Past and Current Issues Concerning Affiliate Marketing

Since the very beginnings of affiliate marketing, there has been little control over affiliate activity. Unscrupulous affiliates have used false advertising, spam, adware, forced clicks (to get tracking cookies set on users' computers), and other methods to drive traffic to their sponsors. Although many affiliate programs have terms of service that contain rules against spam, this marketing method has historically proven to attract abuse from spammers.

Some of the past and current issues that concern affiliate marketing are discussed in more detail below.

Adware

Adware often uses the same methods and technologies as spyware, and rarely provides any useful content to the user, who is typically unaware that such software is installed on their computer. If so installed, adware can act by overwriting tracking cookies, thus resulting in a decline of commissions. Affiliate networks have been forced by affiliates and merchants to take a stand against adware, and ban certain adware publishers from their network. This resulted in:

• LinkShare's Anti-Predatory Advertising Addendum
• Code of Conduct by Commission Junction/beFree and Performics
• ShareASale's complete ban of software applications as a medium for affiliates to promote advertiser offers

Search Engine Spam

As search engines have become more prominent, some affiliate marketers have shifted from sending e-mail spam to creating automatically-generated webpages that contain product data feeds provided by merchants. Their aim is spamdexing - that is to manipulate the prominence or relevancy of resources indexed by a search engine. Each page can be targeted to a different niche market through the use of specific keywords, with the result being a skewed form of search engine optimisation.

Websites consisting mostly of affiliate links are regarded negatively as they do not offer quality content. Because of this, algorithms have been created by the search engines to specifically target spamdexing; this initiative has had great success, and a large amount of mostly computer-generated duplicate content from the engines' indexes have been removed. To avoid being categorised as a spam site, affiliate marketer webmasters must create quality content on their websites that distinguishes their work from the work of spammers or banner farms, which only contain links leading to merchant sites.

E-mail Spam

When affiliate marketing began, many Internet users held negative opinions due to the tendency of affiliates to use spam to promote the programs in which they were enrolled. As affiliate marketing matured, many affiliate merchants have refined their terms and conditions to prohibit affiliates from sending e-mail spam.

Trademark Bidding

Affiliates were among the earliest adopters of pay per click (PPC) advertising when the first pay per click search engines such as Goto.com (which became Overture.com in 2003after being acquired by Yahoo!) emerged at the end of the 90s. Later in 2000, Google launched its pay per click service, Google AdWords, which is responsible for the widespread use and acceptance of PPC as an advertising channel.

As more and more merchants engaged in PPC advertising (either directly or via a search marketing agency), they began to realise that this space was already well-occupied by their affiliates. This situation created advertising channel debates and conflicts between affiliates and advertisers; however, the biggest issue concerned affiliates bidding on advertisers' brands, names and trademarks. Some advertisers began to adjust their affiliate program terms to prohibit their affiliates from bidding on those type of keywords. However, other advertisers embraced this behaviour, allowing (or even encouraging) affiliates to bid on any term, including the advertiser's trademarks.

Cookie Stuffing

Cookie stuffing involves placing an affiliate tracking cookie on a website visitor's computer without their knowledge, which will then generate revenue for the person doing the cookie stuffing. This not only generates fraudulent affiliate sales, but also has the potential to overwrite other affiliates' cookies, essentially stealing their legitimately earned commissions.

Training and Certification

Currently, affiliate marketing lacks industry standards for training and certification. Affiliate marketing is not commonly taught in universities, and only a few lecturers work with Internet marketers to introduce the subject to students majoring in marketing. Although there are some training courses that result in certification, the acceptance of such certifications is mostly due to the reputation of the company or individual issuing the certification.

Outsourced Program Management companies typically combine informal and formal training, providing much of their training through group collaboration and brainstorming. Other training resources used include weblogs, online forums, podcasts, video seminars, and specialty websites.

Code of Conduct

A Code of Conduct was released by the affiliate networks Commission Junction/beFree and Performics on December 10, 2002. It was created to guide practices and adherence to ethical standards for online advertising.

Threat to Traditional Affiliate Networks

Cost per action (CPA) networks may be seen as a threat to 'classic' affiliate marketing networks. Traditional affiliate marketing is resource-intensive and requires continual maintenance. Most of the maintenance includes monitoring, managing, and supporting affiliates, and the ultimate goal is directed toward long-term and mutual beneficial partnerships between affiliates and advertisers.

In comparison, cost per action (CPA) networks eliminate the need for the advertiser to build and maintain relationships to affiliates, as that task is performed for the advertiser by the CPA network. The advertiser makes an offer (almost always CPA-based) and the CPA networks handle the remainder of the process by mobilising their affiliates to promote that offer. Cost per sale and revenue sharing are the primary compensation models for classic affiliate marketing, and are rarely found in cost per action networks.