A Guide to Affiliate Marketing in Australia

Every business involves some risks that need to be managed by the person running the business. Affiliate marketing is no different and needs the affiliate marketer to manage the risks involved. To be able to manage risks, it is important to forecast the risks well. Let us explore some of the risks that are involved in affiliate marketing, and how you could deal with them.

1. Search Engine shocker: Most of your visitors come from search engines. People search for the information on the popular search engines like Google, which then pops up a list of searched relevant links. The users then click on one of the links to visit the particular website. As a website owner, you will always hope that the user clicks on your link. However, you firstly need to ensure that your link gets displayed in the searched list. For this, you will need to do continuous SEO (Search Engine Optimisation) for your website. The risk is that you have little control over the success of your SEO. Your rank may fall down abruptly or you may even find your link out of the list. This could be a big shock for your business. One of the ways to avoid this risk is to opt for PPC (Pay per Click) like the Adwords program from Google. Herein, you pay for a specific page rank and the program maintains you on this rank for a specific period.

2. Merchant turns his back on you: What if one fine day you get an email from your merchant telling you that he is not interested in working with you anymore? You may also realize that the merchant is not paying you well, or on time. This could hit your business as well. To avoid such awkward situations, it is advisable to work with multiple merchants at a time. It is highly unlikely that all the merchants will turn their back on you or that all of them will not pay well.

3. Sudden decrease in traffic flow: Your affiliate marketing business thrives on the traffic flow into your website. If ever the traffic inflow reduces, your business will suffer huge losses. The best way to avoid this situation is to update the content on your website regularly. Additionally, the quality of the content must be good and very informative. People always look for website, which has informative, interesting, and unique content.

4. Hosting jolts: Your website needs to be on air at all times and only then can it do the business for you. If your website gets offline abruptly, it will hit your business in many ways. Not only will you lose out on new visitors but also your existing visitors may not visit your site again if they encounter a temporarily dead site. This can happen if your website is hosted by a poor web hosting company. You must therefore avail the hosting services from a reliable hosting service provider.

5. Website maintenance: You will need to update your website regularly. You would want to add new features to it as well as fix some exiting bugs if any. All this may be difficult to do if your webmaster quits for some reason. The best way is to develop a good knowledge of website development and maintenance, so that you do not need to be dependent on any one else for maintenance.

Over the past few months Adware within the affiliate marketing space has popped its nasty little head up again. Several years ago Adware was a major issue within affiliate marketing- especially within the US and UK markets.

Below is a great little article that covers more specifically Zango Adware and how it affects affiliates today.

Zango is software that gets installed on people’s computers for many reasons, usually occurring when downloading games from the internet and visiting at risk websites.

The software, since it’s installed on the user’s computer, can perform activities like any other installed application, like Word or Excel or your browser.

Pop-up blockers don’t affect Zango because it doesn’t deliver incoming ads (by “incoming”, I mean from the Internet), it generates new ad windows because the software makes it happen from inside your computer - like your calendar software can open a reminder window.

Once installed, the Zango application monitors all Internet activity on the user’s computer, both incoming and outgoing Internet packet activity. From what it sees going back and forth, it can trigger events, like ad windows.

Anything in the Internet communications stream can be used as a trigger - words on a web page that you load in your browser to view (called “contextual” advertising when ads are delivered), urls you visit or click on and other things too. The adware has lists of these things, stored on your computer, that it looks for. When it sees them, it communicates back to their home base (their servers) and decides what to do.

Occasionally, the adware also updates its files, on your computer, of what it looks for.

Let’s refer to these things - the things that it looks for - as “keywords”. Examples of “keywords” that it might look for, as triggers, are:
new balance shoes
home mortgage rates
paris hilton
apple.com.au/cart/checkout.asp

It is critical to understand that last “keyword”, the “apple.com.au” one. It’s not a word at all, it is a piece of a url someone might visit.

How does Zango determine which “keywords” become triggers? Simple, they have advertisers sign up, enter “keywords” of interest and bid on them. With these “keywords”, the advertiser also enters a webpage (their url of their page, their ad’s page) of the ad they want to show.

In Zango’s case, their division that sells ad space (where the advertisers go to sign up and pay to run ads) is called MetricsDirect. Zango / MetricsDirect are not the only ones doing this, there are hundreds of companies doing it, but most not as large as Zango.

In addition, Zango’s bidding system tells Zango themselves which things people are bidding the highest on… the valuable “keywords”. As a business, these “keyword” triggers make Zango the most money. So they’ve created a premium advertiser program where they provide these high value “keywords” to their biggest advertisers - and those advertisers stay busy devising ways to use these “keywords” to maximum gain.

If it sounds complicated, it’s not - it’s important to note the simplicity here - the sole reason they created the Zango software is to sell ads, that’s why it’s called adware. And to make it a success, they need to get their software onto as many computers as they can - so they can sell more “ads”.

Through this system, advertisers have access to cause events to happen, events initiated by the Zango software, when certain “keywords” are encountered.

As an affiliate, if you bid on “apple.com.au/cart/checkout.asp” as a “keyword” at Zango / MetricsDirect, you are getting access to a consumer who is just about to buy something from Apple - they are literally one click away from making their purchase. If you bid on this “keyword”, what url would you enter to make yourself money from your “ad”? How about your affiliate link to Apple. The Zango window would open, right over the top of the Apple window that’s already open (where the customer is making a purchase), your link takes the Zango ad window, the second window just opened to deliver the ad, and an affiliate cookie would be set - and you get credit for that sale and are paid a sales commission.

The money flows:

Consumer (0): no direct effect.

Affiliate using Zango (+): makes commissions for sales for somebody about to buy anyhow, someone they didn’t actually refer to the merchant.

Zango / MetricsDirect (+): makes money for selling the ability to deliver the ad event.

Network (+): the Apple affiliate program shows an affiliate sale, when it honestly wasn’t, and the Network (aka ClixGalore, DGM etc) gets their standard cut (most often, a % of the sale). These extra sales also make the Network look like they are helping the merchant “sell” more, so their reputation is helped when they allow it.

Merchant (-): the merchant pays commissions to affiliates (and a fee to the network) for sales they would have had themselves. The merchants own ppc, seo, email and branding work that brings new and repeat consumers to their website, ends up getting counted as affiliate sales (and incurring affiliate commissions). ROI is reduced for non-affiliate activities, meanwhile, the apparent ROI of the affiliate program is much higher than actual.

Merchant’s Affiliate Manager / AM or Outsourced Program Manager / OPM (+): the AMs / OPMs are typically paid a mix or flat fees and a percent of sales, or at least performance bonuses - there are a lot of sales getting credited as affiliate sales in this case, that shouldn’t be credited to an affiliate (the consumer was already on the site).

Affiliates that don’t use Zango (-): if you referred a consumer to Apple 20 minutes ago (or 4 days ago), then right before the consumer bought the Zango-using affiliate pulled his trick, you don’t get credit for this sale! The cheater becomes the “last referrer” and you lose your rightfully earned commission.

The consumer is a little confused when they see the Zango ad because they’re already at Apple. Typically, they just close the Zango ad window. A sneaky affiliate might also program a webpage that’s invisible (or otherwise hidden) and forces a faked click to also set the cookie, right before the sale - so the consumer would see nothing happen.