Affiliate programs have a relatively low risk. As a provider, most companies will be late when it comes to paying affiliates. This means that the company gets the sale, earns the money and, in the end, pays the affiliates. For most of the history of the affiliate industry, networks have represented both affiliates and merchants in a single transaction and charge “performance fees” for doing so.
While this structure isn't nefarious or illegal, it doesn't leave room for proper checks and balances, so incentives are permanently misaligned. These misaligned incentives have also caused serious problems, such as fraud, brand tendering and cookie filling. Unfortunately, the golden days couldn't last forever. Due to a small category of risky players and bad apples, affiliate marketing gained an unpristine reputation due to fraud and misleading domain names.
In addition to scamming you, these fraudulent partners could significantly damage your brand with their actions. Fraud can result in a direct reduction in revenues and cause the loss of customers or alienate potential new ones, which can cause lasting damage to your brand and reputation. These unscrupulous marketers shouldn't be confused with affiliates who may not add incremental value. As vice president of marketing for a company that offers an affiliate marketplace, I believe that this type of control and oversight helps reduce fraudulent activities and therefore increases the attractiveness of the industry, especially since e-commerce retail is growing quarter after quarter due to the current Ongoing pandemic.
For these reasons, the entry bar was lower than, for example, that of a traditional online business or a physical store, and affiliate marketing began to attract people and companies looking to make money quickly. Affiliate marketing was conceived at a time when Amazon only sold books and AOL sent free trial CDs by mail. Mehmet Oz shared his personal story about how some ethically questionable affiliates and online marketers use his image to sell and promote acai berry and other products, all without his permission. Maintaining a successful affiliate program requires that you monitor your affiliates and be aware of the actions your partners take to promote your brand.
Similar to how you can avoid compensating affiliates who offer no value, preventing unethical affiliates from entering your program requires that you carefully evaluate each of your partners, have a transparent view of what they are doing to promote and represent your brand, and monitor their activities once they be accepted into your program. Today I want to discuss the advantages and disadvantages of affiliate marketing and then what I think you can do to eliminate some of that risk. What is nuanced is when a company assumes that all the affiliates in its program are driving the sales of new customers when, in reality, there are those who mainly benefit from the efforts of other affiliates or channels. But from promoting Amazon listings to taking advantage of Gen Z influencers, I think affiliate marketing is the common thread when it comes to reaching a global audience and increasing sales.
To counter these drawbacks, I've seen leaders in the affiliate marketing industry work hard to gain the trust of product owners through state-of-the-art fraud protection and secure payment processing. An affiliate network allows product owners to set specific commissions, attract affiliates with basic industry knowledge, and establish contacts with other product owners. .