Affiliates vs Merchants vs Music Programs

[Brett_Tabke]

A very interesting recent story in the NY Times (subscription required) about an upcoming meeting between affiliate program operators and affiliate sites. It's in regard to the the current state of parasite ware.

[nytimes.com...]

Affiliate marketers are Web site publishers who direct their readers to merchants and earn a commission on sales. The smaller affiliates are irate at merchants who are doing business with a new breed of software companies. These software companies, whose technology the affiliates refer to as "parasite- ware," have created systems that sometimes hijack the affiliates' referrals. Because the software is often bundled with popular music-trading systems like KaZaA, Morpheus and LimeWire, it is on tens of millions of users' computers.

[buckworks]

Here's another excellent article on the subject of commission hijacking, by Ralph Wilson:

[wilsonweb.com...]

Update: Some senior executives from the largest affiliate networks are meeting next month (Nov. 7) to discuss predatory advertising and commission hijacking:

[nytimes.com...]

Two people have been invited to the meeting to represent "regular" affiliates. One of them is Shawn Collins of New York. He has some affiliate sites of his own, is affiliate manager at Club Mom and is a respected writer on the subject of affiliate marketing. The other person is myself, Elisabeth Archambault, whose chief qualification is that she has been yappy about some of the issues on a couple of message boards.

There will be opportunity for any affiliate who wishes to, to submit a position paper on the issues. The position papers that are submitted will form the backbone of the presentation that Shawn and I will make.

I'll post more about that just as soon as the details are finalized. I do know that the deadline for submitting papers will be Nov 1.

Elisabeth Archambault

[Nick_W]

Well, I just hope some good comes of it. I know Elisabeth and am sure she'll do a fine job of presenting the case.

I am doubtfull however of any real progress being made in favor of the little guy.

Hope I'm wrong ;)

Nick

[adi_gallia]

i hear some of the big guys are miffed about commissions being stolen from their sites as well.

the plot thickens!

[Travoli]

This is a difficult for affiliate program managers to deal with. A possible deterrent could be to require information from affiliates, in order to make sure top producers are legit. Would you (the affiliate) give them your real name, a phone number, and the domains of your sites in order to ensure the quality of the program? Or would this turn you away from their program, for fear they will steal your online sales-generating ideas?

[rogerd]

I think the major affiliate marketers will have to start policing their affiliates more, and put in strict terms that prohibit hijacking. This practice generates no additional sales for the marketer - it's purely cannibalistic on sales that were occurring anyway. In addition, affiliate marketers that fail to respond risk getting dumped by the quality affiliates that give them the exposure that cause the actual sale.

The depths to which people will sink never ceases to amaze me. If these commission hijackers had MBAs and better suits, they probably would have worked for Enron. As it is, they prey on mom and pops (and some bigger firms, too), stealing from them a nickel at a time.

[john316]

The RIAA may also have an interest in going after the "advertisers/leeches" on these networks. They seem to be financing illegal activity.

<commentary>I know many support the file "sharing" concept, but can become quite enraged when someone steals/"shares" web page content. There is no such thing as a "good" cancer.</commentary>

[zeus]

Affiliate programs is a great way for the little or midium webmaster to earn a little for there hard work or a business to get a little commision.

I have most visits from 12-33 year old on my site and for sure alot of them have kazaa and I have affiliate banners on my site and they do visit those but I do maybe earn 1$ a month with 130.000 - 150.000 visits a month so maybe I have a little trouble here.

zeus

[Iguana]

Travoli

we have to give our real names and addresses to the Affiliate program managers so they can send us our cheques!

[Nick_W]

Yes ;)

I've no problem with people seeing my stuff. I don't bandy the url's about but it's pretty easy for any determined individual to find out what I'm up to.

My ideas are sometime good but I've not managed to come up with any concept I'd
be afraid to show others yet.

I'm working on it though ;)

Nick

[rogerd]

>>we have to give our real names and addresses to the Affiliate program managers so they can send us our cheques<<

That must be my problem... and here I was blaming those &%$#@ commission robbers! ;)

[dingman]

<commentary>I know many support the file "sharing" concept, but can become quite enraged when someone steals/"shares" web page content. There is no such thing as a "good" cancer.</commentary>

<rant>
There's a big difference between the "file sharing concept" and theft of intilectual property. Mail isn't evil just because I could use it to send a photocopy of _The_Mind's_I_ to my little brother. FTP isn't evil just because I could put a copy of my Windoze95 disk on an FTP site. Peer-to-peer file sharing isn't evil just because I could share oggs of _The_Gosts_That_Haunt_Me_. The problem is people who actually do those things. File sharing has plenty of legitimate uses, including distribution of content whose creators consent to such distribution.

Good peer-to-peer networks also have the potential to be good for free speech in a hostile environment and civil disobedience, both of which are important.

Mind you, I don't support distribution of copyrighted matterial to which you don't have the rights, whether by p2p networks or other means. But I get really ticked off at people who blame the technology for the abuses.
</rant>

[Go60Guy]

I think the idea that merchants should require a good bit more in the way of disclosure in the affiliate application is, on balance, a good one. These parasites have proved themselves to be entirely bereft of moral, ethical and legal standards. In short, they have lied, cheated and stolen from other hard working affiliates.

The application, among other things, should, in bold letters, ask the applicant to agree not to employ any of the methods, naming them, that have been used by the scumlords to purloin commissions. This will indicate to the affiliate that the merchant is aware of the scumware problem, and is concerned for the welfare of legitimate affiliates.

Any legitimate affiliate should have no trouble disclosing pertinent information to the merchant. If I find a merchant turning the tables on me and stealing or plagerizing my ideas, I'll simply drop them. Occurrences of this kind will be rare in contrast to the opportunities for current and future scumware crooks to become unjustly enriched at the expense of other affiliates.

It seems that most people have given up on the big affiliate networks as having any responsibility in these matters. I may have a radical view, but, I believe they are wholly complicit in the theft of commissions, especially, when they issue the checks.

I applaud the efforts to stamp out this ugly abuse.

[tjcali]

This is an issue of a non-issue. The so-called "parasiteware" are affiliates as well and have figured out a way to monetise their wares. The reality is that not everyone is using these wares and when they do, it does not necessarily translate to commission, and when it does it's for relatively limited products/services. The real parasiteware are AOL8, MSN8, and potentially Yahoo's broadband based browser. This is online business reality and business as usual. It's up to smaller web publishers and affiliates to figure out how to innovate and add value in online chains and they will always be able to do this, just look in the offline world, there is plenty of niche service providers, retailers, and local based medias all competing for the same customers and they all seem to be doing just fine.

[john316]

>>File sharing has plenty of legitimate uses, including distribution of content whose creators consent to such distribution. <<

Definitely agree with that.

[Go60Guy]

tjcali - I have no problem with fair competition. Outright theft is not fair competition. Most countries have legislation against unfair competition. That's the business reality, whether online, or not. Its amazing that when it comes to the internet, common notions of fair play seem to become subverted in the minds of many.

The internet has simply given crooks another platform from which to operate. This should do nothing to change the legal and ethical framework regarding doing business.

[tjcali]

Go60guy! About two years ago I've put together a strategic distribution plan for one of those big 3 mentioned and since it had to do with affiliating distribution partners that would distribute versions of the affiliated software this issue came up from an ethical standpoint (at least in my own planning) looking at it from a perspective the current affiliate game was played at the time. After dwelling on it for about a month, I finally came to a conclusion that any content provider as well as an etailer had a chance to affiliate with us and distribute the software and perhaps this was a side trend that would soon become recognized business practice in the online marketing game. I essentially sold the concept rather than spend time seeing its implementation. That's why I mentioned to keep an eye on those # 8 packages coming out.

Is this theft? I suppose it depends from what perspective you look at it from. If you have the heart for the little guy, maybe it appears so. If you don't care for anything but meeting your metrics and satisfying your investors and other business stakeholders, and you have the opportunity to leverage your current weight in the market, then it's just smart business as usual. If the government gets you for anti-competitive business practices somewhere down the line, so be it as long as you score monetarily and/or strategically in the meantime before they do.

The little guy still has and always will have millions of opportunities. Creativity works wonders.

[Go60Guy]

Good Grief! You're failing miserably at trying to justify what's patently unjustifiable. Granted, there are many avenues open to small business people willing to work hard and creatively. But, in order for these forces to work, you need a level playing field here, where we are talking about affiliate marketing.

Enabling a few affiliates to enjoy a grossly unfair advantage over other affiliates hardly offers a sound business environment. I doubt that this fledgling industry can survive if the parasites are knowingly given unfettered license to destroy the work of other affiliates.

In my opinion, affiliate marketing, done properly, is a business model with great promise. Like any other business structure, it needs ethical and legal safeguards.

[tjcali]

I was just trying to show you a point of view from both perspectives. Both sides want to survive, it's a game of life. Take a philosophical perspective; a "parasite" is a living organism, it exists to live and if you kill it, is that right? If you think about it, there is no such thing as the concept of "right", it's "just" man-made cause one can't grasp the concept that one also behaves like a parasite in a current state of existence in a greater scheme of things. Life like business is first about survival, then finding ways of thriving, and if that does not work, contraction and death, that goes for individuals, businesses, and industries.

[buckworks]

The bottom line here is that parasitic link placements do not generate new customers; they only intercept customers the merchant would have had anyway through other means.

The affiliate whose content and promotions put the merchant in front of the shopper should be the one to get the commission if a sale results. It is simply wrong for some last-minute interloper to hi-jack the commission, just as wrong as it would be in a brick-and-mortar context, and it's even more wrong for merchants and networks to collude in such theft.

Sadly, there are still a lot of merchants out there who don't have a clue that some affiliates are having their customers poached by other affiliates. It's up to folks like us to tell them.

On a different but related note, to assist with preparation for the meeting in New York on Nov 7, interested parties are invited to submit opinion papers. What affiliates say in those papers will help to shape the presentation which will be made by Shawn Collins and myself.

Visit [iafma.org...] to read more about it and to find a form that will enable you to submit your comments quickly and easily. Both Shawn and I will receive copies.

Elisabeth Archambault

[Iguana]

Good post, buckworks

There has been loads of discussion on Amazon discussion boards about 'scumware' - so Amazon can't fail to be aware of the strength of feelings, even though most of it is directed as hatred against Amazon for not doing anything about it.

(I haven't contributed to Amazon discussion boards because the level of personal abuse is extreme - makes you appreciate Webmasterworld and it's posters and moderators)

[tjcali]

Elisabeth, so-called "parasitic link placements" can generate new customers and frankly merchants don't care as long as an affiliate medium can influence its visitor to a point of becoming a customer (else they wouldn't expire cookies), that's why merchants may pretend (rarely) but won't do anything about it (no $ motivation). And the fact is that an affiliate may generate awareness and/or interest in merchants offering but the visitor will most often than not convert to that merchant at another time (cookie expired), via another affiliate channel, directly over phone, or offline locally if offer available. So I saw this new health product on an affiliate site, looked up some more on it via google, checked pricing on dealtime, and bought it through a local shop. According to your bottom line argument, both Google and Dealtime could have been considered parasitic scumware if I had purchased it referred via their interface.

I understand your point of view but your arguments are weak in an industry segment that's less than a drop in a bucket to other industry practices. Anyways, I wish you the best of luck in NY.

[buckworks]

<<Elisabeth, so-called "parasitic link placements" can generate new customers >>

Your definition of "parasitic" must be different from mine.

<<and frankly merchants don't care as long as an affiliate medium can influence its visitor to a point of becoming a customer (else they wouldn't expire cookies), that's why merchants may pretend (rarely) but won't do anything about it (no $ motivation).>>

I don't quite follow your logic here, but one thing that IS a strong $$ motivation for merchants is that the parasites are conniving to place their cookies on traffic that would otherwise have been FREE to the merchant - search engine traffic, type-ins because of offline promotions, the merchant's own newsletters, etc. In my experience once merchants understand what is going on they are not amused.

Trouble is, though, a lot of merchants don't understand. They just see that their affiliate Parasite X seems to be making a lot of sales, and they don't understand where those sales are coming from.

<< And the fact is that an affiliate may generate awareness and/or interest in merchants offering but the visitor will most often than not convert to that merchant at another time (cookie expired), via another affiliate channel, directly over phone, or offline locally if offer available.>>

The visitor will most often than not convert to that merchant at another time ... are there some studies you could point us to, to back up that assertion?

<< So I saw this new health product on an affiliate site, looked up some more on it via google, checked pricing on dealtime, and bought it through a local shop. According to your bottom line argument, both Google and Dealtime could have been considered parasitic scumware if I had purchased it referred via their interface. >>

That situation is not comparable at all, because Google and Dealtime or your local shop do not interfere when the shopper is on my site or has followed my link to a merchant. I'd better qualify that - Not interfering in any way that I know of! ;)

One of the problems in talking about this whole issue is that there are so many analogies being tossed around that are not good parallels at all.

<<I understand your point of view but your arguments are weak in an industry segment that's less than a drop in a bucket to other industry practices.>>

Last I heard, the ancient ethic "Thou shalt not steal" was still in effect. Last I heard, ecommerce was not exempt from tort law or contract law either. Never underestimate the power of what is RIGHT.

<< Anyways, I wish you the best of luck in NY. >>

Thank you; I'll need it. That, and some good research help!

[QNetwork]

Does anyone know what finally happened in the Nov 7 conference?