Also realize that parasites do indeed impact different merchants to different degrees. I do not agree with the statement that parasites impact merchant's traffic equally. This is not what I see in my own testing. I do not see the same amount of activity (direct relationships with merchants, competitor pop ups, untargeted popups) across all merchants. There are some merchants that targeted to a much lesser degree.

    And just like an honest domain-bound affiliate has merchant's that they perform better with, so do the parasites. They have merchants who they perform better with for different reasons. So to say that from one merchant reporting a parasite accounted for 5% of sales (whichever sales were meant) is a huge generalization. That may or may not have been close to the real average across all merchant/parasite relationships. I would consider that quite a coincidence if it was however.

    The statement is just too much of a generalization and incorrect way of assessing IMO. It's equivalent to an affiliate looking at only the gross commissions earned by each merchant to determine the true performance of their merchants. It's a very simplistic view which isn't fully enlightening.

    But I do understand the point Michael is trying to make. As much as I deplore these practices and beat the bushes to find bad practices, I also agree that at times affiliates are quick to blame parasites for performance problems. I've seen affiliates many times blame a particular parasite for their performance problems when it becomes a a public hot topic on a forum or in the news. I'll see comments like "Well that's why my sales dropped 2 months ago..I'm dropping Merchant XYZ." But what was reported on had been happening for years. So it's doubtful that particular affiliate's decline can be attributed to something that had been happening for much longer than the 2 months. In these situations I think affiliates are doing their business a huge disservice. It's key for any business to attribute their own successes and failures as accurately as possible. Whatever the real problem for the decline in performance of Merchant XYZ might happen with Merchant ABC if the real reason was something the affiliate was doing that they could correct.

    But saying only 5%, is also minimizing the real impact of parasites/adware on the Affiliate Marketing Industry. There is too much money involved for it to only be 5% IMHO. Look at the public figures out there for Claria, 180Solutions and DR. We're talking double digit millions in revenue.

  12. #12
    Defender of Truth, Justice and the Affiliate Way
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    Since most of the merchants that I had from Perfomics joined with Upromise, I have lost more that 80% of the revenue I was making with those merchants.
    Don't atrribute Performics with just UPromise. The parasite issues within Performics go well beyond UPromise. UPromise is the least of it when it comes to Performics. More to the point is all the adware/affiliates operating in that Network which behave in far worse ways than UPromise. Not that I condone some of UPromise's behaviors at all (see my upromise thread).

    My point just being it's not just a UPromise issue. Nor just the other applications you are used to hearing about here.

  13. #13
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    The issue is quite complex and will vary from merchant to merchant, from vertical to vertical, I agree. We don't promote our sites the same way.
    Hard to give a figure. If it was easy, we'll have the same opinion.
    We all have different experiences. I've data to back up what I'm saying. I experienced first hand the effect of eBates. I talked to many AMs. I've many sites, many verticals, many merchants.

    I listen to the subliminal messages sent during all these meetings. Who's spreading the news...
    Some of the affiliates don't have a problem with parasites. If you listen to Richard Lewis, and the big boys are, he don't have a problem with parasites, HE IS the parasite.

  14. #14
    ABW Ambassador Sam Bay's Avatar
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    Quote Originally Posted by Kellie aka Ms. B
    MC...5% of the Merchant's total sales or 5% of sales through the AM channel?
    That's the real question. If a merchant's affiliate channel is 6% of their total sales, and if parasites account for 5% of their total sales also, then parasites account for 83% of affiliate sales, which proves your whole point wrong.

  15. #15
    ABW Ambassador ticketguyz's Avatar
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    Quote Originally Posted by Sam Bay
    That's the real question. If a merchant's affiliate channel is 6% of their total sales, and if parasites account for 5% of their total sales also, then parasites account for 83% of affiliate sales, which proves your whole point wrong.
    I think Michael is smart enough to understand the distinction and is saying 5% total (not per parasite) of the total revenues generated by affiliates. So the question is what the AM meant when he stated the percentage, but my guess is he meant the same thing and that's the point behind Michael starting this topic. For the largest merchants, even 5% can be in the millions of dollars before commission. But even that does seem pretty low when considering what's been reported about the parasites as Kellie pointed out.

  16. #16
    Outsourced Program Manager Angel Djambazov's Avatar
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    Quote Originally Posted by Kellie aka Ms. B
    I had one Merchant tell me recently (and they've posted this publicly elsewhere and can elaborate here further if they wish) that with just one parasite they dropped from their program, the total % being brought into the AM channel wasn't terribly earth shattering. However when they dug deeper, they calculated the cost to their business by this one parasite to be around $17k/quarter.
    lol...Ms B...I will take that handoff.

    The total was actually 18k a quarter. What most merchants don't seem to understand that it is not the percentage of theft but the impact of such tactics on ROAS that is important. Most merchants just look at the net revenue stream from the affiliate and don't factor how those sales where delivered. How drastically would their monthly reports change if for that parasitic 5% you added in the cost of the merchants clicks those parasites stole? I guarantee those adjusted figures would not be acceptable to their corporate management.
    Angel Djambazov
    Managing Edtior ReveNews
    OPM for Keen Shoes and Graphicly.com

  17. #17
    Outsourced Program Manager Angel Djambazov's Avatar
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    As an additional note, on specifically how these tactics impact affiliates. In December 2005 after cleaning our program of a host of parasites we made more money in our affiliate channel than December 2004 with 30,000 less clicks. That is just for one month. How would the cost of those clicks have affected the ROA in '04? How many of those clicks in '04 overwrote honest affiliate cookies? That's not even looking at the secondary effects of more insidious programs.
    Angel Djambazov
    Managing Edtior ReveNews
    OPM for Keen Shoes and Graphicly.com

  18. #18
    Action Jackson - King of the World
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    I'll actually agree with Michael on the fact that it is easy to just say sales are down because of parasites. Do they make an impact? Of course they do. But your sales don't go down by 80% from one month to the next because of them.

  19. #19
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    They have an affect but how much is up to anybody's guess, you'll have people guess anything from 5% to up over 50%. A lot of times I'll see posts with people having a bad month saying it's parasites as if these parasites didn't exist the month before when they were having a good month. Usually if this pops into your mind as the reason, it'll keep you from finding out the actual reason. I think they also affect affiliates if they give you the mentality that you can't make money because of them which could be even more damaging than the actual affect. Sometimes people just starting out get a little frustrated because they're not making money as fast as they think they should, read some about the parasites and take the easy out and just blame them. I have a big shopping site with everything from the most infested biggest brands to the cleanest mom and pops you've never heard of. And I can make money with both. I know people would like to say you can't make money with infested merchants but that wouldn't be the truth, some of my best just happen to be infested. Now that doesn't mean I like it and I think I would make a little more if they were clean. And I think the problem lies not so much with the merchant but more so the employees they hired to run their affiliate program. I think a lot of them would be out of jobs if the higher ups knew what was happening, especially nowadays since you can be held liable no matter how far down the chain you are, you're still a link on that chain:

    "Two weeks ago, an attorney at the New York AG's office said in a public lecture that advertisers and marketers can still be found liable if any link in the chain of affiliate networks, sub-affiliate networks, and independent contractors is found to have acted illegally. "You don't want to ever assume that the existence of intermediaries, whether it's two or six, is going to immunize you from liability," he was quoted as having said."

    So I have no idea of the actual affect but we still all need to work on this problem as best we can because I think they're the crap of this industry and to the bigger picture doesn't help the overall consumer confidence with shopping online. This type of thing is not good for future ecommerce and needs to be handled.

  20. #20
    Moderator MichaelColey's Avatar
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    The number surprised me, as well. Many have speculated as much as 50% or more, and I've always felt it was more like 10-20%.

    The 5% is a percent of total sales for that merchant, not a percent their affiliate sales. (It's a total of all parasites "sales", and I trust that the new AM has an accurate number and recognizes all major parasites.) It's meaningless to try to look at it as a percent of affiliate sales, because parasites steal from EVERY traffic source to merchants: type-ins, PPC, natural search, bookmarks, offline advertising, etc. The ONLY channel that is somewhat protected is the affiliate channel. Whatever percent parasites steal, they steal across ALL traffic sources.

    Affiliate marketing is a huge industry, so I have no doubt that the major parasites can make tens of millions even if the total infection rate is just 5%.

    It's ludicrious to think that it could be 50%. Consider this... Let's say that CluelessWidgetMerchant.com has $100 million per year in sales. They open an affiliate program and allow all the parasites in. Their "affiliate program" grows by leaps and bounds as the parasites steal from every other traffic source. Eventually, the parasites are getting credit for 50% of the sales ($50 million per year). Yet the merchant is still only getting $100 million per year in sales. Don't you think they would figure it out?
    Michael Coley
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  21. #21
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    If they saw 5%, then it is probably more like 10 or 15 percent. There are so many
    ways parasites can steal sales, they probably didn't catch all of them. Even a little
    bit definitely affects the affiliates financial situation. Say if I am getting 7 or 8 sales
    a day with one Clickbank product, and with the cost of advertising it takes 3 sales
    just to break even. I would make a good profit if I got credited with all of the sales
    after the first three. But if a parasite is stealing even just one of those sales, say at
    an average commission of $20, that would be $600 a month, or $7200 a year. Makes
    a definite difference in the amount of profit at the end of the year.

  22. #22
    Analytics Dude Kevin's Avatar
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    Thanks for clarifying Michael. I've been thinking about this thread all day as I've been working...
    Kevin Webster
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  23. #23
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    MC- The number surprised me, as well. Many have speculated as much as 50% or more, and I've always felt it was more like 10-20%.
    We're talking 5% of the merchant's sales. That's what merchants are willing to admit. Anyway, they are booking the sales and they have the choice of their partners. It's not my main concern.

    Now let's go back to your question: How Much Do Parasites Affect Affiliates?
    How much are we talking?

  24. #24
    Moderator MichaelColey's Avatar
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    As I already said several times, parasites leach off of ALL merchant traffic. If parasites as a whole steal 5% of merchant traffic, they steal 5% of affiliate traffic. (It actually may be somewhat less, since some parasites follow the Code of Conduct.)
    Michael Coley
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    "Education is the most powerful weapon which you can use to change the world." Nelson Mandela

  25. #25
    ABW Ambassador simcat's Avatar
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    Are'nt a lot of parasites hooked up with adware and spyware that diverts traffic the honest affiliate would've/should've gotten?
    If its diverted to another merchant, neither the merchant or the affiliate will ever know how many sales were 'sidetracked'. ( I wonder about the 5% number)

    "A recent survey by the National Cyber Security Alliance and America Online found that four of five computers connected to the Web have some type of spyware or adware installed on them, with or without the owner's knowledge."

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    Last edited by simcat; April 14th, 2006 at 09:38 PM.

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