Earlier this month @SMNWebcasts tweeted:

Naturally, I was among the first folks to request the whitepaper; but only now I’ve finally found time to blog about it.

The case study starts by quoting some sobering statistics from an analysis by Artinsic Interactive of “hundreds of advertisers”:

There are no hard and fast industry numbers to quantify the dollars missattributed or lost by hijacked brands, but …an average of 40% misattribution per advertiser is not unusual … and for some advertisers, it can hit 90%. Applied to projected advertiser spend on affiliate marketing, that could represent revenue misattributions of as much as $1.6 billions (40% x $4 billion) for advertisers using the channel by 2014.

While the former observation about (misattribution from 40% to 90% per advertiser) matches my own observations over the course of eight years, the latter statement may be a bit far-fetched as many of the larger affiliate programs are taking the issue extremely seriously, and monitoring such behavior.

Having said the above, I applaud Atrinsic for bringing attention to the subject of “chronic brand abuse” which happens when paid search affiliates violate merchants’ PPC bidding rules. Their case study vividly illustrates how and why trademark violators do what they do, what it means for merchants who have trademark violators aboard their affiliate programs, and what they can do to prevent this from happening. They also give some solid practical advice on protecting your brand from PPC violations. I appreciate seeing that they’ve used my blog as one of their references; but moreover I appreciate the practical angle of their white paper. Here are, for example, their “five best tips for locking down your brand”:

1. Know Thyself – Or “understand what is going on with your campaigns”, equipping yourself with ways/tools to track your brand activity constantly keeping an eye on such KPIs as “CPCs, conversion, and click through rates” as well as “rank fluctuations over time, your market share deviation as compared to control group,” and also “to your hot competitors”.
2. Know thy Enemy…and thy Friends! — Monitor “what your competitors are doing compared to you including the top 10 biggest competitive threats, top 10 new competitors, and top 5 gainers and losers in terms of market share”; plus track also what your affiliates are doing to drive their traffic to you. I love their advice on manual approval of “everyone who comes into your program”. See, for example, this article of mine on it.
3. Set the Rules and Make them Stick — Amen again! I’ve written (and spoken) time and again that you want to have precise “publisher and affiliate guidelines” and then police compliance with them.
4. Integrate Search and Affiliate — I agree with the idea of integration so that date could be correctly interpreted and acted upon. I do not agree with the advice that “your affiliate program should be managed by the same division/person that manages your paid search campaigns”. It is enough for the affiliate program manager and your PPC manager to work closely together; and for the latter to have access to all relevant reports.
5. Work with a Trusted Provider — This one is natural.

Overall, it’s an excellent case study — otherwise, why blog about it? — every affiliate, merchant, and affiliate program manager must review. Once again you may request it from Search Marketing Now here.

On Monday, August 8, Pace Lattin of Performance Marketing Insider has drawn the industry’s attention to a lawsuit filed by Reese Richman LLP, the subject of which is “questionable and possibly illegal behavior … by hijacking search queries.” Pace wrote:

Using a technology by Paxfire, supposedly DNS redirects from searches on Bing, Yahoo and Google would lead consumers directly to the page of certain brand and credit the ISP’s affiliate account with any possible commissions. [more here]

ZDNet picked up the story and elaborated on the problem:

Paxfire proudly proclaims itself to be the “proven industry leader in monetizing Address Bar Search and DNS Error traffic for Network Operators. Through our carrier-grade technology, we generate millions of dollars a month in new advertising revenue for our partners by enabling them to participate in the booming $20 billion a year search advertising market.”

In other words, what Paxfire does is it intercepts your searches. Then, if their proxy servers find a match in their advertising databases, they’ll send you top search results from their affiliate marketing programs rather than what your search engine would give you as the best results. [source]

Apparently, the four International Computer Science Institute (Berkely, CA) researchers — whose study reveled that around a dozen of ISPs were using the technology — have put together a blog post on the subject where they’ve mentioned the major affiliate networks that were affected (Commission Junction, LinkShare, and Google Affiliate Network), as well as two tools that affiliates should find of help in spotting traffic hijacking threats:

Why do they do this?

In short, the purpose appears to be monetization of users’ searches. ICSI Networking’s investigation has revealed that Paxfire’s HTTP proxies selectively siphon search requests out of the proxied traffic flows and redirect them through one or more affiliate marketing programs, presumably resulting in commission payments to Paxfire and the ISPs involved. The affiliate programs involved include Commission Junction, the Google Affiliate Network, LinkShare, and Ask.com. When looking up brand names such as “apple”, “dell”, “groupon”, and “wsj”, the affiliate programs direct the queries to the corresponding brands’ websites or to search assistance pages instead of providing the intended search engine results page.

What can I do about it?

If you want to know if the network you’re currently on is subject to this type of traffic redirection, you can run a Netalyzr test. And the best protection against the privacy and security risks created by this type of hijacking is to visit sites using HTTPS rather than HTTP, which can easily be achieved using EFF’s HTTPS Everywhere Firefox extension. [more here]

Yesterday (August 9) Commission Junction suspended Paxfire from the network explaining to ClickZ:

We had no knowledge of this reported activity until last week. At the time, Paxfire was in fact a publisher in the CJ network. We have taken immediate action — Paxfire has been deactivated pending further investigation, and we are continuing our investigation of this matter. [source]

Well, Paxfire is “deactivated”, but there are other similar players — and we’ve discussed this in comments under this 2009 post of mine — who cooperate with ISPs on very similar terms; and who are still active on major affiliate networks (e.g.: working with ISPs “replacing DNS and HTTP errors with relevant advertising” [source]). This has been going on for years… Of course, the problem with Paxfire is different in the fact that they also have “an optional, unadvertised, and more alarming feature that drastically expands Paxfire’s window into users’ traffic” whereby “instead of activating only upon error, this product redirects the customers’ entire web search traffic destined for Yahoo!, Bing, and sometimes Google, to a small number of separate web traffic proxies.” [more here] Either way, whether another affiliate’s cookie gets overwritten in the process or not, together with the traffic affiliate commissions get “hijacked” as well.

Meanwhile, the above-quoted class-action lawsuit (against an ISP and Paxfire itself) is already filed; and we’ll keep monitoring the situation for you.

An affiliate program manager who is working on her affiliate program agreement wrote:

I was looking through your site and the sample TOS you provide and came across paragraph 8.4.

Two quick questions:

1. Should we not allow our affiliates to have popups/popunders (even surveys)?
2. Should we allow our affiliates to use cloaking codes to redirect to our site?

My gut feeling is no — based on all the reading I have been doing — but I don’t really understand why not. I want to be able to make an intelligent decision and to be able to back it up.

This is a very good and important question. However, it seems that a number of very different things are bundled together in it: from pop-ups to surveys to link cloaking. Surveys and other forms of incentive affiliate marketing may or may not work for your affiliate program [more here]. Link cloaking may be used either with kosher motives, and/or to hide something rogue affiliates don’t want you to see/catch [e.g.: trademark violations in PPC campaigns]. Pop-ups are not evil just because they are pop-ups, and neither are toolbars evil by nature… What affiliate program managers should be concerned about are the opportunities for fraud that this or that marketing method, mechanism and tactic may open.

If you re-read the paragraph 8.4 that the above-quoted affiliate program manager refers to, you will notice 5 specific behaviors/actions to watch out for. That paragraph prohibits applications (you will want to broaden this to also include techniques, tools, methods, and anything else) which:

1. Through accidental or direct intent cause the overwriting of affiliate commission tracking cookies through any other means than a customer initiated click on a qualifying link on a webpage or email;

2. Intercept searches to redirect traffic through an installed software, thereby causing pop-ups, commission tracking cookies to be put in place or other commission tracking cookies to be overwritten where a user would under normal circumstances have arrived at the same destination through the results given by the search [video here];

3. Set commission tracking cookies through loading of merchant site in iFrames, hidden links and automatic pop-ups that open merchant.com’s site;

4. Target text on web sites, other than those web sites 100% owned by the application owner, for the purpose of contextual marketing;

5. Remove, replace or block the visibility of affiliate banners with any other banners, other than those that are on web sites 100% owned by the owner of the application.

These 5 things are the behaviors to disallow — and focus on diligent policing of affiliate compliance with these rules — both as actions, and motives behind them; not surveys, pop-ups, or link cloaking.

Trademark violations happen in multiple forms, but the more frequent ones are: bidding on trademarks in paid search campaigns and registering domain names with merchant’s trademarks in them. Both of these methods yield fairly easy money to violating affiliates, and neither of these will ever stop.

Also, just because you may have prohibited trademark use (in one form or another) in your affiliate program’s Terms of Service, doesn’t mean it’s not gonna happen in your program. It happens in every program out there, and if you do prohibit trademark bidding (or trademark use in domain names), you want to have good tools to police affiliate compliance with these rules.

Today I’d like to bring you 5 such tools:

1. iTrademarkBidding — This is a free, open source solution for monitoring trademark bidding. They “use proxies in most US states to monitor trademark bidding” on three major search engines: Google, Yahoo and Bing. “The information is recorded every hour allowing you to know who was bidding on your keywords.”

2. Brandverity PoachMark – Developed by Andy Skalet and David Naffziger, graduates of University of Colorado at Boulder and MIT respectively, PoachMark has been built exclusively with one aim in mind — to meet the paid search compliance need. This excellent piece of software counters the techniques used by more sophisticated black hat affiliates (such as referrer laundering, geotargeting, dayparting and id obfuscation). BrandVerity also manages and maintains two important databases of rogue affiliates: PoachMark Pool and The Affiliate Watchlist.

3. SearchMonitor — The Search Monitor focuses “real-time competitive intelligence to monitor brand and trademark use, affiliate marketers for compliance, and competition on paid search, mobile search, organic search, local, social media, and shopping engines worldwide in every language.”  The Affiliate Monitor can be effectively used to police affiliate marketers for compliance with affiliate program Terms and Conditions, and not only with restrictions pertaining to keyword bidding. This tool also allows you to police direct linking ad copy rules, and keyword rank. With reporting you have choice of viewing it online or receiving email reports. 

4. AdGooroo Trademark Insight –  In the fashion very similar to that of the above-quoted tools, Trademark Insight provides 24/7 automated brand monitoring by identifying advertisers who are bidding on or using your brand terms in their ad copy. Each license enables merchants to monitor up to 200 variations of a single trademark on 8 search engines in 46 countries. You also have options to view copy and average position of competing ads and identify the ad servers and individual affiliates in infringement.

5. CitizenHawk — In case you are prohibiting affiliate utilization of your registered trademarks in their domain names, there are also tools to police cybersquatting. This particular one is a really good tool. Their unique technology “identifies instances of cybersquatting that infringe on a company’s trademark, sends notices of fraudulent activity to domain owners, interrupts the flow of money being paid to cybersquatters and automates legal action to get fraudulent sites stopped for good.”

The above isn’t a ranking of any sorts (just a list of the more robust tools available out there). If I have missed a tool that belongs here, please do let me know about it by using the “Comments” are below.

Ever wondered how exactly blackhat SEO works? My brother has forwarded me a link to an excellent video shot by Sophos, which shows how they are taking advantage of the hottest/trending topics (on Google and Bing).

The eventual goal is to infect your computer with malware (and ultimately, get your money, one way or another).

Enjoy, and spread around for others to see this too:

Related articles:

• Spamdexing Surges
• Fake anti-virus software on the rise
• Cyber-crooks manipulate Internet searches to sell fake antivirus products
• Research paper in PDF: Poisoned Search Results: How Hackers have Automated Search Engine Poisoning Attacks to Distribute Malware

One would think that it is common sense to have a separate section prohibiting parasitic affiliate behaviors in your affiliate program and your program agreement. However, even larger online merchants sometimes do not do so. First of all, this makes them significantly more vulnerable to rogue affiliates. Secondly, it makes it harder to fight such behaviors. After all, if it hasn’t been prohibited in the first place, how do you enforce it?

Earlier today all Walmart’s affiliates have received a notification of an update to Walmart.com’s Affiliate Terms & Conditions. The core of the message read:

You May NOT:

• employ, use or place any web browser add-ons, toolbars or pop-ups on your website.
• engage in any direct or indirect relationships with ISPs and/or mobile carriers that results in the delivery or act of address bar keyword and URL error trafficking (e.g., a user mistypes a web address in the ISP’s address bar or search bar, and, as a result, is redirected to a web page that contains a Qualifying Link that directs the user to sites like Walmart.com).
• without the prior written approval of Walmart.com, use any Trademark, or any Licensed Material in an advertisement that is not created or provided by Walmart.com in any way that might suggest or imply or mislead or is likely to mislead a visitor to your website into believing that Walmart.com, Wal-Mart Stores or any related entity was the creator or sponsor of such advertisement.
• employ, use, or receive any direct or indirect benefit from, any “cookie stuffing” methods (e.g., use of “cookie stuffing” to cause LinkShare’s tracking systems to conclude that a user has clicked through a Qualifying Link — and to pay commissions accordingly — even if the user has not actually clicked through any such link).

Way to go, Wal-Mart! I believe that every merchant should mimic Walmart.com in prohibiting the above-quoted activities. Do you prohibit these in your affiliate program agreement already?

Related articles of mine (the comments under them are quite informative too):

• Toolbars in Affiliate Marketing
• Adware Affiliate Interferes with Other Channels (video)
• Toolbars, Pop-ups & Parasites in Affiliate Marketing
• What is Cookie Stuffing?
• Since When Has Typosquatting Become Acceptable?

I personally hate it — can’t help but recall how just recently I was explaining to my daughter that “hate” is a very strong verb (and she should be careful how she uses it), but here I mean it — when “affiliate marketing” is used in conjunction with words like “spam” or “spammer”. However, this happens, and frequently not without basis.

In a recent article on Halloween-themed spam Softpedia wrote:

Security companies warn that affiliate marketing spammers have already began exploiting Halloween to trick people with fake prizes, contests and offers.

It’s a known fact that cybercriminal activity always intensifies around holidays, when people are more vulnerable and have more money to spend.

And spamming goes beyond email marketing. Softpedia continued:

…spammers compromised legit websites, including some that belong to educational institutions, and used them in black hat SEO campaigns to drive traffic to the website of a Halloween costumes retailer.

“The URL to buycostumes.com contains an affiliate ID which allows the spammer to get a commission (10% to 30% of the total purchase) from the store should a redirected user ultimately make a purchase,” explained Julien Sobrier, senior security researcher at Zscaler.

No doubt, as the holiday approaches, attacks will diversify and will increase in number. Google speculated that a surge of infected emails in August and September had the purpose of planting the seeds for spam botnets that will be used heavily during the holidays.

Much of this boils down to diligent policing of affiliates by affiliate managers — to make sure that such rogue affiliates are kept out of affiliate programs. Otherwise, they hurt both the company’s image, and other affiliates in the program.

Incidentally, another interesting article had just come out on a related topic, where Kellie Stevens of AffiliateFairPlay.com talks about Facebook launching 3 lawsuits against affiliate marketing CPA scams (a must read).

It isn’t unusual to see the following affiliate paid search policy set out and enforced by a merchant:

In the vast majority of cases the above PPC policy is one of those best practices that every affiliate program should implement. The reason is obvious: such affiliate activity adds no value to the merchant, and serves a purely parasitic purpose.

The sole purpose of such activity is to divert the trademark traffic to go through affiliate links/ads first. This sets an affiliate cookie on the end user’s machine, and should the latter place a sale/lead through within the cookie life duration, the trademark bidding affiliate will earn the commission on that sale/lead [more here]

Now, imagine my surprise when I see the same merchant (whose paid search restrictions I’ve started this post with) having the following affiliates (highlighted) on board:

If you go to page 2 of Google results for the above-shown key phrase, you’ll actually see more of similar affiliate websites — those with keyword-rich domain names where one of the “keywords” is the merchants trade name.

How is this different from paid search trademark poaching? It isn’t.

Both affiliates and merchants should be aware of this contextual adware application which is already acting as an affiliate in multiple affiliate programs. Here’s a screenshot of their information from Commission Junction (taken off their today’s application into an affiliate program):

Why should you be concerned?

Well, they are not exactly a “Virtual Mall” as they try to portray themselves on CJ. Kellie Stevens has more:

This is a contextual adware application which displays a web site (the ad) based on the web site the end user is currently viewing. The trigger for the ad display can be based on a URL or keywords from the viewed web page…

Revenue Generation Behavior

We observed two primary revenue sources for the LinksAdor adware:

• Affiliate links belonging to LinksAdor. We have found multiple affiliate accounts on various web sites owned by LinksAdor.
• Displays of ads purchased by advertisers on a CPV/PPV model. These ad buys can be by other affiliates and we have documented such instances. Merchants may also engage in these ad buys directly. In other instances, the ad buys may display PPCSE listings [source and more detailed information].

Why you do not want this affiliate aboard your program? Because LinksAdor has been documented to:

(a) Open up new browser tabs with affiliate ads of competing merchants, or diverting traffic from one merchant to another, but through an in-between affiliate site of their own [see this video]

and

(b) Hijack browsers, redirecting visitors to the page of user’s choice but through a LinksAdor’s affiliate link, or interjecting themselves into the sales channel without actually adding any value: neither to the end consumer, nor to the merchant [see this video]

For more details please read the following material, and stay away from LinksAdor:

• LinksAdor Adware Fact Sheet
• LinksAdor (Kellie’s thread at ABestWeb)

Today Kellie Stevens of AffiliateFairPlay.com has published her first free public adware reports:

The two reports that are already available are:

(i) A report on AllFreeCoupons, a Firefox add-on which displays coupon/deal notifications when the visitor is on a website that may have such available, and also offers the website visitor to share the deal via Facebook or Twitter.

and

(ii) A report on DealAlert, a “shopping assistant” desktop application which “displays instant alerts of product deals and coupons added to the PocketDeal web site.”

Both act affiliates, and the affiliate cookie is being set when the adware user clicks on a deal/coupon alert/notification. In case with DealAlert, “incidents of the affiliate tracking link being set” before “a physical click by the end user” was  not registered [see comments under this post for details], but alerts are coded through affiliate links with a purpose of setting that affiliate cookie. With AllFreeCoupons, on the other hand, channel cannibalization is present, and “the extension does not directly drive unique visitors to the merchant’s web site as it is activated only when the end user is already on the merchant’s site.” Read more by following the two above-quoted links.

The information that Kellie shares [like the above, or this] is a must read for both affiliates and merchants. Affiliates do not want to waste their time and money partnering with merchants that have such affiliates on board; while merchants (and their affiliate program managers) must be educated on such rogue affiliates not to harm their affiliate, and other online marketing initiatives, by letting them into their affiliate program(s).