Cashback Sites : Love Them or Hate Them or Impassive?

[Qui Gon Jinn]

Hopefully anyone involved in cashback sites or who is knowledgable about them will engage in this thread.

• What exactly are the issues some affiliates have with cashback sites?

• Are cashback sites a threat to other affiliates, if so how & why?

• What do cashback sites offer? (and not simply cashback please)

• How do 100% cashback sites make their money

• How do networks & merchants treat cashback sites compared to traditional content or paid search affiliates?

• If or as cashback sites are part of affiliate marketing what have they recently come together to discuss, documented quite recently?

• What problems do cashback sites endure?

I am sure there are other questions which could be thrown up, so who would like to get the ball rolling?

[drivetowin]

Well to answer one of your questions - How do 100% cashback sites make their money?

They charge an annual fee (normally deducted from the member's first cashback payment).

Also bear in mind that not all 100% cashback sites are equal - while some pay a true 100% - others where the merchant pays tiered commissions will only pay cashback as 100% of the base tier. There are also rumours that some 100% cashback sites do private deals with merchants to get a higher rate of commission than the network published rate but pay cashback at 100% of the network published rate.

[Qui Gon Jinn]

So even with a true 100% cashback do they comeback with an * clause really.

Also is there a possibility that a network here or there may offer part of their over-ride to these cashback sites to keep their links in preference to anothers (nice if this happened for normal affiliate too) or even develope special reporting & tools for these affiliates at the expense of development of content affiliates. Perhaps that paragraph I wrote is irrelevant, so revert back to previous questions so that we can all get a better overview to understanding cashback & whether to embrace it as part of affiliate marketing or as a threat in extreme instances.

However in a similar way networks negotiate their fees with their clients on over-ride, is that what the cashback sites are simply doing with their commission via users, or is the latter a more dangerous game?

[pistol101]

What exactly are the issues some affiliates have with cashback sites?

The savy internet users realise that they can use the cashback sites whenever they see an offer, so the affiliate looses the commission as they aren't the last click.

Are cashback sites a threat to other affiliates, if so how & why?

Yes what would happen to affiliates if every consumer used a cashback site.

What do cashback sites offer? (and not simply cashback please)

They are a brand retention system.

How do networks & merchants treat cashback sites compared to traditional content or paid search affiliates?

At the moment everyone is equal, we are in the early stages of what happened with the brand PPC guys in things being banned. I really doubt this will ever happen, but people need to be very careful.

If or as cashback sites are part of affiliate marketing what have they recently come together to discuss, documented quite recently?

The Loyalty Association is a great step forward for this area. This is run by ethical people who think of the whole sector.

I am sure there are other questions which could be thrown up, so who would like to get the ball rolling?

The biggest issue is probably for merchants themselves, do cashback sites generate incremental sales or protect sales that could have gone elsewhere?

[Qui Gon Jinn]

Yes what would happen to affiliates if every consumer used a cashback site.

By the same token, what would happen if every consumer (well considerably more) became an affiliate. Then all get 100% cashback, to qualify nowadays all they would need is something like a personal blog.

Is there a problem that then the barrier to entry is less on Adsense than it is a network. There are acoupleof networks who offer 2nd tier or flat fee on introducing new affiliates, so what is stopping an affiliate setting up a white label directory or blog & signing them up to xyz networks. Then they will all get 100% cashback & the affiliate an over-ride.

Not realistic granted. But what if networks actually created one for affiliates via feeds or directory structure & created white labels, the reporting tools are already there & the consumer could simply login into a separate simplfied interface & manage the user base. This can be expanded on.

Okay off topic slightly so back to Cashback?

So in a very loose sense are members of cashback sites, sub affiliates of the cashback site & just an additional loop on the chain?

What elements are cashback sites discussing within the Loyalty Association?

[fizzbird]

Originally Posted by Qui Gon Jinn By the same token, what would happen if every consumer (well considerably more) became an affiliate.

Hardly likely, In the real world most people are incapable of sending a document by email - so to have their own site or blog would take a quantum leap to say the least.

Furthermore, I can't see brand owners being happy to be associated with the kind of sites that would be created - I think we are at the edge of the envelope on this score already?

[drivetowin]

Personally I see the Loyalty Association as the three co-founders looking to cement their own position rather than really improve standards in the industry - (don't take that badly guys, I know you're all great people with your hearts in the right place) - but I think the Loyalty Association joining fee of £2,500 per year (please correct me if that is wrong but it is the figure I was told by two networks) is far far too high - surely the sites who most need regulation are the new cashback sites, and I can't see many people who are just starting a cashback site stumping up that sort of money to join. Yes sure you need barriers to entry but I think you've set your barrier at Olympic level when most of the sector is still struggling to qualify for the parent's day sack race.

Please note I'm not against the idea of the loyalty association, far from it - I've had a brief read of your launch document and it looks to be very comprehensive and just what the industry needs - I'm just concerned that you're shutting out the very people you need to include.

[Mogga]

When cash back shopping started up I did believe it would be ultimately bad for affiliates.

I've yet to be convinced it has been good for the rest of us.

[Red]

From my own experience, cashback sites can be problematic for lead-based clients. Cashback users fill in the form simply to get the money and no idea what they are signing up for - you then call or contact them back and they can have no idea who said client is or they simply unsubscribe.

This is not always the case, but can be an issue.

[ian-d]

Originally Posted by Qui Gon Jinn What exactly are the issues some affiliates have with cashback sites?

Other than taking consumers away from affiliate based tracking i have no issue with them. I have much respect for cashback sites like Quidco that have thought up and developed a great idea, and now have a large share of the cashback market, and could no doubt sell the business for a tidy profit!

I do know however that they are gaining 'special' commission based deals from some merchants for the high level of conversions, but sure that would be the same for any high end affiliate sending a significant amount of traffic. For that reason i'd beleive that cashback sites like Quidco are pocketing a certain amount of commission for themselves above and beyond the market rate, but that could be down to the 'special offers' like make ten sales this month, get £100 etc etc.