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The big, ugly affiliate marketing scam

venturebeat.com

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Re: The big, ugly affiliate marketing scam

#71

Post by throwaway1979 »

liquidcool wrote: post #61
iopq wrote: post #12

You have a discount code at your checkout? So basically instead of capturing the sale you're ASKING the buyer to google for discount codes. Think of a sneakier way to give people discount codes that doesn't show it RIGHT THERE ON THE FORM. It makes me feel like I'm getting ripped off when I see discount code and I don't have one.

Honest question: when you go to a grocery or department store and they ask if you have any coupons or a rewards card, do you feel like you're getting ripped off? I may feel like I've missed out, but never "ripped off." When I've reached the checkout page it implies this was the best deal I could find. I do appreciate discounts, but don't feel entitled to them, especially if I'm a first time customer (or opted out of…

The equivalent is when you go to a new store (or one you go to infrequently) and they ask you for a rewards card to get the discounted price. One or two times, I've signed up for one. More than half a dozen times, the cashier is nice enough to use their card for you. At one store, I got grief from the cashier saying you have to sign up for the card at the customer service desk, and that he/she couldn't use theirs. Guess which store I make it a point never to go to?

I understand these discounts are designed to promote frequent patronage in some cases. But it can definitely piss customers off.

Re: The big, ugly affiliate marketing scam

#72

Post by prof_hobart »

liquidcool wrote: post #61
iopq wrote: post #12

You have a discount code at your checkout? So basically instead of capturing the sale you're ASKING the buyer to google for discount codes. Think of a sneakier way to give people discount codes that doesn't show it RIGHT THERE ON THE FORM. It makes me feel like I'm getting ripped off when I see discount code and I don't have one.

Honest question: when you go to a grocery or department store and they ask if you have any coupons or a rewards card, do you feel like you're getting ripped off? I may feel like I've missed out, but never "ripped off." When I've reached the checkout page it implies this was the best deal I could find. I do appreciate discounts, but don't feel entitled to them, especially if I'm a first time customer (or opted out of…

I've never had anyone directly ask me at the till, but if they did then yes psychologically I probably would feel that I was being ripped off. I realise that vouchers are available for a lot of shops these days, but if you push the fact into someone's face then it's basically reminding them that they could have had it cheaper.

I have exactly the same thing with the £1.50 for one/£2.00 for two type offers. If I don't want two of them, the very fact that they are highlighting that they are happy to sell them at £1 each makes the £1.50 price look like a rip off, especially if they've put the single unit price in smaller text (it says to me "yes, we'll sell you just one if you really, really want - but we're charging you a massive premium for doing it). I sometimes find myself not buying the item at all as a result.

Re: The big, ugly affiliate marketing scam

#73

Post by prawn »

mcherm wrote: post #68
epoxyhockey wrote: post #4

I was expecting to read about click fraud, but it was just a newbie's experience with running an affiliate program. Kogan had some wild expectation that the majority of affiliate traffic would be first-time visitors to his site. When he uses google analytics to estimate that only 1.6% of referrals were new customers, he trashes affiliate marketing as a business. Unfortunately, he spent no time thinking about how to o…

> it was just a newbie's experience with running an affiliate program No, quoting actual sales volumes, conducting experiments with different commission rates, and measuring and reporting on new customer traffic take this from a newbie's anecdote to a useful, insightful article.

I don't think it's that insightful. The thing to learn is to have your own discount code page/site and that info is in the comments here.

Re: The big, ugly affiliate marketing scam

#74

Post by ScottWhigham »

megfitz wrote: post #39

The major red flag for me in this article was the line "He couldn’t really answer the questions, but I agreed to run a small trial. Based on our results, that marketing consultant is no longer with us." It really colored the rest of the article for me - making me incredibly skeptical of the manager and his instinct, opinions and judgement. It was no surprise then when the reason he was "scammed" was because his check…

The major red flag for me in this article was the line "He couldn’t really answer the questions, but I agreed to run a small trial. Based on our results, that marketing consultant is no longer with us." It really colored the rest of the article for me - making me incredibly skeptical of the manager and his instinct, opinions and judgement.

That's interesting. Here's an article by someone you don't know and, within the first paragraph, you are "incredibly skeptical". I think most people's normal reaction would be to give the guy the benefit of the doubt - after all, it's the first paragraph and that person knows a lot more details about their business than the first paragraph will give away. I think most of us would read that line in the beginning, file it away for verification/thinking as we read the article, then revisit that after we've been presented much more of the article. For you to color your view so easily and quickly is interesting - it's almost akin to someone walking around "looking for a fight".

Re: The big, ugly affiliate marketing scam

#76

Post by jyu »

If you aren't experienced / competent, and you try to outsource it, you're going to get taken. In this case it was marketing, but you could easily be talking about outsourced development, buying a car, seeing a new dentist, etc.

The proper way to introduce affiliate campaigns to your product / service is to succeed using paid advertising in-house. You need to establish your typical CTR, EPC, CPA, LTV, bounce rate, for different channels. Restrict the channels that affiliates use. Once you have your baseline, you can look at the numbers for each individual affiliate to determine their numbers stack up against your baseline. There are a lot more details that can't fit into an HN comment made on my way to work heh.

One concrete example, so it's more tangible. If you don't explicitly restrict pop up traffic, affiliates can pop and drop their cookie when someone with adware installed visits your domain.

Edit: This story is very one sided. Sure the marketing consultant was probably sleazy, and the affiliate marketing tricks were unethical, but the op did not even do basic due diligence. If I were the op, I would at least look at how the affiliate marketing programs of other mature ecommerce sites were set up. Amazon for instance has an affiliate fee of 4% on electronics. Paying 10% instead of 4% as affiliate fees is a red flag. Amazon payouts are made 60 days after the marketing period, where they can conduct their fraud analysis. Also you should be paying very close attention to their operating agreement which outline what does and does not earn you an affiliate fee.

Re: The big, ugly affiliate marketing scam

#77

Post by petercooper »

iopq wrote: post #12

You have a discount code at your checkout? So basically instead of capturing the sale you're ASKING the buyer to google for discount codes. Think of a sneakier way to give people discount codes that doesn't show it RIGHT THERE ON THE FORM. It makes me feel like I'm getting ripped off when I see discount code and I don't have one.

I always thought this about discount code boxes so when I finally had a store checkout of my own to play with I added something like "Got no code? Enter code YAY for a small discount :-)" and it gave 4% off (almost nothing at my margins). Surprisingly, under half of users even bothered to used it :-)

Re: The big, ugly affiliate marketing scam

#78

Post by johnward »

iopq wrote: post #12

You have a discount code at your checkout? So basically instead of capturing the sale you're ASKING the buyer to google for discount codes. Think of a sneakier way to give people discount codes that doesn't show it RIGHT THERE ON THE FORM. It makes me feel like I'm getting ripped off when I see discount code and I don't have one.

Anytime I see a coupon box the first thing I do is google "X coupon codes". This is a case of someone not understanding their own checkout process.

Re: The big, ugly affiliate marketing scam

#79

Post by johnward »

rpedroso wrote: post #23
epoxyhockey wrote: post #4

I was expecting to read about click fraud, but it was just a newbie's experience with running an affiliate program. Kogan had some wild expectation that the majority of affiliate traffic would be first-time visitors to his site. When he uses google analytics to estimate that only 1.6% of referrals were new customers, he trashes affiliate marketing as a business. Unfortunately, he spent no time thinking about how to o…

While you raise some important points, but I think the key complaint was that the author felt scammed by the 20% commission they were paying the affiliate program vendor for sales they would already have made. While these programs may have potential benefits, a 20% commission probably does not reflect the value provided to Kogan.

That's the author's problem for not understanding how affiliates work and setting up a commission structure to work for his particular site.
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