Cross Merchant Advertising - Good or Bad?

[Hero]

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just to ease down your moaning for networks not having replied

Merchants advertising other merchants is not a wrong thing to do on a general scale. As with all things in life & marketing, it's all about where that advertising is and why it's done. If it's on the order confirmation page or on their newsletters or in the parcels they send out, it's a very effective way of business development, called contra deals. I used to do that at a company I worked for and it was highly successful, a lot of new customers came our way and the brand perception from our existing customers was boosted by the association with well known brands. Merchants collaborate with other merchants who have a similar or complementary target audience, and it's effective.

However, placing those links all over your site, especially if they are affiliate links, is not an effective contra deal. You are inviting your traffic to actually leave your site. Why would you do that? The only reason for it is you're making more money from those adverts than you ever would have made by converting that traffic to becoming customers of yours. These merchants need to therefore have a think about whether they should be merchants at all, if it's cost effective for them.

If the mechant has a number of sites, it's only natural to cross promote them. Think about it, most affiliates do the same for their affiliate sites, they cross link them, why would the merchants do differently?

It's not rocket science; either place the links in more effective and appropriate places, or hide them for affiliate traffic. I had an instance when I was doing the consultation with the merchant and this was done over the phone in 2 minutes. Merchants cannot pull the card "oh, it's too difficult, cannot be done, bla bla bla bla", no excuse, they just don't want to do it. Merchants must understand that they cannot have the pie and eat it: get an affiliate program, benefit from the unpaid for traffic from affiliates and then do whatever they please with that traffic. If that's what they want to do, it's fine, we advise them to pay for the affiliate traffic on a cpc basis. Otherwise, they need to hide the links. We won't support the program if these issues have not been resolved. In some cases, we've had merchants who refused - they launched at their own risk. Some times, we come across merchants who add them in after launch - we try to address these issues as fast as possible.

When it's cross promotion of sister companies, we try to bring the sister company onboard too and apply cross-program tracking, and we have quite a few programs like that. In this case, the merchant has the pie and eats it, but the affiliates don't get stabbed.

[Dr Foster]

Leakage – a merchant’s guide

Many good comments in this thread already. This post aims to answer questions that some retailers and affiliate programme managers out there might have, offering some help and insight into what’s being discussed.

There are 3 main leakage problems; in each case the risk is that the affiliate will miss out on a genuine commission.

Problem #1 -Completing a sale offline
The main offender here is the ‘prominent phone number’ – this encourages customers to complete a sale offline.

Solution – Identify affiliate traffic and hide the prominent phone number (or all phone number) from these customers. Alternatively use the IP phone tracking system available from your network to track these telephone orders.

Example: go to Evans Cycles to see their phone number (top right) now try Evans Cycles (Affiliate Link) without the phone number (wow! simple stuff)

Problem#2- Redirecting customers to ‘sister sites’
Sister sites, are websites operated collectively by one bigger brand. These sites send a great deal of traffic to each other URL’s via links on or around their website. Affiliate traffic sent to one site can be lost to the sister site in just one click! It is also possible that when the customer clicks back to their original destination site all links with the original affiliate referrer information are overwritten.

Solution – Firstly instruct you network to twin, link or connect your programmes together. This way your affiliates will earn commission for all your sister sites. Secondly do not overwrite affiliate tracking cookies with your own. Alternatively, identify affiliate traffic and hide the links between your sister sites for affiliate generated traffic.

Example: Visit SimplyScuba.com (all sites scuba, hike, piste etc, are twinned and affiliates earn commission from transactions completed on any of the URL’s)

Problem #3 - Redirecting customers to ‘partner sites’
Links out to third party sites take customers away from the initial destination site. Any consequent sale on the partner site will be attributed to the merchant who (as far as the partner site is concerned) sent them the customer.

Solution – Similar solution to problem#2, identify the affiliate traffic when it first arrives and hide the links to partner sites from these customers.

Example: go to Firebox.com and look at the offers on the home page, some are form CD WOW, now go to Firebox.com (Affiliate link) to see the same site without the partner offers (wow! again and still a simple fix).

In conclusion

As a merchant you have to ask yourself;
a) How much damage might 'leakage issues' cause to potential and existing affiliate relationships?
b) Is the financial impact big enough for you to want to address the issue?

Networks are unlikely to exclude a merchant who fails to put in place the straight forward solutions to address the issues identified, but they will prefer that you do. Affiliates will vote with their feet.

I hope this post proves helpful to some readers,

David

Note: The affiliate links used in this post have been taken from ShopWindow.com

[kert01]

Darn good question, merchants can have their cake and eat it and keep affiliates happy too.

1. Merchants only need to have a telephone number in one place, thats under the customer care page.

Um, you might think that, but that's not what the research says. Assuming a merchant is clued up about e-commerce, then they will certainly have come across the reports that categorically state that having a prominently displayed telephone number improves trust in the website and thus conversions.

I'm not arguing that they shouldn't remove it for affiliate traffic (it makes sense to), but it might help you understand why so many sites have one.

[renegade]

My take on this is:

<b>Phone numbers</b>: Remove them for affiliate traffic OR (as a very poor second, because it relies on trust) is to add a code to quote which can be assigned to affiliate).

<b>Cross promoting other merchants stores or services</b>: No problem so long as the commission is also cross tracked.

<b>Running affiliate ads</b>: I really don't like this and if I notice it will affect how I promote that store - and inevitably their EPC (chicken and egg innit).

I've also noticed a re-surgence of survey psuedo popup invitations which end up with newsletter sign-ups. Not too happy about these either because they're getting in the way of a direct route to checkout and reducing my chances of getting a return visitor. They can easily be removed for affiliate traffic and should be.

Jess has it right (as usual) the place to display partner deals is post sale.