Thread: Tesco vouchers
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Old 24-08-07
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  Re: Tesco vouchers

Quote:
The problem for merchants is that having unauthorised discount codes on affiliate sites is a double whammy for them as not only do they have to give the discount to the customer but pay the commission to the affiliate too. In many cases the discount will mean the margin on that one transaction is wafer thin anyway so paying a commission on top can take a transaction from slim profit to actually being a loss.
I'm going to be a right devil's advocate today (except that I'm really the devil).

Your point only brings up another industry misconception. Due to affiliate money being allocated by CPA the issue of margins often comes up while you wouldn't hear that excuse being given to a television media buyer for example. Affiliates are paid for performance not for margins.

Using your example what happens when someone sees a Tesco ad on Sky for a lounge chair and then thinks hmmm that looks nice. They head to the handy computer and type Tesco chair in google, see a result for "Tesco Direct £10 off!!", looks good so they click, visit a site with Tesco CPM ads, head off to Tesco and buy the chair with the £10 off code.

In that scenario Tesco will have paid £xxx to Sky for the ad, £x for a CPM and the £10 off code will be used (no affiliate involved at any point because they've all drank the koolaid) and I guarantee Tesco will not be saying "OMG my margin!!"

I don't see much margin difference in a Tesco customer using a code from even a non-monetised source after watching a Sky ad to a Tesco customer using a code and clicking through the aff link. The difference is that due to being paid on CPA it is too easy to associate marketing cost and margin. The insulting thing is that often that very margin is based on cost with traditional marketing as part of that cost.

Anyway I don't want to derail the thread on that issue as it's a big one.
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