Earlier this year, while discussing the best practices for the creation of an affiliate program agreement, we emphasized the importance of dedicating a portion of it to “Paid Search Campaigns”. Affiliates do use paid search, together with other online marketing channels, as they promote the businesses they work with and the products they sell. It is, therefore, important to set clear rules on what’s okay and what’s not okay for affiliates to do as far as paid search marketing goes.
There is no universally-applicable answer that could describe a perfect paid search policy for an affiliate program. Every advertiser’s situation is different. You want to address each of the below-discussed facets in light of what’s best for your business. Some brands find it important to rule out affiliate paid search altogether, while others have their in-house PPC teams work successfully alongside their affiliate partners employing the very same channel. It is my hope that this post will help you better understand (a) how affiliates may use paid search, (b) how to prescribe what is allowed and what’s not, and (c) how to handle it all in a thoughtful way.
All examples provided below are accurate at the time of this post’s original publication and may, very well, change in the future.
The very first question to ask yourself is:
Do I want to maintain an “open” or a “closed” paid search policy in my affiliate program?
The former would allow affiliates to engage in PPC marketing to promote you, while the latter would prohibit all affiliate paid search activity in your program.
Here is an example of a closed paid search policy (from HP):
2. Trademark-focused Paid Search
You’ll hear it being called “TM bidding” and other similar terms. The question to answer is simple:
Do I want to allow affiliates to bid on my branded terms or not?
More often than not, when no one is bidding on your trademarks, the searcher arrives at your website by seeing its organic (aka free) search listing.
Take a look at Walmart’s example below.
Even if Walmart wasn’t bidding on its own trademark (to appear as an “Ad” above their own natural listing) their organic listing would’ve routed the user to the right website.
Now imagine, for a minute, if the “Ad” was, actually, run by a Walmart.com’s affiliate. In this case, they’d have a problem: a shopper who is already familiar with Walmart searches for them on Google and, more than likely, clicks the first of the above two options, which sets an affiliate cookie and, should the shopper convert into a buyer, the affiliate would receive a commission for this sale. Had there been no trademark-focused affiliate ad here, Walmart would’ve still landed this sale due to their natural (aka organic) search listing.
3. “Trademark Plus” Bidding
This type of paid search bidding is different from the above-described one: in that it’s leveraging more keywords than just the branded term(s). The classic examples are: TM + coupon(s), TM + promo code(s) or other similar discount-oriented phrases.
Let’s take a look at this example:
Three (of the four) paid search ads shown for “Sears coupons” are ads run by affiliates. We’ve highlighted them for you above.
Very frequently, shoppers that use such discount-oriented key phrases already have items in their shopping cart. They search for these, because they have reached the Promo Code box in the checkout process. Many brands with affiliate programs do not like this, and if you don’t want the above-illustrated affiliate activity to interfere here, it’s a good idea to prohibit it altogether. But not only that! Do something to prevent such customer behavior. Take a look at this post: Affiliates and the Problem of Last Minute Coupon Search (dating back 7.5 years, but still very relevant).
4. “TM vs Competition” Bidding
This one may, theoretically, be put into the same bucket as TM+ Bidding. However, I like to highlight this type of paid search bidding separately. It is different and may frequently add value.
Having passed the Awareness phase, at the Consideration stage people do to shop around. They compare brands and products, study rankings, and dive into reviews… At this stage, they search for “TM vs Competition” type of key phrases.
Let’s consider the following example:
While we see two ads by direct competitors of both Nectar and Casper, the other two (including the top position) are taken by affiliate ads. Whether you want to allow your affiliates to engage in this type of PPC bidding is up to you. But keep in mind that, as the above screenshot exemplifies, your competition will be doing this.
Another interesting fact registered through my research for this post is that some brands encourage their affiliates to bid on competitors’ branded terms:
5. Direct-to-Merchant (DTM) Linking
In affiliate lingo, “DTM Linking” stands for linking an affiliate paid search ad directly to the merchant’s website (routing it through an affiliate link — to get the commission, should the user convert into a customer).
In our screenshot illustrating an earlier-discussed point #3, for example, every one of the affiliate ads was linked to a landing page on a respective affiliate website. As discussed in this post 8 years ago, it’s a common practice to prohibit DTM linking (as well as using the brand’s URL in the display URL. Lacoste’s affiliate program does exactly this:
6. Negative Keywords
If you’re keeping an open PPC policy, prohibiting certain things (be it trademark-related bidding or direct linking), it is also a good idea to provide affiliates with a list of keywords you do not want them to bid on. These may include your branded terms, their misspellings, domain names, and so on. See how Boscov’s does it:
Do not be too restrictive here. After all, you want affiliates to be on your side in the battle (with competitors) for the generic keywords.
7. Landing Page Guidelines
Finally, let’s talk about the content(s) of the web pages which your affiliates may use as the landing pages for their paid search ads. Depending on the vertical, there may be regulatory aspects to keep in mind, but even if there are none: you’re entrusting them with your most valuable asset — your brand. Make sure they feature it in a way that doesn’t break anything for you. Of course, this applies not only to paid search affiliates, but to all affiliates in your program.
Instead of conclusion, it is worth emphasizing that putting together an affiliate program agreement with solid paid search rules (and having your affiliate agree to play by them) doesn’t guarantee affiliate compliance with them. Make sure to devote the time to policing and enforcing their compliance. Violations will happen. The big question is: will you catch them early enough to avoid the damage?