Merchant Terms: Protecting or Hurting Affiliate Programs? – By Deborah Carney

by Colleen on May 9, 2011

Affiliate program terms and conditions (or lack thereof) are often misunderstood. Some merchants set up in-house affiliate programs on networks without giving thought to how affiliates might promote their products.

Suddenly an affiliate is successfully promoting a merchant via a pay-per-click campaign that includes the merchant’s brand name. The merchant is shocked, quickly turns off that affiliate and then reverses commissions with the attitude that those sales would have occurred anyway from the natural search results.

But wait, the merchant didn’t specify in their terms that affiliates aren’t allowed to bid on their brand name. They quickly add that in. Problem solved? Maybe.

At the same time, the merchant is noticing that affiliates are ranking higher than the merchant themselves, in the natural search results. The merchant changes their terms to not allow affiliates to have the company’s brand name in their meta tags, titles or file names.

These are two examples of merchants actually hurting themselves.

They need to protect their brand name, but in many instances the merchants do not have an in-house PPC campaign and are not bidding on their own brand. Their competitors could very well be.

In the case of the natural search results, this is what affiliates do. They create pages to get indexed for brands. If an affiliate is ranking higher in natural results for a brand name, then the affiliate is doing their job, and the merchant isn’t doing a good job of SEO on their own.

Merchant terms need to be constructed in a way that is fair to both the affiliate and the merchant. If a merchant has internal staff that overlaps with their affiliates, the terms can be a little more strict.

But, in the case of SEO, even the affiliates that are very good at it can’t control everything the search engines include in natural results. Having terms that exclude paying affiliates that rank high in search results for company names or products will result in fewer affiliates working an affiliate program. Top affiliates won’t give these programs a second look.

Terms and conditions that acknowledge the various types of affiliates that are out there, like coupon, loyalty, and incentive sites are very helpful. Merchants need to think about how to harness the advantages of those types of sites, and encourage affiliates to promote the merchant by creating terms that allow for ethical affiliates to do so.

Balance is the key, along with understanding what you want to gain from your affiliate program.

Deborah Carney is an Outsourced Program Manager, Merchant Consultant, and Admin of the Affiliate Summit Networking Forum

Download the entire FeedFront issue 14 here – http://www.scribd.com/doc/52425616/FeedFront-Magazine-Issue-14

FeedFront issue 14 articles can be found here as well: http://feedfront.com/archives/article00date/2011/04

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