Yesterday as I was adding new coupons for a ShareASale-based affiliate program I have noticed a little (but a very significant) addition to one of the fields you can fill out when adding a coupon/deal to the network. They now have a field for special commission to be applied on coupon/deal transactions. The fine print (and an important rule) may have been up there for some time, but I certainly don’t remember seeing it a couple of years ago. Under the special commission field it says (highlighting mine):

So “this commission amount cannot be less than your advertised global commission rate for public offers” and “for private offers, it must not be lower than your designated commission rate for that specific affiliate.” Very important rule!

I couldn’t help but recall Todd Farmer’s “ShareASale is My Network of Choice” post. For affiliates it is extremely important to have such an understanding mediator between them and the merchants.

It isn’t unusual for merchants (including some of the largest online brands) to offer lower commission rates on coupons (or to coupon affiliates). I like what I see ShareASale doing above. If the merchant doesn’t want to offer coupons through affiliates, that’s fine. Institute such a policy, and have your affiliate manager police it. If, however, you do choose to use the affiliate channel to distribute coupons, factor in the commission affiliates will receive into the discount you’re offering, and still pay the full affiliate commission. Kudos to ShareASale for supporting affiliates there.

Having surveyed over 8,500 consumers on questions related to online coupon use, Deals.com together with MyType have released a very interesting study that many online marketers should find of help.

The study profiles the demographics and psycho-graphics of both coupon “lovers” and coupon “avoiders.” One of the more surprising findings was that six-figure earners are actually twice as likely to actively seek and use online coupons than consumers with a lower income.

Here are also the profiles of both a coupon “lover” and a coupon “avoider”:

Coupon “lover”:

• Consumers with household income of $100,000+ per year are roughly two times more likely to be coupon lovers.
• People who score as extraverted and imaginative on a standard psychological assessment of personality are respectively 47% and 25% more likely than others to favor online coupons.
• Women are 67% more likely than men to be coupon lovers.
• College-educated people are 78% more likely than the non-college educated to be coupon lovers.
• Parents are 48% more likely than non-parents to be coupon lovers.
• Northeasterners are 66% more likely than West Coasters to be coupon lovers.
• People who identify social responsibility as the most important element of a good work culture stand out as 151% more likely to be coupon lovers than avoiders.
• Devoutly religious people are 31% more likely to be coupon lovers and substantially less likely to be coupon avoiders.
• Libertarians are 47% more likely to be online coupon users.

Coupon “avoider”:

• People who score as insecure or temperamental on a standard psychological assessment of personality are 33% more likely to be avoiders.
• Detached, sophisticated, careless and procrastinating people are also each at least 20% more likely to be coupon abstainers.
• Men are 27% more likely to be coupon abstainers.
• Insecure, low-income men are the quintessential coupon abstainers, being 130% more likely to avoid online coupons. Though they have household incomes of less than $50,000 per year, they are only a fifth as likely as others to be coupon lovers.

There is much more in the report, and you may download the full 45-page Coupon Study 2010 in PDF here.

This month’s Internet Retailer magazine featured an article on the growing use of coupons, the ways these value-conscious consumers shop online, and what some merchants do to keep the frugal shopper yet by-pass affiliates. At this time the article is also available online here. It opens with these words:

Staffers at Macys.com detected a new pattern in customer behavior last spring: consumers would add items to shopping carts, leave the site and then return with discount codes they had found on the web sites of Macy’s affiliates. Only then would they complete their purchases.

“We said, maybe we should just do this ourselves,” says Kent Anderson, president of Macys.com

And they did — by adding a “Find one now” link next to the customary promo code box that many online merchants have on their shopping cart pages:

As a result, “consumer no longer has to search the web for those savings” and can complete the checkout without leaving the Macy’s website, which “also saves Macy’s the affiliate fee, typically 4-5% of the purchase amount,” says Anderson. Read more about it works in Michael Vorel’s post here.

Here’s an interesting detail though:

1. I go to an affiliate website that is focused around Free Shipping (either directly, or because I was looking for a free shipping deal at JC Peney, or Kohl’s, or some other Macy’s competitor) — FreeShipping.org — and while originally looking for something totally different, I decide to click on Macy’s link:

2. Upon reviewing the free shipping offers for Macys.com, I pick one, and click it (setting the affiliate cookie).

3. I get to Macy’s website, add the items I want to my shopping cart, and proceed to checkout; and I see exactly the same “Find one now” link again.

My testing has not revealed any affiliate cookie overwriting upon clicking the links in the pop-up window (shown after following the “Find one now” link), but I can definitely see some affiliates getting extremely uncomfortable about the way it all works now (it’s really just a step away from turning bad).

Additionally, if a customer originally comes to your website from an affiliate’s website (coupon or not), is offering them a coupon really gonna save your margins? Say, it was a shopping comparison affiliate that didn’t push coupons, but you are now offering the consumer an additional discount.

Macy’s current system obviously has some holes to patch.

Are There Better Solutions?

I’ve had a merchant bring up the question of paying too much (discount to customer + commission to affiliate) to me literally two days ago, and this is certainly an area of concern for many merchants with affiliate programs. I understand their worries, and I have seen some banning coupon affiliates altogether, while others deciding to pay from low to no commission on coupons. My opinion is that neither of these decisions are good. You can still work with coupon affiliates, and not let the system devour your profit margins. Using coupon affiliates to push offers like Free Shipping on orders over a certain amount, or Deal of the Day/Week offers, or discounts only on select products/services are just a few of the techniques a merchant can use.

What are your thoughts on this?

A merchant has emailed me:

A newly-joined affiliate is asking if we can offer them exclusive coupon codes. He says these are extremely popular and convert especially well for them. What exactly are exclusive codes? [underlining mine]

The technique of enticing coupon affiliates with exclusive codes is a widely-spread one. In simple language, it entails offering an affiliate a coupon code (or a few) that would be available exclusively through his/her website. So, for example if you already have a $10 off deal available for all affiliates to market, but offering a couple extra bucks off still makes economic sense to you, putting together an exclusive coupon for $12 off and making it available through one (or limited number of) promising affiliate(s) would be a good move.

If, however, you cannot offer any better discount that the already-existing ones, you can still put together special affiliate-specific coupon codes (not as powerful, but certainly more personalized).

I recommend that the very code reflects the name of the affiliate’s site (good co-branding opportunity that benefits both sides). Let’s say their website is called CouponDaddy.com, and you want to have them offer a $12 off coupon. I’d name that code CPNDAD12 then.*

It is a really simple concept, which frequently yields good results.

_________________________
* Flee from use of zeros (which may be misread for letter O), capital letter “I” (which may be misread for number 1), and any other confusing characters

MediaPost has published some information that coupon affiliates should find of extreme interest. Referencing a recent report by Borrell Associates, MediaPost wrote:

…Borrell Associates estimates that the $8.3 billion value of online coupons redemptions in 2009 (including via the Internet, email and mobile) will jump more than 50% to $12.7 billion in 2010 and to $22 billion by 2014.

So the report projects a really steep growth of online coupon use: by over 50% in year 2010, and almost two-fold between 2010 and 2014.

Another interesting observation:

In explaining the growing reliance on digital distribution, Borrell pointed to a study by Nielsen partner NeuroFocus tracking consumer brainwave activity, which found that online coupons outperformed print ones in categories such as attention, emotional engagement, memory retention and effectiveness.

I am not surprised.

Neither am I surprised by the fact that most of the coupon websites quoted in MediaPost’s article are either active affiliates themselves, or are partnering with active affiliates for the distribution of online coupons. Having analyzed some of the top coupon affiliates using Quantcast.com, here are the monthly traffic averages that I see:

1. FatWallet.com – 3.2M
2. RetailMeNot.com – 2.7M
3. DealNews.com – 2.6M
4. CoolSavings.com – 2.0M
5. CouponMountain.com – 1.3M
6. TechBargains.com – 987.8K
7. DealsPl.us – 885.9K
8. CouponCraze.com – 830.5K
9. CouponCabin.com – 694.5K
10. DealTaker.com – 657.0K
11. Savings.com – 632.9K
12. MomsView.com – 490.0K
13. DealCatcher.com – 444.7K
14. CouponAlbum.com – 392.4K
15. Bargainist.com – 388.0K
16. CouponShare.com – 325.1K
17. UltimateCoupons.com – 305.0K
18. Offers.com – 284.8K
19. PromotionalCodes.com – 139.5K
20. CouponWinner.com – 134.4K

With the projected growth in demand for online coupons, there is still room for new affiliate players to enter the market. While the couponing niche is already quite crowded, I do believe that there is still room for new and innovative affiliates to come in an grab their share of the pie.

Got an email from an affiliate which goes as follows: “I’m a new affiliate and I would like to know if you know of any Turn Key operations available at this time.”

While you can certainly purchase an already functioning affiliate website, and start your affiliate journey this way, I would highly recommend you start by building something yourself. First of all, because purchasing a successful affiliate website will undoubtedly be a more expensive way to start as an affiliate; and secondly, due to the simple reasoning that to become a successful affiliate marketer you really want to learn things from the inside out, thereby becoming capable of exploring new niches, and monetizing newly-built websites.

In response to the above affiliate’s question I’ve asked him if he has ever heard of PopShops. He said “no”, and the idea for this blog post was immediately born. There are several truly turn-key affiliate solutions that are worth looking into:

• PopShops (creation of custom data feed-based stores)
• GoldenCAN (data feed and coupon import)
• DatafeedR (similar to the above two)
• BizZites by Traffic Genesis (affiliate website building solution)
• DatafeedStudio (excellent solution for feed importing and creation of comparison shopping sites/pages)
• myDataFeedScripts (scripts to build data feed-driven sites)
• FeedShare.com (feed and coupon integration)
• ForMeToCoupon.com (powerful coupon integration tool)
• WP AmaNiche (WordPress plugin for Amazon affiliates)
• phpOstock (WordPress plugin for Overstock affiliates)
• BuildANicheStore (niche affiliate stores for eBay Partner Network)

Most of the above do not require any technical education/experience, and any “new affiliate” can start using these right away.

If I have missed any tools/solutions that you believe should be included here, please do let me know by posting about them in the comments area below.

Got a message from a client this morning:

I’d like to disapprove this affiliate for illegal use of coupons. I don’t know how they get proprietary coupons but Next Jump is a private program. Another is for cart abandonment. The other two are expired…

Went to the affiliate’s site, took a screen shot:

Dear affiliates who are stealing coupons from fellow-affiliates, this is the surest way to either get your account suspended on the network level, or, at the very least, to be kicked out of the merchant’s affiliate program.

Dear affiliate networks, please borrow buy.at’s idea to help fighting the use of other affiliate’s exclusive coupons by unauthorized parties. The only party that will lose from an implementation of such a technology will be the unethical affiliate.

…at least within one particular affiliate network, within one particular country.

Stolen coupons have been a long-standing problem for affiliates that are receiving exclusive deals from merchants. The essence of the problem is as simple as this:

• You run an XYZ affiliate website
• A merchant gives you an exclusive coupon code (e.g. XYZ-TWENTY) for a 20% store-wide discount
• You upload it, start ranking well, and landing sales for this merchant
• A competing affiliate steals the coupon code, and posts it on his/her site
• You now have to chase the merchant’s affiliate program manager (and/or your affiliate network rep) to get the thief to remove the coupon code from their site

On 4 August 2009 buy.at has added an awesome functionality to their UK system (I’m hearing that they are still working with the U.S. merchants on launching the same product in the U.S.). They called the product OfferCentral, and what it essentially does is lets merchants assign exclusive coupon codes to specific affiliates, so that even when the exclusive coupon code is used on another affiliate’s site, it is the original affiliate that the gets the credit for the sale.

Here’s an official wording from buy.at:

For Advertisers:

• Assign permission to specific affiliates to use a unique voucher code on their site
• Set start and end dates for each code, and manage transaction approval for affiliates that are not authorized to use the voucher code

For Publishers:

• Receive permission from an advertiser to use a unique code on your site
• Sign up for RSS feed updates on new voucher codes and coupon creatives

What an amazing development! Leonardo da Vinci words come to mind: “Simplicity is the ultimate sophistication.” The idea is both simple and ingenious. Why chase the thief when if he/she is marketing the coupons of another affiliate when the system can simply credit the commission to the appropriate affiliate account (that of the affiliate for whom the coupon was created in the first place)?

WTG, buy.at, and hoping many other affiliate networks (especially in the USA) will follow this example as well.

Yesterday Yahoo! has launched a renewed website, Yahoo! Deals (where they feature “deals and online coupons from around the web”), and resurrected their Twitter account @yahoo_deals to push the coupon offers published on Yahoo! Deals [source].

I went to the Walmart coupons page (titles and meta tags of all pages are well-optimized [no wonder why, right?], and destined to get excellent SE-rankings):

…and clicked all of the the “coupon” links to find out that the URL’s the end-users are going to be going through in this particular case are all LinkShare’s (i.e. affiliate) URL’s:

Then I browsed around a bit more to see that many other URL’s go via CouponMountain.com, DealCoupon.com, CouponAlbum.com, BradsDeals.com, DealNews.com, and probably other affiliate websites I haven’t registered.

Looks like Yahoo! has just launched a new (or should I say, the first?) affiliate coupons aggregator.

I wonder what the rules for inclusion are. Obviously, the revamped Yahoo! Deals website is now directly competing with individual affiliate websites.

Yes, I know, the title of this post may sound nonsensical to mainstream marketers, but give me a minute to explain what I mean a bit further.

Over the past two days I have been looking through hundreds of affiliate applications into the DaySpring’s affiliate program, and I’ve been noticing that surprisingly large numbers of affiliates are really misunderstanding what incentive affiliate traffic is. Many list coupons and discounts as types of incentive affiliate promotion. I can see where the misconception stems from. Webster’s dictionary tells us that in its traditional sense an incentive as “something that incites or has a tendency to incite to determination or action”. Therefore, a coupon that would help an affiliate close the deal definitely seems to qualify.

In the context of affiliate marketing, however, the adjective “incentive” — when used in conjunction with such nouns as “affiliate” or “website” — carries a very specific (and different from traditional) meaning

As I have previously written, incentive affiliates (also known as loyalty affiliates) are “affiliates that facilitate the desired end-user action by offering them an incentive”. The most frequently used types of incentives are cashback offers, rebates, donations to charitable organizations/scholarships, and various kinds of freebies.

Yes, coupons and discounts are definitely incentives for the end user to buy (in fact, very strong incentives), but adding them to your website does not make you an incentive affiliate. Read more about the topic in my Incentive or Loyalty Affiliates – Definition and Specifics post, and stop calling yourself an incentive affiliate if in reality you are not one. It can sometimes do you a disservice, which you do not want to happen. One of many examples would be Commission Junction advertisers who choose to automatically decline applications from incentive affiliates. They know exactly what they are talking about. Make sure you know the lingo too.