Live blogging from Internet Retailer Conference

June 9, 2008

Here at IRCE, I’m in a workshop around affiliates and along with 80% of the attendees, I’m sitting here with my jaw open because instead of offering ways to maximise your affiliate business, this workshop has essentially been a 90 minute rant about what scum-bags affiliates are and tons of data that are essentially telling retailers to scale back or do extreme policing of their affiliate programs.

Why the anti-affiliate sentiment?
I decided to cover this topic on CSE strategies, because with ChannelAdvisor’s ShoppingAdvisor product, we’ve seen more and more retailers going direct with their top affiliates, and keeping the bottom-tier affiliates in affiliate networks for closer management.  Retailers seem to be separating the wheat from the chaff.

Barbara Hurd from Harry and David talked about how they are fighting affiliates that are doing bad things like saying they have a H+D coupon code, but then send people to competitor’s sites.

Vickie Updike from Miles Kimball – pointed to some research they did that showed affiliate drove only 17% NEW orders for them.  In other words, 83% of the affiliate orders were essentially coming to MK were intercepted and MK had to effectively pay for orders they would have gotten anyway.

George Michie went on a rampage and talked about the bad guys and their tricks such as:

  • PPC fiends – these guys violate your affiliate rules and do things like buy your keywords at night (night pirates), or use geo targeting to avoid your corp HQ and buy in other regions.  You can catch these, but it’s tough.
  • Coupon sites – these guys are trained by the consumer press (today show mentioned twice – evidently Matt Lauer is big on coupons)
  • Domain squaters – they buy things like plasmatvs.com and do lots of SEO and then charge for traffic to a bunch of affiliates.
  • Loyalty programs – eBates kind of programs essentially want to take an affiliate % from traffic you should be getting – avoid them.

What’s a retailer to do?
At the end of the day, the panel seemed to be saying that it’s time to drop the hammer on affiliate programs, cull out the bad guys and focus more on Web 2 kinds of activities like blogs, user-generated-content, etc.

On the culling side, one of the panelists likened finding your ‘good affiliates’ like trying to find the good guys in prison.

Ouch – nuff said.