Matt Bailey’s affiliate blog

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.