Good Idea or Bad Idea?

[gadget]

Off the back of another thread - http://www.affiliates4u.com/forums/c...lp-please.html - I've had an idea.

Tell me if this is a really really bad idea.

I am currently advising a Merchant who has a good product range (3,000 products) in the telecommunications market. Their prices are ok, neither the cheapest nor the most expensive. Their customer service support is superb and includes next day delivery as standard with a 6.30pm cut-off (yes 6.30pm!).

Their current business is driven through mail order and their online business is quite small at the moment. There is little brand equity and certainly no sensitivities as per the above referenced thread.

What do you think if I was to advise them to change their T&Cs to 'allow' brand bidding, mis-spellings etc?

The only thing I would advise they didn't allow what blatant 'passing-off', which would include similiar domain names.

I'm also thinking of suggesting that they offer an incentive to affiliates of a 10% off discount code.

[nim-b]

I think if they're not brand sensitive and want to build their online presence quickly, allowing brand bidding might be a good idea.

The only thing to consider is that a lot of time people searching on brand would have found the site anyway, thereby increasing the cost of the sale. However, allowing bidding on brand + generics would help cut out competitors bidding in this space.

I'd suggest they go for a closed or limited group of affiliates that they allow to do this, so they can monitor it more closely. If it works for them they can let all affiliate go ahead.

With brands not so established online, brand bidding is less of an issue. The problems occur when you've got an established brand that people are searching for a lot- then brand bidding can cost you unecessary amounts of money.

[morleymouse]

its also worth mentioning that affiliates who do bid on brands use the money made from this to back their other campaigns. Some generics can be very expensive, the profit from the brand makes these campaigns work.

If the company has very little online presence and the brand is only small then there wont be a lot of people searching for it, so allowing it or not chances are it wont be make or break for the programme. The brand activity probably isnt going to be enough for an affiliate to launch any major campaigns off the back of it.

For example if I had sole rights to bid on say "dell", id happily launch a campaign bidding on "laptops" as the profit from the brand would cover me. If I had sole rights to bid on "joes laptop shop" theres no way id launch a campaign bidding on "laptops" as the brand traffic would never cover the cost.

The only issue comes when the brand does get large, and people search for it on a regular basis, the company reaslise the costs incurred and how much they are paying for these sales, if they then decide to back peddle and cut brand related PPC it can have a negative effect.

Set your stall out from the go if you want to build long lasting relationships with a solid foundation

[yesasia]

its also worth mentioning that affiliates who do bid on brands use the money made from this to back their other campaigns. Some generics can be very expensive, the profit from the brand makes these campaigns work.

Actually this is what I thought in the beginning when we started up our affiliate programs, but I do not see this happening in practice. Some affiliates just bid on brands, others on generics and product names. I think the professional brand bidders (especially in the US) make enough money from brand bidding on every merchant they can find, and wont be bothered with other keywords. We would consider giving certain affiliates the right to bid on the brand if they run a full ppc campaign, but it's difficult to write that in terms and conditions.

[hpops]

We would consider giving certain affiliates the right to bid on the brand if they run a full ppc campaign, but it's difficult to write that in terms and conditions.

We've done this from both sides - doesn't need to be covered by terms - choose a trusted publisher, evaluate the activity and spot-check the implementation.
Can work well (as long as you've got a reasonable conversion rate across the board)

[morleymouse]

Actually this is what I thought in the beginning when we started up our affiliate programs, but I do not see this happening in practice.

Its true some will just use the brand.

One way to work this really well is to track their keywords and give them access to the software your using to track it, then insist on a certain split of generic and brand. So from the tracking you will be able to see what keyword has referred the sale, if you were to say you wanted a 50/50 split of generic and organic its then the affiliate and yourself would be able to look at the keywords and it would be very 'open book' on what was driving sales.

If the affiliate stopped bidding on generic you'd both know and you could find out why. Also at natural peaks when the brand is doing well due to seasonality for that industry the affiliate would have to ramp things up o nthe geenric side to match it.