New Voucher Code Site Guidelines

Voucher code sites have been a point of contention amongst affiliates and merchants for many years. Whilst some act completely legitimately spending a large amount of time collecting voucher codes and keeping their databases up to date, some are abusing ‘click to reveal’ purely as a way to stuff cookies.

Collaborating through the AMC, the affiliate networks who are IAB members will adhere to the following set of standards from January 1st 2009.

• - Using ‘Click to Reveal’ when there is no valid or current code present is not permitted of affiliate publishers including using ‘Click to Reveal’ to show any deals/offers/sales instead of vouchers.
• - Voucher code affiliate publishers must clearly detail the voucher offer that will be revealed by the click.
• - A valid code is defined as a code that has been legitimately issued by a merchant for use online. This code will have an activation date and where necessary a deactivation date.
• - Voucher code directories must contain clear categorization and separation between deals/offers/sales and discount codes.

‘Real Life’ Visitors

Is it considered acceptable for affiliates to refer people they know to merchants through their own affiliate links? I’m sure the answer to this question must be yes. How does it make any difference what channel is used to provide the merchant with sales/leads as long as it is legal and doesn’t undermine other marketing activities done by that merchant?

The reason I am taking such a strong stance on this, is that a few months ago somebody in a poker league that I play in asked me to recommend a site for them to play on. I recommended 888.com and pointed them in the direction of a page containing my affiliate link. I could have recommended any other site just as easily as 888.com and I think they would have signed up and deposited. As such, I believe that I have provided 888.com with a new player and that I deserve to be paid a commission for this. I know that the player was legitimate and playing on the site, so when no affiliate commission appeared in my account, I contacted Affiliate Window. They asked for the details of the transaction, which I provided for them on 19/09/08. I have now just been informed that:

“The transaction was declined because our system recognized a pattern of fraud in the player’s behavior, which goes against the company’s Ts & Cs.”

I have not been given any more details as to why the transaction was considered fraudulent, but have been told this information might not be available. I’m sorry, but this really isn’t acceptable. I normally hold Affiliate Window in great regards and frequently recommend them, but this time I think they should at least pressure the merchant into giving a good reason why the commission is not being paid.

I’ve made a post on affiliates4u forum, and I’ll update when any more details come through.

Cashback Sites

It wasn’t long after the birth of affiliate marketing that cashback sites started to appear. These are sites which offer consumers a refund on items they purchase, through the use of affiliate schemes. For example, if a merchant were to run an affiliate program, offering affiliates a 10% commission on all sales, a cashback site could offer consumers anywhere up to 10% off their order value. From the merchant’s point of view, it is still worth paying a commission in the form of a refund to the buyer if it results in a new sale. At first glance, this appears to be a system which benefits everybody. Merchants get extra sales, affiliate networks get extra commissions, and consumers get a better deal. However, the person who loses out is the affiliate who might have already referred the customer.

If a review site is funded by affiliate revenue, they expect that if any of their visitors go on to make a purchase based on their reviews, they should receive a commission. If at the point the visitor was about to make a purchase, they then went through a cashback site, the most recent cookie would be overwritten. This means that the affiliate has gone to all of the work of getting the customer to the point of sale, for the cashback site to take the credit. There is evidence to suggest that people just use cashback sites at the point of purchase. The earnings per click for some merchants is up to 5 times higher for incentivised traffic, suggesting that they only go through the cashback site when they are intending to make a purchase. Is it right that affiliates are being denied commissions because of cashback being a more attractive incentive to purchase?

Pay Per Click Advertising

As with most things internet based, the idea of pay per click advertising is a very recent idea. First introduced by Goto.com in 1998, pay per click (PPC) advertising is now the standard advertising structure used by most search engines. In 2000, Google launched Adwords, using a CPM (cost per 1000 impressions) structure instead of pay per click. However, they moved over to the PPC charging model in 2002 and since, they have had huge success.
Advertisers choose keywords they wish to target and decide how much they are willing to pay.

The amount of traffic provided to each advertiser depends on how prominently their adverts are shown. The sponsored results shown above the organic listings tend to have much higher amounts of traffic, making them the preferred advert location. Although not strictly proportional, the higher the adverts position on the page, the more people tend to click on the advert. As such, Adwords ranks the adverts with the most desirable at the top of the page, and the less desirable being near the bottom or not even on the first page of results.

The ranking of adverts is based on many factors with the most important being bid price and quality index where the quality index is made up of factors like the advert click through rate (CTR). There is a great skill in being able to reduce bid prices whilst ranking highly by boosting the quality score for an advert.

Google Adwords is not the only pay per click service, but it is by far the biggest with current estimates putting its market share at 85%-90%. The biggest competitors in the UK are Yahoo Search Marketing (the new name for Goto.com who were bought out by Overture) and Microsoft Adcenter.

Ethics in Affiliate Marketing

A few years ago I was advertising 12 month mobile phone contracts with 12 months free line rental. These worked by customers having to claim cashback by sending off vouchers to the company they took the contract through. If you didn’t exceed your monthly allowance and remembered to send all the cashback vouchers back in time, you effectively got a free phone and calls for an entire year. I had two of these contracts myself and took advantage of the massive savings. Each person I referred who then took a contract made me around £35. After a lucrative period advertising these deals, most of the companies offering these contracts went into administration. This meant that all of the people they owed money to lost out. I had no idea that these companies I was referring people to were in financial trouble, and if I had, I wouldn’t have been recommending anybody to take such a risky contract. This highlights some of the ethical dilemmas in affiliate marketing – there is a trade off between making a profit and providing a socially responsible service.

The particular thing which brought all of this to my attention recently was a personal experience with Virgin Media. Having had weeks of problems with their ‘customer service’, I logged into my DGM Pro account and noticed that I was an affiliate for them. Whilst I’m not actively advertising them, it did make me think. Do I really want to be promoting a merchant that I know have treated me in such a disgraceful way? Obviously the answer to this question is no. However much money their programme is paying, I would know that I’m signing people up to a company which I have firsthand experience of being terrible! Instead, I made a review of my experiences with Virgin Media letting people know how I had been treated. When I was looking to place a few affiliate adverts on the site, I realised I had another problem. How do I find merchants that I know treat their customers better than Virgin Media? I know that I don’t want to promote a company with a bad reputation, but without firsthand experience how do I know BT, Tiscali, O2 , Eclipse, Be Broadband etc.. are not even worse? I read a number of reviews online and after much deliberation I decided that it didn’t really matter who I advertised because they couldn’t be worse than Virgin (apart from TalkTalk apparently)!

I’m not saying that you shouldn’t advertise a particular company just because a couple of people have had bad experiences, as this would rule out almost all companies! However, there are a large number of sites which deliberately set out to mislead and trick potential customers into signing up to things just so they can get affiliate commission. This doesn’t seem morally acceptable to me.

Web Hosting and Domain Names

The amount of money you need to invest to get started in affiliate marketing is very small as the main investment is in your time. As such, it has good potential of becoming an extra revenue stream for people looking to supplement their current income by investing in their spare time without quitting the day job. The first thing you need to purchase is web hosting which can be done through a very large number of different companies. When deciding which hosting company to go with, there are a large number of different factors which you need to consider.

• Cost – when starting out, the price you pay for hosting is a very important deciding factor.
• Windows/Linux – Whilst they share a large number of features in common, you should research which hosting platform is most appropriate for what you want to do. This might be covered in more detail in a later post.
• Storage space – You need to have enough storage space to store all of the files your site requires. Whilst static html pages don’t take up much space, videos and audio files can be very large.
• Bandwidth – This is the amount of information which is transferred from the server to client’s browsers. If you have 250 visitors/day with an average server load of 100kb each, you would need at least 1Gb of bandwidth each month. It is advisable to have much more bandwidth than you expect you will need to ensure that your site remains live if you receive a surge of traffic.
• Reseller privileges – If you have large amount of storage space/bandwidth unused, you might want to look into whether you can sell this off and make some additional income.
• Uptime guarantee – You want your hosting provider to give some kind of guarantee that your pages will always be available. There is a very large difference between 99% and 99.999%, with the later guaranteeing that your site will not be down for more than one day every 3 years. It is worth looking at exactly what guarantee they offer as some site claim to have guarantees, but don’t provide any kind of financial recompense when they fail to deliver.
• Domain limitations – How many domains can you host on your web hosting package? Some hosting packages provide hosting for one real domain whereas others are unlimited. This is very important if you intend to host multiple domains.
• Web technologies provided – Most hosting providers come with PHP/mySQL etc… You should check that all of the technologies you need to use are available.
• RAM – if you are using a dedicated server or virtual private server (VPS), the amount of RAM available to you affects the speed your visitors get your pages displayed to them.

Depending on the above, you need to decide what kind of hosting is most appropriate to you. In order of ascending cost, the below should be considered:

• Shared hosting – You have a certain amount of bandwidth and storage space allocated to you and you share a server with a large number of other website owners. Shared hosting is available very cheaply and is suitable for some low traffic sites. Be wary of shared hosting providers offering ‘unlimited bandwidth’ – all this means is that if you use too much, they will refund you and send you elsewhere. Shared hosting can be very slow and unreliable and is often not ideal.
• Reseller hosting – This is shared hosting, but with the option of reselling any storage space/bandwidth you aren’t using.
• Virtual Private Server (VPS) – This is a very good option for many affiliate sites. You have a guaranteed amount of RAM/bandwidth/storage space and can use this how you see fit. You chose which control panel you want to use, and you have a lot of control over how you use your VPS. This is a very affordable, flexible option with few drawbacks.
• Dedicated server – you have full control over the server and how your pages are delivered. This is the most expensive option with a managed server costing hundreds of pounds each month. A dedicated server is only required for users receiving large amounts of traffic or providing hosting to many clients.

Regardless of what type of hosting you think is most appropriate to you, we recommend at least giving eUKhost a look. The prices are some of the best in the market, and the service provided is second to none. With 24 hour online chat facilities for support, problems are sorted very quickly. If you’re unsure what type of hosting you’re after, use the support chat to talk to somebody who can help you decide what would be most appropriate for you. If you are looking for shared hosting, Emase Hosting have very competitive prices.

Domain names with eUKhost are overpriced, but you can buy these from any domain name registrar and point them to your hosting. 123-REG has very competitive prices with some domains from just £0.99/year.
Once you have hosting and at least one domain name, you’re ready to get started with your affiliate marketing activities. The next few posts should help you get your first site up and running.

Cookie Stuffing

Cookie stuffing is a way of forcing clicks to affiliate programs without the visitor actually having to take any action, such as clicking a banner. This means that if a person who has visited a site which has stuffed cookies then goes on to make a purchase, the owner of the cookie stuffing site gets credited for the transaction if a cookie for that merchant was set. This means that if the visitor actually found the merchants site through the target sites own PPC programme; they are effectively paying twice for the sale.
There are many different ways to implement cookie stuffing, but most networks and programmes strictly prohibit against it in their T&C’s. If a site is found to be doing this, they are very likely to have commissions withheld or rejected. Although you might think you can make some quick money, cookie stuffing is very bad for the affiliate marketing industry. Think how you would feel if you forwarded a potential customer to an advertiser through one of your affiliate links, but somebody else got paid the commission instead as they had forced a cookie onto the referred customers PC.
Cookie stuffing can be done using HTML <img> tags, iframes or more advanced methods. All of these have the same effect – cookies are forced onto the visitor’s machine without their knowledge or consent.

Affiliate Window Review

Affiliate Window is the largest independent affiliate network in the UK with over 750 merchants including massive names like Play.com, PC World, Woolworths and Boots. To see a comprehensive list of all of the merchants on the network, view the merchant directory. To find more information about each merchants programme, you will need to apply to Affiliate Window as an affiliate. Signing up requires them processing a £5 admin charge which is refunded to your account and paid in the first commission payment. However, on the website it does state “Affiliate Window reserve the right not to return the £5 fee to affiliates who are judged to be intent on malicious or fraudulent activity”.
After signing in, a wealth of information is available to you when picking which merchants to sign up to. You can get conversion rates, earnings per click, approval percentages, validation times, AWIN index, commission amounts and cookies lengths for every merchant. The AWIN index is a number between 0 and 100 which gives an idea how well the merchant is performing compared to other merchants in the same sector and elsewhere on the network. This takes earnings per click (EPC), validation period, click to sale percentages and approval rates into account, giving an idea of which merchants would be good to promote and just a glance.
Payments are made every two weeks and the minimum payout amount is just £25. Affiliate Window run regular promotions giving away great prizes such as all inclusive holidays, televisions and commission bonuses.

Affiliate Networks

Affiliate Networks act as intermediaries between affiliates and merchants. Networks provide merchants with a wide variety of tools which help them create effective campaigns and monitor the successes of these campaigns. Most networks can also offer merchants a large number of affiliates who are currently actively promoting similar sites/brands.
Networks provide a much simpler way for affiliates to sign up to CPA campaigns. Affiliates can browse through a directory of merchants viewing information such as commission levels, average earnings per click, how long the merchant has been with the network etc… It is then possible to sign up to these networks and start promoting them straight away. One of the main advantages is the simplification of having to bill merchants. If you are working with 10 merchants on a single network you will only have to worry about receiving money from one company instead of having to invoice 10 different companies separately.
In the UK, the main affiliate networks include Affiliate Future, Affiliate Window and TradeDoubler. Most networks are free to join for affiliates, but merchants have to pay fees which can stretch well into the thousands of pounds. Affiliate Window requires £5 to open an affiliate account, but this is credited to your account and is paid back as soon as you have earned £20 in commission.

Types of Online Advertising

Like other forms of advertising, internet advertising can be about creating a brand image, increasing sales or encouraging brand loyalty. As with traditional media, there are lots of choices to be made about what will be the most cost effective solution with the greatest return on investment. Online advertising can be purchased in a very large number of ways, but the most common are listed below:

• One-time payment – A one off payment is made in return for an advert being shown on that site for ever. Lots of online directories work in this way, indexing sites and charging a fee in return.
• CPM (cost per impression) – Advertisers pay a fixed rate for every 1000 times their adverts are shown. This is most effective for improving brand awareness as there are no guarantees that anybody will click on the link and visit the destination page. The price paid depends on many factors such as the prominence of the position on the page where the advert will be shown, the sites the adverts will be shown on and the estimated amount of traffic which can be provided.
• CPC/PPC (cost per click/pay per click) – Advertisers pay for each visitor that is sent to their site. Instead of paying for a particular listing or advert to be shown, they are only charged when people attracted to the advert click on it and are delivered to the advertiser’s page.
• CPA (cost per action) – This is the basis of affiliate marketing where affiliates only get paid a commission when the customer they refer goes on to make a purchase. An action can be a sale,  lead or signup but all of these work in the same way.
• CPE (cost per engagement) – A very new term to do with interactive adverts where an advertiser only gets charged when a visitor to a site interacts with a banner in some way.
• Email advertising – This can be billed in a number of ways, but involves sending emails to potential customers. Advertisers can pay for the number of emails sent, the number actually read (often a lot lower) or in many other ways.

All of the above have different pros and cons, which will be covered in more depth over the next few posts.