Here is a classic example of how mis-management of PPC affiliates can cost a brand dearly.  The screenshot below shows listings on the search term bet365.  All of the first page PPC listings are taken up by (presumably one) rogue affiliate who has registered a load of domains containing bet365 and will be earning commissions on the back of all sign ups.  Not only does this mean bet365 will be losing out on cheap sales through their brand it also gives a very bad brand experience for the searcher and could confuse the uneducated Googler.  I know bet365 are hot on their affiliate scheme and so I cant imagine the affiliate in question will ever see any of the commissions they were expecting but it still isn’t good to see this sort of thing going on.  The industry has a bad enough name in some circles and this sort of thing doesn’t help.  what it does highlight however is the need to have stringent programme guidelines in place and a solid affiliate management process to allow you greater control.

Over the coming months it is safe to assume many advertisers will be tightening their belts and reducing or even halting their media spend.  When times are hard it is often the marketing budgets which are the first to go, with companies focussing on maintaining, rather than growing their operations.

However, when affiliate marketing is done correctly, it should be guaranteed return on investment, with zero risk to the merchant company.  So if you were a marketer, looking for the best place to spend your budget in a time of uncertainty and increasing pressure to perform, where would you turn?

The volume of business is never going to be on the same scale as other media channels but when you are just looking to cut costs and keep a business ticking over that isn’t necessarily going to be your biggest concern.  So maybe affiliate marketing is going to see a bumper period as the recession continues.  It is certainly a good time to be pushing the “no risk” message that only really affiliate marketing can truly tout.  Before jumping in feet first however you must ensure you have a sound affiliate strategy and the correct quality assurance system in place to ensure you avoid some of the common pitfalls associated with affiliate marketing.

Microsoft have announced today that they will be launching a cash back system for purchases made using its Live search engine.  Utilising partnerships with ebay, paypal and jellyfish they will offer remuneration to users who find a product using live search and then make a purchase.  This is an amazing step from Microsoft into a market traditionally held by the affiliate world and heralded by the networks as the big growth area for affiliate marketing.  My own experiences of cash back sites are limited due to the way it opens the advertiser up for fraudulent enquiries/sales by incentivising the individual.  that doesn’t mean to say it cant work in the right situation and the entrance of Microsoft into this world not only says they have identified it as a growth area but also could have major implications for the cashback industry as a whole.  On the one hand it could bring the service to the mass market and mean the user base for such size grows exponentially over the next year or so.  On the other Microsoft may decide they want to dominate this industry and use it as a USP for Live search and decide to crush the independent sites in the way only they can.  Id certainly be getting a bit twitchy if I was a cashback publisher at the moment.  full article below

May 20, 2008

Microsoft to Launch “Live Search Cash Back” Tomorrow

The major Microsoft Live Search announcement scheduled for tomorrow will be the official launch of a new product: Microsoft Live Search Cash Back.

The program in partnership with eBay and its PayPal unit will offer cash back to consumers who search on Microsoft Live and make a purchase. The announcement will be made in conjunction with a taped message from eBay CEO John Donahoe. The technology is based on the acquisition of Jellyfish by Microsoft in September, 2007.

The announcement is expected to be made by Satya Nadella, SVP Search, portal & Advertising Platform Group, Microsoft, prior to Bill Gates’ presentation on “Connecting the Future.” The goal is to differentiate Microsoft’s vertical search experience for users while leveraging improvements in the core search algorithm.

Microsoft believes the Live Search Cash Back program will align the interests of consumers and the search engine, putting Microsoft “on the same side as the consumer.”

The job of Live Search will be to match the most relevant products with the most relevant consumers.

Microsoft will likely offer advertisers a CPA (Cost-Per-Acquisition) model rather than a traditional search engine Cost-Per-Click (CPC) auction.

Tony Hsieh, CEO of Zappos, said in a taped interview that the program would help overcome the barriers of first-time buyers of shoes online.

A Barnes & Noble executive stated that clickthrough rates and purchases had increased through the use of the Jellyfish pilot program.

The following message is posted on the Jellyfish.com Web site:

“As part of our pledge to save you money on the products you buy, our Cash Back rewards service is currently offline to perform necessary service upgrades and enhancements. Jellyfish Account holders will receive an e-mail notification when our Cash Back service is up and running again. Thanks for your patience.Using Jellyfish, consumers could compare prices of products from a number of online stores. Retailers paid Jellyfish fees to feature products. A portion of that fee was refunded to consumers who bought through the Jellyfish site.

Jellyfish also offered “Smack Auctions.” During each Smack show, Jellyfish would auction off new products in a unique price dropping format. Every second that ticks off the clock, Jellyfish would drop the price of the product, until the deal sold out.

Jellyfish founder Brian Wiegand is agroup manager at Microsoft. Last year, ye stated, Microsoft is “investing heavily in shopping and e-commerce.”

Microsoft closed the deal on Sept. 27, 2007 but didn’t announce it until Oct. 2, 2007.

This isn’t the first foray of Microsoft into the world of search engine incentives.

Microsoft Live Club is an ongoing experiment with incentivizing searchers but never on the Live Search Cash Back scale. For example, Microsoft Live Search Club lets users play games. A completed gives earns tickets toward prizes, such as Zune accessories, song downloads and ringtones.

Microsoft’s official statement on the announcement:

On Wednesday, we will be announcing a major new initiative that our search teams have been driving. We are getting better and better with our core algorithmic search, and at the same time, we are investing to differentiate in vertical experiences and to disrupt the current model. You’ll hear more about our plans Wednesday.

I was at an affiliate workshop the other day and the panel did their best to persuade me the days of rogue affiliates were behind us and the affiliate world is now full of honourable businesses making their money through legitimate practices. I didn’t buy everything they were telling me, although accept that times have changed. From reading the methods listed below taken from ppcblog maybe it is more the case that rogue affiliates are now more sneaky in their behaviour and are simply getting spotted less. Just because they aren’t blatantly driving up brand costs doesn’t mean they aren’t up to something else. I think for me the issue of guidelines and strict rules would be key when setting up an affiliate programme and a zero tolerance on the rule breakers would be the only way to ensure they stick to it.

7 dodgy PPC methods used by affiliates:

1) Bidding At Certain Times – Brand bidding at certain times of the day or week when they know there is less chance of someone in-house, agency or affiliate network seeing the offending adverts. Evenings & weekends are the obvious choices or a couple of minutes here and there will often go unnoticed. Advertisers don’t even have to be at their computer to do this with Google kindly providing ad scheduling.

2) Geo-targeting – Geo-targeting of smaller individual locations or those where the merchant, their agency or affiliate network are not based. Advertisers can custom geo-target away from those areas, again thanks to Googles ever increasing Adwords tools inventory.

3) IP Exclusion - As Google explains “refine your targeting by preventing specific Internet Protocol (IP) addresses from seeing your ads”. Find out the IP of those you don’t want to see your ad and ban them so they can’t see your advert. Now that is naughty.

4) Advert Tricks - This is pretty sneaky & I have seen this more than you might think. This only happens if the merchant is running their own adverts against their own branded terms. The affiliate simply copies the merchants advert EXACTLY and bids higher to gain a higher ad rank that will replace the merchants own advert. At a glance the merchant will believe their advert is still running, although obviously it’s that of the affiliates. If the merchant digs a little deeper and views the destination url the affiliate might get spotted, but this method is generally used intermittently. If the merchant/ad agency notices they are no longer receiving clicks for there core keywords it will raise suspicion - so this is often used with 1, 2 & 5.

5) Masking Affiliate Urls - I have heard of software from some of the affiliate networks that claim to detect brand bidders by scraping the search engines and monitoring ad urls. (Although this is of course, depending on whether this detection system is not blocked by either 2 or 3 above in the first place). How do naughty affiliates attempt to protect themselves so their affiliate url is not spotted in adverts immediately? Well, by masking the url & affiliate ID within a url redirect. The likes of Tinyurl make this very easy for anyone. In fact, the affiliate might be using multiple redirects to make it a little harder again to be identified without proper investigation that might confuse the average merchant or online marketer.

6) Sending Traffic To A Different Domain - This is not rocket science. This can even be accomplished without setting up redirects, just a little understanding and knowledge of how the automatic and manual ad approvals work at the search engines. Advertisers can take advantage of the time between automatic approval and a manual review, but it’s actually even simpler for affiliates to trick the system after the manual review period.

As an example, lets say an affiliate wants the advert display url to be affiliatename.com, but they want to send traffic direct to a different domain, merchantssite.com. By playing nice at first, affiliates can simply set up their advert with the same display url and destination url to affiliatename.com. The affiliate can allow their advert to go through manual approval. It takes roughly 48hrs (in the week) for the advert to pass through manual approval in Adwords (ads can even be paused during this period) before the affiliate can whip in a keyword level url for the real destination they want to send traffic to. Keyword level urls take precedence over ad level urls and they do not go through manual approval like adverts do.

Another method that is frequently used to get past the one display url per SERP policy from the search engines is to simply send traffic to affiliatename.com and after the manual approval throw in a server side redirect over to the site of choice. That way the advert has not been amended and will not get manually reviewed again.

7) Using Broad Match To Bypass Trademarks – Here in the UK, businesses can protect their trademark brand names in both adverts and keywords on Google by submitting an application. While this method can be very effective for some brands, it can also sometimes be bypassed by the use of broad match. Take the well known car company ‘Land Rover’ as an example. For sometime they protected their band online on Google and hence the keyword ‘Land Rover’ was a trademarked term and would not display ads when used as a keyword. An easy way to get around this was simply having the keyword ‘Rover Land’ on broad match and sure enough it would trigger the advert against a search for ‘Land Rover’. It can be as simple as that. So while trademarking can work great for some businesses, it can easily be bypassed for others.