Matt Bailey’s affiliate blog

Two posts in one day for all you lucky readers. Normally I don’t write stuff that people ask me to, but in the case of my favourite country bumpkin Chris Johnson, I’m prepared to make an exception.

Chris has asked me to write about the A4U Awards, nominations for which are now open.

Why are the A4U Awards important? There are many grumblings that the awards are divisive and small affiliates are prevented from attending by cost etc. I can understand this but as anyone who has spoken to me over the last year will tell you, I firmly believe that in order to secure the future of our industry, we all have to start behaving a bit more professionally. For me the A4U Awards are the greatest demonstration of how far we’ve come and why our industry deserves to be taken more seriously. You can’t get further removed from the picture of a grubby affiliate than a bunch of us at a swanky black tie event in Mayfair can you?

So the details… The event this year is being held at the Grosvenor House Hotel on Park Lane on 9th June, and as I mentioned the nomination phase is now open. The community choice awards are typically fiercely fought over and my desire would be to see a great deal more votes being cast and more people being nominated. There are a lot of talented people in this industry and it would be good to see them rewarded instead of it just turning into a popularity contest amongst the same few faces from the forum.

So get voting everyone. Every vote counts…

I guess that now it is up loud and proud on the IAB’s website, I must be able to discuss it without getting told off by Keano…

My year as Chair of the IAB Affiliate Marketing Council is over and I had a splendid time over the year. I think that we did manage to progress the profile and momentum of the council over the year. Whilst most publicity was received for the Voucher Code Guidelines, there are a couple of things that I am more proud of during my tenure.

Firstly the introduction and attendance of some of the larger brands that play in our space. I think that the desire to get involved and help shape the industry shown by companies such as Sky, eBay, Vodafone and RAC is critical to how the industry is viewed.

Secondly, I feel that the Ethical Merchant Charter is a wholly welcome piece of guidance for merchants who are running or looking to run an affiliate campaign. Whilst something like this can never be regulated, I think it is importnat that we have published a benchmark for how merchants should behave. I believe that a lot of the fallout that we see is down to misunderstanding rather than any one party trying to shaft another, so just compiling a framework showing how merchants are expected to behave is a real positive. I hope that both merchants and networks will continue to embrace this.

Moving into 2010, I am delighted that my legacy is being presided over by Kevin Edwards. Not only was Kevin the man who got me my first job in affiliate marketing, but he is also a respected colleague and a trusted friend. I have no doubt that he will steer the Council in the correct manner. He was up against a raft of worthy candidates and kudos goes to Duncan, Bruce and Lee for making a fight of it and demonstrating that there are a lot of passionate, ethical people in our industry.

Hopefully I will still continue to play a full part in the Council’s activity going forward, and I look forward to helping in whatever way I can with a highly successful 2010.

Quick round up of some useful blog posts and articles from the last few weeks.

First up, bit of a shout to an old school mate of mine who is attempting to make it in the big scary world of affiliate marketing and is documenting his efforts. Whilst he may be a miserable, cynical bugger he does write very well and this blog promises to be entertaining and enlightening. Have a read of the blog – http://www.monthly5k.co.uk/ – and follow him on Twitter – @mjs1979.

Moving on, the naivety of some businesses when it comes to online still astounds me. Either do it properly or don’t do it at all. Something expounded here by George Marshall’s post on Derek Rose pyjamas.

Next a couple of posts from Rob Barham. First one on which merchants he’s seen improvement on in 2009 and then a follow up on how 2010 is shaping up well so far.

A couple of entries from the excellent team at Easy Content Units. Firstly a post about their 1st birthday and a review of the first year. Secondly an interview from the CJ blog with one of the Directors and all round nice guy Jason Brockman.

There have been a few posts about the launch of Impact Radius, which I think is a really exciting addition to the affiliate landscape. My favourite post on it is this one from Fraser.

A couple of posts from Kirsty have piqued my attention again this month, both around a similar theme. Firstly on how her traffic sources are moving from PPC towards SEO, and secondly on how to mine the long tail and why it’s important.

On the network side, AWin continue to innovate and market their innovations very well. At the IAB Affiliate Council we’ve spoken for a long time about how we can facilitate allowing affiliates to market themselves better to networks and merchants. AWin have announced their affiliate index, which looks like a good tool for merchants to use.

As someone who messes around in a very amateurish way with Wordpress for my blog, I find posts like this one from Marketing Elf really helpful to demonstrate to me the potential.

More news from the US, and an interesting summary of a few posts on the changes that Google is making over there and how it’s affecting affiliates.

Another post from the ever excellent Magnus Nilsson on improving your search strategy.

Finally, great to see some of the networks embracing the appeal following the terrible tragedy in Haiti earlier this month. The banners on this page are from DGM and I’d appeal to any affiliate to spare a bit of space on their page to push this important message.

Following on from my previous piece about selecting an affiliate network and in particular the comment from buy.at’s Ginger Finance Ninja Paul Newton, I thought i’d write a follow up post.

What is most important to affiliates when working with a network? When a campaign is dual network, what factors will influence the decision over which network to work with? Clearly personal relationships are a large factor, as is the familiarity you have with the interface. I’m sure that confidence in tracking technology comes into play, alongside the availability of any tools that will make it easier for you to promote the merchant.

However, I think the biggest factor in this decision should be the payment terms that networks operate. This is the key element in the relationship between network and affiliate in my opinion, and an area where networks can offer a key differentiator against their competitors.

However there doesn’t seem to be a great deal of information out there which will allow affiliates to make up their mind on this. Therefore I decided to conduct an independent survey of all networks to discover what they do. I asked each network the following three questions:

• How often do you pay affiliates?
• Does the payment require you to have received the money from the merchant before you pay affiliates?
• What protection do you offer affiliates should one of your merchants go bust?

Webgains -

Affiliate payments are run weekly on Wednesday including all transactions that have cleared for payment up until Tuesday the week before. Affiliates can be paid weekly if they’ve selected to be paid by bacs or paypal, provided the minimum threshold (£20) has been met. We also run monthly payment runs on the first Wednesday of every month for those affiliates who’ve chosen to be paid monthly or by cheque.

For programs on prepayment, affiliates are paid normally as merchants have already provided the funds. For programs on account, merchants first need to pay the relevant invoice before we release payments. 80% of Webgains UK programs are on prepayment. The programs on account, the majority we invoice biweekly or they settle the monthly invoice within 10 days, so the affiliates don’t wait for long for their commissions to be released

We have alerts that notify us should the merchant credit score fails, which allows us to take action immediately to protect affiliates. For program on prepayment, we normally cover their outstanding balances. For programs on account, we try to secure outstanding payments as soon as possible, based on the legalities of each case.

Affilinet

Monthly. 15^th of each month.

No we do not wait to be paid by our advertisers before paying affiliates. We prepay commissions so any confirmed sales in say Dec are paid on 15^th Jan regardless of payment to us.

We prepay so not applicable. Affiliates would always receive commissions because of our prepayment.

Buy.at

1) We pay affiliates once per month, with funds hitting accounts on 29th of each month (or the prior work day if that falls on a weekend or public holiday).  I watch the forums very closely and, from my slightly biased view, I would say that we are second to cone in terms of getting payments right, on time and without fuss.  Our international payment offerings and prepaid debit cards also means that we can deal with international affiliates for the growing global network just as easily.

2) No, the way we view things is that the job of debt collection is ours and if we don’t do it properly then the affiliates should not suffer.

3) We have an excellent track record of paying out to affiliates even when merchants have been declared insolvent. MFI being the most recent example.

Paid on Results

Paid On Results is the fastest paying Affiliate Network in the World. As far as we aware no other Network offers Affiliates the ability to be paid on request. This means at any time, and as many times in a month, that the Affiliate has an available balance (validated sales) over £25 they can submit a request from their Affiliate Control Panel in minutes, for payment via BACS which is paid within days.  As soon as a sale is validated by the Merchant it is ready to pay out. For example during November and December one of our top performing Affiliates requested payment 7 times. Independent source (Kirsty McCubbin) states in Twitter Message http://twitter.com/AffiliateStuff/status/4166552388 “I really, really, really love the POR payment on demand system. Why can’t more networks do that?”.

Yes and 98% of our Merchants are “in funds”. This means that they pay a deposit float in advance and maintain this float as an ongoing positive balance. Consequently there are always funds immediately available to take advantage of our quick turn around in payment that allows Affiliates to quickly invest money back into their promotions. This is especially critical during the busy Christmas period as our Affiliates don’t need to worry about maxing their credit cards and having to wait until weeks/months after to be paid.

Of the Merchants going out of business to date we have covered all debts, however our greatest protection is that we operate an in funds policy for the majority (98%) of our Merchants. As such, our Affiliates have been very well protected and none have suffered any loss of income to a Merchant going bust.

DGM

1. Once a month on 60 days after invoice date

2. Our standard procedure is to pay after 60 days even if we are waiting on funds. However we do reserve the right to withhold payment in exceptional circumstances.

3. In the majority of cases where a merchant has gone bankrupt we have managed to cover the affiliate commission a lot of times at our own expense. This has been done as a goodwill gesture to our affiliates as we aren’t obliged to cover merchants debts.

Affiliate Future

1)     We pay affiliates once per month

2)     No – we pay all the validation commission for the previous month in our payment run, regardless on whether we have been paid by the merchant

3)     There is no set protection for this, however there are a couple of points to make:

1. When this has happened previously, we’ve always paid the Affiliate
2. We have a pretty good credit team and most merchants are pre-paid or have little owing to us.

OMG

Twice a month – on or around the 6^th and the 20^th

Yes – although wherever possible we work on ‘pre-payment’ terms with the merchant to ensure that funds are in hand as soon as validations are confirmed.

In the case of an advertiser going bust, we review any such incident on a case by case basis and typically OMG fund the cost of any losses for affiliates.

Affiliate Window

Affiliate Window pays affiliates twice a month, generally on the 4^th and 18^th of each month.  This facilitates the quickest possible turn around for affiliate payments whilst still allowing merchants the piece of mind to verify sales as we do not operate a ‘claw back’ process.  What’s validated is paid to affiliates.

Affiliate Window introduced a ‘traffic light’ system in 2009 that flags to affiliates the different payment terms in place for every merchant. If a merchant has a green status AWin will pay commission out before the merchant pays us. Currently about two thirds of AWin merchants have this green status and this ultimately means we can pay affiliates more quickly for commissions generated from these merchants. AWin will pay commission generated for merchants with an amber status when that merchant pays AWin. There can be a number of reasons why a merchant has an amber status but it certainly doesn’t mean the affiliate need be concerned in any way, just that they may have to wait longer for their commissions. We like to think that having this traffic light system in place encourages all merchants to want to achieve a green status as well as giving clarity to affiliates about anticipated payment turnaround times. It’s important for networks to recognise there is an element of risk when an affiliate starts promoting a merchant so in conjunction with the additional information we supply on the average validation periods when a sale is generated, we feel affiliates are armed with enough information to decide which merchants to promote.

Subject to the traffic light system, AWin covers the first 3K of any validated loss and this covers the vast majority of niche SME clients, outside of that we have no obligation although our track record has seen us cover the validated affiliate payments for Woolworths, Empire Direct, Blooming Marvelous and CDiscount when they went into administration.  Unable to pay their affiliates AWin covered the loss (an amount totaling more than 150K) even though we were unlikely to recoup anything back bar the goodwill and loyalty of those affected.

Tradedoubler

Once per month, on the third Tuesday

We do require that the merchant has cleared funds with TradeDoubler before we pay affiliates

We have a number of measures in place including a dedicated accounts receivable manager who monitors the financial stability of all of our clients, as well as their payment history. In the event that a client should be in financial difficulty, we will inform affiliates immediately and pause the programme. Our legal team have previously been successful in managing to collect payments where a client has gone into administration, and our first priority is always affiliate payments.

Affiliates should also note that for added security we have a number of prepayment programmes on the network where clients pay a commission fund in advance, allowing us to pay affiliates faster. When applying for a programme, just check if prepayment is selected as yes.

Linkshare

LinkShare pays affiliates weekly

Does the payment require you to have received the money from the merchant before you pay affiliates?  Yes

The agreement is made between the merchant and affiliate.  However, in the past, if a merchant has gone out of business LinkShare has done everything within their power to reclaim payments on behalf of affiliates.

Commission Junction

CJ pay publishers 1 x monthly – usually around the 20^th and on the proviso that payment has been received from the merchant first

Does the payment require you to have received the money from the merchant before you pay affiliates? Yes

CJ are very particular about the type of merchant they sign and all new clients are credit checked prior to going live and in most cases, merchants are required to lodge a deposit with CJ that will cover a month’s payments in the event of an advertiser going into administration.

Commission Junction has extremely thorough credit control measures in place with a dedicated finance team following up on a regular basis with merchants to ensure payments are received on a timely basis reducing the exposure CJ and the affiliates should a merchant go into administration.

Should a merchant go into administration CJ will also follow up with any necessary legal action where possible to ensure all measures are taken to collect any outstanding funds.

Just a quick post to say a huge congratulations to Neil Hutchinson and everyone else at Forward Group (formerly TrafficBroker) on their purchase of uSwitch. A tremendous example of how to grow a sustainable affiliate business.

Really interested to see what their plans with uSwitch are, particularly whether they continue to work with advertisers direct or work with networks. Also I wonder if Neil’s going to appear in his own adverts…

Great interview with Neil here.

As we move into the New Year, it’s always good to look back as well as forward. So here are a few interesting posts and blogs I’ve read over the last month or so.

First of all a few posts from affiliates making their resolutions for the New Year

Raymondo Theakston aka Befuddle

Jason Dale aka Loquax

A4U Awards Blogger of the Year Kirsty McCubbin (McKenzie!)

Peter Anderson

Kieron Donoghue

A few other interesting affiliate based posts

Building a new affiliate site in half an hour by George Marshall (Entrepreneur)

Paul Wright on catching up on missed A4U Expo sessions

Kirsty’s view on Mega Monday

Rob Barham on the Perfect Affiliate Scheme – don’t agree with all of this but a well reasoned, thought provoking piece.

Slightly simplistic piece from Feedfront in the US on quality content on affiliate sites

Wider online marketing posts

The ever excellent Magnus Nilsson on brands hijacking other brands PPC space and the limitations of price comp sites

Really cool timeline of Google changes and announcements over the last 12 months – my favourite is Latitude, but I am a nosey bugger.

Good article on eConsultancy about Augmented Reality and the hype behind it

Really nice presentation I saw on Slideshare about how Apple’s Steve Jobs crafts presentations

If anyone has any recommendations on interesting US affiliate blogs or general online marketing blogs I should be reading, please leave a comment below.

At i-level we are completely network agnostic and will select what we view as the best partner network for our clients. As many merchants will be in this position, I thought I’d write a brief post outlining the process we go through which people will hopefully find helpful.

To my mind, there are five main functions that a network perform and they therefore need to be graded on these criteria.

Tracking Technology

The fundamental thing that a network should offer is robust tracking technology. I think that all of the major networks have good tracking but there are a few differences in between the offerings. I’m no expert on the technological side but you should do your homework and ensure that tags can be implemented etc. Some of the networks offer tracking functionality above and beyond standard cookie tracking, see my previous post for more discussion about this.

In addition to the tracking technology, the client facing interface is something you also need to be comfortable with as you’ll be using it a lot. Out of all the network interfaces that I’ve used I find buy.at the most intuitive and easy to use.

Affiliate Payment

One of the major strengths of the network relationship is there payment of affiliates. Merchants prefer making just one payment to a network and affiliates seem to trust getting their payments from the networks. There are differences in the way that networks pay, and when selecting a network you should take this into account.

From the networks with whom we currently work, it seems that AWin’s fortnightly payment goes down well with affiliates.

Account Management

Clearly if you are working directly with an affiliate network you will look to them to provide some guidance in terms of developing affiliate strategy. Working as I do for an agency, I think there is an argument for dictating this yourself or employing an agency to do this for you, but if you are going to rely on the network to provide this service for you then there are a few things to bear in mind.

I would always recommend insisting on meeting the actual people who will be running your account on a day to day basis ahead of selecting a network, rather than just the sales team. Try and get an understanding of how much they understand about your business and the sector that you operate in. I also believe it’s an advantage if your account manager runs similar campaigns, maybe not direct competitors but has some specialism in your industry. An interest in what you do as a business is crucial in the account manager trying to push your program. I would also suggest tying down in an SLA how much account management time you will receive and making a point to ensure that you get it. I have seen numerous examples of networks pitching that you will get X hours of account management only for that to disappear once the business is won.

Finally, what support does the account manager receive in the organisation. Does your account sit within a key account team or a vertical sector specific team? Is there a publisher team driving recruitment and how do they do that. or is that all the responsibility of the AM? What senior level support within the organisation does your business have? Are there clear lines if you need to escalate and will that escalation point understand your business?

Tools and technologies

There are good wins to be made to your affiliate campaign through the use of tools and technologies that make it easier for affiliates to promote your business. A good network will spend time and money on research and development and you should identify whether any of these tools will enhance your campaign. This will be dependant on your market sector as a lot of the tools are focussed on specific sectors. The obvious stand out example here is Affiliate Window’s ShopWindow suite of technologies, predominantly geared towards the retail sector, but there are other good tools out there. I would highlight Webgains‘ Voucher Code Management Tool, buy.at’s partnership with Coull TV, OMG’s Refer product and CJ’s tie up with FusePump.

Affiliate Reach

My final network function is the reach that they have within the affiliate space, particularly within your industry vertical. Different networks have traditionally held strengths within specific industries and clearly one that specialises in your particular space will have enhanced visibility and influence with affiliates in that area.

All networks will state that they have a wide base of affiliates but you should ask how many affiliates they have that are driving clicks and sales within any particular month. Also you should attempt to understand the breakdown between different types of affiliates within their network. An over reliance on a particular type of affiliate is not healthy and you will want to see a good spread amongst a cross section of affiliates.

General points

I would ask to get some visibility over some other campaigns that the network run, particularly similar programs to your own. Whilst they won’t show you any specific stats, you should ask for an idea of the number of affiliates who are active on the campaign, and an indication of the types of affiliates who do well.

Clearly due diligence should be undertaken into the finances of any network with whom you work and you should speak to your existing affiliates or, if you have a new campaign, anyone you expect to be a top affiliate to gain their insight.

I’m always more than happy to share any words of wisdom if people want to get in touch to ascertain my opinion. You can get me on matt[dot]bailey at i-level[dot]com.

The rise of the iPhone, Android, Facebook, iGoogle etc has seen the increase of applications being developed to sit on disparate platforms. For example, Net-a-Porter have an excellent iPhone app which allows you to purchase their products direct from your iPhone.

So far the majority of these applications have been developed in house by the merchant themselves (in the case above, by the development team at Net-a-Porter. However, we are beginning to see more and more companies open up their API feed to allow 3rd party developers to utilise the original website data and interract with this data in new and exciting ways.

The theory is that the in house development team have limited resource, however by opening this up to an expansive open source community to allow them to develop applications on behalf of the merchant.

I’ll give two examples of how this could work and I’ll use Ocado as an example, for no reason other than I was just on their site. Firstly, a developer could use Ocado’s API to create a website that appeals to a specific niche. For example, a version of the Ocado site that is optimised for blind people or only contains products that can be eaten by people with a wheat allergy. This would allow the target groups to gain a better experience whilst tailored to them whilst being able to purchase Ocado products seamlessly.

Secondly, apps could be developed which interact with the consumer wherever they happen to be online, without having to navigate to the Ocado website. The obvious examples are having apps on platforms such as Facebook and the iPhone, whereby consumers can shop at Ocado whilst on the move or chatting on Facebook. There are also a few more interesting uses, such as integrating the app into a recipe site, having a pre-populated basket containing the ingredients required to make the recipe and purchase them direct from the recipe site.

There are a virtually limitless way of how apps can assist in making online experiences more efficient, but how does this relate to affiliate marketing you may ask? Well I think that there are some very clever ways that the CPA metric can be used to reward these developers. Out/open sourcing removed risk from the merchant but clearly developers aren’t going to create applications just for fun, they need to be rewarded somehow, and paying on a CPA seems the most logical way of doing this.

Sticking with our Ocado analogy, Ocado could pay the developer a percentage for every item added to the basket and/or subsequently purchased. This approach enables a risk free way for the merchant to encourage developers not only to develop apps, but also to distribute them as widely as possible.

So will this become the next iteration of the affiliate model? We’ve moved from content to PPC to cashback to voucher code, and have so far managed to find a place for all. Will “developer affiliates” sit alongside others in the mix and prove a catalyst for merchants to become increasingly aimed towards CPA for their online acquisition activity?

Whilst it looks like the EU has seen sense (or Google have lobbied hard) and decided against this well intentioned but ultimately impossible regulation against cookies (full details), it has raised the question about the future of cookie tracking in the affiliate channel.

A few networks have implemented cookieless tracking, and a few bold claims have been made. My problem is that I’ve never seen any empirical evidence that demonstrates this, which must be not only the most categoric way of proving these claims, but also the easiest.

Networks such as Webgains, Paid on Results and Affiliate Future have invested in “cookieless” tracking and Affiliate Window are currently rolling it out across their merchant base. Now all of these networks run campaigns that are dual network with traditional, cookie only tracking in place. Surely a comparison of the conversion rate across each campaign would answer the argument once and for all. Whilst I appreciate that this may vary slightly dependant on the type of affiliates on each campaign, it should give a reasonable indication.

Furthermore, affiliates are generally pretty savvy and I’m convinced that we’d have seen a switch from those networks without “cookieless” tracking to those with, to take advantage of the increased sales. In particular, the big cashback sites who work across multiple networks and also invest a lot of resource in dealing with missing transactions. They have more visibility than anyone and yet there doesn’t seem to have been much desire to consolidate their business to the networks with the more advanced tracking.

My second point is that if we do accept that more sales will be tracked through “cookieless” tracking, does that mean that merchants should reduce their commission rates? It has always been accepted that a certain percentage of sales will not be tracked and so therefore, CPA rates have always been artificially high to compensate for this. If tracking is improving, should we be looking to reduce commissions as merchants are effectively now paying for sales that they would previously have got for free.

I’m sure this argument will not be popular with affiliates or networks, but should provoke interesting debate…

I haven’t blogged in ages which is rubbish, but we have been very busy here in the i-level affiliate team working on various projects for our clients, one of which I decided to write about today as it’s something we’re quite proud of.

We’ve been working with Orange and FusePump to overhaul the way in which the Orange product feed is produced and distributed. FusePump extract content dynamically from Orange’s site and use the data to produce a feed, and also a couple of really handy affiliate tools.

The benefits of taking the information this way are that the information is current as it comes direct from what customers see on the site. Also we take all information that is available, meaning a much richer feed than previously.

The first of the two tools is FeedCreator. This allows affiliates to customise the feed to suit your requirements. So for example, you can customise a feed that contains only Nokia handsets or pink phones, making it easier to manage.

The second tool is AdCreator, which allows affiliates to create dynamically updated content units in a full range of IAB approved ad creative sizes. Rather than just witter on about them, here’s one I prepared earlier.

Big thanks to Rob and Lee from FusePump for getting us live so quickly and if anyone has any questions about the technology or how to use it, give the Orange affiliate team at i-level a shout.