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?

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.

Many merchants and affiliate program managers do not know what incentive affiliates (aka loyalty affiliates) are. This, in some cases, results in low quality affiliate program performance, whereas in others, ignorance regarding the essence of incentive affiliate marketing may bring about unwanted customer activity.

Incentive/loyalty affiliates are affiliates that facilitate the desired end-user action by offering them an incentive. Cashback offers, donations to charitable organizations and contributions to scholarship funds are by far the the most popular forms of incentives used by this type of affiliates. FatWallet.com, BigCrumbs.com and CashBaq.com would be classic examples of incentive affiliate websites.

Here’s how it works when it does work for the merchant:

Example:

Merchant A pays 10% commission on all orders
Incentive affiliate offers their visitors 5%
Everyone (customer, merchant, affiliate) is happy

However, there are instances when partnerships with incentive affiliates do not work (and cannot work) for the advertiser/merchant. Let me model three contexts to illustrate such situations. If one of the below-described performance-based payment models describes your affiliate program, you better screen affiliate applications carefully to look for incentive affiliates.

Scenario 1:

Merchant B (hosting company) pays 50% or $25 (whichever is greater)
Incentive affiliate offers $15 cashback on all orders
Problem:  customer signs up for 1 month of hosting at $6.95

Scenario 2:

Merchant C (diet supplements merchant) pays $35/sale (including orders for free trials)
Incentive affiliate offers $20 cashback on all order (including free trials)
Problem: customer orders a free trial

Scenario 3:

Merchant D (credit relief company) runs a PPL affiliate program paying $20/lead
Incentive affiliate offers $10 cashback to everyone who fills out the form on the merchant’s website
Problem: obvious

The marketing model used by incentive/loyalty affiliates can work for you when your affiliate program’s specifics allow for such type of online marketing. In certain contexts — like the three scenarios that I have modeled above — affiliate program managers should keep the incentive affiliates out of their programs.

Additionally, let me emphasize that in cases when there is room for merchant’s partnerships with incentive affiliates, affiliate program managers should regularly monitor their behavior. Many incentive/loyalty affiliates are known for using cookie-overwriting toolbars, forcing clicks, and engaging in other unethical behavior. If you run a managed affiliate program, and your program manager takes his/her job seriously, devoting time to policing, and staying on top of all relevant news, you should be okay. Partnerships with kosher incentive affiliates can bring additional sales to your affiliate program (the question of value added deserves a discussion of its own, and I will not touch upon it in this post). Conversely, partnerships with the wrong types of incentive affiliates (for example, OneCause.com and We-Care.com) can do your program much damage (it will simply not grow beyond the level of sales that a handful of unethical affiliates can refer to you, interfering with the performance of your other online marketing channels; and no decent affiliate will want to work with you).