I'm putting together a list of merchants who don't accept cashback sites as affiliates. These merchants would rather use their limited marketing budgets for real promotion rather than supporting a 'lifetime cookie' cashback site.
PrezziesPlus.com
Amazon
John Lewis
If you have any suggestions to add to the list, please post them here.
Tuesday, 5 May 2009
What IS affiliate marketing?
I've been racking my brains over the last couple of days over a pretty basic question - what IS the aim of affiliate marketing?
What were the original aims when the idea of commission-based online marketing was created? Was it to harness buying power to visitors of sites that have genuine content relating to specific product types?
When I started out a decade ago, things seemed a lot more straightforward and uncomplicated - you had a website on a specific subject and wanted to monetise it by adding links and advertising to products your target users would have an interest in. Therefore, you signed up to one of the then-young networks and started popping links on where appropriate. You'd generate a small income that would cover your costs and maybe put some change in your pocket for a few beers.
At some point in the last decade the focus has changed from that to a whole cut-throat industry worth billions, but that is severely and negatively affected by an underground 'scene' that is out to generate as much money through fraud as possible. On top of that you have more legitimate sites that are there to redirect advertising budgets into their own pockets and those of their visitors whilst adding no real value for merchants.
There also seems to be a middleground of sites that are put together specifically to promote particular niches using more and more clever ways of bringing in traffic through SEO.
Unfortunately, all of these things have conspired against the sites that were in affiliate marketing in the early days. Those sites now have to become more and more about SEO and marketing of themselves to ensure they continue to generate a stable income through the affiliate model. With more focus being placed on Google rankings rather than creating genuine and useful content that isn't JUST about selling the latest gadget it becomes near impossible to sustain a decent income.
So modern affiliate marketing is a lot different now - however does it really offer the same benefits to merchants that it did in the past? Are the merchants receiving a decent stream of new customers come in through their affiliate marketing channels? Or, are they seeing the same customers they would have had anyway, but now they have to pay 5% or 10% for the priviledge?
Is there really a long-term future for affiliate marketing as it is now? Are the 'super affiliates' actually offering any real financial benefits for anyone other than themselves?
What were the original aims when the idea of commission-based online marketing was created? Was it to harness buying power to visitors of sites that have genuine content relating to specific product types?
When I started out a decade ago, things seemed a lot more straightforward and uncomplicated - you had a website on a specific subject and wanted to monetise it by adding links and advertising to products your target users would have an interest in. Therefore, you signed up to one of the then-young networks and started popping links on where appropriate. You'd generate a small income that would cover your costs and maybe put some change in your pocket for a few beers.
At some point in the last decade the focus has changed from that to a whole cut-throat industry worth billions, but that is severely and negatively affected by an underground 'scene' that is out to generate as much money through fraud as possible. On top of that you have more legitimate sites that are there to redirect advertising budgets into their own pockets and those of their visitors whilst adding no real value for merchants.
There also seems to be a middleground of sites that are put together specifically to promote particular niches using more and more clever ways of bringing in traffic through SEO.
Unfortunately, all of these things have conspired against the sites that were in affiliate marketing in the early days. Those sites now have to become more and more about SEO and marketing of themselves to ensure they continue to generate a stable income through the affiliate model. With more focus being placed on Google rankings rather than creating genuine and useful content that isn't JUST about selling the latest gadget it becomes near impossible to sustain a decent income.
So modern affiliate marketing is a lot different now - however does it really offer the same benefits to merchants that it did in the past? Are the merchants receiving a decent stream of new customers come in through their affiliate marketing channels? Or, are they seeing the same customers they would have had anyway, but now they have to pay 5% or 10% for the priviledge?
Is there really a long-term future for affiliate marketing as it is now? Are the 'super affiliates' actually offering any real financial benefits for anyone other than themselves?
Wednesday, 28 January 2009
Merchants acting as competitors - promoting affiliates and cashback
Yesterday I discovered an email in my junk box from Purple Parking promoting a new(?) cashback site. Usually I just ignore spam, but in this case I'm very unhappy for two reasons:
If a merchant is benefitting from customers and referrals provided by affiliates then they should at least have the courtesy of NOT promoting their own affiliate links and ads for other companies within their sites.
I have posted a thread on the A4U forum, but have not, to date, received a response: Related Thread
- I ALWAYS opt out of receiving promotional emails - so this email is 100% unsolicited.
- More importantly, this email is obviously sent out by Purple Parking to all of their customers - some of which may have been referred through their affiliates. By promoting a cashback site, Purple Parking are biting the hands of the affiliates that have sent them many hundreds of valuable customers.
If a merchant is benefitting from customers and referrals provided by affiliates then they should at least have the courtesy of NOT promoting their own affiliate links and ads for other companies within their sites.
I have posted a thread on the A4U forum, but have not, to date, received a response: Related Thread
Ethical Saving - a new stance for Price Devil
I'm repositioning Price Devil as a site that is standing up for all the good things about affiliate marketing. By doing this I'm making a promise that the site will operate within all the affiliate marketing rules and guidelines and will act in the best interests of the industry as a whole.
Here is the text I have posted on Price Devil:
http://www.pricedevil.co.uk/EthicalSaving
Here is the text I have posted on Price Devil:
Price Devil prides itself on a basis of 'ethical saving' - our definition of this is giving you, the consumer, the chance to save as much money as possible without unduly and adversly affecting other people. We provide factual information that has been provided to us specifically for promotion to you via the 'affiliate channel'. This includes basic prices, vouchers aimed at the affiliate market and offers promoted to us directly from our partners.
Unlike many other sites, we don't try to exploit loopholes, bend the rules and play an unfair game. Every company needs to make profits to survive and during the current economic climate we should all be doing our best to support the UK retailers who provide us with quality goods at decent prices. Every time a voucher code is misused, the merchant may end up paying out twice - significantly eroding or totally wiping out profits. If this continues many companies will struggle and find themselves without enough income to survive.
Every voucher code and offer listed on Price Devil is specifically targetted at our visitors. We won't try to make a quick profit out of other people's misfortune or work.
Using our links will, in most cases, earn us a small percentage of each sale. This money is used to pay our hosting fees and associated costs - as Price Devil grows we'll need to spend an increasing amount of money keeping it alive. We're not here to make a huge profit and at times will be forsaking our commission cut in order to provide you with bigger savings at no additional cost to the merchants involved. The more people that use our site and our links, the better the deals we'll be able to arrange.
Price Devil is leading the way in ethical affiliate marketing - we adhere closely to all affiliate guidelines and IAB rules to ensure that we provide the best service possible for our partners and our visitors. We'll use all the technology, contacts and friends at our disposal to find new ways of saving you all money without the need to bite the hands that feed us. We hope you'll approve of our stance and help us make a difference in an increasingly anarchic money-saving world.
http://www.pricedevil.co.uk/EthicalSaving
Wednesday, 3 December 2008
When is a promotion nothing of the sort?
"They did not reduce the onsite prices by 2.13%. At least they did not on the 3 bosch appliances I have been considering"
"I agree - None of the speake[r]s / amps I was looking at are reduced either"
"I was tempted to pick up one of those Western Digital Media Players, it was £79 on their website last night, but it's now £99."
"gotta agree also, couple of TV prices i was looking at have not been reduced, arguably a little higher now. Not good."
All of the above are genuine quotes from The DVD Forums following our promotion of today's Double VAT Cut promotion at Pixmania. The general gist of the offer is Pixmania would reduce their prices in line with the UK VAT rate cut and then knock off another 2.5% - so a small, but nice saving.
What they actually appear to have done with a number of products is put their prices up instead. By quite a lot in some cases!
Doesn't sound like a particularly good promotion to me...
It's not the first time this has happened - I've seen many instances of promotions being put together by online merchants only to discover that their 'standard' prices for certain items have miraculously increased overnight making their sale price the same as the full price the day before! That's not a sale and it makes those of us pushing these offers to our users look stupid for wasting their time.
Not one of the people quoted above will be likely to bother with Pixmania again now and I can't really blame them. What does this kind of misleading behaviour achieve?
"I agree - None of the speake[r]s / amps I was looking at are reduced either"
"I was tempted to pick up one of those Western Digital Media Players, it was £79 on their website last night, but it's now £99."
"gotta agree also, couple of TV prices i was looking at have not been reduced, arguably a little higher now. Not good."
All of the above are genuine quotes from The DVD Forums following our promotion of today's Double VAT Cut promotion at Pixmania. The general gist of the offer is Pixmania would reduce their prices in line with the UK VAT rate cut and then knock off another 2.5% - so a small, but nice saving.
What they actually appear to have done with a number of products is put their prices up instead. By quite a lot in some cases!
Doesn't sound like a particularly good promotion to me...
It's not the first time this has happened - I've seen many instances of promotions being put together by online merchants only to discover that their 'standard' prices for certain items have miraculously increased overnight making their sale price the same as the full price the day before! That's not a sale and it makes those of us pushing these offers to our users look stupid for wasting their time.
Not one of the people quoted above will be likely to bother with Pixmania again now and I can't really blame them. What does this kind of misleading behaviour achieve?
Friday, 14 November 2008
How can the content affiliates compete with cashback sites?
Recent weeks have seen some big UK names throw their weight into the cashback arena - The Sun and The Mirror, two of the UK's biggest newspapers now have their own cashback services and with readerships in their millions, these to behemoths will have a huge impact on the affiliate marketing world.
For a long time, content sites have struggled to earn a decent income from affiliate links, especially when web-savvy users go out of their way to shave a few pence of here and there. Sites such as Quidco and it's ilk have made huge amounts of money by taking their affiliate commissions and feeding them back to their visitors - for smaller items such as DVDs and CDs this may be a few pence, but for bigger items we could be talking about anything up to £100.
This money is set aside by merchants as marketing budget - ie to draw in sales and encourage new business. However, what cashback does is take discounts out of the merchant's hands and puts it into third parties who can do as they please. This has the potential to devalue brands and with new super-cashback sites weighing in this is likely to happen all the more.
So, now that 'Joe Public' knows about cashback and the amount of money that they can make/save by taking advantage of it. Those sites who use the affiliate programmes in the way that they were initially intended are going to suffer - tight margins are going to become non-existant or even losses and sites that have been running for a decade will no longer be able to support their increasing hosting costs (for some sites that aren't even that big, this can run to hundreds of pounds). Our own portfolio of sites are running at a marginal loss at present, and as the economy contracts in the coming years this is likely to grow. With the added problem of every man and his dog opting to buy via cashback sites, this is almost certain to be a death blow for many of us.
How are we supposed to compete? Some would suggest that this is survival of the fittest, others would question why we don't set up our own cashback sites. It makes sense - if you can't beat them, join them. However cashback isn't an easy thing to set up - there are technical concerns, security issues, payment methods and other problems to consider and when there are huge budgets there being ploughed into cashback promotion via national newspapers this would be a futile effort.
Can the networks and merchants help? Probably not - they're not going to step in when there's money to be made regardless. A million people buying via cashback is better for making money than a few tens of thousands of potential customers a content site can offer. What can they do - even if there are different terms and rates available to cashback sites, this still isn't going to stop the public using these services as all it might mean are slightly lower cashback rates.
The next few years will see the internet change considerably. Many, many content-based sites will collapse, those that remain are the ones with strong financial backers and those run by established media organisations - the best won't necessarily make it through, just those with the most money. Instead we'll end up with millions-upon-millions of blogs and on-line stores. The days of the independent sites are numbered and the internet is going to be a whole lot worse without them.
For a long time, content sites have struggled to earn a decent income from affiliate links, especially when web-savvy users go out of their way to shave a few pence of here and there. Sites such as Quidco and it's ilk have made huge amounts of money by taking their affiliate commissions and feeding them back to their visitors - for smaller items such as DVDs and CDs this may be a few pence, but for bigger items we could be talking about anything up to £100.
This money is set aside by merchants as marketing budget - ie to draw in sales and encourage new business. However, what cashback does is take discounts out of the merchant's hands and puts it into third parties who can do as they please. This has the potential to devalue brands and with new super-cashback sites weighing in this is likely to happen all the more.
So, now that 'Joe Public' knows about cashback and the amount of money that they can make/save by taking advantage of it. Those sites who use the affiliate programmes in the way that they were initially intended are going to suffer - tight margins are going to become non-existant or even losses and sites that have been running for a decade will no longer be able to support their increasing hosting costs (for some sites that aren't even that big, this can run to hundreds of pounds). Our own portfolio of sites are running at a marginal loss at present, and as the economy contracts in the coming years this is likely to grow. With the added problem of every man and his dog opting to buy via cashback sites, this is almost certain to be a death blow for many of us.
How are we supposed to compete? Some would suggest that this is survival of the fittest, others would question why we don't set up our own cashback sites. It makes sense - if you can't beat them, join them. However cashback isn't an easy thing to set up - there are technical concerns, security issues, payment methods and other problems to consider and when there are huge budgets there being ploughed into cashback promotion via national newspapers this would be a futile effort.
Can the networks and merchants help? Probably not - they're not going to step in when there's money to be made regardless. A million people buying via cashback is better for making money than a few tens of thousands of potential customers a content site can offer. What can they do - even if there are different terms and rates available to cashback sites, this still isn't going to stop the public using these services as all it might mean are slightly lower cashback rates.
The next few years will see the internet change considerably. Many, many content-based sites will collapse, those that remain are the ones with strong financial backers and those run by established media organisations - the best won't necessarily make it through, just those with the most money. Instead we'll end up with millions-upon-millions of blogs and on-line stores. The days of the independent sites are numbered and the internet is going to be a whole lot worse without them.
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