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.
4 thoughts on “Parasitic / Adware Affiliates Hinder Affiliate Program Growth”
Good affiliates outnumber bad affiliates (parasitic/scam/unethical) 20-to-1. AMs ask yourself this, is that one worth losing the 20? Because the 20 will never sign-up with your program if you allow the bad ones in.
Ditto what Matt said.
Another post on the subject coming up today. Some people just refuse to admit how parasitic behavior is actually hurting affiliate marketing, saying that by by slandering adware & parasitic affiliates I am “bringing us all down” making our industry look non-reputable [detailed wording here].
I would also view other types of affiliates as parasitic (to a merchant’s affiliate program profitability):
Trademark poachers – As you have stated, affiliates using this practice are not contributing additional traffic to websites, but rather feeding off of traffic that is attributable to the brand/organic equity of that website.
Coupon sites – specifically I mean sites that solely promote coupons (and earn affiliate commissions through such coupons)
Coupon sites such as Retailmenot or Coupons4u typically don’t contribute additional traffic that would not have otherwise come to our website. Rarely do individuals go to a “big” coupon site, unaware of our site, and then click through to us. Instead, someone will get to our checkout page, see a coupon field, and then search for a coupon code in Google and find one to use from one of these sites. This leads to the affiliate receiving a commission for the sale and the customer receiving a discount on their purchase which, added together, significantly decreases our profit margin on those sales. One point of clarification – I have no problem with affiliates making lots of money, as we generally make lots of money too. When they don’t actually contribute additional traffic & sales, but rather feed off of our own traffic, I find it parasitic though instead of symbiotic.
One more important point to consider that could counter this parasitic effect of “big” coupon sites is the promotional effect of the coupons. Perhaps some of these customers would not have purchased had they not found a coupon to use? Our testing has found that few of these customers drop off completely without the promotion of a coupon, but that may be limited to our market. What have others found?
Joseph, thank you for your comment. I’m with you on trademark poachers, and have listed them and a number of other parasites in my Spyware & Parasites blog posts.
As for the “coupon sites” I wouldn’t exactly classify them as parasites. It is entirely the merchant’s choice: to work or not to work with them. If the merchant sees no use in promotion via coupon affiliates, they can spell it out in their program’s TOS, and enforce this rule.
If, on the other hand, the merchant does have room for coupons, but doesn’t want its customer to “leak” to coupon affiliate sites between adding items to their shopping cart and checking out, they can offer a coupon search tool within their own merchant site (Macy’s doing this).