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Affiliate Marketing Organizations- Lessons from AU
Having read Carsten’s latest blog I am reminded of a project years ago when dozens, actually a large chunk of the nascent performance marketing community came together.
Bootstrapped in late April, 2000, the “Affiliate Union” is ongoing series of planning discussions between Affiliates and Merchants United : Welcome to Affiliate Union affiliates, merchants and affiliate technology providers aimed at developing both a “certification standard” for affiliate merchants and the organization to implement those standards. It is a completely volunteer online organization in the spirit of early Internet “open standards committees.”
This effort needs the participation and support of merchants — especially those merchants who run well-thought-out legitimate programs. After all, much of the mud churned up by the more abusive affiliate merchants gets splattered on their faces.
This effort needs the participation and support of affiliate directories. They have heard many of these horror stories first hand and are more like affiliates than merchants anyway. They will need to be the first line of education to the affiliates on these efforts — the ones saying, “Don’t sign up for any program that doesn’t run the emblem.” Or maybe they should be saying we won’t even list them if they don’t.
This effort needs the participation and support of affiliate solution providers. Every single affiliate network makes their merchants adhere to terms of service — some even provide template “affiliate agreements” to their merchants. They will be an important part of bringing these standards back to the merchants and, at the same time, they can provide the group with insight from the collected experiences of hundreds of merchants.
And, of course, this effort needs the participation of affiliates — lots of affiliates. The kinds of horror stories that affiliates tell each other in discussion groups now have a use: they give us the real world examples to wrestle with when planning the criteria. From each horror story we can derive a new certification criteria.
I was invited to be among the group’s board and remember great dialogues from pioneers Brad Waller, Brian Clark, Glenn Sobel and many others…it was an interesting time and an educational one for me.
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I didn’t agree with the name that was democratically chosen (AffiliateUnion) because it posed a feeling of ambiguity. In spirit it was meant to convey the message that affiliates and merchants and vendors should be working together, and a good place to start would be full disclosure of important details in the contract. I do think many merchants felt it was an attempt to build a “labor union”. A rather absurd thought since performance marketing is built on free enterprise. Still the attempt was a good one and certification aside (I didn’t agree with that either) it did have the desired effect that some affiliates started READING the agreements they were accepting. In the end the organization, I think, becamemired in politics and control issues and who would benefit the most.
So what became of the document? Thankfully frozen in time at archive.org…..please note that someone snared the domain a couple years ago where it now stands as a parking page…because free enterprise continues to run the industry for better or for worse….often the latter, but that is again why it is a true free enterprise. In short I wouldn’t reject such an idea, but having participated in an open source like movement on only one concept- agreements (which have improved in disclosure at the least- terms are another story) the task, the politics, etc are a huge barrier…so on with this relic of years ago. The AU Final Draft…
Drafts
DRAFT: AFFILIATE PROGRAM CERTIFICATION CRITERIA
http://www.AffiliateUnion.com/ (no longer active)
Draft of September 11, 2000 (Status: Approved)
* New Criteria (5. k) has beed approved and added on August 31, 2001
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TABLE OF CONTENTS
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* Status of this Document
* Introduction
* Proposed Certification Requirements
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STATUS of THIS DOCUMENT
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This document is a proposed draft representing the consensus on September 11, 2000 of the Affiliate Union mailing list (affiliateunion-subscribe@egroups.com) between affiliates, affiliate merchants and other people with an interest in affiliate marketing. This document is in the form of “proposed standards for affiliate program certification, implying a future effort by this same group to certify affiliate merchants willing to embrace the minimal protections and guarantees of fairness that this document represents.
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INTRODUCTION
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Since late April, 2000, the Affiliate Union mailing list has been working to define standards for merchants with affiliate programs based on an objective, fair set of rules that doesn’t bend because the group likes someone or their product. This concept is not about judging the value of a merchant’s product, personality, or program; it’s about creating a standard for fairness and equity that applies to everyone.
Once a standard has been established by consensus of the Affiliate Union mailing list, the group hopes to launch an organized “certification and education effort” with affiliates, merchants, affiliate technology providers and affiliate-oriented publications aimed at separating the “bad from the mediocre” by:
1) encouraging merchants who offer affiliate programs to the general internet public to abide by the AU disclosure requirements and to seek certification for their affiliate program agreements.
2) educating affiliates in the area of affiliate agreement disclosure as well as their rights and responsibilities upon joining an affiliate program.
Affiliate Union has taken on the mandate of delineating the areas of disclosure that enable a potential affiliate to have the information necessary in order to make an informed decision as to whether or not a particular program may be right for his/her business purposes. The Union has made every effort to avoid mandating particular quantitative requirements so as not to dictate business terms to merchants. Affiliate Union does NOT make qualitative judgments regarding the value of any particular program, and certification does NOT imply any endorsement whatsoever of the certified program. It ONLY confirms that the agreement, as submitted to the Union, has met minimum disclosure requirements.
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PROPOSED CERTIFICATION REQUIREMENTS
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In order to be certified:
1. AFFILIATE RIGHTS AND PROTECTIONS
While we recognize that merchants should have the broadest possible liberty to design an affiliate marketing program that meets their needs, we also believe that certain minimal “rights and protections” for affiliates must be affirmed by merchants. In order to be certified:
a) Your agreement cannot require an affiliate to post any logos, graphics,or hyperlinks to their website that are not a direct part of the commissionable relationship (for example, “partnership logos”). You may encourage and recommend that practice from your affiliates, but it cannot be mandated.
b) Your program cannot require a “membership fee” or “enrollment fee” from affiliates. While we recognize that some merchants might choose to offer “enhanced partnership opportunities” that may involve startup costs being shared between merchant and affiliate, no program will be certified that charges a fee for simple involvement in a performance-based marketing partnership.
c) You will publish a “privacy policy” on your website that applies to data collected from affiliates (including such confidential information as contact information, site traffic, conversion rates and commissions earned) as well as data collected from the customers referred to you by your affiliates.
d) You will publish an “affiliate agreement” on your website that will be available to affiliates and potential affiliates. This certification criteria also requires that certain elements be contained in this agreement.(See subsequent sections.)
e) You agree to include in your “affiliate agreement” language to ensure that you will only make substantive changes to the agreement “in good faith” with the affiliate.
f) You will certify to your affiliates that your company operates within the legal requirements of your jurisdiction (i.e., are not selling illegal goods, are not constructed to violate “pyramid scheme” laws, etc.).
g) You will publish on your website email addresses, postal address and telephone numbers for affiliates to contact you regarding your program and any tracking issues or problems that might arise.
h) You will obtain permission from affiliates during signup to contact them via email with promotional messages (i.e., newsletters and sales offers) and provide a simple method for affiliates to “opt out” of those mailings at a later date.
2. NOTIFICATION
We recognize that merchants might from time to time need to change the substantive portions of the agreement that they have made with their affiliates. However, we believe it is unfair to place the burden of “checking for changes” to the affiliate agreement on the affiliates themselves. In order to receive certification, you must agree that you will contact your affiliates via email regarding any substantive changes to the terms of your affiliate agreement — including changes to commission rate, payment frequency, the rights and protections of affiliates or other major contractual issues — as well as posting those details to your website. It is recommended (but not required) that merchants pre-notify affiliates of such substantive changes at least a week before such changes go into effect.
3. CONFLICTS AND DISPUTES
Even in the best affiliate programs, we recognize that some conflicts and disputes will arise (most typically regarding tracking & performance issues, commissions calculations and appeals regarding “termination for cause”). We recognize and understand the desire of merchants to serve as the sole and unappealable judge of how to handle such conflicts and disputes, but highly recommend that merchants designate either mediation or arbitration options for their affiliates to handle such disputes.
a) If a third-party is responsible for tracking performance metrics (for example, an affiliate technology provider), you must disclose this to affiliates and potential affiliates.
b) In the event that you choose to offer mediation options to affiliates to handle disputes, you must notify affiliates that this option is available to them in your affiliate agreement and designate your chosen mediation service. You may select your third-party tracking provider (if you have one) to serve as your designated mediation service.
c) In the event that you choose to offer arbitration options to affiliates to handle disputes, you must notify affiliates that this option is available to them in your affiliate agreement and designate your chosen arbitration service. You may select your third-party tracking provider (if you have one) to serve as your designated arbitration service.
d) In the event that you choose to offer neither mediation or arbitration options, you must describe in your agreement the process available inside your company for dealing with and appealing decisions made regarding grievances with your company, including email addresses, postal addresses and telephone numbers for individuals responsible for grievance handling and appeals.
4. PROGRAM TERMINATIONS
We recognize the need for merchants to regulate the actions of their affiliate partners and fully support the rights of merchants to terminate an affiliate “for cause.” We also believe that, in the case of an affiliate being “terminated for cause,” nothing need guarantee payment of commissions due or other ongoing obligations from the merchant. In some cases (where either the merchant or the affiliate have chosen to sever the relationship without such cause), you must provide certain guarantees to your affiliates. To receive certification:
a) You must detail in your agreement what actions by an affiliate constitute cause for termination from your program. (See also 5.C below.) You may not terminate an affiliate “for cause” for any reason other than those detailed in your agreement (although you may terminate affiliates “without cause” as you choose). When terminating an affiliate “for cause,” you must stipulate to the affiliate what actions they committed have led to this termination.
b) If you are running a two-tier affiliate program (where affiliates are commissioned in part based upon the sales of additional affiliates that they recruit on your behalf), those second-tier
commissions must survive termination, if such termination is “without cause.”
c) You must provide your affiliates with a mechanism to “cash out” of your program free of minimum payment restrictions in the event of “termination without cause” by the affiliate or the merchant. You may deduct a “check cutting” or “processing fee” from the total commissions owed to the affiliate, but must disclose what that fee will be and how long after termination payment will be issued as part of your program disclosures. (See section 5.)
5. PROGRAM DISCLOSURES
We are not looking to mandate how you run your program, but certification does require “complete disclosure” on the operating terms of your partnership with your affiliates. Instead of mandating the details of operation, we instead seek to mandate the disclosure of the terms of operation (so that affiliates fully understand the agreement they are entering). You must disclose the following to your affiliates in your affiliate agreement:
a) You should provide details on your program’s definition of commissionable sale, lead, click-thru or other terms used to define the rewarded actions under your program (including “return days,” “qualifying items,” commission rates, handling of returns and other details).
b) You should provide details on your payment schedules (including minimum amounts, processing fees and check writing frequency).
c) You should include the commission structure in the agreement (or specifically refer to an exhibit that is incorporated into the agreement).
d) You should not make claims or promises in your affiliate program promotional materials that are not:
1. Specifically included in their agreement.
2. Supported by evidence, such as ridiculous potential earnings claims.
3. Consistent with their agreement, such as stating a commission “up to 15%” when most affiliates will earn 5% based on the contract terms.
e) You should provide details about what actions are prohibited under your affiliate program that could result in “termination for cause” (spamming, etc.).
f) You should provide details on how you handle international affiliates (those affiliates not based in the same country as your company) including frequency they will be paid and in what currencies. It is highly recommended that you also provide information on international customer orders (including to what countries you will sell and ship) as part of this information.
g) You should provide details on the mediation or arbitration options available to affiliates, as well as any third parties (i.e., affiliate technology providers) with access to private information of the affiliate or responsibility for tracking the performance of the relationship.
h) You should provide details on the method and length of tracking visitors, how this will translate into a commissionable event plus who gets credit in case of multiple senders.
i) You should provide details on what performance statistics will be available to affiliates or what records you will make available to your affiliates.
j) You should provide details on what your typical timeframe for tracking and reporting is (i.e., the time it takes a new commissionable sale to be reflected in an affiliate’s accessible statistics).
k) Merchants shall disclose their use of any predatory advertising methods designed to generate traffic from sites they have not contracted with for the online promotion of the merchant’s products, services or affiliate program and whether or not they prohibit their affiliates or anyone else acting on behalf of merchant or their affiliates from using such predatory advertising methods. Predatory advertising is defined as any method that creates or overlays links or banners on web sites, spawns browser windows, or any method invented to generate traffic from a web site without that web site owner’s expressed, written permission.
Examples include, but are not limited to, keyword parsing browser plugins such as TopText and Surf+, banner replacement technology such as Gator, and browser spawning technology that is not web site dependent.
Banners or links that are changed pursuant to a pre-determined arrangement between the merchant and a publisher or affiliate to automatically update materials on the publisher’s or affiliate’s site shall not be deemed subject to this section as long as there is no change in the tracking and crediting of the previously agreed upon commissionable event.
We also highly recommend (but don’t require) publishing these disclosures in a summary section somewhere on your website with as little “legalese” as possible. Making sure that your affiliates understand what you expect of them (and what they should expect of you) is the most important step toward minimizing conflict and disagreement with affiliates later on.
- End of Draft -
Experimental No Heat: Tag Non-Cloud Formation
- tag cloud
- affiliate marketing
- tagshare
- affiliateunion
- tagshare
- Revenews
- revenews.com
- social bookmarks
- Web2.0
- organization
Trust me, most don’t want an Union to be confused with a Labor Union.
Some “extra-bright” would might even confuse it with the “other” Union and feel the urge to counter it and found an Affiliate Confederation hehe.
No, what I have in mind is an Organisation or Association open to everybody who does business in the Affiliate Marketing, correction, Performance Marketing Space.
We have the advantage that we have a lot more common interests than other industries where US versus THEM might be okay. Its rare to find a business environment where at the core the things that are beneficial for all involved parties are the ones that will work long term and guarantee growth and prosperity for everybody.
It maybe sounds cheesy, but it is true.
Carsten: this is just me, but what exactly would an organization “open to everyone who does business in the performance marketing space?” I’m one of your chronic non-joiners of trade organizations, so I’m a tough market (or probably fall through the cracks of the organizational net from non-specialization.)
However, Wayne’s post is an interesting one: he skipped over the history lesson that goes with that document. See, back in those days, the affiliate marketing industry was going through death throes … some might argue death throes that are now complete, others might argue the patient made some kind of a recovery.
Personally, I still like that word Union is attached to it … and am still inspired by efforts like the Passenger’s Union in LA or the Freelancer’s Union in NYC as models of the kind of efforts that stir my enthusiasm.
Sure, there’s room for an organization representing merchants and solution providers, but the solution providers don’t play well together and very few merchants think of themselves as “affiliate marketers” as entire category.
Conversely, the bulk of affiliates out there are still existing in a world of contracts of adhesion. Interesting glimpse into the aftermath of the AU effort: what merchants asked for the most from the Union was a template “good affiliate marketing” contract. They all wanted to just copy that and be done with it.
“he skipped over the history lesson that goes with that document. See, back in those days, the affiliate marketing industry was going through death throes”
Well being privy to certain aspects that others didn’t….
I think it might be more accurate to say that publishers were being exploited by networks who sold it that way and merchants eager to take it with a whole wave of “creatives” who really didn’t know a lot about contracts as the real lesson?
Should we ask Jeff Molander if he ever said “free branding” in a sales pitch? (sorry about all the tagging- experiment in process)
I don’t want have two parallel discussions running. I was already sending the email responses out to multiple people because the questions people have seen to be very similar.
To answer your question: Who I mean is Affiliates, Merchants, AM’s, OPM’s, Networks and 3rd party software and services vendors who target this industry.
The organization should be a possible focal point to provide information and to engage in discussions. It is much easier to agree with something or refer to something that is not another company (even competitor) or individual with his own agenda, but a neutral entity. Something that is sometimes needed especially for controversial issues.
Becoming a Member or not should not become a financial question (like the SEMPO one with several hundred $100 per year). A symbolic membership fee to demonstrate that you are at least a bit interested would be okay (like the $5 per month in Shawn’s private forum, probably even less)
The rest should be covered by donations and sponsorships that MUST be OPEN to avoid any abuse or bribery.
You will be surprised how cheap it can be to run an organization via a group of a few dozen volunteers who can take care of the every day things and a few sponsorships to cover basic cost list hosting, 3rd party software providers (like mailing lists, web analytics things of that nature)
Everybody has to make the decision if joining makes sense and should not bitch and yell that nobody is doing something, because there is nobody who could.
It’s really interesting to read this as it’s an idea that keeps getting discussed over here in the UK at the moment.
One of the stumbling blocks I see is actually getting a group together who the majority would believe represent the industry. The IAB http://www.iabuk.net/ have been making noises about a “code of conduct” but I don’t think most affiliates have even heard of them nevermind consider signing up to their code.
For me the issue is that a union generally represents & supports the interests of one group of people. I struggle to see how one organisation can include affiliates, networks & merchants and best represent the interests of each party.
Thanks for posting this though – it’s certainly made me think
I’ll just copy and paste my response as this gets talked about from time to time.
“I think ultimately why these things end up failing is what I touched upon before. Strong willed, independent people who are used to running things, don’t want other people representing them, speaking for them. Too much of an independent type business.”
And you’ll find this with past attempts at affiliate unions, affiliate organizations, things like SEMPO:
http://forums.searchenginewatch.com/showthread.php?t=3692&highlight=SEMPO