Since the onset of economic uncertainties brought on by the global pandemic, marketers have been asked to optimize their program spend and reduce unnecessary expenditure. What classifies as unnecessary is the subject of heated debate. One thing everyone agrees on, however, is that you shouldn’t pay commissions to affiliates who don’t abide by your affiliate program rules and who aren’t driving incremental revenue.
While the vast majority of affiliates and partners generate incremental revenue from new audiences, there can sometimes be “bad actors” who intentionally break your partnership agreements to increase their commissions.
BrandVerity finds these types of non-compliant affiliate activity and makes it easy to contact the affiliates directly. Follow these simple rules to make the most of your BrandVerity subscription and reduce those unnecessary commissions.
1. Review your affiliate agreements
First, in order to effectively monitor your affiliate programs, you need to understand the details of all the agreements you have with your affiliates. Most affiliate agreements will prohibit some, or all, of the following:
- Bidding on branded keywords
- Appearing at all on branded keywords, meaning affiliates must negatively match all branded keywords
- Direct linking to the advertiser’s site
- Using the advertiser’s brand name or specified misspellings in the ad title or the ad copy
Based on the provisions of your agreements, you then adjust your monitoring to catch the violations which you prohibit and enforce accurately.
2. Set up your monitoring
Your monitoring can be customized from within the Paid Search Monitoring tool. In most cases, when your subscription began, the BrandVerity team will have set the tool up to match your requirements. This means that the solution will automatically flag any affiliates, who are part of your affiliate network/s, who appear on your branded keywords. In addition, the tool will also be flagging anybody, regardless of affiliate network, who is direct linking to your site.
If your affiliate agreement states that it is only a violation if somebody uses your trademark in the ad title or ad copy then please read below to see how you can ensure those ads are the only ones we pick up.
Navigate to the ‘Policies’ tab at the top right of the page. Select the affiliate policy/policies that you wish to change and open them in a new tab. You will see that we have a selection of filters in the policy and the second one down on the left says “Ads to Include”. Here you can use the ADCONTENT option. Enter ADCONTENT[your trademark name] for all trademark names you have, I would also recommend you include misspellings. Then be sure to click save at the foot of the page.
3. Find Violations
As long as your monitoring is set up correctly, each alert we report will be of interest. Before contacting an affiliate make sure that they are part of your affiliate program. If they are not part of your program then they are not breaking any rules by appearing on your branded keywords. To check if the affiliate we flagged is in your program you should take the affiliate ID, or domain name, and check that within your database.
If the affiliate is not in your program then you can go ahead and ‘Always Ignore Advertiser’ so they don’t keep coming up.
If the affiliate is in your program then you will want to reach out to them to make sure they are familiar with the rules of the affiliate program.
4. Contact Affiliates
It is important that you have a strategy in place for how to respond to affiliates who have broken the rules of your affiliate agreement. If you find an affiliate breaking the rules of your agreement, we recommend that you contact them immediately and issue them a warning. Typically, affiliates who are caught are not actually brand bidding but have neglected to negatively match the brand terms you have specified. Hopefully a warning will be sufficient in the majority of cases.
If you continue to catch the same affiliate, then you may wish to escalate. This could include second warnings, reducing commissions, or removing them entirely from the program as a last resort.
5. Measure the Impact
After you have put in the effort to reduce the level of affiliate violations in your program you will want to measure the impact of your actions. BrandVerity offers a number of solutions to help.
The first step is to go to the Intelligence Reporting tab and then select the Top Advertisers report. Here you will see a number of filters but the important ones are Policy, Alerts Only, and Date Range. You should select your affiliate policy. Then ensure that Alerts Only is checked, this means that only affiliate violations will be returned. Finally, you can set the date range to cover the period from when you first began monitoring your affiliates to the present day. You will see the graph populate with the five affiliates who placed the most ads but underneath you will see a table with an option to select the All Advertisers Total. This will show every affiliate we captured over the date range you are interested in. A declining line here shows that the number of affiliate violations is lower than it was when you began.
Of course what we also want is a reduction in costs. That can happen through two mechanisms; reduced CPCs and reduced commissions.
BrandVerity clients frequently report cost savings of anywhere between 105% ROI all the way up to 1,000% ROI by reducing CPCs and commissions.
You can check your CPC reductions by looking in your AdWords account. You can compare the CPCs at the start of the monitoring until now to see how much your CPCs have been reduced. If you wish to look deeper into this then you could also bring in extra information like seasonality to get a more complete picture.
When looking at CPCs it is important to understand the size of the affiliate issue and how much influence you have over it. You can do this by navigating once again to the Top Advertisers report as above but this time do not select Alerts Only. That will tell you the total ads we have found; inclusive of your own ads, competitor ads, and other non-affiliate ads. Make a note of the Total Ads number then select Alerts Only and run the report again. You can now see what percentage of your total ads are placed by affiliates breaking the program rules. If the affiliate ads represent a very small percentage of total ads then the CPC benefits are likely to be minimal, however, if they are a high percentage then the benefits could be very significant.
Reducing commissions is simpler. If you identify an affiliate that has broken your rules then most affiliate agreements would state that you do not need to pay a commission for the activity they have driven, as above you should also warn them that they are breaking the agreement. You can then measure how much you have saved by not paying out commissions to those affiliates.
With this information you can do a cost/benefit analysis to see how much you saved by using the BrandVerity tool.
If you follow these simple tips you can not only identify the scale of the issue, you can also take action and monitor your success.