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!