2007: The Good, the Bad and the Ugly in UK Affiliate Marketing. Part II

Following on from the recent blog post about the best things in affiliate marketing in 2007, I present the seven worst things.

The Bad

1.    Some networks lost respect by continuing to provide poor service to affiliates and, instead of holding the position of trusted third party, operating in a manner which favoured merchants. As a result of these and other reasons, many larger affiliates began to work more closely with agencies and merchants (“Affiliate networks face a strong challenge from super-affiliates” NMA, 15 February, 2007).  

2.    Related to the above, the most frustrating single issue for affiliates was abrupt program changes. 2007 saw more than its fair share of merchants closing down affiliate programs or reducing commissions with zero or little notice. Thankfully, in a few rare cases, merchants did respect cookie periods even when closing down or migrating networks. 

3.    Many affiliates continued to be lazy. When I go through the list of affiliates on programs that Azam Marketing manages, I struggle to find websites that surfers would actively seek out. It’s disappointing to see affiliates still not investing in building resources with unique, high quality content. Ruffling up a shopping website with a datafeed, a logo jumbled together in fifteen minutes and not a single word which has not been nicked from merchants/Wikipedia does not add value to the internet, enhance the image of affiliate marketing or generate long-term revenue.

4.    Voucher codes became a hot topic because of their misuse by certain affiliates. MyVoucherCodes was famously accused of not only copying voucher codes, but lifting content from another affiliate’s site and targeting rival affiliates’ domain names. Although lily-livered networks, agencies and merchants did not look beyond their own pockets and failed to take a stance against unscrupulous behaviour, I know two agencies who have booted MyVoucherCodes off all their programs.

5.    It may not be well received in one of the only countries in the world where people boast about binge drinking and the resultant vomiting on the way home, but I’ll stick my head out and say for the first time that excessive drinking is becoming an increasing issue in British affiliate marketing, impacting not only on the individuals concerned but the sector. Just because there is free booze ought not to lead to a minority of people wanting to drink the bar dry. Two separate network Account Managers expressed frustration to me that, at one of the highlights of the year, the A4U Expo in October, affiliates were too hung over to talk business.

 

It has a tangible business impact. Earlier this year, when discussing possible acquisition targets with the head of a network, I suggested a UK network and he uttered, “They’re not suitable for us. They just like to hang around pubs.” I would go so far as to say that one of the reasons the City does not take a liking to affiliate marketing (see next point) is because of how the industry comes across. Of course, this is not denying the majority of affiliate marketers behave impeccably and know how to let their hair down without feeling compelled to imitate a crazed chimpanzee. 

6.    The amount of money people spent online went through the roof in 2007. This resulted in the valuations and share prices of most internet companies heading in the direction of the Arctic. But the stocks of UK affiliate networks could not resist but follow in the footsteps of Captain Scott. IBG (Affiliate Future) plummeted from 29p to 10.88p, Tradedoubler from 204kr to 138kr, and DGM from 3.5p to 1.5p (formerly 25p). Things got so difficult for the latter that there was a Management Buyout of DGM UK for about as much as your average super affiliate earns in a day: 1.5 million smackers. 

7.    As the previous point demonstrates, most affiliate networks are not exactly raking it in and I fear the pressure on networks to drop overrides in 2007, while celebrated by some, is likely to have a damaging impact on the industry in the long term. As the percentage networks take is chipped away, they will have to cut back on support provided to affiliates and go in the direction of becoming merely tracking solutions.

 

Tradedoubler, a well-resourced and classy outfit which is understandably reluctant to slash overrides, lost a number of merchants in 2007 to other networks who have been willing to drop their middle-man fees to as little as 10%. While some networks may genuinely believe they can offer quality support for a 10% override, one can’t help but think that, instead of being focused on the long term wellbeing of affiliate marketing, one or two individuals are more concerned about lucre they will pocket when their networks are sold off and having a portfolio of brand name clients makes that more likely. 

And the Downright Ugly

It was so distasteful, all seven uglies for 2007 go to ASOS.com’s Nick Robertson, who told the NMA on 8 March that affiliates were “grubby little people in grubby studios growing income at our expense, getting in the way of genuine sales” and calling affiliate marketing “cheap and dirty”.

Unfortunately these was not one-off remarks that affiliate marketing folk may perhaps have forgiven over time putting them down to a moment of inconsideration. He has mouthed off against affiliates in other articles in 2007. People who have been in meetings with Herr Robertson have told me he has not shied from lambasting affiliate marketing at every possible opportunity.

What irked affiliates was that, not only had ASOS generated 25% of their sales through the affiliate channel, but they helped build the brand of what was once a start-up which could not afford CPM advertising. Azam Marketing ourselves must have given their logos and banners a few million impressions on our sites without them having to fork out a penny for the brand building benefit.

The 1^st of January may not be the only day of 2008 which produces fireworks as, despite his slurs on the channel, Robertson has promised: “Next year we’ll reintroduce affiliate marketing”. 

With the bells of Big Ben about to chime a goodbye to the year in barely three days, I’d like to use my last of a few hundred thousand words penned in 2007 to end on a positive note. Despite the many frustrations, despite the long long hours, I and all us must try to remind ourselves when we feel like moaning yet again that it is not that bad a field to be in. I could list many advantages to working in affiliate marketing, but will focus on three of the most important for me.

Firstly, the physical environment. Sitting infront of a computer in a warm, clean room beats most jobs. Having spent many years stacking shelves at supermarkets, offloading container trucks at warehouses and keeping night guard at building sites, I can tell you the comforts of an office based occupation must not be underestimated.  

Secondly, we are lucky for being in an industry that is growing at a blazing pace and there are many, high value chips on the table for those with the perseverance and the ability. Imagine what it’d be like if we were working in television, radio or the print press, whose share of advertising spend is getting smaller by the month.

Finally and most importantly for me, what makes affiliate marketing one of the best fields to work in is the camaraderie. Many people who have moved into it from other industries have told me how much more amiable the people are and expressed astonishment that competitors regularly help each other out.

I myself have been privileged to experience the affiliate marketing love on many occasions during the course of the eighth year of the millennium, such as the 50-odd greetings on my birthday and the countless Christmas cards and gifts for which I am grateful to everyone.

As the economy moves into a downturn for the first time since affiliate marketing came into being and the waters become choppier, we should all try to remember we’re on the same boat and continue to sail as a cohesive force under the affiliate marketing flag. United we stand, divided we fall.

Happy New Year and I wish you all a healthy, prosperous and peaceful 2008.

Nadeem 

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