Thanks for the responses. I realise that we have to work around these sites, like I said they’re loved by networks and some merchants. I fully understand why, and as business models I’m sure those involved have worked hard etc.

But, from my perspective, regardless, they will always be a big pain in the butt – perhaps even more so when you see via your own community sales heading off elsewhere.

Other affiliates, who may not be as close to their userbase as we are, may not be aware of this – and so hopefully can use their ingenuity to work around these things.

I hope you’re all right in what you say, but I do have a feeling that they do squeeze the market place plus they do make life a little more difficult for established and new affiliates.

Jason

I do agree with some of your points and it must be frustrating for an affiliate who spends time and money generating unique content to play a part in a sale only to see the consumer research on your site and then at the last minute switch to a loyalty site to earn their cashback.

However from a network point of view we are always looking to add incremental volume to our clients. If we are simply bastardising traffic that would have gone to them anyway or taking from one affiliate to give to another then the relationship we have with the merchant is not going to last long.

As merchants become more and more savvy about online and the affiliate channel in particular then we are under more and more scrutiny to deliver this incremental volume and by making the most of the cashback sites USPs then we can do this. For merchants offering similar products, the difference between winning a customer and losing a customer could be the offering of 5% cashback on their purchase.

Let’s not forget that the cashback sites do invest a great deal of time, effort and money in marketing themselves and that in turn showcases our merchants brands. They have large and loyal member bases and for smaller merchants this can provide a means of showcasing them to a large number of potential customers.

All in all, I understand the concerns of other affiliates but feel that loyalty sites and 100% cashback sites in particular do have an important part to play inour market going forward.

Matt

Personally, I think there is room for all types of affiliates; trends is what makes this market stay alive. A few years ago no one was thinking of search arbitrage. When it came on, everyone was saying it would be the end of content sites. When price comparison came in, everyone thought people would no longer shop around but go to a comparison site. With incentive sites on the up now, there is a fear they will push over other affiliates; I doubt this will happen either.

When I am the customer, I always prefer to see my discount in my order, not wait for it to be given back to me in cash or prizes to choose from; I want to save money right the moment I’m about to spend them. I’m sure there’s more people likeminded.

You raise some very valid points and I’d like to think we educate advertisers on both the pros and cons of cashback/loyalty affiliates.

I’ve always been an advocate of affiliate marketing as a thoroughly flexible medium; therefore advertisers shouldn’t get too hung up on the idea of a fixed commission rate- it’s whatever activity (and this can be multiple types of activity) costs in for them. So it is entirely feasible to offer different commission rates based on who the affiliate is.

Some advertisers (increasingly so) are integrating their ‘new customer acquisition’ target into their affiliate campaign. This has an obvious consequence for incentivisation of traffic.

Screwfix has done this for the past few years and as a consequence hasn’t worked with any affiliates who incentivise at all. They are an excellent merchant with a massive, active base of affiliates so don’t suffer for this loss of income.

Also cashback can be abused by users on lead based programmes. We’ll always advise advertisers of the danger of this. That’s not to say they shouldn’t work with them, but they could in this instance adjust commissions accordingly.

Therefore where is the value in cashback?

Where cashback sites come into their own in my opinion is in the pushing of bespoke offers and deals. Securing space in newsletters and blog entries can result in that particular affiliate returning many multiples of their existing sales for a given merchant. The key is to find out how best to work with incentivised traffic to ensure there’s a ‘value add’ for the client. We recently launched a no brand mobile phone reseller who had a compelling launch deal but little online publicity to support it. By brokering one specific partnership this reseller pulled in very significant phone contract numbers, far more than could have been expected.

The client had spoken to the affiliate, brokered the deal and secured a premium on site slot. There is obvious value in this type of relationship.

And lets not forget cashback/loyalty sites have built brands in their own rights. Increasingly they find themselves in a position to leverage this power to develop partnership deals.

Finally, the users of cashback sites tend to be highly engaged and I believe motivated by the trigger of saving the odd pound here and there. When presented with similar deals a well optimised campaign can make the difference between your merchant receiving the sale or not.

Advertisers who tap into this mentality whilst keeping a close eye on the incremental value of the deal stand to gain the most.