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 Adware - how it hurts honest affiliates and merchants
There has been a discussion about the use of adware by affiliates on the A4U Australian affiliate forum recently after some affiliates discover the widespread use of zango/hotbar targetting Australian merchants. Several merchants have expressed concern about the practice and confusion about how it works and how it affects them. Here are some scenarios to illustrate how we have seen it used on Australian merchants sites.
- Direct targetting of a single merchant with their own site
The affiliate targets the domain name or shopping cart of the merchant causing a new window to open up over the top of the existing window when the customer is at the merchant's website.
Effect on the customer: none
If the customer came via a genuine affiliate referral
Effect on the genuine affiliate: their commission is claimed by the rogue affiliate
Effect on the merchant: no immediate effect, however genuine affiliates are likely to drop the merchant that doesn't seem to convert well or if they see that the merchant's program allows adware.
If the customer came direct so no commission is due
Effect on the merchant: They will pay commission when none was due.
- Targetting of a merchant with competitor's websites
Effect on the customer: possible irritation at the intruding advertisements, possible diversion of interest and purchase to the new site
Effect on the original affiliate: possible diversion of interest and purchase to the new site resulting in lost commission
Effect on the original merchant: possible diversion of interest and purchase to the new site resulting in lost sale, plus long term loss of genuine affiliates when sales don't convert
Effect on the intruding merchant: possible additional sales, possible negative reaction of consumer, possible ill-feeling from affiliates and merchants whose sites are being targetted. Additional traffic calls to their site can result in extra hosting fees and skewing of statistical data.
- Either of the above plus cookie stuffing
Some affiliates are not content with simply opening one merchant over another. Although to the user, this may appear all that happens, log files will reveal additional merchant's sites called via affiliate links without their pages even being seen by the user. During this process and affiliate cookie is laid for each merchant, usually including the targetted merchant and the displayed merchant. Sometimes the displayed merchant will be of little relevance to the consumer which can lead to the incorrect assumption that adware is relatively harmless.
Effect on the customer: possible irritation at the intruding advertisements, delays on the computer while it processes a string of requests.
Effect on genuine affiliates: Existing affiliate cookie will be overwritten be the adware affiliate. This is a particular problem with merchants where there is a delay between the initial click-through and the final purchase. The adware affiliate will claim the commission from the promotional work put in by the genuine affiliate for new and repeat sales.
Effect on original merchants: Traffic can be diverted, affiliate commissions incorrectly assigned or claimed as in the examples above. In addition to this, their site can be all but unusable when multiple windows open over their site.
Effect on cookie-stuffed merchants: Additional traffic costs, skewed statistics, payment of commission to adware affiliates if customer later goes directly to their site, long term loss of genuine affiliates
Effect on the intruding merchant: possible additional sales, possible negative reaction of consumer, possible ill-feeling from affiliates and merchants whose sites are being targetted. Additional traffic calls to their site can result in extra hosting fees and skewing of statistical data.
Effect on the industry:
Affiliate marketing offers a superb business model for pay-for-performance advertising when all parties act in an ethical manner. The intrusion of the use of adware into this model undermines this model. As a result some merchants and publishers may abandon affiliate marketing and look for new business models.
Other merchants and affiliates who wish to maintain the affiliate marketing model will become much more careful about who they deal with. Merchants will be more cautious about which affiliates they allow to join their program which will make entry to newcomers more difficult. Publishers will also become much more selective about which merchants they promote and which affiliate networks they use. The increased time needed to monitor activity will mean that both have fewer business partners meaning that many newcomers and others will miss out.
Future of the industry:
It is ironic that the action against the adware companies has focused on the effect on the computer users who inadvertently installs their software, yet the way that their software is used by affiliates and the effect that has on other online businesses has largely ignored.
However, a class action in California is finally bringing this into the legal arena. We will all watch with interest.
The lawsuits, filed on behalf of affiliates and merchants, allege that defendants ValueClick, Inc., Commission Junction, Inc. and Be Free (collectively, “ValueClick”) have engaged in unfair business practices resulting in harm to affiliates and merchants on their affiliate networks. According to the complaints, ValueClick has failed to take reasonable steps to address malicious adware and adware users on its networks.
Posted by admin at July 6, 2007 12:19 AM
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It could be argued that other practices like brand-bidding, fake coupon sites, cookie-stuffing, etc which require no software downloads are an even greater risk to merchants and publishers.
Posted by: Gayle at June 29, 2008 12:34 AM
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