Affiliate Networks, Transparency, and Trust
Imagine for a second what happens in an Affiliate Marketing conversion, from original click to sale. In an ideal situation here’s the deal (assuming you’re promoting with search, and no intermediate landing page):
Joe Blow searches google for “plant food.” He sees a bunch of real results and a bunch of ads. One of the ads is yours. Joe clicks your ad. You pay google a handsome sum of 15 cents or something like that for the click. Joe is sent to a link provided by your Affiliate Network where the network records the click and sends Joe to a plant food merchant’s website where they will presumably pay you 20% for anything Joe buys from them. Joe browses the site for a while and ends up buying some plant food for $10. A tracking pixel on the sales page informs your Affiliate Network that a sale has been made and you are given credit for your $2 commission. Congratulations, you just made $1.85 profit. Here’s a rough diagram of what’s happening if that didn’t do it for you.
Seems simple enough. You spend money on traffic, if your traffic converts to a sale, you get your cheddar, everyone goes home happy. Unfortunately, this isn’t always the reality of the situation.
Let’s imagine something a little more realistic. Joe clicks the ad, he’s sent to your affiliate link where your Affiliate Network records the transaction. They’re then sent to the merchant page and…. who knows. It’s easy enough for the merchant to choose not to include the Affiliate Network tracking code in every transaction, meaning they don’t have to pay commissions on every transaction, which is a win for them. If they’re caught however, you’d think they’d be immediately dropped by the Affiliate Network, but this isn’t always the case. They can easily just lie and say that a sale was never produced or that they were having technical difficulties or whatever and continue to scam people.  Again, a diagram:
Is this overly paranoid thinking? Absolutely not. It’s not rare for a thread to pop up on wickedfire or elsewhere with an angry affiliate complaining about tracking. Lack of transparency is a very scary thing, especially when there’s tons of money on the line being spent on traffic with the assumption that once a sale is made that was produced by you, that you will be paid $x, no matter what. It’s just a shady scenario in an already shady-ish business.
So what is the ideal solution to the problem. Many networks would have you believe that there is nothing further that can be done to police the merchants without them getting pissed and leaving. Nickycakes calls BS. He’s been thinking long and hard, and there are definitely some very doable solutions that will ensure Affiliates aren’t getting shafted. And this NEEDS to be looked into, because at the moment, the only way to test these offers is for the affiliate to send fake leads or sales to the merchant to check if the transaction is showing up in their stats, and even then, there’s no way to be sure because the merchant could be selectively dropping some of the transactions but not all. Anyway, here are a few ideas:
Affiliate Networks Send Automatic Test Leads
Every so often, the affiliate network would send a test lead to each offer on the network from a random affiliate to test if the offer is tracking properly. If the leads or sales are not tracking, the affiliates are notified of the bum merchant and the merchant is dropped immediately. At the end of the month, each merchant is given a list of the test leads and aren’t required to pay the network for them.
Drawbacks: Requires some coding work for the networks which means they have to probably pay a new person to integrate it. Works well for lead based offers, but much more difficult to set up for ringtones and anything involving a credit card.
Affiliate Networks Check Merchant Code
This is a little easier to implement, and much more reliable. The affiliate network would, at all times, have access to the merchant’s webpage code. They would be able to look, at any time they wished, at the website to make sure the tracking code was installed and working, and nothing shady was happening.
Drawbacks: Requires someone at each network to check on the merchant’s website code. Also requires the merchants give ftp access to all the networks, but they really should have no problem with this unless they’re hiding something, m i rite?
More Communication From the Networks
One thing some networks do a terrible job with is communication about some details. They all need to be very specific about what qualifies as a “conversion” for each offer. For example, does it convert on a first page form submit, on a credit card submission, pin number verification, whatever. If it’s an email submit and some leads are scrubbed if they’ve been previously submitted, then this needs to be absolutely clear before the affiliate starts spending serious money promoting the offer.
Nickycakes would be first in line to promote offers on any network that implemented 2 out of the 3 above suggestions, and there are plenty of others who would love the same.
For even more controversy, what if the network and merchant had insider deal which paid out commission to only prominent affiliate marketers while shaving the newcomers?
The situation would be feasible due to the AM promoting the network and flaunting his/her monthly revenue on blogs/forums while leading others into entrusting a network that shaves leads to beginners to perpetually sustain the relationship with the promoter (Affiliate Marketer).
You could also argue with my statement and proclaim that networks operate under ethical conditions but seeing how we live in a capitalist country, practices from what I’ve portrayed is executable with transparency.
Yep, also was going to post that. Although there are probably plenty of advertisers who may be shady (or incompetent) what I actually worry about more are the networks shaving valid leads (or being incompetent and missing them).
The idea setup would be where it was transparent for all 3 parties. The advertisers, the networks and the publishers.
I mean, if I had complete faith in both the advertiser and network and knew they were missing, or stealing, leads then I would be much more inclined to promote more offers more often.
But of course there are enough shady people in all three legs that wouldn’t want transparency so it will never likely happen.
PS Great article BTW
Great post Cakes and right on Yi Lu. It’s sometimes a very ugly business and getting to know some affiliate managers around the networks it’s quite disturbing to find out some of the shit that is going on.
Don’t forget about the goddamn scrub lists. When all else fails, they claim half of the people you sent them were scrubbed. I’m not naming specific names, but I’ll refer to them by the alias C.P.A.E.
well, i’m a little biased when it comes to cpae because they’ve done great by me and i’ve made a good deal of money with them, but you really shouldn’t be running zip or email submits anyway. too good to be true usually means exactly that.
Great post Nicky! Already forwarded to the higher ups!
Interesting post and very true. More transparency is required in this affiliate business. I am in a program that has refused to pay me for over 6 months while paying some others.
[...] = “http://www.nickycakes.com/avoiding-a-shady-affiliate-deal/”; As a followup to the post on affiliate networks, transparency, and trust, Nickycakes would like to talk a little bit more about the scary reality of shady affiliate [...]
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I say implement some type of screen recording which records the purchasers actions.
I’ve signed up on half a dozen affiliate networks and all of them seem to be scamming me in way or another.
I wonder, if you were stranded on a deserted island and could only choose one affiliate network… which would it be?