Interesting Cashback Consumer Advice
4 Comments April 20, 2007 / Posted in Affiliate MarketingFinance site This is Money often run a number of consumer advice articles and on a trawl round the web their latest one caught my eye: Make more money from the internet! The article is about cashback sites and features the bain of non-cashback sites Quidco.
Cashback sites often get mentioned amongst my own users and when you’re trying to promote merchants to finance running a free service it’s sometimes frustrating to see your carefully crafted informative posts followed by users telling others how to earn cashback and essentially divert revenue away from the site.
Anyway, enough of that – we have to work round it!
From a consumer point of view it’s an informative article – explaining how web users can happily earn a few quid from shopping online, buying insurance and signing up for services. However, there was one part of the article that merchants, especially those in the gaming sector should take serious note of:
“it is possible to open an account with Cyberslotz through Quidco and claim £20 of cash back. Cyberslotz requires that you place £5 into an account with them, but they will then give a £5 free bet. So you can withdraw your £5 stake, keep your £20 cash-back and have a £5 wager on Cyberslotz for free”
Perhaps it’s a loophole? Perhaps the merchant is happy with the arrangement? I don’t know whether other affiliates think about this, but if I was the merchant in question and paying out money for an affiliate referral, then offering a free bonus – only to find my new customer was just after £5 of free play, then I’d not be best pleased.
Cashback is a massive part of affiliate marketing. However, with consumers working out how to get the most of the deals on offer to be beneficial to themselves (and not necessarily for the merchant) it highlights why cashback is a fierce and difficult competitor in the affiliate arena.
You are going to see a lot more “incentive site get this commission†for the Networks that can support this kind of commission set up. Not all Merchants are happy with cash back sites, but you do have a huge portion of them that are very happy. As always it all comes down to what kind of model they have in place and what works for them.
But yes I do see more of the “this is what normal Affiliates get and this is what incentive Affiliates get†as commission deals. However as per all rules there will be some rouge Affiliates that pretend not to have Incentive Sites to get the better deal that can/will spoil commission for the people playing by the rules.
Clarke, I’m not too concerned about the affiliate commission aspect, the point I was trying to make is that as consumer’s start to wise up to how to make the most of the offers then that’s going to lead to problems for merchants.
I read on a forum that someone had got cashback with their Egg credit card, cashback with a rebate site AND used a discount code to buy stuff online for a fairly pricey purchase. Great for the consumer, but is it for the merchants?
If you run Cyberslotz and basically were handing out £25 free as is described above would you be happy (assuming that everyone who uses the cashback site is fully aware of this wonderful way to earn a free couple of quid)? Is this really the way things should be?
For me cashback sites are a problem for a lot of affiliates – ultimately will we all have to offer cashback just to generate sales or at least “compete”? Or will the likes of insurance companies and even gaming sites go “hold on, we can offer online users cashback incentives direct and save on advertising costs by not running affiliate programs”?
Also are merchants getting “too comfortable” with cashback affiliate revenue that they’re no longer bothered about other affiliates – in fact are networks getting “comfortable” too? Will affiliate marketing become something simply for PPC and Cashback affiliates with the affiliate model becoming outdated for content and community sites?
Jason
Jason,
I think your point re. merchants and networks getting too comfortable with cashback affiliates is a very valid and a wake up call to us all. Matt Wood has already said on his recent interview with Fraser that 40% of the network’s revenue now comes from cashback sites. That’s a huge amount!
However, I think it is inevitable, that as the collective buying powers of the cashback site increases, the network WILL bypass and discriminate against other affiliates (especially smaller or less established affiliates like myself). I guess the only way to combat that (and I maybe very naive here) is to be even more creative and innovative to bring in the sales.
Joe
We run FoxyBingo it offers users £5 for just registering with us.
What hacks us off is all the other sites Gala for example who claim £10 free but this is a matched bonus.
We are keen to work out ways of getting the message over that this is a no strings offer unlike many other sites but it sounds like we are gripping and mean.