On November 5 at 3:47 pm ET affiliates of a major program on one of the top affiliate networks received a notice that started as follows:
The reaction to my tweeting of the above screenshot has ranged from negative [see this Tweet by Charles Born from California, or this one by John Coulson from England, or this one by Ken Schultz from Demark] to understanding [see Jake Ludington's yesterday's Case For Decreasing Affiliate Commissions post]. Regardless of the solid line of argument used for the support of the latter, I still have at least 5 problems with the above instance of affiliate commission drop:
- Lack of Advance Notice — Notifying affiliates at 3:47 pm about an important change that takes effect the very next day (shouldn’t such things be regulated by networks, imposing a rule that affiliate program terms cannot be switched overnight, but require a 7-days notice?) is unacceptable. What if an affiliate has a paid search campaign, the bids in which are immediately connected to the percentage of sale that they’re expecting from the program?
- Scale — It is hard to tell from the above excerpt, but we are taking an unexpected threefold commission decrease (from 3% to 1%) in this case.
- Q4 Expenses — When we’re talking products the demand for which rises during holiday shopping, it is helpful to remember that marketing expenses rise not only for merchants, but also for affiliates. Unless, of course, the latter are relying solely on their organic rankings in their marketing. But even then: what guarantees does this merchant have that their links, products and offers won’t be swapped for their competitor’s links, products and offers? Overnight (just as the commission drop) too.
- Contradiction — Calling an affiliate a “valued partner” (I would’ve customized this crucial email, using short-codes, to reflect the actual name), and talking how much you “appreciate” this “continued partnership”, yet doing something that (as phrased above) comes across as a completely opposite approach doesn’t help.
- Lack of Clarity — Based on the above text, it is unclear whether this threefold commission drop is something implemented for November-December 2012 only, or if it is going to stay that way for longer. And even though the very last line in this notice (the one you don’t see above) said “feel free to contact us with any questions”, if the merchant knows the exact period for which this is being done, it is best to inform affiliates of it — so that they could tweak their own marketing efforts accordingly.
I’d love to hear what others (merchants, affiliates, networks, agencies) think about this particular situation (or strategy?). The name of the merchant is irrelevant. The essence of the case is what does deserve attention.