Affiliate Marketing

3 Dangers of Affiliate Marketing and How to Avoid Them – Multichannel Merchant

3 Dangers of Affiliate Marketing and How to Avoid Them – Multichannel Merchant
Written by publishing team

Affiliate industry nuances. There are many players, classes and moving parts. While it is some of these nuances that make the affiliate model unique and valuable, such as linking compensation to results, there are others that are less desirable. What’s more, if the company is not aware of it, it risks damaging its brand.

In order for companies to take full advantage of the opportunity and the return on investment that the Ally program is able to produce, they need to understand and learn about some of the aspects and nuances of the industry. Here are three examples of this and what you should pay attention to:

Followers who don’t create value

Affiliates are marketing partners. They include content bloggers, review sites, schools and organizations, to name a few, and can be incredibly effective in promoting a brand’s products and services. The vast majority have a very good reputation and are constantly on increasing legitimate sales of brands. However, there are also those who do not.

In affiliate marketing, the concept of “increase” generally refers to sales that the advertiser would not have obtained without the affiliate’s contribution. In other words, the affiliate leads a new customer into a company.

Where a nuance occurs is when a company assumes that all affiliates in its program drive sales of new customers while, in fact, there are those who primarily benefit from the efforts of affiliates or other channels.

For example, some affiliates (we will call them “last affiliates”) design their business models to try to attract customers who are already in the buying process or in the shopping cart. By doing so, they may also negatively impact the affiliates that generate the most value for the brand and new customers via their blog, social media channel, review site, etc.

By intercepting a customer while their intent to buy is already high or just before the point of sale, these latter affiliates often get credit for transactions that they did little to initiate or offer no additional value to them. Thus, companies end up paying such large commissions to the latter’s affiliates.

To prevent this type of activity with low or no value in your program, it is important not to accept results at face value. Dive into your affiliate tactics to really understand how they promote your brand and consider structuring your external referral model so that it doesn’t reward this behavior.

Unethical affiliates

While most affiliates are ethical partners that provide great value to companies, bad apples do exist, unfortunately. These unscrupulous marketers should not be confused with affiliate marketers who may not add additional value. No, these types of affiliate marketers are more outrageous. They intentionally engage in deceptive marketing activities to collect commissions.

For example, in a recent Huffington Post article, Dr. Mehmet Oz shared his personal story of how some ethically questionable affiliates and internet marketers used his likenesses to sell and promote acai berry and other products — all without his permission. It’s gotten so bad that it’s putting his brand and integrity at risk. To draw attention to this pervasive problem, Dr. Oz has dedicated multiple episodes of his TV show to the topic, even hiring private investigators to find out who these shady marketing individuals are and educate the public on how they are intentionally deceived.

Some companies realize these rotten apples but turn a blind eye because their marketing tactics generate revenue. Other companies have no idea that these types of affiliates exist in their programs or promote their brand in illegal or unethical ways. Regardless, none of the scenarios reflect well on a company or show a successful program.

Similar to how you can avoid compensating affiliates that don’t provide value, preventing unethical affiliates from getting into your program requires you to carefully examine each of your partners, get a transparent view of what they’re doing to promote and represent your brand, and monitor their activities Once they are accepted into your program.

perverted incentives

For most of the affiliate industry’s history, networks have represented affiliates and merchants in a single transaction and have charged a “performance fee” to do so. While this structure is not outrageous or illegal, it leaves no room for appropriate checks and balances, so incentives are always skewed. These skewed incentives have also led to serious problems, including fraud, bidding for brands, and cookie stuffing.

Today, although the industry has developed and matured, some of these skewed incentives still exist because they benefit many players in the value chain; Stopping these behaviors can reduce profitability. Fortunately, there are companies that are becoming more aware of who they are involved with. They have also begun to reject partners who do not support them, who do not represent their brand with integrity, and who accept bribes. This is a welcome situation and will help the affiliate model get to a place where everyone has the opportunity to stand out and work productively together.

The nuances are present in every industry. Some lead to a competitive advantage where others can be a blow to your brand. By choosing your partners carefully, demanding transparency from them, and making sure there is a clear link between the results you get and the amount you pay, you will be able to reap the rewards that an accurate affiliate program offers.

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publishing team