Voucher Codes May Not Be Destroying Affiliate Marketing But….

Feb 6, 2009 by Jason Dale    7 Comments    Posted under: Affiliate Marketing

Following QualityNonsense’s Why Discount Vouchers Will Destroy Affiliate Marketing Kieron gave a good rebuttal titled Why Discount Vouchers Won’t Destroy Affiliate Marketing. Both bloggers have valid points and both articles are well worth a read. However, I do feel Kieron’s argument for voucher codes scores a bit of an own goal by the revelation from a merchant that commented..

I liked the bit in the blog regarding voucher sites and I have to say that I like working with them. They probably contribute around 80% of our affiliate revenue.

So 80% of revenue generated by affiliates for Merchant X is down to voucher code sites?

Is that really a good thing for affiliate marketing?

Firstly it means everyone else (i.e. affiliates not promoting voucher codes) are in the other 20% and that sends a clear indicator to new would be affiliates (and of course older heads) which peg their hat should be hung on when considering promotions or getting started in AM.

Secondly it makes me question the merchant! 80% of your affiliate sales are through voucher sites… why? Perhaps the site doesn’t convert without a voucher? Perhaps it’s now entrenched in a customers psyche to shop with you with a voucher that it’s inevitable they’ll go looking for one first? Perhaps you don’t do enough to encourage non-voucher code sites to work with you? Perhaps it might just be easier to discount your prices?

Thirdly if you’re an established affiliate with Merchant X and you discover that sales of items you’re spending time promoting are more inclined to go to voucher code sites… what do you do? Well you could add the codes yourself (although not every site gets the codes) or perhaps you could promote a competitor instead?

But essentially this “we do 80% boast” is tantamount to saying “the affiliates who don’t have codes are wasting their time promoting us”… that doesn’t sound good does it?

I don’t think voucher codes are destroying affiliate marketing BUT nor do I believe they’re not having a serious impact on the industry. Whilst there are positives and negatives to their usage (and no one can deny their consumer popularity), it’s hard not to think that voucher codes have given “old school” AM a right good kicking between the legs whilst 100% cashback has stolen in behind and smacked it over the head with a baseball bat.

Getting new affiliates, new innovations and new blood into the industry is vital – but if the only route to earning commissions is voucher codes (or cashback) that surely discourages development of anything other than code sites and the promotion of vouchers.

Is that really a good thing for affiliate marketing?

7 Comments + Add Comment

  • Hold on there Mr. Duck. Who said anything about an 80% boast?? Put it this way, suppose merchant X has an affiliate programme and lets say that before he introduces discount codes his affiliates generate £20k worth of incremental sales a month. He then decides to offer discount codes and launches some to affiliates. Lots of new discount code sites now promote him (they didn’t before) and his sales shoot up to £100k a month. How is that bad?? The fact that he is generating 80% of sales via discount code affiliates is a GOOD thing. Not bad.

  • Look at the quote from your blog post “I have to say that I like working with them. They probably contribute around 80% of our affiliate revenue”!

    What you’re saying is different to the above… you’re saying “by introducing codes we started to generate more sales”.

    If you take the first quote as being exactly what it says – i.e. 80% of sales come from code sites… that means only 20% come from elsewhere, therefore that says quite clearly the points mentioned above.

  • If you also take your example though, this merchant couldn’t do any sales before until VCs were introduced into the AM mix… that’s surely got to be worrying?

    It either means the merchant’s offering wasn’t good enough or attractive enough for consumers without codes (or was being out-competed because of competitor deals), or that non-VC affiliates weren’t attracted to the merchant (why? did they do enough to work with non-VC affiliates? are there even the affiliates around to work with them and improve sales?).

    VCs affiliates are here and a huge AM proposition and fair enough your example is good from a point of view… but analyse it flipped over and ask why this merchant could only do their sales this way? How is knowing a merchant can only do serious affiliate business through a VC encouraging to affiliate innovation and invention of anything other than more VC sites?

  • It simply means that the voucher code sector is so big that it added 80k more sales to the merchants total sales when they introduced voucher codes. So they were doing OK before (£20k a month) and now they’re doing even better. Simple!!! :)

    Off to pub now, catch u later!

  • A big VC sector means that other sectors therefore must not be able to generate sales volumes for at least this merchant (and I’d guess the story is applicable across other merchants) therefore it’s important to ask why?

    Has consumerism got to a stage where the bulk of buyers must have a code to purchase? Is it the economic climate? Is the merchant just crap unless they discount stuff? Is it that actually the rest of AM (non-VC sites) aren’t actually that good a channel? Or are there simply not the affiliates in place to inspire more sales via a non-VC route?

    Each of those questions has got to be a concern – unless you’re a VC affiliate – and if you’re not, it’s surely a case of all aboard the skylark?

    Enjoy t’pub!

  • It’s begginning to seem that the voucher code & discount code sites are the Captain Pugwash’s of the industry, whilst the rest are Master Bate(r)’s. It just seems that rather than giving discounts on a site which was the normal procedure, a code has to be given out instead for anything & everything. Together with supposedly approximately 18-25% of content & ppc cookies being overwritten by a few pirating voucher code sites & that same 18-25% being overwritten between voucher code sites. It seems cookie is king & not content, people can harp on about quality content all they want, but potential new blood looking in & even the crew of the old hand may feel less inclined to be innovative or build decent sites. Like how BBg’s were,It gives another good reason for networks not to provide further tools. VC sites have as much right to be there than anybody else, however it’s the last cookie wins scenario which probably needs an overhaul. The problem is networks won’t agree on standard for queueing system of cookies or incremental rewarding of a customers journey. Networks still earn their crust (they don’t want to upset vc sites) thus non vc sites are stuck with it, like it or lump it. Personally I would suggest that affiliates look more towards old school sponsored listings (built around content if you insist) , until networks do something to address.

  • I think it is obvious that appearing on a high profile voucher code site will drive traffic to you! But then appearing on any appropriate high profile site will drive traffic to you! So be careful before drawing any conclusions about value! So I think merchants need to think about whether giving up x% off all their sales is the best form of marketing. Some might think that traditional advertising is more cost effective? I don’t know.

    From my own point of view I think amateur “content” site owners such as myself need to consider the demographics they are targeting. Through my day job I have access to research that suggests users of voucher code sites fall into very specific Acorn demographic groups (http://www.caci.co.uk/acorn/). So by targeting different groups, the less net savvy, those looking for advice, the non-penny pinchers etc, there is still plenty of space to operate in.

    I slanted my site towards “beginners” who might be more inclined to just click through to Amazon and buy. Clearly the Amazon brand provides a little more than just “best price” and attracts people like my parents who have no idea what a voucher code is! What it does offer is a trusted name, convenience and choice. Plus great cross sell for us associates!

    I noticed early on that Amazon converted much better and thanks to the ease of using their content I will probably just gear my site towards these people. Perhaps a site like mine (3000-4000 UVs) won’t be much of a loss to the other merchants but if more sites start thinking like me and chase the mainstream traffic perhaps they’ll start to notice.

About One Little Duck

One Little Duck is the affiliate blog of Jason Dale - Managing Director of Loquax. I've been involved in affiliate marketing - now performance marketing - for over 10 years and use the blog to give my views from a hard working siteowner perspective.

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