Between yesterday and today, a sequence of events has happened, raising an important question… Let me quickly reproduce them for you:

1. I found a product I was interested in. It was one of the major — one of the top ones on The Top 500 List — e-tailers selling it.
2. I placed my order through an affiliate link (I frequently do this, believing that hard-working affiliates deserve the support), which went through and got confirmed.
3. This morning I received a new email from the merchant, inviting me to join their special customer program (with lots of cool perks).
4. Being an affiliate marketing guy, I’ve decided to check their affiliate TOS, and see that once I join the customer program, all of my further orders through affiliate links “will result in a correction or a reversal of commission” for affiliates whose links I may use.

Whether this was a coincidence or a part of their marketing strategy (something inclines me to believe that it was the latter), I have mixed thoughts and feelings about this one. Had it been a CPL (Cost Per Lead) affiliate program, I would’ve not given this incident so much attention. After all, you’ve paid for this “lead” already. Why pay again? Now with CPS (Cost Per Sale) affiliate programs, having something like the above in place is similar to paying for new customers only, and no merchant can be 100% certain that the customer will definitely return to them. Therefore, I do have a problem with this practice.

Would love to hear other affiliate program managers’ and affiliates’ thoughts on this one.

In one of the newly launched affiliate programs (where specific types of affiliate promotion are explicitly prohibited in a short and easy-to-read program agreement), we have observed that over 38% of affiliates who apply into this program do not read that agreement. Yes, there is a mandatory requirement to agree to the terms and conditions prior to submitting an application, and they do state that they have read it. However, their websites show that there is an obvious mismatch between the program’s policies and the marketing methods they use.

If you are an affiliate reading this, please take a moment to participate in the following anonymous poll:

There is something affiliate program managers should learn from this. Do not rely solely on having that affiliate program agreement in place. The fact that you do have it is good, but it does not safeguard you from having non-matching affiliates apply into your program. The fact that they have ticked the “I agree” box does not necessarily mean that they have read it. So, to save yourself the time policing inappropriate affiliate behavior in the future, make sure you carefully screen all affiliate applications at the very outset.

It is always an honor to have my articles published, especially so when they are published in affiliate marketing magazines. One of them is, of course, the official magazine of the Affiliate Summit, FeedFront. It’s issue 5 has been made available for online browsing and downloading at Scribd.com today.

My article on the pitfalls of putting an affiliate program on autopilot may be found on page 23. In it I talk about unwanted affiliate behaviors, the importance of paying attention to your affiliate program’s agreement [see also this post], some of the findings from the UK and US Affiliate Censuses, and more. Beyond everything, I hope you will find this article of practical use.

Also, if you are not yet subscribed to the FeedFront magazine, the subscription is free, and I highly encourage you to do so now.

Today is the day when I’m starting to use videos in my blog, and I have decided to devote the first one to a question we’ve been discussing with Nancy (aka 2busy) via e-mail after she posted this comment of hers in my blog. After reading her comment I came up with a term “merchant naivete”. By analogy with the ecological naivete, it characterizes merchants that start their affiliate programs (i) without any Terms of Service (naively entrusting the promotion of their brand to whoever decides to join their program), and (ii) without any affiliate manager to actually manage the program (naively presupposing that it is the affiliate network’s responsibility to manage it). Both of these facts can (and often do) lead to deadly consequences.

Here is my video on the subject:

Nancy has shared with me that she has “evaluated 29 new (Jan 2009) affiliate programs, and found 17 with no terms at all, some claiming that they were professionally managed by a trusted third party.” 7 more programs “had some unusual terms, maybe PPC Restrictions but no real TOS” and “only 5 had full TOS and detailed PPC restrictions.” Wow. Stagerring stats! They do correspond to what I myself discovered when conducting an analysis of 100 affiliate programs for “A Practical Guide to Affiliate Marketing” back in December of 2006. I documented that 51% of the affiliate programs lacked Terms of Service (TOS) agreements altogether, 36% had extremely generic ones, and only 13% had full affiliate program agreements in place. In Nancy’s smaller sample the spread has roughly corresponded to mine: 60% had no TOS, 23% had very generic ones, and 17% had TOS in place. Over 2 years have passed, but things haven’t changed much. The sad fact is that they have actually worsened. The merchants that have no affiliate program agreements now say (and often believe!) that they are “professionally managed by a trusted third party,” misunderstanding an affiliate network for an affiliate program management agency [read about the differences here]. They make themselves vulnerable to those affiliates that are just waiting to feast on another new merchant’s affiliate program who has no clue what he/she is doing.

Nancy said that “whenever possible” she “would rather work with programs that are managed by people who know what they are doing,” and I believe, this summarizes the approach that the majority of serious affiliate marketers take. When an affiliate program is run an an ‘auto-pilot’, it is wide-open to unethical affiliate practices that we speak about daily. “No terms at all shows a poor understanding of the arrangement that they have with the network or a poor understanding of affiliate marketing,” says Nancy, and “in today’s economy it can make all the difference between survival of the program and failure.” I could’ve not expressed it better!

A poll was posted at ABestWeb today where one of the affiliates is asking other affiliates to express their opinion on whether ShareASale, an affiliate network known to stand up for affiliates’ interests, should start allowing affiliates to use downloadable toolbars in their marketing.

The question stems from this post in ShareASale’s blog and this thread of Brian Littleton, the founder and president of the ShareASale affiliate network. ShareASale is contemplating changing their Terms of Service to start allowing affiliates to use toolbars. On 3 February 2009 Brian is holding a roundtable where he wishes “to lay out a base guideline document” regarding what toolbars may be acceptable for use by ShareASale affiliates, and what mechanisms to put in place to police the unappropriate behavior (however it is defined).  Kellie Stevens rightfully called this a “shift from the historical policy of ShareASale which has not allowed software in the network,” a shift that has naturally produced a “heated discussion” in the above-quoted ABestWeb thread. [source]

Much can be written about the topic, and I certainly encourage my readers to review all of the above-quoted links (it may take you some time, but it’ll be a time worth spent — especially, if you do not know much about the problem), but in this post I would like to draw people’s attention to the results of the poll. At the moment of this writing, over 85% of the poll participants have said “no” to toolbars.

Having been discussing this issue over the past several days with different affiliates and fellow-affiliate managers, I have heard different opinions. The basic undertone of every conversation that I’ve had has been that of concern that by allowing toolbars in, the affiliate network makes itself vulnerable to parasitic affiliate behavior. One affiliate told me: “I’m afraid that if the door is opened, even just a little bit, it’ll be a disaster. You can’t control in real time what is downloaded on the customer PC.”

I do applaud Brian for setting an unprecedented example of a real time communication channel between the affiliate network and all other involved parties. I also applaud his boldness and his openness. I am, however, in agreement with those affiliate marketers that see the dangers of allowing toolbar affiliates in. I’ll be present at the roundtable teleconference tomorrow. I pray it is constructive, as it is a historic moment both for one particular network, and for the industry as a whole.