A few years ago a client of mine received approval from the FDA to market a hair regrowth drug called Caproxen. Direct Response built his landing page and backend.
Based on the limited budget for the campaign, we decided to introduce his offer via affiliate networks. At that time, I had never worked with a network directly, instead we had developed internal affiliate programs. After a little research we decided to go live on Azoogle (now known as Epic Direct Network).
Within hours of going live, hundreds of affiliates started promoting Caproxen. I was astounded! This had to be a great sign. Atleast 1 of these affiliates would send us sales.
As every hour passed, we anxiously sweated the stats. Tons of clicks were coming in, but without a single sale. Then finally we hit 30 sales in an hour. Everyone started celebrating! Woohoo, we finally did it! From there on out, we started hitting consistent volume.
Bottle after bottle of Caproxen shipped out, and the sales continued to roll in. Ostensibly the Caproxen hair regrowth business was off the ground.
About 10 days after our initial sale, my client received a call from the bank. The bank was freezing his Visa/Mastercard merchant account due to an inordinate amount of fraudulant activity. Say what? We were advised by the bank that someone had passed through hundreds of stolen credit cards through his account.
The bank provided us with timestamps of every transaction that was suspect. Sure enough, the time stamps matched the exact dates that Azoogle had sent us sales.
Armed with clear and conspicuous proof of fraud, we contacted Azoogle. We expected to receive immediate assistance. Instead we were advised that we have “3 days from the time of sale to return it” and that “the publisher has already been paid on the account, therefore the latest we can charge back is 3 days.” Azoogle reverted back to these terms:
5. Cost Per Acquisition Programs.(a) For all “cost per acquisition” (“CPA”) Campaigns, it is the Advertiser’s responsibility to confirm that the information collected through acquisition corresponds to the information and/or data fields enumerated in the applicable IO. Advertiser must report any discrepancies, i.e., differences between the data requested in the IO and the data collected, within three (3) days of the data collection. “Duplicate acquisitions” shall be considered data field discrepancies for purposes of this section. Advertiser expressly waives all rights to dispute payment for acquisitions based upon any data field discrepancy not reported within this time frame.
Wooh, wait a second. Were these guys really telling us that we had no recourse whatsoever to the fraud that was sent to us? Apparently yes, as we lost a few hundred thousands dollars to their “affiliates” who sent us stolen credit card sales.
Fast forward 2 years. Affiliate marketing has proven to be a very lucrative source of traffic for my advertisers today. Many of them doing millions of dollars in revenue a month from top publishers.
In life it is always better to learn from the lessons of those who have failed before you, versus learning from your own failures. Here is a list of 5 caveats to consider when you advertise via an affiliate network:
1. Do Not Work With Big Networks
Big networks like ClickBooth, CX Digital, Epic Direct, Copeac, and NeverBlue have a ton of overhead. Therefore they need to charge advertisers a higher CPA to cover their costs.
Additionally, these networks have thousands and thousands of active affiliates. There’s absolutely no way to monitor these affiliates, therefore the chance of affiliate fraud (as our Caproxen advertiser experienced) is enormous.
2. Set Your Offer To Private and Only Allow A Few High Volume Publishers Run Your Offer
When you go live with a network, have them set your offer to private so their run-of-the-mill affiliates can’t see it. Then get in touch with an affiliate manager on the network and have them hand pick 1 or 2 trusted publishers that can hit high volumes.
DO NOT, REPEAT, DO NOT EVER ALLOW A NETWORK TO BROKER YOUR OFFER.
In affiliate marketing, there’s about 150 affiliates out of the hundreds of thousands that make networks all of their money. Without these affiliates, networks wouldn’t exist. Have the network hand pick those affiliates to run your offer. They will bring in as many sales as you need. If you want introductions to those publishers directly, let me know and I’ll introduce you.
3. Do Not Work With Unknown Networks
Unless you’ve been personally referred from a trusted party or have deep insight on a network, do not work with an unknown network. Chances are these it’s a scam and you’ll receive a ton of fraudulant traffic.
4. Remember Networks Need You, You Don’t Need Them
Always keep in mind that it is the advertiser that brings the dollars to the table. If you have a really good offer, you have the power to negotiate the CPA with the networks. Most CPA Networks will try the car salesman tactic on you by asking for a high dollar amount. Prepare to walk away and let them know you have better rates out there, even if you don’t. Identify their top competitor and get them in a bidding war. Then sit back and watch the CPA price drop, haha.
5. Include A Clause That Will Allow You To Chargeback Fraud For Up To 30 Days
If you’re working with a legitimate network that takes pride in sending high quality traffic, demand a clause in the IO that allows you to chargeback leads for up to 30 days. In there, for the sake of fairness, give them the rights to view your CRM and contact the bank to verify any fraudulant lead claims.
If a network won’t agree to this clause then don’t give them your business, period. Remember, they need you, you don’t need them.