In continuation of my last two posts, and pondering on some of the comments at Econsultancy.com, let’s see what parties can benefit from adware pop-ups, and if anyone really gets hurt.

To begin with, let’s list who is involved in the game: (a) adware affiliate, (b) merchant,  (c) affiliate network, (d) sometimes an O(A)PM, and frequently (e) another affiliate.

A) The adware affiliate benefits from it. Period.

B) The merchant may benefit from a loyalty adware affiliate in some situations, and may be hurt by it in others. Much depends on the merchants own objectives and strategy. I am not going to comment any further on this, as much has already been illustrated in this video of mine.

C) Both the affiliate network and (D) the O(A)PM (outsourced (affiliate) program manager) can benefit financially as well.

E) What about the other affiliate?

Let’s see the following quick video:

Something is telling me that there is no way for an affiliate whose link was clicked prior to that of the adware affiliate to be a happy camper.

I have been thinking and discussing the issue of parasitic affiliates a lot over the past 40 hours (since the publication of this post, and the recording of this video), and there are 2 things that stand out to me as the main downsides of having a parasitic/adware adware affiliate aboard an affiliate program:

1. Channel cannibalization which I have illustrated vividly in my yesterday’s post.

2. Growth hindrance which I have touched upon back in February [see this post], but would like to re-emphasize today as well.

By having an open-door policy for parasitic affiliates, merchants (or often it’s their affiliate program managers – remunerated on performance basis – who are doing this, and the merchant isn’t even aware) hinder the growth of their affiliate program. We hear the talk about super affiliates all the time. Where does one find them? How does one get them on board of an affiliate program? By cleaning it up!! No serious affiliate will join an affiliate program that is actively partnering with parasites. They would much rather promote your competitor. Yes, the immediate results of partnering with an adware affiliate may look attractive, but the moment you do, your affiliate program loses its long-term growth potential.

Earlier this morning I published an article on Econsultancy.com where I talked about the problem of parasitism in affiliate marketing, and channel cannibalization, and how it should not be viewed as a problem for affiliate marketers only, but be tackled on a much wider scale.

As I was adding more affected merchants to the comments under that above-quoted article/post, I’ve noticed that some of them run affiliate programs on more than one affiliate network. This drove me to the recording of the below video where I show how a parasitic affiliate could hurt affiliates in all of the programs that you run, as well as all other channels of marketing that you may be utilizing (yes the offline ones too! you could be building a brand that drives direct type-ins of your domain name, but those get cannibalized as well). Here’s the video:

If you’re a merchant/advertiser, check your own affiliate program for this particular parasite. If you’re an affiliate/publisher, check who you’re partnering with, and notify them of the problem if We-Care.com is in their affiliate program too. From the lists of merchants [see my comments to the Econsultancy's post], it is apparent that this parasite is an active affiliate on at least the following three affiliate networks: LinkShare, Commission Junction, and Google Affiliate Network.

Let me start with a story, a true story. I hosted a table at the last Affiliate Summit’s Meet Market. Meet Markets are networking events held for the purpose of affiliates, merchants, affiliate networks, outsourced affiliate program managers, and other agencies to “meet-and-greet” each other during the first day of the conference. At one point a lady (with a tag “Affiliate” on her badge) stopped by my table, stretched out her hand to grab one of the giveaway items I had laying on the table, then raised her eyes to my badge — which simply read: Geno Prussakov, President, AM Navigator — dropped the giveaway item, said: “We’re ShopAtHome — you don’t like us!” and left… Once the Meet Market ended, I went up to my hotel room, and searched both my own blog, and ABestWeb for any posts that I might have made about ShopAtHome, as I wasn’t sure I’ve actually made any. I was correct. Not a single post that would specifically point at them, or explicitly state that I “don’t like” ShopAtHome.com. Then I did a bit more thinking, and remembered that back in December of 2006 when I was finishing “A Practical Guide to Affiliate Marketing” I did write a brief section on “spyware operators” and among others did mention ShopAtHomeSelect (cf: pp. 98-99). I also quoted Wikipedia’s summary of how spyware works, which back then read:

Spyware which attacks affiliate networks does so by placing the spyware operator’s affiliate tag on the user’s activity—replacing any other tag, if there is one. This harms just about everyone involved in the transaction other than the spyware operator. The user is harmed by having their choices thwarted. A legitimate affiliate is harmed by having their earned income redirected to the spyware operator. Affiliate marketing networks are harmed by the degradation of their reputation. Vendors are harmed by having to pay out affiliate revenues to an “affiliate” who did not earn them through a contractual agreement.

Educate yourself further: read more about how ShopAtHome fits into this picture (and what hurt they are bringing about) on the “Debunking ShopAtHomeSelect” page by Ben Edelman

Aha! So they’ve read my book (or at least got to those two pages where I warned affiliate managers about spyware)! Moreover, there is another important conclusion to be made from the above-quoted story: they have nothing to counter my statement with, apart from stating: “We’re ShopAtHome — you don’t like us.” They are not denying the fact that they are the spyware that hurts the affiliate marketing industry, and neither are they doing anything to stop being one.

But wait, it gets even more interesting!

Back in 2005 ShopAtHomeSelect was removed from Commission Junction “for violation of the publisher service agreement and the Publisher Code of Conduct.” [source] But yesterday, my friend Elena, who is an affiliate and is concerned about these issues, reminded us that this very ShopAtHome that is known for “automatically overwriting affiliate clicks,” runs an affiliate program where they pay affiliates $2.10 (per download) to distribute their toolbar. The said affiliate program is run through the LinkShare affiliate network. [details]

So, a spyware that forces clicks which overwrite other affiliates’ cookies runs an affiliate program for these very affiliates to distribute the guillotine. WOW.

Now, besides pointing out to this strange (to say the least) “affiliate program” Elena asks a very important question: “How come so many merchants are OK with what they do?” redOrbit states that there are “more than 1,500 leading retailers” featured by ShopAtHome! [source] The list of these retailers includes all of the Top 10 Online Retailers by Conversion Rate (Dec 2008 data) and many more famous brands! The quick answer to the question of why these merchants are not doing anything against it is ignorance. Yes, regardless of how large the brand may be, the people at the helm of their affiliate program management are often lacking basic education on the subject of spyware and parasites, and the negative repercussions that this parasitism has for their affliate programs in particular, as well as for the affiliate marketing industry in general.

The purpose of this post is to once again draw the attention of affiliates, affiliate program managers and merchants to the one of the main problems of the present-day affiliate marketing – adware (also known as parasiteware). If you are reading this post, and you do not know what it is, how it works, or how it hurts your business, you are an easy prey for such parasitic affiliates as ShopAtHome, Claria, Ebates, Zango, TopMoxie, Dollar Revenue, Targetsaver, WhenU, and others.

Here’s a list of good free resources where you can start educating yourself on the subject:

• “Understanding How Affiliates Use Adware“
• Publications by Ben Edelman
• ParasiteWare Forum at ABestWeb

Should you have any specific questions, please do not hesitate to post them in the “Comments” area below. It is an extremely important issue, and I strongly encourage you to start learning about it (and taking a stand against it) today.