Mar 29 2012

How Affiliate Marketers Can Affect Your Pay-Per-Click Program

Here at Blue Acorn, we’re fans of both pay-per-click (PPC) and affiliate marketing, but when the two are exercised simultaneously, lines have to be drawn as to who can bid on what terms. Otherwise, you may be cannibalizing your own marketing efforts.

For example, have you ever noticed an odd-looking AdWords ad that has your brand’s name in the search engine results and then spent an exorbitant amount of time searching high and low in your own AdWords account for that ad without being able to find it? The ad in question may contain messaging similar to your ads, but if you write your own ads, you know your own style, so it’ll probably jump out at you. If you couldn’t find the ad in question and use affiliate marketing, then chances are the ad belongs to an affiliate marketer.

What is Affiliate Brand Bidding?

Brand bidding is the practice of affiliate publishers using your brand name(s) in the ads they create and bidding on your brand terms, such as your company’s name or the name of a product line that your company owns. The advantage of brand bidding is that if you don’t have the budget or resources to manage an efficient PPC program, your affiliates will get your brand name(s) out there for you. Such affiliate ads can also generate a lot revenue for you.

Despite these advantages, you’ll likely want to retain marketing control with regards to how your brand name(s) are marketed online. In fact, most companies who use affiliate marketing include a section in their terms and conditions that prohibit brand bidding. Common brand bidding rules can include but aren’t limited to:

  • Not allowed to use domains containing the brand’s name
  • Not allowed to use the brand’s name in the subdomain on the publisher’s own domain
  • Not allowed to bid on brand’s name (including misspellings and variations) n AdWords, adCenter, etc…

The biggest disadvantage to affiliate brand bidding occurs when your affiliates’ ads are shown in place of your own ads. In this instance, you will end up paying a commission percentage on whatever is purchased by customers that come to your site via your affiliates’ ad, instead of paying a relatively low cost per click (CPC) to bring them to your site with your own ad.

To top it off, when your affiliates are also bidding on your brand(s), your CPC may increase when you are bidding on your own brands because the affiliate is now in direct competition with you.

How to Determine Who Created the Ad?

Determining which of your affiliates is responsible for a brand-bidding ad that violates your terms and conditions is the logical first step, and it’s actually an easy one. Here’s how:

  1. Right click on the ad in question and click “copy link address.”
  2. Paste that address into a new browser or browser tab, but do not hit enter to go to that address. We simply want to look at the entire URL, which will be fairly long and messy.
  3. Look for an affiliate ID in that messy URL. The format of this ID will vary depending on the affiliate network you’re in. You may also see a shortened link, such as bit.ly. If you do see a bit.ly link, copy the link and add a “+” to the end (e.g. bit.ly/abced+). You’ll get the full URL on that page and should be able to pull the affiliate from that link.
  4. Once you obtain the affiliate ID, log into your affiliate network and search for that ID. If for some reason you can’t find the the ID using the search function, export your list of affiliates and their corresponding IDs to a spreadsheet and search that using the Find function that is typically activated by pressing Control+F (Command+F for Mac users).
  5. Finding the ID is the first step, regardless of what course of action you choose to take, which I’ll touch on later in this article.

It’s important to keep in mind that all PPC affiliates do not market the same way. While the honest ones will likely link straight from their affiliate link – which is not an attempt to mimic the brand’s url – to their client’s site. Some affiliates are a little more sophisticated. Here’s a specific, real-life example from HostGator. It’s interesting because earlier this week, I saw an email from HostGator reminding affiliates that bidding on their brand name is against HostGator’s terms and conditions.

HostGator Affiliate Ad

When I copied the link and pasted it into my browser, I saw:

http://www.google.com/aclk?sa=L&ai=Ce32lxoVaT4uOHM2gtgeC6_y3BpTG6PYB7Lq9x0HdlZLjBAgAEAE-gjZamGFCr7Yr-_f____8BYMmWu4zYpKAQyAEBqQKbl9bBgUSFPqoEGU_Qure-it33zWzXUsRnmQcbNbnwiPTEolmABZBO&sig=AOD64_3jxDLnwaFWQT5KDt-UglTbnfbKR2g&ved=0CAsQ-0Qw&adurl=http://www.webhostingomg.com/hostgator111.htm&rct=j&q=host+gator

Below is the section of the link I’m looking for, which starts with www. and ends with .htm:

If you visit this URL, you’ll actually be redirected THREE times before finally landing on the real “official” HostGator site.

Using a tool like Live HTTP Headers to view HTTP headers as they load, you can see a list of where you’ve been redirected. Visit all the links included in the redirects until you find a landing page with a link or other call to action with an affiliate link.

Going through all the links, I found this landing page for HostGator with HostGator anchor text in the first sentence.

Affiliate Landing Page

Whenever you hover over the first HostGator link, you can see the landing page link at the bottom of the browser. In this URL, you can easily see the publisher ID of the affiliate in violation and you can also see HostGator has their own affiliate network.

HostGator would now have the ID of that affiliate if they wanted to take action.

Not all PPC affiliates are going to have cloaking techniques as complex as this, but it is something to be aware of.

Options for Dealing with the Publisher

When it comes to dealing with a publisher you feel has stepped out of line, you’ll want to start by making sure your terms and conditions are clear and concise when it comes to brand bidding. You don’t want to point the finger and call names if you’re the one at fault.

If it is clear that your affiliate has violated your terms and conditions, there are typically three courses of action that you may take, depending on what you have allowed for in your terms and conditions.

  1. The most conservative course is to contact your publisher and give them a deadline to pull the ads in question. If they don’t comply by the date given, remove them from the program.
  2. Some advertisers have a zero tolerance policy with brand bidding and will immediately remove the publisher from their program.
  3. Some companies may also be entitled to withhold commissions that have resulted from brand bidding.

Words of Caution

Now that we’ve gone over how to determine who is behind those ads that violate the terms and conditions your company has established for its affiliate program and some suggestive courses of actions, I want to also offer up some words of caution when it comes to reducing the size of your affiliate network. Remember, affiliates can also be a very valuable asset for an eCommerce site.

Keep in mind that if you stop a publisher from promoting your brand or product, there is no guarantee that you will be able to get them back, should you change your mind at a later date.

If you’re going to prevent your affiliates from bidding on certain brand names, keywords, etc., make sure you have the the PPC budget to make up for it. You can end up in a lose-lose situation if you dwindle down your affiliate network and don’t bump up your PPC budget to make up for the loss of revenue from those affiliates.

Maintaining the most profitable balance of both PPC marketing and affiliate marketing requires monitoring both channels regularly. You’ll want to police your affiliates on a regular basis, looking for odd increases or anything dramatically different. An affiliate can be bidding on your brand this month even if they weren’t bidding on it last month. But monitoring your affiliates won’t just let you know which ones you may want to cut. It will also allow you to keep track of which ones you could be loosing to the competition.

Bidding on Your Own Brand

This article brings up the topic of bidding on your own brand, which has been thoroughly debated, but I always recommend bidding on your own brand name. While this may seem counter intuitive, I’ve always had great results doing so.

Here are just a few of the advantages of bidding on your own brand name:

  • PPC marketing allows your brand to show at the top of the results if you have a more generic company name and aren’t ranked at the top organically.
  • Even if you do have the top spot in the organic results, you will have control over the copy in your PPC ads and the use of the sitelink extensions that will allow you to tailor things even more.
  • Yes, you may end up paying for a click when a searcher can click on your organic listing for free, but the cost per click is usually very low with a high click-through rate and conversion rate…both are good for a PPC account.
  • I love to see domination in the search results from a combination of a paid ad, organic listing, shopping result, YouTube video, etc… it’s a win-win scenario for any ecommerce company.
  • Some studies have shown that even without the paid ad, an organic listing at the top of the results still may not get the clicks. The full study of our incremental clicks impact search advertising can be found here.

What to Keep in Mind

Regularly spending time to monitor both your affiliate marketing program and your PPC program is the best way to achieve the most profitable balance between the two. We suggest you continue to optimize your PPC account, and let your affiliates fill in the gaps to take your search marketing even further.

Blue Acorn

One Comment

Astound commerce
Apr 05 2012

I like the idea about brand bidding… although I was sure that affiliate marketing is going to collapse because they depend very much from search engines, and due to latest changes in google algo it seems to be very difficult to promote websites and get high rank…

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