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March 5, 2005

Misperceptions about Search Arbitrage Affiliates

Posted by Adam Viener

Over the past few weeks I have spent some time talking to some affiliate managers and reading some recent articles which lead me to believe that there is a lack understanding of perspectives between affiliate managers and search arbitrage affiliates, those affiliates that buy pay-per-click advertising and link directly to the merchant's site via their paid search ads.

First, I got dragged into a rather lengthy online discussion with Jeff Molander on his comments regarding my "Top 10 Ways to Repel Super Affiliates from your Program" post. We clearly have two very different perspectives and I believe our online comments back and forth helped us both learn and appreciate the other's point of view.

Second, I met with Beth Kirsch director of online marketing for Audible, columnist for Revenews, and co-teacher at Affiliate Boot camp. Beth and I had a nice chat in New York where I was attending the Search Engine Strategies conference. Beth had recently hired the former affiliate manager of Blue Fly, Jen Weiss, to be the new affiliate manager after Audible gave Beth a well deserved promotion. Jen had indicated to Beth that I used to market for Bluefly and stopped when she asked me not to bid on their trademark term.

Jen mentioned that bidding on the trademark term was "easy money if you can get it." So I decided to do some research on my old Bluefly ads. After about a year of trying to market Bluefly, I had spent $3,985 in ads utilizing well over 20,000 keyword phrases. I had exactly 9 clicks on the Bluefly trademark term, non of which converted into sales. From my marketing efforts Bluefly made $63,631.93 in sales and after backing out an incredibly high 30.67% return rate, I earned a total of $3,990.94 in commissions. This was probably the hardest $5.94 I have ever made in my life. Easy money? No. A lack of two way communications and mutual understanding of each other's perspectives? Absolutely! I don't blame Jen, clearly I am equally or more to blame for not clearly reading their guidelines for trademark bidding and for spending so much time on one program without trying to communicate with the affiliate manager.

Finally, I was reading Mary Wagner's Top Spot Column in Internet Retailer Magazine today where she talks about how marketers are wrestling over trademark use under Google's new ad policy. What stuck out to me was the quote from LinkShare's CEO, Stephen Messer:

"LinkShare doesn't encourage participation from Search Arbitrage affiliates... Our entire message to our partners has been, they have to add value, so they, (the search arbitragers), probably weren't working with us."

The obvious message being that Stephen Messer thinks that search arbitrage affiliates that buy ads and link directly to the merchant's site via affiliate links don't add value.

To be honest I am disappointed by his comments. Being a search arbitrage affiliate isn't as easy as some might think. There seems to be this perception that all that a search arbitrage affiliate does is bid on a company's trademark and make "easy money". This is far from the truth.

Perhaps we all need to spend some more time communicating with each other and sharing our different perspectives, it's the only way that a true partnership can arise and the truly valuable long term win-win relationships can be created.