How To Prevent Affiliates From Driving Up Ppc Costs? Options

[ttw]

Our client has affiliates that want to bid on many of the same keywords that we are bidding on. How can we manage this so that the affiliates don't drive up our cost on PPC?

The affiliates are saying they won't 'outbid' us but how can we best manage both the keywords and costs?

Thanks

[Jill]

I might be wrong about this, but I think that Google will only show one ad for any product or service that goes to the same site. So I'm thinking you'd have to tell them they can't do Adwords at all if you want to show up and not have them show up.

Otherwise, I think you'd have to create certain rules to belong to the affiliate program. But I'm not sure the affiliates would like that.

The thing is, do you want them to make sales or not? Does it really matter if they make the sales and you don't? If it does, then don't have affiliates, is what I'm thinking.

[Hyperformance]

Hey ttw -

I had just received some changes to the site builder program where he was making PPC agreement changes with affiliates in reference to specific terms (?)

You might find something there...?

- S

[shahab6]

f you think they are driving the price up, don't let them use ppc

[davidbrett]

I have come across this issue myself and at first I was of the opinion that affiliates should not be able to bid on the same keyphrases as the client.

However after thinking about it more I came to realise that affiliates, if operating correctly, are bringing business at an agreed rate that makes sense to the clients bottom line

It is likely that PPC is only one of the initiatives that the affiliate will be using to drive business and at the end of the day as long as they deliver business then your client wins.

It is possible that in some instrances it may be more cost effective to pay the affiliate rather than paying Google.

It is likely that the issues at play here will vary from one industry to another but I have seen where this kind of relationship works for the client, the affiliate and our company.

[BBCoach]

First, I have to say I literally detest affiliates. They'll do almost anything to make a buck and screw you in the process. I had them scrape my site, put our site in a frameset and basically do all kinds of things against the affiliate network rules and you have to catch them at it before you can take action against them. Even then they'll try something else to get an edge.

I think there are two separate issues at work with affiliate marketing and I tend to disagree with marketing folks when discussing this. First scenario is, if you're products are not ranking high (top 10-20) in the SEs and you're running a PPC. Second is, your products are ranking high in the SEs and you don't put that much (if at all) into a PPC. If the second scenario is where you're at, I say don't do affiliate networks because there's no need to just give money away because they're running gorilla PPCs for your products. The ROI is nominal at best and a waste of resources at worst. However, if you fall under the first scenario, then do affiliates until your rankings improve to the point that it becomes nominal. You'll have to watch many factors during prolly a 1-2 year period before you can make the call on whether or not to affiliate or not. I tried for five years to get the owner of my company to dump affiliates that were costing $20-30K/month. It wasn't until I could demonstrate that our products where getting more click-thrus and conversions than the affiliates, that he was willing to drop them. He finally agreed and his fear was that sales would fall off the table. Guess what? They actually increased significantly without spending the $20-30K/month. In large part because there wasn't a ton of duplicate descriptions his site was competing against once the affiliates program ceased.

Where I and marketing folks disagree is they believe that if they have X-amount of screen real estate to market, then they "feel" that the more our product links permeate the first page the better for us. Five years ago, I might have agreed with that philosophy; however, today SE users are more savy and understand that if one company shows up all over the place, then they're doing something to pollute the SERPs and may click once, but are typically hesitant and will refine their query for a broader spectrum of SERPs. This is my opinion based upon a lot of informal in-person surveys conducted by me. One thing stands out though. Our sales have gone through the roof since eliminating our affiliate program. I'm talking $1.5-2.3 million/month in SE referral sales. 50+% of all traffic comes to our site from an organic SE query. Nice! BTW, the reason I don't agree with marketing folks is because their coming from a catalog, magazine or newspaper understanding of marketing. What they don't get or refuse to acknowledge is that conducting a query in an SE is nothing like flipping pages. Users are not cruising for a product in a Sears catalog, but are looking for a specific product at a competitive price from anywhere. Something the "old school" marketing methods don't allow. Users tend to click on multiple SERP listings comparing prices on their own and only pay a cusory glance to shopping comparison sites as a means to broaden their comparison shopping. Why do I say that about comparison shopping sites. It's all in the numbers. Google, Yahoo, and MSN are head and shoulders ahead in sending us sales compared to comparison shopping sites like Shopping.com, PriceGrabber.com, etc. I don't advocate using those sites either because they'll charge you for an organic SE click thru as well as a click-thru from their sites. Foooie! I don't see enough of a ROI on that internet hype marketing, but it's hard convincing a marketing person of the numbers. Perhaps I'm too myopic about it, but my numbers always kicks their numbers behinds.

[Randy]

You raise some very good points BBCoach. Most of which I completely agree with.

The moral of the story being that when you have an already established site you need to be very, very careful about what affiliates you accept. And those you accept, if you choose to run an affiliate programs at all, you need to support like gangbusters but also make sure you have very clear rules and cut them off if they can't follow them.

That probably sounds weird. And I can tell you that I've gotten a lot of flack from turning down folks who managed to find (even though I don't advertise it at all) old affiliate programs I have for some of my sites. They get upset when I decline them from the get go, even though I'm doing both of us a favor.

For new sites it's a bit of another ballgame. Having even a couple really good affiliates can push you into profitability. And there's something to be said for getting to profitability quickly.

But for older established sites you really need to look at the dollars and cents involved. And not only the dollars and cents it takes to get traffic to your site and how much ROI there is in those various channels. But also the cost of supporting your affiliates. That involves setting up a system that will correctly recognize legitimate affiliate conversions, tracking those conversions, tracking the commissions owed, cutting the checks or however you're paying commissions and most importantly having someone (or often some people on your staff who have Giving The Affiliates Something To Work With as part of their job description.

In other words, setting up a decent affiliates program isn't something that just happens. There are a lot of hidden costs. Ones that you need to expose and take into account if you're going to go that route.

In my experience, for brand new products/services it can make a lot of sense because you can gain a ton of exposure that you'd not get in years by other methods. If you get lucky enough to get one or two of the Super Affiliates on board who can put your offer in front of 200,000 people (each) in a favorable light, you can get roaring right out of the box.

But if you're already established and going the typical route where you're going to end up with hundreds or (God forbid!) thousands of affiliates who do no business that you still need to track, having an affiliate program can be a major headache and cost you a lot more than it's worth.

[nethy]

First, I have to say I literally detest affiliates. They'll do almost anything to make a buck and screw you in the process. I had them scrape my site, put our site in a frameset and basically do all kinds of things against the affiliate network rules and you have to catch them at it before you can take action against them.

I agree with some of what you say & disagree with other things.

The stuff I disagree with is probably things I stick in the general category with 'You do PPC when your site is new & until you get some SEO rankings...' I actually think there is a lot of value from having multiple sources of traffic & that cannibalisation is such a minor effect that you are better off ignoring it completely.

But I agree on the affiliate thing. It's hard to run a classy show. It probably isn't worth dealing with that kind of rubbish. The ideal of they happen to run a salsa enthusiast site & you sell corn chips is rubbish. Small time & as an aside sites tend to go with Amazon. It's the sleazes that are signing up for any program they come across.

If you can keep it clean, be choosy with affiliates & keep things civilised that's fine. But stay away from ugly affiliate programs. If you take the average affiliate program as your working model, that means stay away from affiliate programs.

[Leo Hanes]

First, I have to say I literally detest affiliates. They'll do almost anything to make a buck and screw you in the process. I had them scrape my site, put our site in a frameset and basically do all kinds of things against the affiliate network rules and you have to catch them at it before you can take action against them. Even then they'll try something else to get an edge.

Hello BBCoach

Sounds like you have had nothing but negative experiences with affiliates.......Thats unfortunate, but affiliates are people just like webmasters....There is always somebody ready to game the system........then there are those of us that try to follow the rules
If you want affiliates to sell your products, encourage them...if you don't then don't set up an affiliate program...its seems pretty simple......

There are "rogue" affiliates, and vendors!

Just my 2cents!

[ttw]

Hey ttw -

I had just received some changes to the site builder program where he was making PPC agreement changes with affiliates in reference to specific terms (?)

- S

Thanks but where can I find this?

[Hyperformance]

Hey ttw - I received an email from site build it, I believe on their website you could find something on "new rules for PPC Partners" or something similar. I hope this helps you, I think he was implementing something that dealt with this.

BBCoach - Thank you for not holding back... I (a marketer, I think...) am a super-affiliate in certain markets niches and have similar dislikes for Merchants who offer affiliate programs and not only do not support them, but think what we provide is worth very little... of course this comes from a 20+ year salesman... so maybe add your own salt. We ALL came from another media type before we hit the web... This is my point... we were salespeople before, now online we are affiliates???

Affiliates CAN BE the most effective sales force your company has online... or this (IMO) is what it should be. When real Merchants who seek real success online put together a program that benefits the salesperson as much as the Merchant - then there is a huge win for all parties involved. SALES FORCE is the keyword here, not just slouch affiliates who put up anyones banner to see if anyone (ever) clicks-through. These are not affiliates - a good affiliate program 'qualifications/requirements list' that is actually checked on could help... if you do not want "those' slouches, then you only consider those websites with visitors traffic exceeding 500 visitors per day - and you have ruled out many small players and can make your own exceptions for the truly niche focused who are not large, but offer great conversions.

Anyway, if you want to do and manage PPC - know that it comes with a hefty cost too... just the good and proper management of a busy site is overhead. (PPC gets talked about like it is free?)

I agree as has been stated, you have to decide what you want, how you wish to arrive at it, and what YOU are willing to do yourself. If you choose to (or can't) outsource or outtask anything?, (the PPC mngmt., the affiliates or the program, the organic SEO), Or even as stated, a combination of multiple avenues. Every website can't be the 'hub', or the authority... and even when they are the Authority on something, people have to either find it, or be brought to it in order for some success online. However you can best accomplish those goals is still a per instance equation to me, based mostly on the capabilities of those involved.

- Scott

(sorry to get off topic here ttw / Jill... I'll take the blame)

[BBCoach]

In other words, setting up a decent affiliates program isn't something that just happens. There are a lot of hidden costs. Ones that you need to expose and take into account if you're going to go that route.

Can I get an AMEN!!!!

That is just one of the reasons I detest affiliates. The other and most annoying thing is they are absolutely LAZY!!!! In my opinion for an affiliate to really be worth their salt, then they should write their own copy instead of begging/scraping for your copy. Why? Because they want the quick and easy buck. Which with hundreds or in my case thousands of affiliates with dupe content out there it waters down our relevance in SEs. True affiliates should sorta be like a middle-man taking a product, re-packaging it, branding it and then distributing it. But no, instead they do all sorts of things that a legit and professional looking ecommerce site would never do just to get SE rankings using our copy (and bid against you in PPCs). To top it off they even have the nerve to not upload our images to their servers, but instead will point 50-100+/page image links to our servers sucking down our bandwidth. No matter what the affiliate rules are, the bottom-line is you have to catch them in the act before you can take action against them, and that's a very time-consuming task. For the record, of the more than 3500+ affiliates we had there were 5 or 6 super affiliates that were more enjoyable to work with (low maintenance good ROI), but they were still lazy and wouldn't write their own copy.

Like I said and Randy said, if you're a new site or a site that doesn't have many products ranking high in SEs, then a properly managed affiliate network can be very profitable or at the least the grease that gets your site rolling. Just remember, there is a ton of work managing an affiliate network and generally you'll have to do all of the creative copy and finding/taking images for the products while they take their commissions for simply uploading your hard work that you send them (all the while watering down your products' relevance in the SEs making it tougher to get rankings). Something they or the networks won't talk about. Shhh!!! Also, don't forget that most of the big affiliate networks also are sleeper super-affiliates getting your money from both ends.

not just slouch affiliates who put up anyones banner to see if anyone (ever) clicks-through. These are not affiliates

That's correct and requires a lot of time, work and knowledge to determine. Not easy for newbies to manage when they're concerned about getting exposure.

There are "rogue" affiliates, and vendors!

True, but more on the former than the latter because the networks will cancel the vendor for non-payment quicker than they'll cancel a rogue affiliate. Personal experience anyways.

[torka]

In my opinion for an affiliate to really be worth their salt, then they should write their own copy instead of begging/scraping for your copy. Why? Because they want the quick and easy buck. Which with hundreds or in my case thousands of affiliates with dupe content out there it waters down our relevance in SEs.

For the record, of the more than 3500+ affiliates we had there were 5 or 6 super affiliates that were more enjoyable to work with (low maintenance good ROI), but they were still lazy and wouldn't write their own copy.

Uhm... I'm an affiliate for a handful of programs. Wouldn't call myself a super affiliate by any means... but one thing I always, always, always do is write my own copy.

Primarily cuz I think I can do a better copywriting job than the program itself, most of the time. (IMG:style_emoticons/default/smile.gif)

--Torka (IMG:style_emoticons/default/mf_prop.gif)

[Hyperformance]

What's a super-affiliate? (LOL) One who actually sells?

I'm with Torka, I also write my own content /websites... I DO repackage, I do rely on gaining trust, I also take my images directly for my ads or banners/links, I have made zero quick and easy bucks, I do not believe I am lazy, I believe you are then referring to all the so-called affiliates that offer those one to three page websites just for pre-sales...? Then they quickly send you off to an even longer ClikB sales page with some great closing ratio Ebook... There is much more to it than that - These are NOT the same people you want selling for you is it? Then one just needs to look for what they DO want - you OWN the affiliate program, make the rules.

If the program or products are worthy of writing about (selling) 2 - there is some perceived value or demand, and 3 - If the compensation will eventually cover the 20-40+K I will put into building a website to sell their products (among other items, and this does not include PPC or marketing), Then it is worth MY effort... It is a tremendous amount of work to attempt to own a category online, or get a (200+ keyword phrases) first page organic result piece of an already very established product line or stretch of keywords - this is who you want to affiliate with... this is who will work for you because they have done all the research and are actually doing it to fulfill a need, or simply for themselves from a stream of income standpoint. These people have the right motivations... they beg to work with good and honest Merchants and continually want to improve upon what is already working for both of them.

It is not a battle (IMO) - We are all going for the same thing... the sale of YOUR product.

- S

[BBCoach]

Ok, torka & Scott y'all are the model for affiliates. The vast majority out there in the affiliate networks are NOT, and if a retailer discovered you, then they'd be lucky indeed. I've never seen an affiliate write their own copy and they should for precisely the reasons both of you extolled, but my experience is they don't (particularly when a company has 20+K product line). The two of you are the exception in my seven years experience running an affiliate program. I would have loved to have worked with the two of you back in the day.

It is not a battle (IMO) - We are all going for the same thing... the sale of YOUR product.

True, but how much are you earning (taking out of my pocket) to get that sale (all things considered)? I don't think most companies truly evaluate the overall costs of running an affiliate program, and if they did they would see the ROI isn't worth the competition in SE rankings or PPCs (for those affiliates that don't write their own copy).

What's a super-affiliate? (LOL) One who actually sells?

I considered affiliates making more than $2500/month from us as super affliates. A few made more than $7500/month. Most were well under $100/month. Again, without the affiliate networks we're making more money and have a free SE referral program running while saving $20-30K/month.