Fraud is the biggest challenge to the credibility of affiliate marketing. The laissez-faire approach is no longer working and the major players in the industry are now finding ways to ensure their affiliates are clean.
(PRWEB) August 19, 2005 -- The affiliate marketing world has been shaken in
the last year by an increase in unsavory practices. Whereas merchants were once
happy with a scattergun approach taking on as many affiliates as possible,
they’re now getting wary and are seeking new ways to keep rogue affiliates off
their books. Twibo www.twibo.com, one of the newest affiliate programs, has
publicized the measures it will take against affiliates which it sees abusing
Affiliate marketing is still seen as a cornerstone in the marketing activity of many companies. In June, 77 percent of the 50 fastest-growing Web retailers ran affiliate-marketing programs, according to LinkShare. The company's customers include J.C. Penney, 1-800-Flowers.com, American Express, Avon Products and Dell.
Affiliates represent a dream sales force for many companies. Typically owned by individuals or small businesses, these affiliate websites often delve into markets which the merchants don’t have time to think about. Whereas a merchant will need to promote all its wares worldwide, a good affiliate may optimize its site for a particular product or market and generate strong sales through its niche. Until now, merchants haven’t asked too many questions of their affiliates because, apart from anything else, affiliates get paid on results so if they’re not successful the merchant doesn’t stand to lose much.
Although affiliate fraud has always been an issue it was costed in by merchants and generally accepted as a downside to this type of marketing. It is now perceived as a major obstacle. Merchants risk having their reputations muddied by unscrupulous affiliates who send bulk spam to bring in the clicks and the sales. They’re also paying out fees and commission to affiliates who create automated scripts attempt to mimic the activity of legitimate, human visitors.
Another suspect practice of some affiliates is typosquatting - trading off common misspellings of existing companies. Dorian Harris, Director of Sales and Marketing for Skoosh www.skoosh.com which this month launched its own affiliate program, Twibo, is only too well aware of the issue. When he originally started trading as Twinroom www.twinroom.com in 2001 he set up as an affiliate of one of the leading hotel booking companies. Finding that even his loyal customers were wrongly referring to the site as "Twinrooms", he looked into buying the domain, only to find that it was already taken. Disappointment turned to frustration when it emerged that the unscrupulous registrant of twinrooms.com was poaching his loyal customers, acting as an affiliate of the very same merchant.
‘It was unbelievable to me that a merchant would allow a new affiliate to trade off the name of an existing one but our appeals were flatly rejected despite the immense commissions we had accrued for the company’, Harris comments. Unable to reverse the merchant's decision, and faced with a huge bill if he chose to contest the typosquatting case in a legal battle, he took the ultimate step and set up a separate company, Skoosh, as a merchant in the same industry, hotel accommodation. With its own newly-launched affiliate program, Twibo, Skoosh has learned from this experience and is taking measures to prevent affiliate fraud from occurring within its new recruits.
‘For a start we screen every new affiliate’, Harris explains, ‘and we run through a checklist on the data affiliates used to sign up to the program’. Often the last check before acceptance as a Twibo affiliate is a personal phone call. Sometimes it's the only way to know for sure if someone is legitimate.
Then, each affiliate is continually monitored, their sites visited and their newsletters reviewed. In the background, the tech department checks incoming IP patterns for any suspicious activity coming from affiliate links.
If Twibo is setting the benchmark for the industry it certainly represents a major shift in the relationship between the merchant and the affiliate. But it’s undoubtedly vital for the merchants to regain some control over their sales force if this marketing method is to remain credible.
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Source : http://www.prweb.com/releases/2005/8/prweb273875.htm