The Ugly Underbelly of Affiliate Marketing

I love affiliate marketing. There are many reputable, ethical merchants who sell quality products and services online, and many merchants and affiliates who use ethical methods to market those products and services. This article isn’t about those businesses; it is about the rest of them.

Anyone who has been in the affiliate marketing world for awhile, especially the CPA affiliate marketing world, knows that the industry has been prone to more than its share of unethical practices. What are those practices? Why do they occur? Should you care? What can be done about them? In this article I’ll try to provide some answers to those questions.

Flawed Thinking About Ethics

Some of the reasons typically given for running a business ethically include:

  • In the long term, you’ll lose business if you’re known for ripping off customers.
  • You’ll give the entire industry a bad name, which will hurt you, too.
  • You’ll get fined or thrown in jail.

I think those statements miss the point entirely. While they may be true, there are far more crucial reasons to run an affiliate marketing business ethically. I believe that ethics deserves attention beyond the risk of hurting your business because I see running your business ethically as good for other people.

I think this shift in focus will motivate people to run their own businesses better and to eliminate harmful practices elsewhere in the industry.

Bad Offers & Bad Marketing

I think most of the ethical issues in affiliate marketing can be divided into two categories: unethical offers and unethical marketing.

Unethical offers include everything from many of the rebill offers, mobile “pin submit” offers, and penny auctions whose business models would come crashing down if customers actually understood what they were signing up for, to “have an affair” dating websites that play an active role in causing people the most intense suffering they may ever experience.

How To Justify Unethical Behavior

Somehow, for some reason, everyone from merchants to affiliates to affiliate networks to affiliate managers to ad networks absolve themselves of responsibility with arguments like:

  • I’m just promoting the product; I’m not actually selling it.
  • It’s not my fault if the customer doesn’t read the fine print.
  • Morality is subjective.
  • Eat or be eaten.

It seems to be so easy to rationalize bad behavior when there’s a profit to be made. The golden rule has been tossed aside and replaced with “How can I make the fastest and easiest profit without getting thrown in jail?”

Businesses absolutely need to focus on profit, but not at the expense of ethics. That’s not how capitalism is meant to work. In true capitalism, businesses make increased profits by offering increased value to the world. Far too often in the affiliate marketing world, profit is made by talking value and delivering suffering.

Thankfully the FTC in the United States has recently cracked down on deceptive rebills and the misleading marketing that is often used to promote them. The FTC has certainly had an impact on cleaning up the industry to an extent, but regulators in other countries haven’t been as quick to act, and in the United States, other types of unethical offers and marketing are still rampant.

White, Gray, and Black

When it comes to ethics, there is very often a gray area, and I certainly won’t say that no one should step into the gray. It’s often unavoidable and perfectly ethical to do so, in my opinion.

For example, consider a disclosure to a customer that she’ll be billed $80 each month after her 30-day free trial. How prominent should that disclosure be?

You could design your web page so that the disclosure is the main headline on the page in 100 point font, or you can write the disclosure in illegible six point font in the middle of a sea of terms and conditions that you know no one will read, or it can be somewhere in between.

At some point, as you decrease the disclosure size and location to make it more and more obscure, you start entering the gray area, and eventually you enter what is clearly black. The boundary between ethical and unethical is not always clear, which is why the gray area exists. The problem is that far too often people in the affiliate world are walking around in the pitch black and using ludicrous arguments to rationalize it as white or gray.

Why Are Affiliate Marketers Prone To Unethical Practices?

That’s a tough question to answer, but here are a few of the possible reasons:

  • Affiliates have no ongoing relationship with customers. Most types of businesses need to maintain a good reputation and relationships with their customers. Affiliate marketers usually don’t have that incentive because they don’t have any relationship with the customer. They’re simply middlemen driving customers to another business.
  • Many CPA products themselves are one-time scams. Many merchants themselves build their businesses around the “squeeze as much money as possible out of the customer and then forget about them” model. Since they think short-term and aren’t concerned with how their website or product will be performing five years from now, they don’t “need” to build a good reputation or provide good customer service.
  • It’s more difficult to empathize through a computer. I realized this recently when I was about to write a scathing review of an incompetent customer support rep who I had dealt with through email. When I visited the web page to leave feedback about this particular rep, I saw her photo. It’s true that I thought she was incompetent, but seeing her photo made me consider that she had probably done her best and how my review would make her feel. So although I still left a negative review that I thought was justified, it was far less scathing than I had originally planned. I think affiliate marketers would be far less likely to sell a ringtone scam to a teenager face-to-face in a bricks-and-mortar store, compared to an online store where the affiliate simply sees a click and conversion recorded in his tracking software.

None of the reasons are valid justifications for unethical behavior, of course. They’re just reasons why I think it’s easier to be unethical in the affiliate marketing world. Those same reasons, I think, are why people who have lower ethical standards to begin with are more likely to be drawn to affiliate marketing than to other forms of online business.

Affiliates’ Reaction To Ethics

To be sure, there are many ethical affiliates out there. But on numerous occasions I’ve seen affiliate marketers laughing and joking about customers who complain of being ripped off after buying a garbage product without reading the fine print. For instance, someone will post a complaint that they received from a legitimately ripped off customer, and everyone will talk about how hilarious it is!

Just last month I saw an affiliate network owner scoffing at the concept of morality in response to a customer who complained about being ripped off. Here are just a few actual responses to ethical questions that I’ve seen on affiliate marketing forums:

  • “Are you making money? Or not? That’s the only question that matters.”
  • “Your job is to convert -period- not philosophize on whether or not you’re f***ing people over.”
  • “Ethics? Drop them if you’re serious about marketing.”
  • “I believe that most people who pay for ringtones and buy diet pills are probably the kinds of people who will blow their money anyway regardless of whether they’re blowing it on my s**t or someone else’s, so it really doesn’t bother me.”
  • “I decided to temporarily put my conscience in a box until I am rich.”
  • “I am a full blown deceptionist when it comes to my ads, you gotta do what you gotta do… bottom line, this world is a f***ed up place, it’s not gonna change anytime soon. You either flow with the current or don’t, plain and simple.”
  • “I used to be a bit concerned with ethics. F*** that, now I ask myself one question and one question only – Is It Legal?”

What Makes Something Unethical?

I think most of us know when we’re doing something unethical without needing to be told or given a set of rules. To try to make this point more clear, I’ll digress from marketing for just for a moment (please pardon the unpleasant example, but I think it’ll help get the point across):

If you saw someone kick a helpless puppy across the street, you wouldn’t need a law to tell you that something bad just happened, would you?  You know in your heart that it’s wrong. We all know that it’s wrong, and that knowing exists entirely independently of what any law might say or what your coworkers or some religious book might tell you. This sense of ethics is built into all of us. It’s universal.

Some of us block it out of our minds or have had our consciences malformed due to abnormal experiences, but none of that changes the fact that a universal ethics does exist.

The golden rule is one universal rule of thumb that everyone inherently knows, but that many people in our industry choose to ignore. If you wouldn’t want a certain scam sold to you, don’t sell it or promote it to others. If you wouldn’t want to be deceived in the way that your ads deceive other people, don’t run those ads.

Most of us know when we’re acting unethically, but many of us simply don’t care unless laws are put in place to force us to act as if we cared about ethics.

Why Care About Ethics?

It’s hard to know how to convince people to truly care about ethics if they don’t already. The right reason to act ethically isn’t “because you’re going to get in trouble,” although for many people that seems to be the only reason that works.

I think that often when people act unethically they have an inability to (or they refuse to) empathize. The best way that I can think to explain the importance of ethics is to continue with the previous analogy…

Why should you not kick a helpless puppy across the street? Is it:

  • Because you might get put in jail or fined?
  • Because it would hurt your reputation?
  • Because customers might boycott your business if they found out you did it?

NO! Those are certainly some of the potential consequences, but the reason that you shouldn’t kick the puppy across the street is because it would hurt the puppy. You know it’s wrong because you can put yourself in the shoes of the puppy and feel yourself what the puppy would feel.

A deranged person might be unable or unwilling to empathize with the puppy. Such a person either can’t take the perspective of the puppy and imagine feeling what the puppy will feel, or this person refuses to do so. This person might laugh as the puppy flew across the street. He’d probably also be likely to laugh at customers who get ripped off by deceptive marketers.

“Because I’ll put you in jail if you do” is the reason that you might have to give to a deranged person to prevent them from kicking a puppy across the street. And “Because I’ll put you in jail if you do” is the reason that you might have to give to a deranged marketer to prevent them from making a profit at the cost of making other people suffer.

It’s true that if you run your business unethically you might get put in jail, it might hurt your reputation, or your customers might boycott your business. But if those are your primary reasons for acting ethically, then you’ll always be prone to acting unethically if you think you can escape the consequences. If your government bans rebills, you’ll start promoting them in other countries or perhaps you’ll start a deceptive penny auctions business.

When people have a true concern for ethics they don’t need laws and rules to govern how they run their business; their own conscience guides them independent of any laws.

A Challenge

I’d like to reemphasize that not all ethical answers are obvious; there’s often a gray area. But when the answers are obvious (and they’re obvious far more frequently than affiliate marketers seem willing to admit), what could be more important? Profit?

If you were getting paid $1,000 per day to torture puppies, and one day you realized it was wrong, should you continue torturing puppies until you had a new ethical income source to replace the $1,000 per day? Of course not. You should stop torturing puppies immediately, whether or not you have any other income source. If you have to sell your house and move into your parents’ basement for a while, so be it. Deceiving and ripping people off online is no different.

The challenge is this:  Do something. Whether you’re directly or indirectly involved in unethical practices, or whether you’ve been allowing them to occur by sitting back and watching, take action to make a change. If you’re not actively doing anything wrong yourself but you’re aware of other people who are doing something wrong, you’re not off the hook.

You wouldn’t just sit back and watch while someone else kicked puppies across the street, would you? You’d get up and do something to stop them. So how can you justify sitting back and watching while families get destroyed by “have an affair” dating websites or while customers are deceived into paying exorbitant prices for useless products?

Or worse, how can you justify allowing those types of offers onto your affiliate network or ad network? If you’re in a position of influence in an ad network or an affiliate network you’re even more obligated to act. In the words of Spider-Man’s uncle: “With great power comes great responsibility.”

If you’re an affiliate manager, you can refuse to help your affiliates to promote unethical offers, and use what influence you do have within your network to eliminate those offers.

If you’re an affiliate, in addition to only promoting clean offers using honest advertising, you can try to avoid doing business with affiliate networks that make large quantities of shady offers available to the world.

Whether you’re an affiliate marketer, an affiliate manager, a network owner, a merchant, or anything in between, there’s probably something you can do to act more ethically and influence others to do the same.

Don’t be a coward and sit back to watch while everyone around you is causing suffering, or convince yourself it’s okay because everyone is doing it. As a wise man once said: “All that is necessary for the triumph of evil is that  good men do nothing.”

Updated: This current version reflects two additional links that didn’t appear in the original article.

About Justin Clark

Justin Clark has been a full-time affiliate marketer since 2009. He also runs AdChop.com, a collection of internet marketing case studies.

35 Responses to The Ugly Underbelly of Affiliate Marketing

  1. Unethical affiliates are just plain lazy IMO.   In the short term and in the long run, it’s just better to run an ethical business for both the website visitors and the affiliate.

    In my opinion you DO in fact have an ongoing relationship with your website visitors, just not in the traditional sense.  You need to add value to the transaction so once a website visitor goes on to the merchant’s site to make a purchase (complete a form, transaction etc…) they do so because they received solid information to help them make that decision.

     

    • Justin Clark says:

      Sorry, editing…

    • Anonymous says:

       “In my opinion you DO in fact have an ongoing relationship with your website visitors”  I think it’s true that you do have a relationship (not necessarily “ongoing”) with visitors to your own website.  But many affiliates marketers don’t have their own website(s).  They run advertising campaigns that send visitors directly to the vendor’s website… or perhaps through a simple pre-sell landing page, which isn’t a full website.

      •  Absolutely adchop, I agree with you too, but when an affiliate does that (has only a landing page, or direct links to a merchant site)… aren’t they making their own decision about the depth of the relationship they want to carry with a website visitor?

        I suppose I could have phrased it better in my original post, I’m of the opinion that affiliates have a responsibility to their website visitors to some degree (to add value to the transaction).  And while their “ongoing” relationship isn’t necessarily client-service based, I think that affiliates have a relationship beyond a simple “click” based on that value they add, to earn their commission.

  2. [...] The Ugly Underbelly of Affiliate Marketing, http://www.revenews.com [...]

  3. Cburke2 says:

    Joseph, You article is on time and hit home with me. Integrity rules!

    Chuck

  4. Biquitous says:

    Hi Justin,

    Excellent piece and diatribe, I agree whole heartedly and coming from an industry like Internet marketing, believe me when I tell you there are way more opportunities to be a “grey” “black” sorta person than white.

    One thing I would like to have seen is some visual examples of what you are talking about.

    Some of the fraud that you discussed I didn’t know about, understand or couldn’t quite visualize.

    I guess that’s because I’ve never personally experienced it or perpetrated it through my own or client’s websites, but nonetheless, it would have been nice to see what you were discussing in action.

    Either way, thank for bringing light to all of this, discussing it and trying to explain to the idiots of the world that are still doing this sort of stuff, why the reason should be internal, not external for why something is right or wrong to do.

    I use the mom and dad test: Would you do it to your mom or dad?

    Nuff said.

  5. Justin says:

    I’ve just noticed that ReveNews removed two phrases about “have an affair” dating sites from my article before they published it – they felt that the phrases were distracting and didn’t fit in with the rest of the article.  Although ReveNews has a valid point that I hadn’t mention “have an affair” dating websites regularly throughout the article, I think those websites are a serious ethical violation and need to be mentioned.

    Here are the phrases that they removed (the parts that they removed are all in CAPITALS):

    From near the beginning of the article…

    “Unethical offers include everything from many of the rebill offers, mobile “pin submit” offers, and penny auctions whose business models would come crashing down if customers actually understood what they were signing up for, TO “HAVE AN AFFAIR” DATING WEBSITES THAT PLAY AN ACTIVE ROLE IN CAUSING PEOPLE THE MOST INTENSE SUFFERING THEY MAY EVER EXPERIENCE.”

    From near end of the article…

    “So how can you justify sitting back and watching WHILE FAMILIES GET DESTROYED BY “HAVE AN AFFAIR” DATING WEBSITES OR while customers are deceived into paying exorbitant prices for useless products?”

    I’m discussing with ReveNews the possibility of adding those phrases back in, but in the meantime I wanted to mention them here because I think they’re rather important; “have an affair” dating website are the MOST unethical offers that I think I’ve seen.

  6. Excellent post. In addition to actual offers, we need to go into practices. Are your practices ethical? Are you forcing clicks, pixel dropping, trademark bidding, etc.? Love how direct you are about this topic – it needs to be brought to light more and more in this industry.

  7. Matt McWilliams says:

    Brilliant Justin!

    You just wrote the treatise that has needed to be written for a long time. I don’t know that I have ever seen all of this put together before. I’ve seen snippets and had my own conversations over the years but nothing like this.

    I look forward to reading it again and sharing it! 

    The “mom and dad” or “grandma/spouse/pastor” test is generally a good rule to follow. If you wouldn’t recommend something to your family or pastor or 3rd grade teacher, don’t promote it. If you wouldn’t want them falling for your stupid tricks, don’t do them. Pretty simple.

  8. [...] The Ugly Underbelly of Affiliate Marketing [...]

  9. Daddyhelpline says:

    Since when Ethical replaces LEGAL. Care to define ETHICAL for every transaction? This is exactly the kind of BS that hurts the industry. If you stay on a legal side it means you are ethical. Period. End of discussion.

    Stop protecting children. Write clear laws that protect everyone.
     

    • Justin says:

      Care to define ETHICAL for every transaction?
      – Sorry I don’t understand your question.

      This is exactly the kind of BS that hurts the industry. If you stay on a legal side it means you are ethical. Period. End of discussion. 
      – It is legal to cheat on your spouse.  Do you think that also means it is ethical to cheat on your spouse?

      Stop protecting children.
      – I’m not sure what you mean by this.

      Write clear laws that protect everyone.
      – Sounds like a good plan to me – I have no objection to that!

      • Daddyhelpline says:

        Every transaction means that each program manager decides what is ethical to him at THAT time. Read affiliate terms posted on on any website and you will understand. Affiliate managers violate law by inventing reasons how to spread budget among family and friends as much as the unethical affiliate that helps them to make those targets.

        Yes It is legal to cheat on your spouse until she files against you. Yet many people choose to resolve this outside of the court. Same applies here. The only way to stop unethical marketing is to get a strong Feeling that you are doing to get a legal action against you.

        Stop inventing new ethical ways to pull a blanket over yourself. Stop any kind of discussion about protecting individual population segment. Just stop.
        Makes me sick to know that my commission depends on some church going “ethical” old fart out to get the bad guys.

        Optimize your landing pages. Fix you dumb copy. Return your customer service phone calls and then we will talk about being ethical

        • Justin says:

          I’m sorry – I’d really like to respond, but I can’t understand most of what you wrote.  

          • Daddyhelpline says:

             Exactly my point. You should understand issues before you write about them. You should be a real world affiliate or at least consult with one before writing something as biased as you did.

  10. This is a fantastic article and I totally agree with everything you’re saying. However, I think those kinds of people who rip others off with their affiliate ads and then laugh at them are not going to change their ways because you tell them to – they simply have no morals. And unfortunately, yes nasty people exist in this world and there is ALWAYS going to be someone out there trying to scam you on the internet. I think it’s really down to the customers to actually bother to read the fine print before they make a purchase if they want to be sure they’re not ripped off. And in terms of the ‘affair’ dating sites, I’m pretty sure the people who use them would cheat anyway whether the site existed or not – I’m not saying I agree with the sites, they of course shouldn’t exist, but they are definitely not responsible for people having affairs. 

  11. Louie says:

    Justin, thanks for this post. I’ve been researching AM as a means to make a living or at the very least supplement income. I’m recently unemployed so I have tons of time and energy to invest. But I’ve been hesitant to really commit because I haven’t been able to find anyone who will speak frankly on the issue of AM. Everything I hear is hype and there are fakes everywhere. It’s like buying a counterfeit pill from wherever….you really don’t know what’s in that pill…could be brick dust, could be sugar, you just don’t know. Well AM is like that to me right now. I just don’t know who is the “real deal” or who to believe. The guys saying they’re earning millions and they can show me how to do it too for the low, low price of….it’s like you see them pop up, then they disappear. Your post has restored some faith that maybe there are ethical people out there, like myself, who just want to help others find what they’re looking for online and earn a few bucks doing it. I’m not interested in cheating anyone or misleading. How can you sleep at night knowing you’re swindling peoples’ had earned money? That’ not for me. Thanks for writing about the AM population out there that are adding real value to others’ lives. By the way if you know of any AM resources in Dallas, TX please do tell. I’d love to connect and grow. Thanks again!

    • Justin says:

      Hi Louie, I’m trying to respond to your question about resources, but Disqus keeps deleting my comment – I guess it’s mistaking it for spam :P  Feel free to contact me here and I’ll send you my response if you like - http://adchop.com/contact-us/

  12. Zack Lim says:

    Hi Justin,

    Thank you for sharing the article and you have highlighted one of the biggest problem that is happening around the whole internet marketing industry.

    Many of them are now only interested in getting the customers’ money and they are not interested in giving values to the customers. I have purchased some products before with high expectation but only to feel disappointed after getting access to the product.

    Those who are only interested in money tend to over promise and under deliver. Although it is disgusting, but it seems that most of them are still getting results because they still can get customers to purchase products from them.

    But the good thing is that there are still many good and ethical marketers around who are genuinely interested in helping their customers and this inspires me to model after them.

    Zack

  13. Benjamin Hanlon says:

    Justin,

    I agree with you completely here.  There are so many scams and unethical marketers on the web that it has made people hesitant to buy from legitimate affiliate sites.  My motto on my site is that I would never promote anything that I wouldn’t recommend to my family members. At the end of the day I’m not sure how unethical affiliates can feel good about the business they have created. 

    -Ben

    • Justin says:

      “My motto on my site is that I would never promote anything that I wouldn’t recommend to my family members.”
      – Sounds like a good rule of thumb to me!  Thanks for your comment.

  14. Justin says:

    Good news: http://ftc.gov/opa/2012/02/willms.shtm

  15. Anne Howard says:

    Thanks for writing this post. I wrote an article in which I labeled AM using certain practices as spammers and have been harassed non-stop on my blog, twitter, facebook and even emails ever since. The response from Affiliate Marketers surely hasn’t helped to change my opinion for the better.

    • All industries have their downsides Anne. The fact that this post was written on one of the affiliate industry’s leading blogs just means that we are always working on improving the channel. Mislabeling a whole industry, any industry, is libel to get knee jerk reaction from those who advocate on it’s behalf. There are a lot of good players out there in affiliate marketing. Companies like SkyMall, NextJump, American Express, Nordstrom, Apple, and even Google are all in the space. They are companies you know and trust. You should take Missy and Shawn up on their invite and take the time to learn more: 
      http://www.revenews.com/affiliate-marketing/the-ugly-underbelly-of-affiliate-marketing/

    • missyward says:

      Oh please Anne.  The response was not just from affiliate marketers, but all kinds of marketers and PR professionals. 

      Let’s be clear here… You wrote a link-bait post with inaccurate information.  When you were called to the carpet on it, you deleted your tweets, protected your personal and business twitter accounts, called everyone spammers that retweeted the article that called you out on it here: http://blog.affiliatetip.com/archives/dear-ane-howard-you-are-cordially-invited-to-affiliate-summit-east-2012/ and then slightly changed your article which sadly, made you look worse.

      You own a PR release company (which in many people’s eyes does nothing but spam Press Releases out), yet you hide when being called out and cry foul. 

      I appreciate you taking the time to post on a site that I am the Co-Publisher of.  It’ll be interesting to see if you delete your comments here, too.

      • Jim Kukral says:

        Agree with Missy here. You stepped in it, then pretended you didn’t and tried to wipe it off your shoe without anyone noticing. You’re not the first, or the last, to do so.

        The link-bait may have gotten you the attention you were looking for, but remember, attention doesn’t equal credibility. Punch the monkey? It’s 2012, not 2002.

  16. Great post. Sadly morality is often in short supply in affiliate marketing. For example, it’s always heartbreaking to be an affiliate marketing standing around with a bunch of affiliates who are swapping tips and one guy says: “we’ve all done black-hat SEO in our time”. I look around and *everybody* then nods their heads. I don’t nod my ahead as I’ve never done blackhat SEO in my 15 years in this industry and never will. But I feel completely outnumbered in an industry where the lure of the $$$s seems to override ethics for the majority of people – there is a very ugly underbelly of affiliate marketing, but it’s seldom spoken about.

  17. Jon Rhodes says:

    I totally agree with you about the benefits of ethical affiliate marketing. I try to promote ethical affiliate marketing practices on my blog all the time.

    In order to be really successful in the long term you must build up a solid reputation. You can do that selling dodgy untried and untested affiliate products. Everyone should take their reputation very seriously with every decision they make that effects their online business. Even write the word “reputation” and stick it at the side of your monitor as a reminder if you have to. It’s that important.

    • Jon Rhodes says:

       Sorry, that should read ” You can’t do that selling dodgy untried and untested affiliate products.” That one letter I missed out makes all the difference!

  18. Knut Holt says:

    The lack of ethics is more on the mechants’ side consisting of cheating affiliates for their commisson, and this practise seems to rize in frequency.

    I have the policy of trying out merchans some time. If no sale has been registered, and it should occur according to the traffic, I take them out, the same if a merchant stops registering commisssion for some time. My experience is that a few merchants grant you a commission on a regular nase, others never ever, regardless of the traffic and popularity of the products.

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