This is a live blog post from the Affiliate Management Days Conference in San Francisco.
Affiliate Management Days is an educational event for affiliate managers and those responsible for performance marketing programs within their organizations. It is a place where the thought leaders of the performance marketing world gather to exchange thoughts about the advancement of their performance driven campaigns.
Following are the key takeaways from Keynote Ben Edelman, Associate Professor of Business Administration at Harvard Business School.
Key Takeaways: from A New Code of Conduct for Affiliate Marketing
Why Affiliate Marketing?
- Attractive pricing model, low risk model — “I’m thrilled to pay x percent commission for anyone who can bring in a sale. I can’t lose!”
- Affiliate marketing fixes paying for placement on low quality sites, invisible banner ads, and large volume click fraud.
- Difficulty managing and monitoring high volumes of affiliate partners you’ve never met.
- Many and divergent incentives: merchant, network, affiliate program manager, affiliate.
Affiliate Earns Commission If
- User browses the affiliate’s Web site.
- User clicks affiliate’s link to merchant.
- User makes a purchase.
Question: If that’s the case, can the merchant partner with anyone?
What Can Go Wrong?
- “Strategic behavior” — doing something that perhaps you would not like that helps them earn more money.
- This impacts affiliate behavior, affiliate network behavior, and affiliate manager behavior.
You can use network tools and forensiq.com to help monitor and catch fraudulent behavior in order to keep your program as clean as possible.
There are legal case examples of “what can go wrong” working with affiliates, per Edelman’s website.
- Can decide “how hard” to look for this stuff. If they are not taking responsibility or accountability for affiliate bad behavior, they will still earn revenue from it. They need to consider what happens if they find a problem and how it will affect their revenue.
- How will merchants respond if they find problems?
- Can decide “how hard” to look for this as well, especially when they get paid $60,000 plus 10 percent of year over year affiliate program growth, as an example. They have incentives to look the other way in many cases.
- Get an old computer and use Firefox’s built-in tools and/or Chrome after installing some adware/spyware to try and catch this behavior.
Solutions to “Turning the Other Way”
- Set realistic goals.
- Reward genuine advances, such as catching fraud.
- What if the affiliate manager finds fraud in last year’s results? Accept and applaud that you get to save money going forward because of their discovery.
Keep an Eye Out For:
- “Loyalty” plugins
Recognize your vulnerabilities.
Network Managed Program
- Think carefully about network’s incentives. Set clear guidelines especially in the areas that are controversial.
- Don’t assume network’s default is in your interest.
- What do the specialists know that you don’t?
- Come to AMDays. Read news forums. Hire professional help!