Remember my PPC Display URLs and Affiliate Direct Linking Are Interconnected post two months ago? In it — being guided by Google AdWords policy — I argued:

Permitting “direct linking” (or Direct-To-Merchant (DTM) paid search bidding), however, implies that affiliates are allowed to link their paid search ads (through their affiliate links, of course) right to your website.

Yesterday, however, we spotted the following affiliate ad on Bing:

This was an affiliate agreement violator and brand hijacker (as Halloween Mart prohibits paid search bidding on its trademarks, URL, and variations thereof), but, as it is obvious above, they are — or, at least, they may think they are — not as bad of a violator as some others. The “keyword” they are using is the merchant’s full URL. They are also using it (twice) in the ad copy. But when it comes to the display URL, they went away from the actual merchant’s URL, and added the word “store” (in)to it… Apparently, Bing doesn’t require the display URL (the website address that the searcher sees on a PPC ad) to match the domain of the destination URL (the page on which they land upon clicking the paid search ad).

Minutes after my tweet about the above situation, a well-known super affiliate and affiliate marketing advocate Scott Jangro tweeted:

Google started requiring for the display URL to match the landing page URL in early 2008 [more here]. Apparently, Bing still doesn’t.

Affiliate program managers must be aware of this tactic, and treat my Display URL and DTM Linking post in light of the above exception (at least, until this gets addressed by Bing).

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.

Yesterday I have once again touched on the subject of affiliate compliance with rules, and how merchants are or aren’t policing it. As I wrote in my FeedFront article:

…to begin with, you want make sure you have an affiliate program agreement in place. Not to be confused with the affiliate network agreement, it is basically the contract between you and your affiliates. I won’t pause much on this here, but if you need a sample, I have one for you at www.amnavigator.com/TOS.html.

Now, just having that affiliate program agreement in place doesn’t safeguard you. It gives you grounds to enforce the rules.

If you don’t have the rules, there’s nothing to enforce… But even in the rules (or program “policies”) merchants are frequently confusing. Here’s an example I’ve caught just the other day:

The AdWords policy is:

The display URL in your ad must match the domain users will land on when they click on your ad. [emphasis mine]

Permitting “direct linking” (or Direct-To-Merchant (DTM) paid search bidding), however, implies that affiliates are allowed to link their paid search ads (through their affiliate links, of course) right to your website. If the use of merchant’s “display URL on any PPC engine is prohibited” (as in the above example) then there’s no way they can direct-link their PPC ad to you; and you want to mark that DTM field “No” (not “Yes”).

When, however, merchants (or affiliate program managers) word their agreements, policies, or rules, in ways which may point to their lack of knowledge about a particular field, rogue affiliates easily spot that. And then don’t be surprised about “violations”.

An affiliate has emailed me the following situation and question:

I’m fairly new at PPC, but I’ve already had some luck with it. A few days ago I started promoting [merchant name here]‘s program  on CJ. Sent over 150 clicks to them spending over $30 on it already, but haven’t had any sales yet. Their EPC range on CJ is $18-$24. Should I start worrying?

In a nutshell, the answer depends on a number of factors, but if you’re new at paid search, and already aren’t 100% sure that what you’re doing is right, start analyzing and tweaking things right away.

I’ve pulled up this particular merchant’s info, and here’s what I see:

It seems that you’re concerned because your current CPC (cost per click) is right around $0.20, and you see that the maximum you could expect from this program is $24.68 for every 100 clicks, but, more than likely, this number will be 30% lower, as over a longer period of time (3 months vs 7 days) this merchant’s program has been registering an EPC (earnings per 100 clicks, in this case) of $17.87. As mentioned above, your current situation may have good reasons for concern, but only if you aren’t 100% certain about the traffic you’re sending to them (how targeted is it? are you actively using negative keywords to sift off the folks you do not want?). Yes, (a) you’re already spending  quite a bit on each click (but that’s fine as long as the ROI is there), and (b) overall program’s EPC is like an average body temperature around the hospital, hence, not good grounds for basing your CPC decision on [more here]. Having said all of this, if your budget allows for it, and you’re certain that you’re sending highly targeted traffic to this merchant (i.e. the traffic that is meant to convert into a sale, and not merely to find out information on their product), it may be too early to jump to conclusions. The reason for this being that this particular merchant’s AOV (average order value), or average price tag seems to be in the vicinity of $400 (which, by the way, with their 14% commission rate, should convert into a good average payout), and higher ticket items generally take longer for the customer to decide.

I’ve analyzed return days distribution (or how many days it takes for the customer to complete the purchase) in two of the higher AOV affiliate programs that we manage, and here’s what I see:

I don’t know over what time period you’ve been sending those 150 clicks, and this particular program’s return days distribution may look even more different, but the above should give you at least some idea. It is also absolutely acceptable to request this information from the manager of this particular affiliate program. It’ll help you a lot in your analysis. So, I would definitely do it as a part of your analysis and tweaking.

If you’re a paid search expert reading this, and have something to add, expand on, or correct, please do chime in, and post your comments, ideas and suggestions below.

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.

Regardless of what you may hear about affiliate marketing being an untapped goldmine waiting for you to become the Internet’s next millionaire, you gotta be careful. Campaigns where as an affiliate you are remunerated for performance only require (i) a careful and educated approach, and (ii) taking it easy. Otherwise, your affiliate role may end up being a complete fiasco, turning you into another skeptic that failed due to his/her own mistake.

Focusing on any one metric is always a deadly mistake; even more so when this metric is the affiliate program’s EPC (abbreviation originally created to signify a program’s average affiliate’s Earnings per Click). Most affiliate networks display EPC data to you even before you join an affiliate program. There are two things you shouldn’t do with that information:

1) Understand EPC Literally — In the vast marjority of cases EPC now means Earnings per 100 Clicks, and not per single click [more here].

2) Budget Your Campaign Based on EPC — If you’re planning on buying traffic (be it via PPC, or any other method), you gotta be especially careful with how you use the EPC data. One of the costliest mistakes is to merely divide the EPC figure by 100, and budget your marketing campaign setting the result of this basic arithmetic operation as the amount you’re willing to pay per click/visitor [see the below example].

Let’s take a health insurance affiliate program as an example. Below is the information you will see on it (prior to joining it):

The program’s 3-months’ EPC is $16.56. Dividing this number by 100, we will arrive at an average affiliate earning of $0.16-$0.17 per click.

Here’s the part you do not see (top 10 affiliates’ EPC in the program):

Do you see how different the amounts are in every case? They range from $5.45 to $292.24 in earnings per 100 clicks, but you don’t know this when you’re looking at the average; and the individual affiliate’s EPC data is only available to the merchant.

There are also other important factors that you do not know, but the above one already illustrates the point well.

Averages are good to know, but always tricky, and should be treated as such.

Never base your decision on any single metric, especially if this metric is an average.

Related article:

• How to Project Affiliate Earnings: 5 Metrics and Formula

I’ve blogged about multiple things during the past days (sometimes more than once a day), but naturally wasn’t able to cover, or react to everything that I personally have found to be of interest. There really is an abundance of great content being produced on a weekly basis, and to highlight some of the posts and articles I haven’t mentioned in my own posts, I’d like to link to them today.

So here’s my unconditional link love to the great (and important) content on affiliate marketing (or immediately relevant topics) that has been produced over the past 10 days:

• 06/16/2010: DMA Urges Action on Colorado Tax Reporting Law by Direct Marketing Association
• 06/17/2010:  The PPC Affiliate Marketing Myth by Mike Lowe
• 06/22/2010: 2010 Golden Link Award Winners by LinkShare
• 06/23/2010: Is Your Affiliate Datafeed Site Sinking in Mayday? by Rae Hoffman
• 06/25/2010: California’s Referendum on the Advertising Tax by David Lewis
• 06/25/2010: Skimlinks Revolutionizes Content Monetization with Launch of SkimWords Beta by Hannah

If I’ve missed anything else, as always, be my guest, and post a link (as a comment) below.

Nine months ago, when I blogged my 5-step advice for paid search affiliates, I wrote:

Use negative keywords (or keywords for which you do not want your ad to show in paid search results, as they are unlikely to convert into the desirable action)

Using negative keywords not only helps you improve the clickthrough rate (CTR) and quality score of your paid search campaigns, but also prevents ad impressions for irrelevant keyword combinations, and saves you the money wasted on undesirable clicks.

Well, it appears that today the process of compiling lists of negative keywords has become one step easier. 50 minutes ago WordStream announced the launch of “the world’s first” Negative Keyword Tool. The best part is that its completely free. Here’s the video on it:

Affiliate program managers and affiliates alike will love this. Thank you, WordStream!

Yesterday Google introduced a new split testing tool for paid search marketers that use AdWords to try — the AdWords Campaign Experiments (ACE) tool [see original announcement here].

Google’s below video explains how the only way of handling split tests in PPC marketing before was to conduct a “before and after analysis” where you would compare performance of one campaign to another.

The problem with this method was that even if your conversions increased you really wouldn’t know if that was because of the bid change or due to some other factor like a sudden increase in the demand for [the product/service you're selling].

With ACE you can test one campaign against another simultaneously, “without having to apply the bid change to all auctions for which your ad could appear”. You leave the original campaign up, and also set up an “experimental bid” campaign, split testing between the two, and seeing which one makes more business sense to carry on. Besides this basic scenario, there are other ways you can use the ACE, and if you’re serious about your paid search marketing with Google, it’s time to start experimenting.

The tool is now in its beta phase, and to request your access to it you need fill out this form.

Following the example of Amazon.com and Amazon.ca, Amazon UK has just notified its affiliates/associates that DTM (direct-to-merchant) linking will be prohibited starting from February 1, 2010. Unlike their North American counterparts, Amazon.co.uk is explicit that they are against direct linking of both paid search ads and organic SE results. Those that do not comply with the new regulations will have their accounts terminated. Here’s the text of the email that Amazon.co.uk’s affiliates have received earlier this morning:

After careful review of our Associates programme, we have made the decision that as of February 1, 2010, we will no longer pay referral fees to Associates who send users to Amazon.co.uk: Low Prices in Electronics, Books, Sports Equipment & more , aStore for Amazon Associates or Shoes & Handbags – Free One-Day Delivery & Return Shipping: Javari.co.uk through keyword bidding or other paid search on Google, Bing, Yahoo! or any other search engine, or their extended search networks. In connection with this change, as of February 1, 2010, we will no longer provide Associates who engage in such paid search activities with access to our Product Advertising API or datafeeds. If you are currently enrolled in the Associates Programme as a Paid Search Placement Associate and wish to continue to participate in the Programme after February 1, 2010, you must choose a new category that most accurately describes the method you will use to send users to the Amazon.co.uk or Javari.co.uk site. Of course, just choosing a new category is not sufficient – you will also need to stop sending traffic via paid search links, as you will no longer be paid for such traffic starting on February 1, regardless of what category you choose. You may change your category by writing to us using the Contact Us form available on Associates Central or by following this link:
https://affiliate-program.amazon.co….ciates/contact

If you are enrolled in the Associates Programme as a Paid Search Placement Associate and you do not contact us to modify your category on or prior to March 1 2010 your Associates account will automatically be closed.

In addition, as of February 1, 2010 we will no longer pay referral fees on purchases made by customers who are referred to Amazon.co.uk: Low Prices in Electronics, Books, Sports Equipment & more or Shoes & Handbags – Free One-Day Delivery & Return Shipping: Javari.co.uk via Free Search Results. Free Search Results are links containing an Associate’s tag displayed in a search engine’s free, natural, or organic search results in response to a search query which send customers directly to an Amazon site without the customer first being sent to an Associate’s site and the customer clicking on a link to arrive at the Amazon site.

These changes do not prohibit you from purchasing paid search advertisements or submitting links to search engines so long as the links that appear on the search engines send customers to your site. If customers arrive at the Amazon.co.uk or Javari.co.uk site by clicking on Special Links displayed on your site (ie, links on your site pointing to Amazon.co.uk or Javari.co.uk with Amazon Associates tags), you will continue to earn referral fees in accordance with the Associates Programme Operating Agreement. There are a number of tools available through Associates Central to assist you with integrating Special Links into your sites, such as aStore by Amazon, various customisable widgets, and the Product Advertising API.

While the first paragraph of their letter — the letter begins with a statement that Amazon UK “will no longer pay referral fees to Associates who send users to [Amazon.co.uk and Javari.co.uk] through keyword bidding or other paid search on Google, Bing, Yahoo! or any other search engine, or their extended search networks” — may sound like all paid search activity will be prohibited starting from February 1, paragraphs 3 and 4 make it clear that this move is prohibiting only DTM linking (see the underlined parts of the text above) — both from paid search and organic results.

Thanks to Kevin of ProperPrice.co.uk for the heads up, and to Rehan for tweeting.