Ethical Issues in Affiliate Marketing — Affiliate Summit West 2009 Session Report
Now that Google Affiliate Network (GAN) is a reality, affiliate marketing has finally received some mainstream credibility that it has always struggled for. After all, when Google puts their name behind something (in this case, Performics), online marketers pay attention.
Mind you, not all that much has changed since GAN entered the industry. The industry is still largely as it was before; there are just as many white-hat and black-hat affiliates and programs as there were before. It’s just that outside perceptions have started to change. Where things will get interesting is when those outside perceptions cause new players to enter the industry, and those new players cause it to change.
Well, at this past Affiliate Summit West 2009, I sat in on a session called Ethical Issues in Affiliate Marketing. Moderated by Haiko de Poel, Jr., owner and administrator of ABestWeb, the panelists include:
- Connie Berg, CEO, FlamingoWorld.com, LLC
- Chuck Hamrick, Affiliate Manager, affiliateCREW.com
- Brian Littleton, President / CEO, ShareASale.com
- and Alex Buxton from OneCause who was standing in for Paul Nichols, Director of Sales, Ebates.com who couldn’t make it
Although they all discussed what counts as ethical and what can be done about it, they all failed to note one important fact: affiliate marketing is about to go mainstream and attract a lot more trusted, household brand-names, and as it does, there will be a lot less room for unethical affiliate marketing practices.
Profiteers & Programs
The panel was kicked off by Haiko likening the current state of affiliate marketing to how Vegas has lost its soul when profits became more important than “the Vegas experience.” Haiko saw this as happening in affiliate marketing because it’s become progressively more corporate and profit driven.
Now, there are usually as many sides to the stories as there are players. In the case of this session, though, there were only five sides to the story, so the picture they drew is somewhat incomplete. However, most of the panelist pretty much agreed that affiliate marketing gets unethical whenever:
- a network is an affiliate of their own program,
- a network share info on its affiliates with one of their preferred/super-affiliates,
- or an affiliate or network offers a toolbar that overwrites cookies.
The Responsibility of Networks & Merchants
This place most of the fault on the networks because either the network is running its own program, favoring certain affiliates over others, or looking the other way when one of its affiliates is doing something unethical. With that being said, Haiko, the moderator, turned his attention to how networks can address it.
Most importantly, he emphasized how the primary role of a network was to track sales, write checks, and prevent fraud. For that reason, it’s imperative that companies not only take a stance on what practices are ethical, but enforce them.
The Responsibility of Affiliates
Of course, just because something isn’t your fault, that doesn’t mean it’s not partly your responsibility. People can often cause messes that we all have to live with and, therefore, have to help clean up — the environment is a case in point. And this is where affiliates come into the picture of helping the industry become a cleaner place.
Aside from those who actually over-write cookies themselves, Haiko felt that all affiliates were responsible for the state of the industry if only to the extent that they work in such isolation from one another. He pointed to how the affiliate side of the industry can have a very short and attention span, with individual affiliates overlooking specific incidents that don’t relate directly to them, but rather to the industry as a whole. For instance, if an affiliate hears about a cookie-jacking toolbar, but promotes a vertical that isn’t affected by it, they’re likely to forget ever happened.
For this reason, Haiko wrapped the panel by encouraging affiliates to take an ethical stance with the networks (and merchants) they do business with. Now that a line has been drawn by the network (in their TOS), he asked, what are individual affiliates going to do to hold them to it. He stressed that networks are in it to make money, and seemed to suggest that affiliates show them that there are less gains to be had by working with black-hat affiliates who can yield a quick return at the expense of the majority.
Rocks, Hard Places, & Affiliate Marketing
The funny thing about word-of-mouth and the media is that they tend to focus mostly on when things go wrong. That is, you rarely hear about when things run smoothly.
Haiko was bang-on when he pointed out that the job of networks is to track sales and prevent fraud. And to that extent, when something goes wrong with affiliate tracking, it is usually the fault of a human-error or a bug in the tracking software, and not greed or malice.
That being said, many companies have been built on shady practices, and have then gone clean once they had a nice cushion in the bank. However, such companies are the rule rather than the exception.
But as long as there is someone out there who wants to profit at the expense of others, there is a market-demand for black-hat tactics. And if there is anything that capitalism has shown, it’s that as long as there is a demand for something in the marketplace, someone will step in to fill it.
The best we can count on, then, in the world of affiliate marketing, it’s that now that the industry is maturing into the mainstream, more and more household name-brands will rely on this channel to promote their goods and services. Most trusted, household brand-names, moreover, are loath to have third-parties tarnish their reputation through shady distribution practices.
As these brand-names set-up affiliate programs, then, you can pretty much count on them leaving the black-hatters out in the cold. What that means is that there will be a lot more money in it for networks who keep their own act and their affiliates clean. What that means, in turn, is that black-hatters are pretty much slated to bet pushed out of big-money affiliate marketing, and white-hat networks and their affiliates can count on their piece of the piece getting a lot bigger in the near future.