Affiliate Summit East 2012 Panel Summary: Affiliate Compliance – Best Practices, Issues and Options

sam.polak Aug 24, 2012

We thoroughly enjoyed Affiliate Summit East and found it to be a great learning experience.

We were fortunate enough to have our CEO, Dave Naffziger, moderate a savvy panel of affiliate managing and marketing experts. Including the likes of Pat Grady, Marty Marion, Matt Wool, and Adam Riemer, the group touched on several important affiliate compliance issues facing the industry today. With tons of years of experience discussing a range of topics, there were a few messages that stuck out to us:

Affiliate Compliance and Terms & Conditions- “T’s and C’s,” as they were referred to several times during the panel’s discussion, are the key to a solid foundation for an affiliate program. However, as the goals of all affiliate programs are different, so too should the rules be. It is important to police violations and maintain brand integrity while not compromising potential affiliate channels for profitability. Matt Wool, in working with the Tiny Prints, referenced one clause that allows him to do just that. In addition to guidelines that clearly establish acceptable and unacceptable affiliate actions, Tiny Print's Affiliate Program Terms & Conditions' Reversal & Communication Policy gives them the right to request an explanation of traffic driving techniques from any affiliate suspected of violating the rules. If the corresponding response is insufficient or untimely, Tiny Prints is warranted in taking action against that affiliate. Ultimately, aim to structure a clear and concise agreement to protect and even encourage the most profitable affiliates (ie ‘mommy bloggers’, ‘coupon sites’, or other high value avenues that work for a specific site and not others) while limiting wiggle room for fraudsters.

Typosquatting, Blog, Search, Pay Per Call and Software Affiliates- When it comes to evaluating different affiliate types, it is again valuable to construct Terms and Conditions that are program-specific. It unlikely that there is a universal way to leverage an affiliate program to profitability nor is it fair to assume that any affiliate marketing avenue is guaranteed to cost tons in commission theft. It is simply important to evaluate how each channel impacts your brand and build your terms and agreements accordingly. It might be worth considering how certain softwares and affiliate subdomains may impact search listings, how different types of ads interact with your site, how autodirecting from similarly named sites will impact profit, the nature of phone calls or leads being driven, etc. As an example, Adam suggested affiliate managers should test the different softwares affiliates use. In order to evaluate how affiliate software can impact profitability, it is necessary to check how an affiliate portrays a brand across the entirety of the internet. Since affiliates can bring users to different pages given an ip address, it is essential to to investigate how an affiliate's software can impact the user experience from computers outside the company in addition to inside.

When should you Investigate an Affiliate- There are a number of red flags, which again vary from program to program. Understand your conversion data and establish a status quo in order to understand when affiliates’ activities seem out of the normal. By establishing baselines and a general rapport with affiliates, it is easier to analyze unusually high conversion rates, notice blank referrers, and recognize responses from contacted affiliates that should warrant investigation into their traffic driving means. Pat offered an anecdote in which he noticed an unusual trend in his pay per call affiliates. In a pay per call system, affiliates often earn commission when calls last a minimum amount of time. Upon inspection of his program, Pat recognized that several calls lasted identical amounts of time. After sifting through the recordings, it turned out an affiliate had hired individuals to run through a script as a means to reach the appropriate length of call and trigger the payout. Comparing emerging patterns to established trends is a mechanism for recognizing investigation-worthy affiliates. Depending on the size of an affiliate program, some managers will monitor the first 5 sales of a new affiliate, audit the top 50 affiliates, or even audit a random sampling of affiliates to investigate the possibility of violations. Though streamlining compliance actions can be an effective means to save time, it is important not to burn the wrong individuals. Growing suspicion into intuition via a monitoring tool is a great first step in spending less time on compliance and more time on profitability.

Sub-Affiliate Networks- Some affiliates will act as an intermediary between a network and additional affiliates. Given this fact, visibility into such subnetwork may be obscured and it can be a great way for notoriously nasty affiliates to hide. It may even be the case that certain affiliates have not met network standards, but in fact can slide in through this back door due to a lack of compliance standards in the sub-network. In any regard, a lack of transparency and clarity at any level is worth avoiding in an affiliate program.

We hoped to highlight some of the key points that emerged from the panel’s discussions. Please feel free to reach out to us with any clarifications or follow-up questions!

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