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I'm heading over to New York over the weekend for the Ad-Tech conference and would love to meet
any of you in the affiliate marketing space. Drop me an email if you are planning on being there:
Gene Kavner, Former World-Wide Director, Amazon Associates Affiliate Program, 2005-2006.
There is a substantial amount of debate that spread through the blogosphere recently about how much disclosure blog writers should provide to their readers about compensation bloggers receive and who they receive it from. All this disclosure would serve a presumed goal of allowing readers to make an independent decision as to whether this compensation may in a way influence the blogger to be biased in his or her post.
This debate was sparked by PayPerPost.com, an Internet startup that has developed a broker network between marketers who want to grow sales of their product/service and bloggers who would like to monetize their blogs. Certainly, many other networks give bloggers an ability to monetize their inventory, but what makes P3 unique is that they may be implicitly encouraging bloggers to offer positive commentary in their posts because they are being compensated for their writing.
Michael Arringon of TechCrunch expressed in strongest terms that P3 is a "virus" in his post titled PayPerPost Is Now Officially Absurd. In his perspective,
PayPerPost bloggers should also be disclosing the fact that they are being paid for their post prominently within the post...
Another post by a notable Internet analyst, Dave Taylor, titled PayPerPost creates DisclosurePolicy, TechCrunch calls it absurd?, questions Arrington's tough stand:
Exactly where is this a problem? The fact is, PayPerPost has no responsibility to enforce any sort of disclosure policy nor is there any requirement that bloggers be transparent.
This pretty much sums up the current Internet controversy. This is just the latest bout between Internet puritans and Internet marketers and that their conflict will not be solved any time soon. I see this as another evolution of the same old debate between Open Source backers and Microsoft backers as to whether companies should charge for software and enforce their intellectual property rights.
I will be upfront in disclosing my bias here: if someone believes that it is possible for someone's commentary in an Internet posting to be absent of bias, this someone was probably born yesterday. We all have our biases and everything we do in our lives and say in our blog posts reflects those biases. I have little doubt that Arrington, Taylor, and I have our biases, whether financially motivated or not, for our perspectives.
In the offline world, there is little expectation on our part that NBC's Apprentice will disclose that their episode where contestants market Domino's pizza is actually sponsored by Domino's. One rarely expects that your financial planner who offers you a life insurance policy to disclose that he is being paid by the policy provider. A writer in New York Times writing a story on the race for Congress is certainly not going to disclose his personal voting record.
In the online world, on the other hand, somehow there is this tendency to assume that we are living in a more refined world where "public trust" as Arrington describes it rules. There is no more public trust in the online world than there is in the offline world and expecting the online world to somehow take the high road is unrealistic. We should all take everything we hear on the Internet and cross that information with the credibility value we implicitly assign to the source of the information. Basically, it's the eBay seller model applied to the blogger -- we observe the credibility value assigned to the blogger by other bloggers and readers and if the value is high, we can assign more trust to their posts. If the blogger is fairly new, we take their message with a bit more grain of salt. If a blogger pushes a "broken" product or service simply because he or she is being sponsored, blogger's credibility will permanently suffer. On the other hand, there is absolutely nothing wrong for a blogger to comment on a product he or she believes in, despite being compensated for it. At the end of the day, we have to trust those we read and follow regardless of whether they are or aren't being paid for their communication. Considering how easily and irreparably trust can be broken, no reputable blogger will be quick to alter his or her perspective on an issue solely based on the value of compensation they receive.
Would love to hear your thoughts.
Gene Kavner, Former World-Wide Director, Amazon Associates Affiliate Program, 2005-2006.
I've been looking at various affiliate programs on the Internet and having run the largest affiliate program in the world, I feel that overall, affiliate programs are lacking some critical components that every affiliate program should have. Let's take a look at some of these important affiliate program features.
1. One of the most important components of any affiliate program is the relationship between the merchant (site with an affiliate program) and the publisher (site that drives traffic to the merchant).
Typically, publishers know what merchants' products appear on their sites. Unfortnately, the same does not typically apply in reverse. Merchants frequently do not have any idea who their affiliates are, how much each one sells and how each of the affiliates is driving business to the merchant. If one of the publishers suddenly stops driving traffic to the merchant, the merchant has no means to call the publisher and address the problem they may be having. In the current day and age, if your affiliate program does not give you means to establish a direct relationship with the affiliate, you need to take a look at other affiliage technologies.
2. Each merchant needs to have a clear way to understand how elastic their affiliates are.
Elasticity is the measure of how a group of publishers will respond to either increasing or decreasing of fees they are paid. Every merchant will typically have affiliate that drive traffic to them in different ways. Affiliates that drive traffic in a similar way would be typically be described by the merchant as an affiliate segment. Each affiliate segment would respond differently to changes in fees by a merchant. Let's take a look at two sample segments of affiliates and how one is more elastic than the other:
Redirectors are typically affiliates that purchase inventory, typically from Google AdWords or AdSense (they could purchase this inventory elsewhere as well) where they display only one merchant's offer. They hope that they will make more from the merchant's commissions when their customers purchase merchant's products than they will spend on bringing those customers to the merchant's site. Redirectors frequently do not even need to have their own web site to generate business. Redirectrs have to have a way to measure which campaign makes money and which campaign loses money for them; they would then quickly need to abandon money-losing campaigns while focusing on purchasing more profitable inventory. Typically, redirectors respond very well to any increase in fees that a merchant would pay them. Higher fees allows them to purchase keywords that would otherwise be unprofitable. If a merchant were to pay redirectors a higher amount, redirectors would typically sell more of the merchant's products -- a win/win scenario. Redirectors are therefore considered to be an elastic affiliate.
Bloggers, on the other hand are typically considered to be inelastic. Bloggers typically participate in affiliate programs of merchants who sell products that are aligned with the content of the blog. Blogs about electronic products would do very well displaying products from electronics merchants and are likely to do poorly promoting financial products. Of all the merchants in their space, certainly, bloggers would like to promote the merchant that pays them the most. However, there is so much that typically goes into the commission (such as click-through-rate and conversion) that bloggers are more likely to stay with the merchant that they trust to pay them consistently and that is a recognized brand than the one that pays them a bit more. Thus, if a merchant were to offer additional fees to the blogging affiliate segment, it is not likely to result in additional sales.
3. Merchants need to provide tracking id's to their affiliates.
Because certain affiliates are sophisticated enough to measure various campaigns separately (and these affiliates are likely to be the most successful), each merchant needs to offer tracking id's to the affiliates. Each tracking id would then need to have its own section in the report that the merchant provides to the affiliate. Each tracking id has to report impressions (if applicable), clicks, conversions, and resulting fees. This report will allow affiliates to understand which of their campaigns is working and where to allocate their expenses.
4. Merchants need to be able to offer ladder commission structures for affiliates based on volume of leads.
Not all affiliates are the same. It is likely that every affiliate program will follow the 95-5 rule: 5% of affiliates will generate 95% of the sales. The most successful merchants will figure out a way to reward those affiliates that generate the most sales. At the same time, each of the smaller affiliates should have a realistic goal to shoot for. This goal, if met, should result is higher fees, going back retroactively. This is a great incentive for affiliates and bonds them closer with the merchant. eBay Affiliate Program and Amazon Associates Affiliate Program have done a good job at their compensation tiers.
5. Merchants need to be able to compensate different affiliates with different commission structures.
Some affiliates are just better at negotiating. Some affiliates are able to drive so much traffic and sales to a merchant that this business needs to be fought for and won by the merchant. As a result, merchants' affiliate programs must have a way for the merchant to find and sufficiently compensate those affiliates that can really contribute to sales. At the same time, those affiliates that are not as good at negotiating, even if they do drive as large or even larger sale volumes, should not receive as an attractive compensation structure. This commission "gap" will allow the merchant to fund those hard-to-please affiliates and keep them happy bringing signficant sales to the merchant.
6. Affiliates should have direct links to the merchant.
Once a merchant finds a number of different affiliates, the merchant should do everything to signficantly leverage those affiliate links. One way to leverage these links is to obtain the best possible Google PageRank. An excellent PageRank has potential to generate a tremendous amount of search traffic, all of which is free. If your affiliate program creates links that redirect through their site, you will not get the same PageRank benefit; and it could result is tremendous loss of sales. The right way to track affiliate clicks is via the tag on the URL going directly to the merchant instead of a redirect. Better yet, affiliate clicks should be tracked via the Referrer field for those affiliates that have a consistent domain from which they generate traffic.
7. All affiliate programs should generate 2nd-tier commissions.
2nd-tier commissions reward affiliates for finding other affiliates. There are many affiliates who are simply not in the community of potential consumers but instead, are in the community of other affiliates. Typically, those sites that offer 2nd-tier programs will pay 10% of all 1st-tier affiliate revenues to those 2nd-tier affiliates who have found the 1st-tier affiliates. Thuis will allow more excitement, more discussion, more promotion of your affiliate program. Everything your program can do to allow you to get above the Internet "noise level" is important. 2nd-tier affiliate programs will get your program beyond the 1st-only-tier programs.
Gene Kavner, Former World-Wide Director, Amazon Associates Affiliate Program, 2005-2006.
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Gene,
In the past there have been questions concerning what Amazon considers an order. Would you please explain this procedure? Does payment need to be made first? I ask because some orders never ship and others are refunded. myhart |
Thanks for your question, myhart.
Amazon considers an order when someone makes a purchase of any one item from the Amazon catalog. If the same person purchases two products at the same time, this is considered as two different orders. It is therefore possible for someone to purchase 10 different products on the same purchase and for you to be credited for 10 orders towards your next payment tier (see my post on the Amazon Associates Payment Tiers).
If you referred a customer who purchases an item, you will receive credit for the item as long as it is sold or placed in the cart within the 24-hour period of the original click (for more details see my post on how Amazon tracks affiliate orders). If the customer places an order and then returns immediately to make another purchase directly to Amazon, you will not receive credit for the second purchase, unless the customer returns through one of your links.
On your Amazon Associates Central report, you will see a separate Orders Summary and Earnings Summary. The reason for this separation is because while you see the order placed right away (usually within 24 hours of the order), you do not receive any earnings on the order until the order actually ships. This can be the next day or it could be a week later, depending on the shipping preference made by the customer at check-out. Because Amazon makes it easy for the customer to cancel the order before it ships out, Amazon waits to make sure the order ships before you are credited with the sale.
If the customer cancels an order or returns an order after he/she receives it, the Amazon system is smart enough to track it and reduce your fees by the amount you originally earned on the product purchased and then returned.
Hope that answered your question!
I've been reading the varoius forums on Amazon Associates and found the following interesting question.
| Does Amazon store cookies on people who bought through your affiliate program? Here is the senario: User comes in the 1st time through your link, and doesn't buy. One week later, user types in the amazon main website url, and buys from there. My question is: Do you get credits for that? |
This question is the most fundamental to any affiliate program. Ultimately any affiliate program is not going to survive if it is not able to establish a trusting relationship between a merchant running the affiliate program and the publisher driving traffic to the merchant. The affiliate needs to feel 100% comfortable that they will get compensated based on the terms of the agreement.
Having taken another look, I see that the Amazon Associates Operating Agreement dated August 17 2006 does not fully address this question. Thus, let me address this critical question here.
When you build any link to Amazon.com from Associates Central, Amazon tags the link with your Amazon Associates ID. When you click on the link you may end up on a page with a very long URL. Typically, you will see one of the parameters on the URL called "tag". This is the tag that specifies your Associates ID:
If you click on any link on this page, you will redirect to a different Amazon.com page but your tag will be replaced with the Session ID that looks like 102-8430161-8248922:
It does not mean that your tag is no longer associated with this transaction. Amazon still "remembers" your tag and it is now associated with the entire session that this customer has established on Amazon.com. Because your Associates ID gets attached with the Session ID and the Session ID gets passed from page to page in the URL, the customer does not even need to have his cookies enabled for your Associates ID to be linked with this session -- until the customer closes his browser. If the customer comes back to Amazon within 24 hours of the initial click, even if he types "http://www.amazon.com" in his browser, Amazon will attempt to re-esatblish the original session from the customer's cookie. If cookies are enabled, the session tagged to your Associate ID will get re-established. If the cookies are not enabled, a new session not tagged with your Associates ID will be established. I find that about 85% of the users run their browsers with cookies enabled.
From the moment a customer clicks on a link on your site and ends up on the Amazon site, his session will last for 24 hours. Any purchases during this period will be credited to you as an affiliate as long as:
1. A purchase is made in the same browser as the original click within the 24 hours of the first click, OR 2. Customer clicks to Amazon, exists the browser and comes back to Amazon directly within 24 hours while his cookies are enabled.
Lastly, there is one more way you can get credited with the purchase even if the purchase is not made within the first 24 hours of the click. If the customer adds an item to his cart within the first 24 hour period, those items may be purchased within the next 90 days and you will still receive affiliate credit for those items.
So, the answer to your original question is: If the user doesn't buy on the first visit and then comes back one week later to buy, you will not get credited if the user hadn't added the purchased item to the shopping cart within 24 hours of the original visit. If the user had placed the item into his shopping cart, then you will receive the affiliate credit.
P.S. Go Tigers!
icon next inside the "Text Links" section:
In my previous post I have given you a complete overview of all link types that Amazon Associates affiliate program provides that you can use to link to Amazon. As I have discussed, these links are broken up into two groups as follows:
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Page Content links
Advertising Slot links
In this post I will give you some more details about the Page Content links (specifically, Product Links) and in my upcoming post I will give you more details about the remaining Page Content Links and the Advertising Slot links.
Page Content links are the most successful link types in the Amazon Associates program, offering affiliates ways to link directly to the desired products in the Amazon catalog. Because of this ability to pick products, you are able to specifically match the content of your site to some number of products in the Amazon catalog.
As an example of this, if your site is about new cell phone gadgets, you may want to link to some products in the Amazon catalog like the Treo 700 or the Blackberry 8700g: