a4u Blog

Deeply true Clarke, most PPC policies are ill-thought out, overly restrictive and based on a frankly odd paranoia that affiliates are out to get you!

Obviously as a search agency we get asked about these issues, most of our clients are suprised to hear our recommendations which suggests that most agencies are bringing out the (usually faked) scare stories.

I'm not sure that "brand protection" is always the reason given by merchants when they try to discourage affiliate PPC activity. Some merchants I could mention (heh) have extensive PPC campaigns with thousands of keywords. If they were to allow open-season PPC bidding by affiliates, the next effect would be that they are effectively competiting with the merchant's own campaign, and CPA would rise.

Yes, the affiliates do bid with their own money, but the nature of the relationship is very different. A merchant can say to a PPC agency: "Deliver X sales a month for an average CPA of Y."

But could a merchant say that to an affiliate? No, the affiliate will do what suits them. That's fair enough and it's part of the appeal of being an affiliate - you're your own boss! - but how many affiliates *guarantee* to deliver a minimum number of sales to a merchant every month?

If there are any out there, I'd love to hear from them! :-)

I'm going to risk being shot down in flames here, but I can understand the rational behind it.

Let's give a good example:-

A company have a PPC campaign running that is bringing them a 12:1 ROI. They are very happy with it and the campaign is run well with thousands of keywords and plenty of groups that are constantly monitored.

They also want an affiliate program - to be competitive the affiliate program needs to give away a 10% commission rate - the PPC makes them more in terms of money invested but the affiliate program is still an essential part of their business.

So should they then open up the URL? Surely by doing so there is the risk that they could see a drop in their ROI? Maybe they should do a test? but what kind of PPC affiliate would want to do a months test, or however long it is.

It's a tricky situation to be in and when you have to try and convince the merchant to potentially put their PPC campaign at risk it's difficult.

Would be interested on how you would tackle this Clarke..

I think if you have a highly successful PPC program in place before you start your Affiliate Program then you might as well not allow any PPC full stop if that is your wish, personally think that’s a bad idea but still one a Merchant is allowed to make.

However if you have no PPC in place and Affiliates are doing rather well and covering ten of thousands of keywords only for them to be told because the Merchant has hired a PPC Agency and they recommend that you remove the Affiliates this is something you have to give serous hard thought about. Are you willing to risk your existing Affiliate relationships on the advice of an Agency that knows they can’t compete with more highly competent Affiliates at PPC than they are?

I know a far few Affiliates who have invested hundreds of man hours in campaigns running in to the tens of thousands of words that are less than pleased when they are told you have so many days to pull your links to the program as it now breaks the new rules. The problem is Merchants do think they can try these things out and that the Affiliates will come running back if the new route didn’t work out for them, the problem is not all will and the point of my article is saying, get advice from all parties before you make these decisions as often something you have not thought about or could do differently.

The other flip side is if you ban them from doing PPC on a product because you already do it, they will just find someone else that is selling it and PPC the hell out of it to ensure they get the sale and you don’t. Keeping every penny a prisoner is never a good idea, if you set a commission per sale expect to pay that, and don’t look for cost savings on everything you do as could have knock on effect of sales drying up from a source because you added on too many rules that your competitors don’t have.

I think this is really a digital landscape issue. I would never recommend that affiliates not promote us via PPC but often this will be on the mutual understanding that we will allow brand bidding exclusive to a few partners and in return they will not out-bid our own PPC activites. In respect to a change in ROI, I think that when done well, the lowering of ROI by commission payments can be more than justified through a larger expanse of search engine coverage and thus potential more revenue (although this would certainly have to be watched very closely).

From an unbranded perspective there is a relative connection to the previous paragraph only the difference is that this is more open. If it is an unprotected arena then surely you are better off having affiliates promoting your brand raising your bids than competitors.

Companies need to decide whether they want to pay their affiliates or scrap their affiliate program - it is as simple as that.

In my view as a previous 'honest' affiliate manager, I tried to tell management to get out of the PPC game and let the affiliates spend their money instead. An honest and decent company WILL NOT COMPETE with their own affiliates for PPC. It is stupid and does little more than drive up the prices.

Managing a PPC program with tens of thousands of keyword phrases is a full-time job, and if the company doesn't have a resource to allocate to that task, it is better handled by the affiliates. Secondly, if it gives the affiliates a way to make money and continue their interest in the affiliate program -- that's an extra bonus.

Let's face it, if the affiliates don't make money, then you won't have affiliates for very long. By robbing them of the opportunity to SPEND THEIR OWN MONEY TO DRIVE YOU SALES, is shortsighted and just plain stupid.

The problem is that companies get greedy and want to run revenue direct to avoid paying their affiliates. By stealing this small, but sometimes juicy morsel from the affiliates, they cut the throat of the very affiliate program that supports them.

Throwing 'scraps' to affiliates and taking all the good promotional tools for themselves is greedy and stupid.

From the affiliate perspective, if companies do this to me, I don't walk away from their program -- I RUN to programs that are more fair and honest.

Great points raised here and to put my simple take on it, I think that if the merchant views his affiliate as his partner and not his "worker" then as long as the overall CPA of the transaction referred by a paid search affiliate is maintained at an acceptable level, then it makes perfect sense - and shows fair play - to encourage affiliates to engage in PPC and take a share of the cream that is the brand/display etc. As you say Clarke, the day may come when the merchant needs the skills of the PPC affiliate to bail him out of a sticky spot and if he/she has moved on to pastures greener, where will the merchant be then but back to square one.

I agree with the principles with many of the points raised. However, working ageny side myself I think it's far too easy to paint us all with a very broad brush. Each merchant's PPC policy needs to be evaluated on whether it's actually cost-effective for that client tow work alongisde affiliates on either their brand terms or URL. It's not always cost-effective for a merchant to be paying a higher level of commission when it's actually be far cheaper for the client to acquire the customer on their own. You have to weigh up each case on it's own merits as different clients have different CPA's, objectives and end goals.