Affiliate networks competing with their customers?

[blaze]

I was checking out a landing page, and I noticed that it (and many many others) belonged to a top tier affiliate network.

I wasn't really suprised that this is happening, though I was
somewhat suprised that the whois entry was so brazen.

Is this simply an accepted practice? How do you feel about aff networks simply checking out which of your offers are high revenue, your landing page, and then cloning your practice?

[ibQuixote]

Its no secret that the networks are getting on the content side of the business. In the last year, ValueClick (owner of Commission Junction) acquired a couple of publishing operations, one in the US, and there was another in Europe, (I think it was a bunch of classified sites). From their perspective it makes a lot of sense, as they've recently stated their desire to "control traffic" They know how much the affiliates are making, which is a lot, and so why not buy the affiliates out?

CJ is on the advertiser side of the business as well. They acquired a group of differntly branded advertiser commerce sites that sell toner cartriges. Talk about controling the traffic! They usher the consumer all the way from first click to the final transaction. Im not sure, but I think LinkShare may have a similar strategy, as I believe they may have recently bought another publisher business.

While these strategies do put affiliates at a disadvantage, it does make some affiliates hopeful to have their own operations bought.

[edited by: eljefe3 at 4:08 am (utc) on Dec. 14, 2007]

[blaze]

It would be nice to hear about an affiliate network that promises not to compete with its customers. I'd be happy to sacrifice a few points to work with them rather than some of the other ones that are creating landing pages and competing with me on keywords.

[Chuck Hamrick]

Commission Junction owns a coupon site and I had some trademark issues with them. They took 10 days to comply so I removed them from that program and two other networks.

I am not comfortable with networks owning affiliates. I am also not comfortable with affiliates becoming merchants and affiliate managers.

[edited by: eljefe3 at 3:45 am (utc) on Dec. 14, 2007]

[Marcia]

I am not comfortable with networks owning affiliates. I am also not comfortable with affiliates becoming merchants and affiliate managers.

I'm certainly not comfortable with merchants becoming affiliates, first recruiting affiliates for themselves and then putting up their own affiliate links to other programs (or Adsense). Visitors sent to them by their affiliates, when those visitors then click on the "merchant's" affiliate links, result in giving FREE traffic because the ones sending them the traffic don't get paid for sales made through the "merchant's" affiliate links.

I'm also not comfortable with an OPM having all the proprietary information of the affiliates of the programs they manage, having been entrusted with it in confidentiality, and then doing PPC as an affiliate themselves, competing against the very people whose efforts they're supposed to be supporting.

[markwelch]

I think the key issue (for me) is the worry that the affiliate network will exploit "my" data to compete against me. I've had the same issue with some search engines which have staffers actively engage in PPC bidding as affiliates.

Here I am, spending my money on site designs and SEO, or PPC campaigns, to identify the best ways to earn profits as an affiliate. After I've spent my time and money, I find that I can't profitably promote about 90% of merchants.

But the affiliate network and the search engine both have access to some of my key data, and if they exploit my data, they can see which affiliate programs work and which do not. They can even aggregate data from many different affiliates and merchants.

A couple of years ago, one of my clients told me that he'd "caught" a Google employee exploiting his account data to create an affiliate account with money paid to one of the employee's family member. I'm not certain I believe that report, but it certainly is something I worry about.

Of course, the merchant can do the same thing, to some extent (and when I work as a consultant to merchants, I encourage them to exploit their referrer data, including affiliate-referrer data). But the "network" and the "search engine" are in an even stronger position to aggregate and exploit data.

I tend to agree with folks who view some aspects of PPC search, coupon sites, and affiliate activity as forms of "arbitrage" -- and profiting from arbitrage requires good data. If someone else can view the same data I have, without paying for it as I do, or if they can view even more data than I can access, they will have a huge advantage over me.