Coupon sites like CouponCabin and RetailMeNot have become too numerous to count. For consumers, this is a great thing! Who doesn’t like saving money? Coupons are so popular that when searching a brand name in Google, the autocomplete often suggests “coupon” as the next search term. However, for eCommerce managers who have an affiliate program, coupon sites could be stealing commissions they don’t deserve.
If you’re at all familiar with coupon sites, you may have noticed a pattern with how many of them choose to display their coupons. Coupon site often require visitors to click on a certain area of the website to reveal the coupon code or copy the code to their clipboard. We will term this type of site as a “click-to-reveal” coupon site. In fact, the internet’s largest coupon site, RetailMeNot.com, is a perfect example of this click-to-reveal business model.
As an eCommerce managers, why should this worry you? The answer is in how these click-to-reveal coupon sites generate revenue. Many of these coupon sites are affiliates for numerous stores, and when their users click to reveal a coupon code, the eCommerce store that corresponds with said coupon opens in a new browser window or tab. When the loading of the online store happens, it’s through an affiliate link, which implants an affiliate cookie on the user’s computer. As a result, the coupon site will be awarded with a commission when the coupon user completes his or her purchase.
How Affiliates Should Add Value
Your affiliates should always add value to your online store. In this case, “adding value” means driving online shoppers to purchase from your store through an affiliates’ own marketing efforts. These efforts include affiliates who run PPC campaigns, promote your store through their email lists, or help users comparison shop more easily (i.e. Kayak.com or ShopStyle.com). Instead, click-to-reveal coupon sites can often inject themselves later in the sales cycle as an afterthought of customers who were already prepared to buy.
Let’s demonstrate this with a hypothetical persona named Beth. Beth is shopping on NastyGal.com and has decided to purchase a dress. She’s checking out and notices an input field call “Promo Code,” which is Nasty Gal’s equivalent to coupons. Beth realizes she could be saving money on her purchase if she has a promo code, so she decides to use Google to search for a promo code.
Funny how after typing “nasty gal” in the search box, Google’s next suggested term is “nasty gal promo code.” Apparently Beth isn’t the first person to do this. The term “nasty gal promo code” has been searched for so often that it’s the first suggested search after the brand name.
She clicks on the first search result for promo code, which takes her to RetailMeNot.com. She then clicks to copy a coupon, and upon doing so, another browser window opens that loads NastyGal.com. RetailMeNot has just inserted an affiliate cookie onto Beth’s computer so that when she has completed her purchase, they will be awarded a commission for it even if they didn’t lead Beth to NastyGal.com or further convince her to make a purchase. She was already going to make a purchase. There was no added value that RetailMeNot Provided. They simply injected themselves into the conversion funnel and will get a commission that they don’t necessarily deserve. NastyGal.com is now losing revenue by having to pay an affiliate comission to RetailMeNot and having to honor the coupon they provided Beth.
What’s more alarming is that this is just a single example. This happens a lot more frequently than you might think. Blue Acorn recently took on managing a client’s affiliate program and immediately discovered 23 affiliates that were click-to-reveal coupon sites. These sites, blurred out below, were already set to collectively bill our client for commissions on $20,000 worth of sales that month, and the month wasn’t over yet! We deactivated them instead.
What You Can Do as an eCommerce Manager
As an eCommerce Manager, you can take steps to prevent paying out commissions to affiliates who do not deserve them. It starts with being proactive and creating an affiliate terms of service that prohibit this behavior. Secondly, any existing affiliates that are engaging in this sort of behavior need to be notified and instructed to stop. Any affiliates that do not comply will need to be deactivated. As a general rule of thumb, you should always check out the websites of all affiliates who apply to your affiliate program before approving them. Do not simply approve all requests to join your affiliate program.
What to Keep in Mind
It all comes down to properly managing your affiliates. Affiliate marketing can be a wonderful way to increase your store’s revenue many times over. However, it does take proper management to create a successful affiliate program that benefits both your store and your affiliates. For more information on setting up an optimal affiliate program, please see my article on Building a More Competitive Affiliate Program.
If you’re looking for someone to help you manage affiliates, check out Blue Acorn’s Affiliate Marketing services, or contact us using the button on the right.