Affiliate Program Problems and Issues

Past and Current Affiliate Marketing Issues
In the early days of affiliate marketing, there was very little control over what affiliates were doing, which was abused by a large number of affiliates. Affiliates used false advertisements, forced clicks to get tracking cookies set on users' computers, and adware, which displays ads on computers. Many affiliate programs were poorly managed.

False advertising
False advertising (or more mildly, deceptive advertising) is an act of deliberately misleading a potential client about a product, service or a company in general by reporting false or misrepresenting information or data in advertising or other promotional materials. False advertising is a type of fraud, and may also be considered a hoax.

False advertising is often a crime. In some countries advertising practices (including "truth in advertising") are regulated by a government authority (FTC in the USA), in others the advertising industry is self-regulated and professional associations combat false advertising.

To decrease their legal liability for deceptive marketing, many companies cover their tracks using small print. In radio, the equivalent is fast talk, which likewise is nearly impossible to hear or understand. In either case, this often allows false advertisers to continue their tactics without prosecution.

Adware
Adware is software integrated into or bundled with a program. It is usually seen by the programmer as a way to recover programming development costs, and in some cases it may allow the program to be provided to the user free of charge or at a reduced price. The advertising income may allow or motivate the programmer to continue to write, maintain and upgrade the software product.

Some adware is also shareware, and so the word may be used as term of distinction to differentiate between types of shareware software. What differentiates adware from other shareware is that it is primarily advertising-supported. Users may also be given the option to pay for a "registered" or "licensed" copy to do away with the advertisements.

Email Spam
In its early days many internet users held negative opinions of affiliate marketing due to the tendency of affiliates to use spam to promote the programs in which they were enrolled. As affiliate marketing has matured many affiliate merchants have refined their terms and conditions to prohibit affiliates from spamming. Search Engine Spam / Spamdexing
There used to be much debate around the affiliate practice of spamdexing and many affiliates have converted from sending email spam to creating large volumes of autogenerated webpages each devoted to different niche keywords as a way of SEOing their sites with the search engines. This is sometimes referred to as spamming the search engine results. Spam is the biggest threat to organic search engines whose goal is to provide quality search results for keywords or phrases entered by their users. Google's algorithm update dubbed "BigDaddy" in February 2006 which was the final stage of Google's major update dubbed "Jagger" which started mid-summer 2005 specifically targeted this kind of spam with great success and enabled Google to remove a large amount of mostly computer generated duplicate content from its index.

Sites made up mostly of affiliate links are usually badly regarded as they do not offer quality content. In 2005 there were active changes made by Google whereby certain websites were labeled as "thin affiliates" and were either removed from the index, or taken from the first 2 pages of the results and moved deeper within the index. In order to avoid this categorization, webmasters who are affiliate marketers must create real value within their websites that distinguishes their work from the work of spammers or banner farms with nothing but links leading to the merchant sites.

Affiliate links work best in the context of the information contained within the website. For instance, if a website is about "How to publish a website", within the content an affiliate link leading to a merchant's ISP site would be appropriate. If a website is about Sports, then an affiliate link leading to a sporting goods site might work well within the content of the articles and information about sports. The idea is to publish quality information within the site, and to link "in context" to related merchant's sites.

Adware
Adware is still an issue today, but affiliate marketers have taken steps to fight it. AdWare is not the same as SpyWare although both often use the same methods and technologies. Merchants usually had no clue what adware was, what it did and how it was damaging their brand. Affiliate marketers became aware of the issue much more quickly, especially because they noticed that adware often overwrites their tracking cookie and results in a decline of commissions. Affiliates who do not use adware became enraged by adware, which they felt was stealing hard earned commission from them. Adware usually has no valuable purpose or provides any useful content to the often unaware user that has the adware running on his computer. Affiliates discussed the issues in various affiliate forums and started to get organized. It became obvious that the best way to cut off adware was by discouraging merchants from advertising via adware. Merchants that did not care or even supported adware were made public by affiliates, which damaged the merchants' reputations and also hurt the merchants' general affiliate marketing efforts. Many affiliates simply "canned" the merchant or switched to a competitor's affiliate program. Eventually, affiliate networks were also forced by merchants and affiliates to take a stand and ban adware publishers from their network.

Trademark Bidding / PPC
Affiliates were among the earliest adopters of Pay-per-click advertising when the first PPC search engines like goto.com (which became later Overture.com, acquired by Yahoo! in 2003) emerged during the end of the nineteen-nineties. Later in 2000 did Google launch their PPC service AdWords which is responsible for the wide spread use and acceptance of PPC as an advertising channel. More and more merchants engaged in PPC advertising, either directly or via a search marketing agency and realized that this space was already well occupied by their affiliates. Although this fact alone did create channel conflicts and hot debate between advertisers and affiliates, was the biggest issue the bidding on advertisers names, brands and trademarks by some affiliates. A larger number of advertisers started to adjust their affiliate program terms to prohibit their affiliates from bidding on those type of keywords. Some advertisers however did and still do embrace this behavior of their affiliates and allow them, even encourage them, to bid an any term they like, including the advertisers trademarks.

Lack of Self Regulation
Affiliate Marketing is driven by entrepreneurs who are working at the forefront of internet marketing. Affiliates are the first to take advantage of new emerging trends and technologies where established advertisers do not dare to be active. Affiliates take risks and "trial and error" is probably the best way to describe how affiliate marketers are operating. This is also the reason why most affiliates fail and give up before they "make it" and become "super affiliates" who generate $10,000 and more in commission (not sales) per month. This "frontier" life and the attitude that can be found in such type of communities is probably the main reason, why the affiliate marketing industry is not able to this day to self-regulate itself beyond individual contracts between advertiser and affiliate. The 10+ years history since the beginning of affiliate marketing is full of failed attempts to create an industry organization or association of some kind that could be the initiator of regulations, standards and guidelines for the industry. Some of the failed examples are the Affiliate Union, iAfma, USAMC, Affiliate Marketing Advertising Board and Affiliate Marketing Trade Association.

The only places where the different people from the industry, affiliates/publishers, merchants/advertisers, networks and 3rd party vendors and service providers like outsources program managers come together at one location are either online forums and industry trade shows. The forums are free and even small affiliates can have a big voice at places like that, which is supported by the anonymity that is provided by those platforms. Trade shows are not anonymous, but a large number, in fact the greater number (quantitative) of affiliates is not able to attend those events for financial reasons. Only performing affiliates can afford the often hefty price tags for the event passes or get it sponsored by advertisers they promote.

Because of the anonymity of forums, the only place where you are to get the majority (quantitative) of people in the industry together is it almost impossible to create any form of legally binding rule or regulation that must be followed by everybody in the industry. Forums had only very few successes in their role as representatives of the majority in the affiliate marketing industry. The last example of such a success was the halt of the "CJ LMI" ("Commission Junction Link Management Initiative") in June/July 2006, when a single network tried to impose on their publishers/affiliates the use of JavaScript tracking code as a replacement for common HTML Links.

CPA Networks "Threat"
Affiliate marketer usually avoid this topic as much as possible, but when it is being discussed, then are the debates explosive and heated to say the least. The discussion is about CPA Networks and their impact on "classic" Affiliate Marketing. Traditional Affiliate Marketing is resources intensive and requires a lot of maintenance. Most of this includes the management, monitoring and support of affiliates. Affiliate Marketing is supposed to be about long-term and mutual beneficial partnerships between advertisers and affiliates. CPA Networks on the other hand eliminate the need for the advertiser to build and maintain relationships to affiliates, because that task is performed by the CPA Network for the advertiser. The Advertiser simply puts an offer out, which is in almost every case a CPA based offer, and the CPA Networks take care of the rest by mobilizing their affiliates to promote that offer. CPS or revenue share offers are rarely be found at CPA Networks, which is the main compensation model of classic Affiliate Marketing.

The Name Affiliate Marketing
Voices in the industry are getting louder that recommend a renaming of Affiliate Marketing. The problem with the word affiliate marketing is that it is often confused with network-marketing or multi-level marketing what it is absolutely not. "Performance Marketing" is one of the alternative names that is used the most, but other recommendations were made as well, but who is to decide about the change of a name of a whole industry. Something like that was attempted years ago for the Search Engine Optimization Industry, an attempt that obviously failed since it is still called SEO today.