It is the marketing equivalent of "posing as a police officer." The Search Monitor has released revealing data regarding affiliate marketing tactics in the paid search channel. From January to June 2012, almost 70% of affiliate marketers on the major search engines (e.g. Google networks, Yahoo and Bing) bid on trademark terms (47%) or, even more startling, direct linked (22%) from their paid search ads.
Direct linking (a.k.a "URL hijacking) occurs when an affiliate marketers assume the identity in paid ads of merchants they represent. Simply put, the affiliate marketer masquerades as someone they are not and reap benefits from it, driving up pay-per-click (PPC) costs for legitimate advertisers.
As Search Monitor CEO Lori Weiman wrote for Search Engine Land, "There are simply more affiliates than there are merchants who have adopted compliance tools and therefore, only the most diligent merchants have cleaned up their programs. We are still in the early stages of this type of compliance checking and therefore, most users are early adopters."
About these new findings, Weiman observed "When we looked at the data for the first half of 2012, we found some surprising numbers. Only about 30% of affiliate marketers, who are using paid search, do it without trademark bidding or direct linking. That means advertisers with affiliate marketing programs must be vigilant in policing their affiliates. Otherwise, some affiliates will be out there in the marketplace tarnishing your brand and taking money out of your pocket."
The Dollar Costs To Advertisers
Trademark bidding and direct linking affect advertisers negatively by causing increased CPC, diminishing the number of clicks on "real" ads, and lowering impression volumes – all of which decrease returns on the advertiser’s paid search spend.
"Where these affiliates really affect an advertiser’s bottom line is when a consumer clicks on an affiliate’s ad, is cookied with that affiliate's ID and then later clicks on the advertiser's ad and converts. The advertiser just paid twice for that conversion because, not only did they pay for the click on their own ad, now they have to pay the affiliate a commission because that affiliate’s ID is tracked to the conversion," Ms. Weiman said.
The Search Monitor compiled this data by examining all search engine paid ads that contained affiliate tracking IDs between January 2012 and July 2012. That data point was then referenced against our database of known brand and trademark terms to determine trademark bidding offenders. If an affiliate's paid search ad contained a website domain (the display URL in the ad) that did not match a valid destination domain, the affiliate was determined to be direct linking.
The Search Monitor tracks paid search, organic search, social media, mobile search, and shopping engines worldwide for brand and affiliate compliance, and competitive intelligence.