Affiliate Marketing is NOT …

Saturday, December 6th, 2008 at 9:41 am

I am not participating in discussions like this one at ABestWeb.com, even if I am contacted directly with the request to comment.

The debate whether or not publisher A is legitimate or not, if his business model is based on incentivized traffic, is irrelevant in my opinion. If the publisher uses desktop software or browser plug-ins does also not matter to me, regardless if that publisher honors the “affsrc=1” URL parameter or not.

Technical Fit <> Business Fit

I stated repeatedly in comments and blog posts of mine that I do not consider publishers who are using any type of incentive to drive business to an advertiser to be an affiliate. This includes coupon sites.

Those publishers are using the affiliate tracking technology for their purposes, because the existing technology does everything they need to run their business. That the technology works does not mean that the business model fits too.

The Purpose of your Affiliate Program

It is not what advertisers are being sold about affiliate marketing and what it can do for them. Most advertisers launch their affiliate program with goals in mind like customer acquisition, pre-sale and moving potential customers a step forward in the buying process, extension of reach and branding.

Incentivized traffic on the other hand fit more the purpose of customer retention and increase of customer loyalty overall. This is a perfectly valid and good purpose, but it is not what advertisers have in mind, when it comes to the marketing channel “affiliate marketing”. This difference in type of traffic and referred business is often ignored or not understood. Advertisers allow incentive publishers and coupon sites into their program and eventually find out that a lot of their existing traffic is diverted as a result of it. Then they talk about that affiliate marketing does not work and that it cannibalizes their other marketing efforts and eventually shut the whole program down, because it “failed” to deliver what was promised.

Like Membership Rewards Programs

The incentive traffic has to be viewed at like a membership rewards program that many retailers already have in place. That traffic would be an extension of this type of promotional vehicle. As the in-house membership program is tracked and measured independently from the affiliate program, so should the incentivized traffic.

Affiliates are being paid commission on top of any rewards of any membership system that the retailers might have in place. The cost of an in-house membership and rewards program does usually have its own budget and its effectiveness is reviewed independently and not as part of the affiliate program, search marketing campaigns and display advertising activities. Maybe email marketing is included sometimes, especially if special mailers are sent to existing customers promoting the membership program.

Suggestions

Incentive publishers, like cash back shopping portals such as eBates.com and FatWallet.com, charity sites like uPromise.com and ShoolPop.com, as well as coupon sites should be tracked and reviewed outside of the regular affiliate program. The same platform might be used, but it must be ensured that tracking of those traffic sources does not interfere with the tracking of the core affiliate program.

Conclusion

The effectiveness of those methods have to be reviewed independently and decisions about whether to continue a partnership with a publisher or not also needs to be done separately. You cannot do that, if you are using one tracking system for both of them. You are also not tracking your PPC or Email marketing campaigns via affiliate tracking links for the same reasons, don’t you?

Not separating the two channels blurs the numbers and impossible to gauge the effectiveness or ineffectiveness of each of them, resulting in decisions that are made based on wrong assumptions and misinterpretation of existing data.

The two channels overlap a little bit, as virtually all other marketing and advertising channels do today. If you do advanced web analytics already and even consider multiple touch-points with a customer in the entire conversion path, then you probably already separate the different types of traffic by the different types of your affiliates, even if you use the same tracking platform for both of them. The separation of the two would end the debate about parasites and how they steal commissions of regular affiliates, because you track them independent from each other.

You then can make much better educated decisions about the value of individual incentive publishers and the cannibalization of your other channels, including your affiliate program, your search marketing campaigns, your email newsletters to existing customers, your social media and viral marketing activities and your display advertising campaigns.

Cheers!

Carsten Cumbrowski

Internet Marketer, Blogger and Entrepreneur
Internet Marketing Resources Portal at Cumbrowski.com