Dealing With Affiliates: A Roadmap to Success

March 25, 2009
By Lisa Barone in Internet Marketing Conferences

Look into my eyes. Are they bleeding? They feel like they’re bleeding, which, not surprisingly, is not a good feeling. There’s lots of burning. Let’s hope this last batch of speakers go easy on me. Please? After this session I get to go meet up with Rhea. Yey, Rhea!

Ready? Jeffrey Rohrs is moderating speakers Kristopher Jones, Jeff Ferguson, Lori Weiman, and Peter Figueredo.

Jeff Rohrs calls for the folks in the back to turn down the smooth jazz so we can do introductions and I can get food in my belly. Fine. Maybe I made that last part up. But I’m hungry!

Up first is Kristopher.

He has a unique perspective in that he used to be an affiliate marketer. He still has that perspective. They launched an affiliate network called Peppperjam Network. 

Your affiliate network should stand as a resource to help you:

Identify potential channel conflicts

There are four primary potential channel conflicts:

  1. Direct linking: Occurs when an affiliate uses an affiliate tracking URL as the destination URL for PPC marketing purposes, instead of sending the traffic through their own unique landing page and URL. Unfortunately for you, Google does not provide protection from “direct linkers”. Therefore, you must learn the rules.  There is a relatively easy to way to find out if direct linking is occurring — Google only delivers one ad per unique display URL. That means if your affiliate is direct linking, Google may show your affiliates sponsored listing instead of yours. A simple way of identifying whether an affiliate is trademark bidding is to go to Google, right click the ad, and look at the properties for the link extension that you see.  There are tools to help you minimize this challenge.
  2.  Trademark Bidding: Trademark bidding is a serious concern for many advertisers and therefore is prohibited as part of the Terms and Conditions. Other advertisers allow trademark bidding and see it as a way of pushing out competitors from the SERPs and incentivizing select affiliates.
  3. Bidding on the same keywords as you: Many advertisers complain that SEM affiliates run up the pricing for the same keywords the advertiser is trying to bid on. This is true only if the advertisers doesn’t have specific rules in place. Before you put a NO PPC Policy in place, realize that the SERPs represent available real estate for you and your competitors. One of the best ways to cover more real estate is through your SEM affiliates.
  4. Promotion of conflicting marketing messages: Conflicting marketing messages can occur when your affiliates use inaccurate product information, nonauthorized banners, and/or through misrepresented or outdated ad copy on search engines. This conflict can be minimized through increased communication with all of your affiliates, as well as more selective distribution.
  5.  Minimize channel conflict: Send a request to Google to disallow advertisers from bidding on your trademark. Amend your affiliate contract with a no direct linking policy. Be explicit about what search affiliates can and cannot do.

Understand who your affiliates are and what promotional methods they use to drive sales

One of the keys to increasing the overall efforts of your affiliate program and minimizing channel conflict is through increased affiliate transparency. Get to know your affiliates. Quality is more important that quantity.

Optimize the affiliate channel

Set minimum/max bidding rules. Restrict certain keywords and allow select affiliates to bid on trademarks. Provide your key search affiliates with private offers and incentives.

Next up is Jeff Ferguson.

He says that this panel was originally put together as a debate. He didn’t like that.  Zen is all about balance, he says. It’s difficult to obtain. People, by default, exist close to a balanced state but it’s outside influences (like Rae Hoffman) that push them toward extremes.

Common Issues

  1. Letting affiliates use paid search will dilute your own paid search campaign:  You want to be at the top with no one competing with you. That’s your zen. However, that’s not how it works. You have competitors competing with you.  Use your affiliates to create an alternative and to block out competitors.  However, there’s often a kneejerk reaction to this. You immediately think they’re stealing from you even though you invited them there. He thinks you should allow it in a few situations:  When you’re using a highly competitive keyword, when you’re the most relevant ad on the search term, when there is a high chance of loss of opportunity.  However, DON’T let them use it when you’re usually all alone on a term.
  2. Affiliates will drive up the bid on my paid search ads: It’s a kneejerk reaction to immediately blame your affiliates for what’s wrong with YOUR program. Don’t do anything crazy like kick them out of your terms. The problem is really you. You need to step up and figure out what’s going on.  It can happen. You should allow affiliates to be there when you can make it work with your ROI.  DON’T allow it when someone on the term is a little crazy or when you want to be more cost efficient.
  3. Affiliates will hurt our good name in their paid search ads: It’s usually a nonissue, it does happen though. They’re the crazy affiliate who just starts spouting off things that aren’t true. You shouldn’t allow it when they are truly damaging the brand or breaking the rules. Or when they’re comparing you unfavorably to other brands.  You should allow it when they have discovered something you should have been saying all along. You can also allow it if you never had any brand equity anyway (hee). Because then you need to just shut up.
  4. Over dependence on paid search affiliates: Paid search affiliates are a great way to expand your program. Once you let them into the mix, don’t lose focus on other areas. The risk here is that you can become dependant and can lose big with changes in Google’s policy, if an affiliate moves, etc.  Yes, it can happen and no you shouldn’t allow it. You need to take complete control over it.

When you’re combining all this, you have to ask yourself if the combined volume of the two programs increased. If it did, then you can take a look at your ROI. If it went negative because of the effort, then adjust accordingly.  If not, then you need to rethink the program a little bit. 

It’s not you, it’s me: Don’t blame the affiliates for your own shortcomings.   However, sometimes affiliates really are crazy, stupid or both. Sometimes they don’t do the math to realize that they are outbidding you.  If that’s the case, then you need to reach out and explain it to them.

Up next is Lori. She’s going to talk about math. Someone hold me. [cries]

How We Know What We Know

They crawl the major search providers on a regular basis looking for competitors and affiliates. They identify affiliates who direct link, who operate their own Web pages, etc. They watch brand terms, head terms and the long tail.

Affiliates: A Problem or a Solution?

They think of affiliate marketers as a solution. They offer increase leads/sales, help you corner a market on search and they protect your brand.  They’re a problem when they direct link (compete for visibility, drive up for CPC) or when they drive down your rank (their quality score is better).

When It’s a Problem: Direct Linking

There are two ways to measure if you have a problem.

  1. Measure Frequency of Ads Served: The % of time that your ads are served vs. your affiliates ads showing up
  2. Measure Impression Share: Look at your impression or market share. If its lower for no good reason, turn to your affiliates to see what’s going on. Go into your Google Account, run a Campaign Performance Report with “daily” selected for unit of time. Graph the result in Excel. Determine your mean/avg impression share. Look for an anomalous dip. Investigate the cause.

This can happen if the affiliate has a better Quality Score than you do. They operate a review sites. You operate an ecommerice site. Their site has lots of text and information. Your site has a conversion oriented landing page with limited content. You either need to accept it or put rules in place. Make sure your quantifyy this before putting rules in place.

Use Affiliates As a Solution

Affiliates should be in your marketing arsenal. Lets you increase sales, corner the market and you can protect the brand. 

Truisms: You will never get all the clicks by occupying just one position – even if you are rank 1. You can’t prevent competition. If you have more than 1 competitor bidding against you, you’re losing even more. Use your affiliates to occupy more than one position on the page. Many times your affiliates have better landing pages than you do so they can rank higher. Leverage your affiliates with a high quality  score. Don’t be a 1 out of 10. Become a 10 out of 10.

You don’t have to worry about your brand if you have a controlled program. You can’t control it because the search engines don’t police your brand and they let advertisers sponsor your brand. The best way to protect your brand is to encourage the competition to go away by empowering your affiliates. You can put rules in place to prevent things that concern you. Create position rules, time of day rules, ad copy rules. Provide your affiliates with the ad copy you want to see.

After saying all the good things — here’s the trick:

  • Practices: Switching the Landing Page.
  • The rule: The display URL must match the landing page URL.

Getting around the rule:

  • Affiliate initially set up its ad to point to the affiliates own landing page.
  • After it sees the Googlebot do its editorial check, the affiliate changes the landing page to the merchant’s Web site.

Finishing us up is Peter. My hands are literally going numb. And burning. This can’t be good. Don’t tell Rae, she’ll call me weak.

His clients feel like affiliates are still like the Wild Wild West.  People are either letting them do what they want and scared, or letting them do what they want and still scared.

The Good

Seven Characteristics of an Affiliate Hero

  1. The Exclusive Ranger: Will agree to be exclusive with an advertiser. They’ll promote you and not your competitor. They work for you.
  2. Testy McGee: Test different offers for you.
  3. The Enricher: Invest in content, write it themselves, hire writers and really do a lot to enrich the consumer experience.
  4. Doc Development: He builds Web sites out just for advertisers. He can build these sites that focus on your particular category or brand. It’s a great benefit because he enriches the consumer experience. He can help teach you something about improving your conversion rate.
  5. Long Tail of the Law: Help get you on longtail keywords to get more exposure.
  6. Marshall McShare: Rare.  You get a trust level where they share information with you.
  7. Sheriff SEO: There’s a ton of affiliates doing SEO. They’re getting natural rankings and aren’t relying on PPC. Affiliates doing search can generate more than 30-50 percent of sales.

He talks about an affiliate he works closely with. He’s pretty savvy in SEO. He’s promoting their client the Wine Enthusiast.  He’s pulling in the client’s product feed and having it populate a lot of stuff. He’s also adding his own content. He’s testing innovative units like video.

The Bad

[He offers up a bottle of champagne to some guy in the audience who recognize Billy the Kid on one of this slides. Sweet.]

  • Hijack domain misspellings and confuse natural listings.
  • Hide ads by geo/daypart targeting around you.
  • Steals your display/linking URLs and kills your ad.
  • Steals your ad copy and causes consumer confusion.

The Ugly

Just because it looks bad to you, doesn’t mean its really malicious. For the most part, affiliates aren’t bad folks. If you reach out and don’t hear back for awhile, then you may want to take action.

[And another bottle of champagne to a lady who recognize Jesse James. I’m too young for these games.]

  • Use ad copy that fails into the grey area
  • Promote your competitors offers alongside your own
  • Register domains that are similar to yours but not misspellings.
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