Coupon Affiliates, Are You Worthless?

by Scott Jangro on November 2, 2009


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According to George Michie of The Rimm-Kaufman Group, there are two types of coupon affiliates, and I paraphrase:

The Worthy: Those who have a loyal following and through promotion to their own clients send incremental sales to advertiser sites.

I am not completely worthless shirt from Zazzle.com-1.png

The Worthless: Coupon sites that earn their commissions primarily through capturing brand traffic, like “merchantname coupons” and “brandname deals”.

His assertion is that the in the latter case, most sales likely would have happened anyway. Those affiliates don’t drive many incremental sales and are therefore worth less, or nothing.

Are you worthy? Prove it!

George therefore posed a challenge to Coupon Affiliates:

I propose a test: Coupon affiliates can easily prove their value simply by capturing the referrer string from visitors to their site (showing the last page the visitor was on prior to arriving at the affiliate’s site — including a search string if relevant) and appending it as a parameter when that traffic passes from the affiliate’s site to the advertiser’s. The advertisers could then see what fraction of affiliate orders come from people looking for the advertiser by name and what fraction got to the affiliate site by something other than brand search.

It’ll be a cold day in hell before any publisher voluntarily appends the referring natural search traffic to clicks to the merchant and I don’t anticipate that ANY publisher will take George up on this challenge. Neither does he, I’m sure.

(hint: Merchants, you don’t need affiliates to help you out here. You can figure this out for yourself with some analytics.)

But what if you Coupon Affiliates put yourself to the test in the privacy of your own mind? How would you do?

If you come up on George’s scale on the side of worthless, don’t just shrug it off with a “FU George”. I think this is a sentiment that is becoming more and more common among advertisers as coupons become more and more sought-after by consumers.

You’ll soon start feeling some pressure to add some more value.

BTW, “value” is in the eye of the one paying the money. It doesn’t matter what you think.

You can either change what you’re doing. Or change the perception of your worth by speaking up.

Photo Credit: Zazzle
  • Two issues not to be overlooked by merchants: consumer behavior and Google love. As an avid online consumer I am constantly looking for best deals. Visiting a site I will invariably click out and search for a coupon. So here I am representing any number of retail coupon oriented merchants and telling them not to penalize affiliates for consumer behavior... the exact kind I am practicing. And when I talk to my clients, they admit they do it too. So don't shoot the affiliate.

    Secondly, have you seen how much love Google is giving coupon sites? We launched a new client, one with a very strong brand and organic search position, and he was "appalled" that within days of launching his affiliate program, seeing a strong pickup by high quality coupon affiliates, EVEN THOUGH HE WASN'T OFFERING A COUPON, that they were showing up in positions 4-20 in natural search results. Is this the affiliates fault?

    So we have a storm of changing consumer behavior and Google love giving coupon affiliates a strong position in the marketplace. This too will change and to penalize affiliates who offer good value propositions for most, if not all of our clients, doesn't seem the best way to go.
  • JohnT
    @Durk -- "We launched a new client, one with a very strong brand and organic search position, and he was "appalled" that within days of launching his affiliate program, seeing a strong pickup by high quality coupon affiliates, EVEN THOUGH HE WASN'T OFFERING A COUPON, that they were showing up in positions 4-20 in natural search results. Is this the affiliates fault?"

    The question that seems more relevant to me is this: What is better for the client's overall strategy? Well, if you search for a client's brand name or some variation, does the client's organic search result show up?

    If the answer is 'no', then the client would probably benefit from the increased exposure that an affiliate could provide. The cost to consider would be the commission that the client pays the affiliate for that incremental traffic.

    If the answer is 'yes', then the client would be better off having that brand search-traffic click the organic search link, rather than lose traffic to affiliates, whose sales are discounted (by commission). If a Google-search on a client's brand name yields the client's organic search result, consumers will undoubtedly find the client without the presence of an affiliate site.

    If the client is looking to appeal to the coupon/deal-searching-consumer-behavior, why not offer a coupon via their own site instead of giving the coupon offer to affiliates? What are the pros and cons?
  • It's good advice for all affiliates, regardless of their business model, to keep the value they bring to the merchant in the front of their minds. Over the years, I've seen almost all affiliate models come into question with regards to certain aspects and their value. All potential affiliate business models have strenghts and weaknesses. Build upon the strenghts and be honest about ways to minimize and find solutions for the weaknesses.

    CSN Stores is a merchant that comes to mind who did a very critical analysis of the role of coupon affiliates within their own business and made changes in their affiliate program to reflect that role.

    I think the biggest issue that coupon affiliates need to address as far as their value to the merchant is that of consumers seeking coupons once in the shopping cart. A tough one to find a solution for, but tough or not it shouldn't be ignored.
  • JohnT
    @Scott: "It’ll be a cold day in hell before any publisher voluntarily appends the referring natural search traffic to clicks to the merchant and I don’t anticipate that ANY publisher will take George up on this challenge."

    So the reasons are obvious why no illegitimate affiliate will take George up on this challenge--an illegitimate affiliate who reveals his click traffic sources would be fired by the merchant.

    But for what reasons would any legitimate affiliate advertiser refuse to take George up on this challenge? Isn't this just an issue of transparency?
  • There may be some affiliates who wouldn't mind sharing this information, but generally speaking, this is competitive information that search engine marketers like to keep close to the vest, not because they're illegitimate, but because it is extremely valuable information.

    For example, if I am buying traffic, then the keywords that I'm buying and succeeding with would be interesting to the paid-search team at the merchant site. This is performance marketing, and profitable keywords are hard-earned.

    Or if I'm doing well in natural search, then my successes are extremely interesting to the SEO's in the merchant organization. As an SEO myself, I know that my sites are studied closely by the merchants that I promote.

    I think the questions that George raises are valid. But just because an affiliate won't disclose their IP doesn't make them illegitimate. Find another way to measure.
  • Great article. I've noticed an explosion of coupon sites over the past few years. I'm not impressed with most. I had to think about this a bit: What do I consider to be valuable in a coupon site? Apart from being updated, having great offers, and being easy to navigate, I couldn't think of many other value adds. I'm interested in seeing what others have to say. Thanks!
  • Hi, you know Networks can work it out as well (Merchants are in the best seat for this type of data) how quickly and often an Affiliate Flips a sale. By this I mean, person clicks on Affiliate A link goes to Merchants site, person then has Affiliate B cookie in less than 30 mins of being on the site! Now this it's self is no proof as could be someone shopping around for a good deal, could even be spyware infected user, but if you actually know what your Affiliates do to promote a merchant and you see a coupon based Affiliate who flips a lot of sales, you could have a "Brand + Coupon" PPC bidding Affiliate on your hands, is that adding value to anyone?

    That's the debate at present, also data is allegedly saying this is not the case and I will be honest I have not run enough tests to know what the facts are so, can't give a concrete answer on that one.

    Clarke
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