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What Happens When Merchants Don’t Play By Affiliate Marketing Rules Part 2

This is a follow up to my “What Happens When Merchants Don’t Play By Affiliate Marketing Rules?” post, which I believe affiliate marketers will be keenly interested in.

I called the merchant and talk to them, and what they told me surprised me.

But first, a summary: With a gap in a web service merchant’s affiliate commission payouts on an affiliate network and their in-house program, I was keen to hear what veterans in the affiliate industry had to say. The commission payout through the affiliate network was about 50% higher, compared to the merchant’s in-house program.

Communicating with the merchant was certainly a key point in addressing this issue and some might say the information gap was being unfairly used in this instance:

“That’s retarded. Tell them to retroactively apply the network rate to your in-house sales from the date they started that network rate. If they won’t, dump them..” – Geordie Carswell, RevenueWire EVP.

“I attribute the fault in this to the affiliate manager/team handling your account. It is he or she’s job is to make sure affiliates (super or not) are taken care of. That person should have given you the choice as to which network you promote their program through, or at least told you about both offers. You are a well known affiliate and blogger and you should have been informed of both options. The affiliate marketing managers of Pepperjam are in constant contact with the affiliates who make a difference our programs. We build and form relationships to gain trust. The affiliate manager who was assigned to you did not do that.” – Robyn Martin, Pepperjam Affiliate Marketing Director.

“Before I began working for LinkConnector Affiliate Network, I was the affiliate manager for a few different companies. I considered it one of my responsibilities to keep our payouts consistent between the in-house program and the network programs. If anything, our in-house program sometimes had a higher payout because no additional fees were involved. I would never have considered that disparity between commissions – that’s just shooting yourself in the foot.” – Jeannine Crooks, LinkConnector.com Affiliate Sales Manager.

“I personally feel strongly that bigger and pro-actively managed programs SHOULD offer 2 versions.
In-house and a good network. TYPICALLY, but not in this case the in-house commissions would be a little higher, possibly longer cookies, etc. to make the in-house option more attractive and offset network costs…a possible scenario hit me that COULD make sense of this situation. Not saying this scenario would make the situation any easier for you to take but…
If the merchant, like many are was clueless and the affiliate program was not being tended to properly and they hired an OPM.” – Linda Buquet, 5Star Affiliate Programs Founder.[See the 5Star discussion thread]

Which is in-line with what I would expect. An in-house program would have lower operating costs and could give out higher payouts, but the opposite scenario is at work here.

And Chickenfeed AKA Millnic Media‘s Jason Bailey chimed in with:

“you got hosed and it is your own fault. This IS the standard practice and fully within the marketers code of ethics. (I can see the shit flying at me already…)…In House programs are notoriously low payers. They are also usually the most poorly managed of the places you can pull a particular offer from. CPA networks have schwacks of experience with a wide variety of offers, merchants and publishers. In house affiliate managers are often the webmaster as well, and quite possibly the night doorman to boot (not always — **dodges shit** –)…

You got hosed. If you were doing well at $60, think how much better you’ll at $90. Hell if the CPA network is offering at $90 on the street and you can push some volume, I’ll bet the can get $95 no sweat. Suck it up. Don’t make that mistake again. Lot at the bright side – You just got a $30 pay bump!..Join all the big networks and shop around. Get them fighting each other for your traffic. You have to be the squeaky wheel to get the big payouts. Logging into CJ to see what is new doesn’t cut it.

And as Share Results Network affiliate manager Julia Stead suggests:

“Doing the research is necessary to find the top payout. I often have affiliates negotiate/barter payout rates with me for certain offers that are available through other networks, however it’s helpful to keep in mind that payout isn’t the only factor when choosing which network/program to partner with. That being said, the huge payout discrepancy that you experienced seems unusually high. ”

As an affiliate marketer, having all the information at your fingers (joining both affiliate networks AND a merchant in-house program) are necessary if you want to succeed.

Remember, as an affiliate marketer, you’re more a traffic broker, so you need to join every relevant program relevant to your niche.

I heard some interesting alternatives to the situation too:

“Merchant should be required to disclose to affiliate what networks their offers are running on + in house offers and what the respective payout are. Affiliate have a right to know. This could be done through industry self-regulation.” – Amit Mehta, Super Affiliate, SuperAffiliateMindset.com.

“I’d attribute this to one of two things:
1) lack of communication between two people that are handing things at the company. I was on the short end of this at a previous job when I managed the affiliate program. There was somebody else in the company doing “media buys” for a higher caliber of publisher than i was getting. Turned out they were cannibalizing some of my biggest affiliates for 50% more than I was permitted to pay.

2) pure idiocy. Some companies really don’t think affiliates will connect the dots when they wildly vary payouts in different places.

Either way, tell them you expect $100 a lead now.” – Shawn Collins, Shawn Collins Consulting, AffiliateTip blog, Affiliate Summit.

So what was the outcome?

I called the merchant during their stated hours of operation “8am to 6pm” for affiliate and business development matters. And was told the affiliate guy comes in at 10am. So much for posting that information on the website.

I never got to talk to the affiliate manager and instead spoke to a series of sales guys. All of whom told me the same thing “The affiliate network determines the payout.”

“But aren’t you paying the affiliate network? Don’t you plan to synchronise your payouts?”

“The affiliate network is a third party, we don’t control them. We aren’t concerned about the commission discrepancy. You can choose which program you want to promote.”

Perhaps they could pitch this development as a new reality TV series: “Affiliate Programs Gone Wild”.

So much for customer service. I’ll be promoting other merchants from now on.

8 comments on What Happens When Merchants Don’t Play By Affiliate Marketing Rules Part 2

  1. Geordie Carswell
    August 9, 2007 at 12:46 am (4796 days ago)

    Most affiliates in your situation would simply personally blacklist the merchant and move on. When affiliates actually take the time to give the merchant a chance to respond, and still get blown off, that’s pretty weak. Having said that, it sounds like the guys you were talking to weren’t incented to care how affiliates perform, so it’s hard to say what the actual affiliate rep would have said if he came to work that day…maybe they should keep up on their affiliates’ blogs:)

  2. Andrew Wee
    August 9, 2007 at 1:03 am (4796 days ago)

    The other part to this story is that the CEO has a blog and mentioned that if readers had any comments or feedback about the company or its services, to write to him direct.

    It’s been about 5 working days (7 include the weekend). No response.

    Time to move on…

  3. chickenhole
    August 10, 2007 at 1:56 am (4795 days ago)

    Looks like I was right and their in house program is very poorly run. This is very typical. If they can’t get it together to answer a phone call or respond to an email, how are they going to respond when your cheque (which was six weeks late) bounces.

    Their AM shows up at 10? sweet gig… Most good account managers at the better CPA networks (like us) can generally be found online 18 hrs a day, we openly give out all of our IM info, direct phone lines, emails, and to our better publishers who respect boundaries – our cell phone numbers. 10 am … sheesh … who hired that guy?

    Stick with the pros, avoid in house programs if possible. I’d even take a slightly lower payout with the promise of consistent and on time payouts that come from a network.

  4. Andrew Wee
    August 10, 2007 at 6:29 am (4795 days ago)

    Jason,
    For sure, lesson learned the first time round.

    I think documenting this gives new affiliates an idea of the reality of the situation.

    Some great merchants/networks out there, some with lots of room for improvement too.

    Yep, cashflow is critical for success because we’re running businesses after all.

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