21 Comments

Affiliate Relationships and Disharmony…

Dec 4, 2006
by

Most who know me in this industry know I run a reputable offer comparison site and network. So in our usual daily routine of content search, we found a new discount code for one of our top CJ merchants on another site. It was
better than the one we were authorized to promote and better than any in the CJ system, so we contacted our CJ rep to find out if we too could have permission to promote the offer as well. We were promptly e-mailed, “You
canNOT use this code. Any publisher promoting codes will be expired.” We have all heard it a hundred times before, right?

But there was only one tiny problem this time. The site that had the exclusive offer was PriceRunner.com (owned by ValueClick, who also owns CJ).

When I questioned the relationship and seemingly unfair advantage, I was e-mailed, “…Pricerunner even though also owned by Valueclick doesn’t have anything to do with CJ. The advertiser might have worked something out with Pricerunner directly. So it’s not an affiliate related offer.”

I’m all for fair competition, even unfair business considerations if they are warranted, but this just seemed different.

When I attended this year’s CJU, I recall the recurring theme of “building better relationships”, these better relationships representing the famous pyramid – CJ/Merchant + Merchant/Publisher + Publisher/CJ. Then, I also
remembered hearing quite a bit of promotion of PriceRunner.com, ValueClick’s product price comparison site that also lists coupon codes and discounts for many CJ merchants. When I first heard the focused promotion of PriceRunner, it immediately sent up a discord in my mind that a network was aggressively promoting a competitive business to their affiliate publisher base right in front of us, but I wasn’t too concerned because of the way it was presented. In the wake of the forced JavaScript debacle, surely, CJ/VC wouldn’t risk doing something to rally publishers together again against something blatantly unfair, right?

I thought I remembered hearing something about PriceRunner only using offers available to all publishers on CJ to keep things on a level playing field. Maybe I was wrong…does anyone else from the event remember any specific
discussion about PriceRunner competing against CJ’s publisher base?

Maybe this isn’t that big of a deal, but does anyone else feel concerned that PriceRunner could be leveraging their CJ connection to get exclusive offers and maybe exclusive search term and brand name bidding rights down
the line?

The irony in all this is that the merchant involved is a leader in helping people find lasting “relationships” (in case my headline didn’t give it away). I found it amusing.

Filed under: Affiliate Marketing
  • http://www.biddingfortravel.com Sheryl

    "I'm all for fair competition, even unfair business considerations if they are warranted, but this just seemed different."

    Could you please define "unfair business considerations?"

    How can something that is unfair be warranted in the affiliate marketing arena? The way I read this, it seems that you feel it's OK to be selective as to who is issued the coupon code as long as you are.

    I agree that giving a coupon code to one affiliate and no one else is just wrong, but it seems to me that you feel that you shouldn't always be held to the same rules as the affiliate marketing community as a whole.

    Why haven't you contacted the merchant about this?

    CJ clearly has a conflict of interest here.

  • http://www.keycode.com Kurt Lohse

    Thanks for commenting Sheryl.

    Yeah, I probably should have better defined what I meant by "unfair business considerations".

    I am a huge advocate of fairness in all aspects of my life, but I'm a realist too, and I know in business there are times in which businesses make unfair business decisions for various reasons.

    For example, a merchant who never issued a coupon code before, may select a publisher they can trust to do a limited test. If the test works they roll it out to their entire network of affiliates. It's unfair that the publisher got the coupon first, but ultimately it enabled the merchant to see the beneifit of the added promotion, and later everyone wins.

    Also, if one of my competitors, spent a great deal of money to advertise and produce sales 10x what I produced, then I am ok with my competitor getting a better commission deal or even an exclusive offer. It's unfair to me because it now gives my competitor an advantage, but they earned it. I would only ask that the merchant offer me same deal when I reach a similar target level of sales.

    As for contacting the merchant – we're in progress and I will get back to you on what they say.

  • http://www.biddingfortravel.com Sheryl

    Just for the record, I don't have a problem with tiered commission levels based on volume. After all, that's no different than a wholesaler providing better pricing to a large retailer than to a much smaller retailer.

    Exclusive offers, in the form of a coupon code or anything else, is a completely different ballgame in my view.

  • http://affiliates.digitalriver.com Todd Crawford

    I think it is perfectly fine to offer certain affiliate "exclusive" offers in exchange for special promotion on their site. There are affiliates that will do more for you if you do more for them. If an affiliate complained to me about not getting as good of a deal, I would use that as an opportunity to negotiate special promotion on their site and provide them a comparable offer.

    As for the Pricerunner issue, it is a different business unit of VCLK and typically only does CPC deals, which are run outside of most affiliate programs. I do not think CJ and Pricerunner are conspiring to cheat affiliates out of coupon codes.

  • http://www.keycode.com Kurt Lohse

    Sheryl – some merchants use exclusive offers like commission tiers to reward sales performance and increased exposure. I'm playing devil's advocate, but why do you think that is a different ball game?

    Todd – great point about using the opportunity to help the publisher "earn the offer", I think that is the perfect response from the merchant perspective.

    Your view on PriceRunner is a little disturbing, however. Am I to assume that just because Pricerunner offers a CPC ads they are somehow free to make deals with network merchants outside of the affiliate Network? It sounds like you and CJ may not even consider them an Affiliate publisher. Strange.

    Should we all convert to CPC now and avoid all the sales tracking hassle?

  • http://www.biddingfortravel.com Sheryl

    "Sheryl – some merchants use exclusive offers like commission tiers to reward sales performance and increased exposure. I'm playing devil's advocate, but why do you think that is a different ball game?"

    In a tiered commission program, all affiliates are presumed to be on the same playing field. It's up to the affiliate to draw the traffic to his site and ultimately to send sales to the merchant.

    Exclusive offers, however, change the playing field. They give those affiliates the opportunity to increase sales while leaving all other affiliates behind and thus negating the opportunity to achieve maximum earnings from the program.

  • http://www.keycode.com Kurt Lohse

    UPDATE: the exclusive code in question has been removed from PriceRunner at the merchant's request.

    Sheryl – Why are these performance tiers both not equally fair to publishers:

    Tier 1 – $0-$4,999 in sales – 5% commission
    Tier 2 – $5,000 – $9,999 in sales – 6% commission
    Tier 3 – $10,000+ – 7% commission

    Tier 1 – $0-$4,999 in sales – 5% commission + Free Shipping to shoppers
    Tier 2 – $5,000 – $9,999 in sales – 6% commission + 5% off discount to shoppers
    Tier 3 – $10,000+ – 7% commission + 10% off discount to shoppers

    Paying somebody more by giving them a better commission gives top performers the unfair ability generate more sales because they can spend
    disproportionately more on advertising or paid search. Either both tiers are fair or they are both unfair, I don't think the exclusive discount offer represents a significant difference in fairness.

    Regardless of the fairness issue, merchants regularly give exclusive discount codes to a small group of publishers or a single publisher at their choosing. There are, of course, repercussions that occur to a greater or lesser extent whenever this happens. And that is when the merchant weights out the pros and cons and acts accordingly – as in this very specific case.

  • http://www.biddingfortravel.com Sheryl

    "Sheryl – Why are these performance tiers both not equally fair to publishers:"

    For the reason I stated in my last reply…it's no longer a level playing field.

    The ability/expectation to advertise to a greater extent should never come into play when a merchant defines commission levels and/or incentives. If a merchant wants greater paid advertising exposure, they can advertise themselves outside of the affiliate marketing channel.

  • http://www.affiliatefairplay.com Kellie

    One more note. The whole http://coupons.pricerunner.com area is actually hosted on an IP address owned by TopMoxie, which is what they do for all their private label solutions.

    Also, for the Merchant in question in your post. Click through on the current coupon offering for them and look at the landing URL for that Merchant. You will see it is indeed a CJ link. The AID and PID will be passed in the URL. ;)

  • http://www.affiliatefairplay.com Kellie

    Kurt,

    There is, in my mind, a larger issue here with PriceRunner Coupon area. I’m assuming that you saw the exclusive coupon in their coupon area located at http://coupons.pricerunner.com.

    I don’t know if you are aware of this are not (I think probably not) but the whole coupon area is syndicated content…along the lines of what KeyCode does. The coupon area is NOT CPC ads made with direct deals by PriceRunner with the Merchants. Those are syndicated affiliate links. And yes….some do ulitmately go through CJ. So when the CJ rep stated it couldn’t be promoted by a CJ affiliate or the affiliate would be terminated…the rep was either uninformed or not being completely forthcoming.

    From my own perspective, here is where I have the really big problem with the coupon area of PriceRunner and it being owned by a VLCK. The syndication is being provided by none other than TopRebates/SavingsWatch. Also more commonly known by affiliates and merchants as TopMoxie. Granted I have never seen the adware part of the whole TopMoxie web label web site solution on PriceRunner (and I’ll be screaming bloody loud if I ever see that happen), but yet…IMO it all doesn’t sit well me in the least and I do see it as giving VLCK giving a certain affiliate unfair competitive advantage…an affiliate who engages in some very controversial practices. Regardless that CJ does deem TopMoxie as compliant.

    And CJ IS benefiting financially from the coupon area of PriceRunner, as sister company. And it is one of CJ’s affiliates providing the syndication. As an example click through on the EBatts.com coupon, with “CJ” as part of the coupon code, and see if a CJ cookie isn’t set.

    And check out any of the ValueClick’s quarterly filings with the SEC and check out how much of ValueClick’s revenue is generated internally from relationships between their sister companies. It’s reported in those filings.

  • http://www.keycode.com Kurt Lohse

    Kellie – great research, thanks for adding to the discussion.

    Operating a syndication service, you would think I would have quickly spotted the syndicator and tracked down Incentive Networks LLC connection. In any event, I'm glad you did. I am not familiar with Top Rebates/Savings Watch/Top Moxie or how they operate. But if what you say is true, I certainly understand your additional concerns.

    As for the assertion CJ made that the merchant link somehow fell "outside the affiliate channel" as a separate CPC program with Pricerunner directly, I never really believed that either. Your observation of the link passing CJ tracking and publisher ids just proves the opposite.

    It brings up some very interesting questions about affiliate networks (or the companies that own them) using affiliate supplied content on their destination sites.

    Maybe PriceRunner had a contract in place with TopMoxie prior to their acquisition and has to abide by the term?

    If not, I can not imagine why CJ would need a syndicator (squeaky clean or not) to provide offer content. CJ should be providing this data to PriceRunner directly and abiding by all of the affiliate fairness rules for PR sake if nothing else.

  • http://affiliates.digitalriver.com Todd Crawfordq

    I do not have direct insight into how Pricerunner and CJ work together – my comments above were based on my general knowledge. If the offers are being syndicated by another third party (aka an affiliate), CJ may be unaware that Pricerunner is getting these deals.

    It seems all the coupon offers resolve through http://www.ntwk18.com, which takes you to http://www.loyaltyventures.com/. The site lists three partners – ValueClick, LinkShare and Performics.

    Many deals are done outside of affiliate marketing channels and special promotions and unique commission structures (CPA, CPC, CPM, Hybrid) are not out of the norm. Typically these deals are done by other people not responsible for the affiliate program.

  • http://http:affiliates.digitalriver.com Todd Crawford

    Many traditional affiliates that took CPA deals have converted to CPC models. Bizrate is a good example.

  • Quit Whining

    Dude, quit whining. You are a middleman in an industry that has little to no future.

    This type of action will only occur more and more in the future. If you don't see the writing on the wall than you are WAY behind the curve. I saw it 3 years ago.

  • http://www.affiliatefairplay.com Kellie

    Kurt,

    LoyaltyVentures/TopMoxie/SavingsWatch/TopRebates are all the same company. SavingsWatch and TopRebates are their own affiliate sites (coupon and rebate). If you go http://www.loyaltyventures.com and http://www.topmoxie.com you'll see basically the same site. TopMoxie provides rebate reminder software for other incentive sites. They do the adware for UPromise, Ebates, iGive, Care2 to name a few. They also have the adware on their own affiliate web sites.

    The ntwk18.com domain is a used for redirects and tracking of their own affiliate sites and the web sites they provide syndication to. They run all syndicated traffic through the same aff IDs. Since they also have to track users via the sub id parameter because of the rebate end of things, they first track their syndication partner through the ntw18.com domain, then redirect the aff link.

    The person you spoke with a CJ may not have been aware Kurt of the situation. I'll grant that much. But now way does CJ itself not know that TopMoxie is running stuff on PriceRunner. I can't believe that one. It's been there. It may well have been a prior agreement. Maybe archive.org would shed some light on it. Regardless of the when and why, it's the current situation and it's not new. I've been monitoring it for months now (maybe a year?) just to be sure the adware part doesn't show up there also.

    The technical tracking aside…it's definitely an affiliate (TopMoxie) on the *coupon* part of PriceRunner and it's definitely affiliate links. And yep Todd those types of outside deals do happen like the BizRate. But that's not the case here, while TopMoxie may have brokered some hybrid deals with some of the merchants. But all those links track through Affiliate Network links.

    "It brings up some very interesting questions about affiliate networks (or the companies that own them) using affiliate supplied content on their destination sites."

    Totally agree. And that was really my point. It does bring up both interesting and important questions. And not just with ValueClick in this age of company acquisition.

  • http://www.pricerunner.com Martin Andersen

    Hi

    First of all thanks for a great blog. I represent PriceRunner as General Manager of the business unit. PriceRunner is wholly owned by ValueClick Inc. which also owns companies like Commission Junction and ValueClick Media.

    At PriceRunner we list offers from different affiliate networks and we have a great relationship with all of them. Among them is of course also Commission Junction.

    I think that it's important that I give a little overview on how we work with CPA offers on PriceRunner. We have CPA offers in two sections of the site:

    1. Comparison Shopping Section (Price Listings)

    2. Coupon Section

    PriceRunner is like many other comparison shopping sites based on CPC so it's only in very rare cases we list CPA offers in our price listings. We do work directly with the affiliate companies to receive product feeds from these merchants. PriceRunner abides by the same terms and conditions as any other company working with the affiliate network. At no time has PriceRunner received any special consideration or treatment from CJ.

    We do in come cases work with different tiers – but that's simply because PriceRunner like any company can qualify by sending more and better traffic.

    The coupon section on PriceRunner is operated by a 3rd party provider. The company providing us with the service is SavingsWatch (LoyaltyVentures). SavingsWatch is hosting the service and 100% responsible for the day-by-day operation. PriceRunner is NOT working with CJ on our coupon section and it's highly possible that CJ is not aware of this relationship – simply because PriceRunner have had no contact with CJ about this section. All communication regarding the coupon section and the affiliate networks is handled by the 3rd party provider.

    It could seam strange that PriceRunner is not working with CJ on this – but it's simply because coupons is not our focus on we do not have the resources to operate a section like this.

    We started the coupon section 10 months ago and it's still running in a beta mode. I think we can do a lot of things to improve the section – so for our 2007 Roadmap we have planned to do a complete redesign. Once again we are not going to work directly with any affiliate networks. We are currently evaluating different providers so any coupon providers are welcome to contact me directly. I remember contacting KeyCode.com a while ago but I never received a response (maybe I send the mail to the wrong person – I will see if I can find the mail) – but I would love to talk to you about your syndication services.

    In regards to the CJU conference which I also attended – I do remember that PriceRunner was mentioned. But PriceRunner was mentioned in the connection with other ValueClick companies and can't connect it to any special treatment. Commission Junction and PriceRunner are owned by the same company so it's natural that they will be mentioned in the same company presentations. I do recall one session about online shopping where different representative presented their solutions. Comparison Shopping was presented by Pronto.com a competitor to PriceRunner.

    Please feel free to contact me with any questions about PriceRunner.com

    Best regards

    Martin Andersen

    GM, PriceRunner.com

  • http://www.thoughtshapers.com Jeff Molander

    Kurt and all…
    Respectfully, this is not new nor is it "unfair." This is business and business is business.

    Bargainbetty + MSN
    CouponCabin + Yahoo
    ??? + Google

    These are all business arrangements conceptualized and executed upon by people — some more creative and capable than others.

    It's dog eat dog and anyone who has a CJ, Linkshare, Performics, etc. link on their site will continue to earn certain treatment… for being considered an "affiliate". Unfortunately this word brings with it a "junior leagues" connotation.

    IMO, affiliates need to earn "publisher" (hat tip to CJ who tried to polish their network via this word so as to attract VCLK's attention) status.

    This entire topic revolves around this central issue — affiliates being treated a certain way due to their association with an "affiliate network" — a network that can use the word "publisher" all it wants but in the end cannot control how advertisers view them.

    "Shopping comparison engine" beats out "affiliate".

    Web sites using pure CPA MUST rise above "affiliate" status.

  • http://www.keycode.com Kurt Lohse

    Jeff – I couldn't agree with you more – on all points.

    I never intended to mean that I support the position that says business or affiliate marketing in general should be "fair". I personally like fairness especially in business, but I know it rarely exists as a valid consideration for many in modern business strategy.

    Business at all levels is highly competitive and clearly not fair. But, when certain business aspects prove themselves to be unfair, there are repercussions from those who are negatively affected – some appropriate some not. By pointing out and debating seemingly unfair practices, change can occur before over reactions take place.

    I guess that is what I was trying to accomplish here.

    You're point about the necessity of raising the perception from "affiliate" to "publisher" is excellent and worthy of creating a new post dedicated to just this topic.

    It seems as if raising the affiliate publisher perception should be among the highest priorities of the Networks. If not, one could imagine the unfairness level rising to such a degree that quality publishers would have no choice but to "graduate" to a CPC based model outside of network tracking out of sheer necessity to survive. Bizrate, Shopping.com, Shopzilla, PriceGrabber, even PriceRunner all seem to have found a way to become "more legitimate" by becoming "direct relationship" worthy ad channels by doing this. Maybe this is just a natural progression once a publisher reaches a certain size audience. Is Fatwallet ready to make a switch?

    All I know is that if this switch was made by even the top 10% affiliate publishers in general, it would be devastating to the Networks as a whole. I hope it doesn't have to come to that. Like I said – definitely worth debating.

  • http://www.keycode.com Kurt Lohse

    Martin – Thank you for taking the time to address some of the questions we have raised here and for clarifying PriceRunner’s position and operating standards.

    This is exactly the kind of dialogue that strengthens our industry and makes blogs like Revenews truly valuable.

    I have worked for public companies in the past that owned numerous subsidiaries and individual operating units, and I understand how and why sister companies often struggle to find effective ways to work together on seemingly obvious fronts.

    As far as having previously contacted Keycode regarding your content syndication needs, we operate out of a small and tight office and I am sure I would have seen your e-mail if we received it. I would be very interested to know if you still have a copy of the original request for information. In any event, we would love to see if we can meet your upcoming needs.

    I would also be happy to recommend some of the other competitive coupon syndication services out there, like David Lewis’ anycoupons service and others, so that you can get a good base of qualified options to choose from.

  • http://www.thoughtshapers.com Jeff Molander

    Kurt:
    Fully and more clearly understood. You articulate your points with energy and zeal. Love it.

    Your questions are not lost on me and I trust not on network executives who I know read these threads.

    A handful of us (Wayne Porter, Lee Gientke, Amanda Watlington, Sam Harrelson) discussed this a bit here (http://www.thepartnermaker.com/weekly_insight/index.php?id=3). You may find some of Sam and Wayne's comments to be interesting given how the debate was so free-flowing.

    Also, I would enjoy spending 15 minutes with you on the phone some time soon if you would be up for a quick audio interview on the subject. Perhaps we might pull in 1 or 2 others who have concerns such as yours. Maybe even an affiliate who is in a position to make such a leap (to CPC)??? I would even welcome a network to discuss this if they were forward-thinking enough to join.

    Wouldn't it be cool if you stood up at the Summit and asked Chris Henger of Performics about his views on this concern? :)

    He's speaking on the panel "Ask the Experts: Thought Shapers and Influencers"

  • http://www.keycode.com Kurt Lohse

    Jeff – Many thanks.

    I'll definitely check out the partnermaker link.

    I'd be happy to talk with you any time about this topic and participate in an interview or even in a larger round-table discussion.