Tricia Meyer

Affiliate Marketer, Blogger, and Consultant

Calculate Content Versus Coupon Ratio for Your Merchants

by

One of my favorite benefits of working with Todd and Eric on Wine Club Group is that they both really dig data. To maximize our profits on the site, we use a LOT of data analysis. Some of it is related to SEO and traffic but a lot of it is figuring out which merchants to better position on the site based on things like Earnings Per Visitor, Earnings Per Click, and Conversion Rates.

You’re probably familiar with all of those, but I have something new for you today that you may not be tracking. Whether you are adding a new merchant to your site or evaluating a current partner, do you know how much of their traffic comes from coupon sites versus content sites? 

Why is this important?

First, it depends on what type of traffic you are sending. If you are sending content traffic and a program is heavily dominated by coupon sales, you might struggle to get conversions yourself. Are coupon sites overwriting content cookies because the merchant isn’t using attribution properly? Conversely, if you are a coupon site and the program is primarily paying out to content sites, maybe it is an opportunity for you because the merchant isn’t working with any of the other big coupon sites.

Second, coupon sites impact conversion rates. If a merchant is paying out 90% of its commissions to coupon sites, you would expect to see very high conversion rates because people often look for coupons after they have already decided to make a purchase. If you are a content site, don’t expect to have as high of conversion rates as a coupon (or cash back) site. If you see a program with a crazy high conversion rate and low percentage of payouts to coupon sites, it might mean that content sites are having great luck with converting for that program.

Third, knowing this information might help you understand why average commissions for a program are low but might actually be much higher for you. If you are one of a few content sites working with a merchant, you may be able to achieve better stats in the program than average, assuming the merchant has its attribution set up correctly so that those coupon sites or toolbars do not overwrite your content-driven cookies.

How do you figure out the balance?

You could just ask the affiliate manager and maybe they would tell you, but usually they will not. So if you are armed with 3 different numbers from the program (which you should be able to get either from the network or maybe even the program description), I can help you figure it out. Here is what you need:

  • Standard Program Commission
  • Average Sale Amount
  • Average Commission Amount

Another number that is helpful but very hard to get is the rate the merchant pays coupon sites. I suggest using either 1% or 2% because if a merchant IS paying a coupon site much less than standard, it will usually be one of those.

Caveats

As with all data, there can be a lot of variance. Not every merchant pays their coupon sites lower rates. Some pay the full amount to all affiliates. Some only lower the commission for the coupon site if it ranks for the merchant name + coupon. There also may be some other factors in the commission rates that throw things off like:

  • Cash back sites paid lower than content sites
  • “Other” affiliates like cart abandonment affiliates are paid a lower rate
  • VIP rates for a large percentage of the affiliate traffic
  • Flat rate bonuses

The way you will know almost immediately if this calculation is important for you is to look at:

  • Average Commission Divided by Average Sale Amount

If that number is smaller than the Standard Program Commission, you can use my calculations. If that number is larger than the Standard Program Commission, it means the merchant is paying out some VIP commissions or bonuses that make my calculations useless. Except that it means you should probably investigate whether you should be asking for a commission increase or bonus! 

So there you have it. It’s not a perfect science, but it’s one more data point that you might be able to use when running your affiliate marketing business. I’m including a link to a Google Sheet that I created that has a place for you to fill in the variables and it will automatically calculate the average commission and the content versus coupon for you.

Please download and a make a copy for yourself rather than trying to change my numbers! 

Or here is the formula if you just want to plug in the numbers yourself. It’s a bit of a bear!

(Standard Commission)*x + Coupon Commission(100-x) = Overall Program Commission

Where Overall Program Commission = Average Commission / Average Sale

Solving for X will give you your content site percentage and 100-x will give you coupon. Remember that you can use either 1 or 2 for that Coupon Commission. I suggest running both if you don’t know for sure and giving yourself a range.

Was this helpful to you? What is your favorite data analysis that you run for your affiliate sites?

FTC Proposes Changes to Disclosure Guidelines

by

FTC Disclosure Changes

The FTC came out with two documents this week that are significant for affiliate marketers, influencers, and merchants. For all of the background information on where the FTC currently stands, check out my post Affiliates Take Note: New FTC Disclosure Guidelines. It includes 7 years worth of statements, settlements, and updates from the FTC in one place.

Right now the FTC is talking a lot about “influencers” and doesn’t distinguish how they are paid. In affiliate marketing, we might want to know if they are being paid when people click on their links or use their exclusive coupon codes or whether they are flat fees (or maybe a combination of both). But for purposes of this discussion, the FTC does not seem to care about payment details and is more concerned in general about the practice of influencer marketing and how brands are using the influencers to get away with advertising that doesn’t look like advertising (they actually call it “launder advertising” and “illegal payola” which makes it sound even more sketchy!)

Statement of Commissioner Rohit Chopra

Let’s start with the Statement released on February 12, 2020. Regarding the Endorsement Guides Review.

The Commissioner cites that influencer marketing will reach $15 billion for 2022 and that it is getting harder for families and small businesses looking for truthful information. It also believes the tech companies are part of the problem and not the solution right now.

In an interesting statement and a change from the website that was fined last week, the Commissioner says that they want to “focus on advertisers, not small influencers.” Specifically “When individual influencers are able to post about their interests to earn extra money on the side, this is not a cause for major concern.” Chopra seems most frustrated that past enforcement (like the Lord & Taylor settlement) isn’t “deterring misconduct in the marketplace” and wants to be able to pursue larger sanctions against companies in violation.

Chopra wants to review the Endorsement Guides and would like the FTC to:

  1. Develop specific requirements for any technology platform that facilitates or in any way profits from influencer marketing.
  2. Turn the “guides” into codified rules that will allow for both civil penalties and damages.
  3. Give specific contractual requirements that all influencers will have to follow in their campaigns.

So after a long time of wondering if the FTC was going to actually take the disclosure guidelines seriously, I think we have our answer. There’s just too much money being made not to.

FTC Looking for Public Comment

As mentioned in Chopra’s statement, the Commission wants to review the current Endorsement Guidelines and is now seeking public comment: FTC Seeks Public Comment on Its Endorsement Guidelines

This is an opportunity for our industry to officially tell the FTC what we like and don’t like about the Guidelines. What is possible for us to do and what isn’t.

A proposed Federal Register Notice gives a lot more detail about what the FTC is going to be considering. The questions are just a starting point and not a limitation on comments. Further, the FTC would like commenters to submit any available evidence and data that they have, including consumer complaints. You can read all of the proposed questions yourself but these are the ones that stuck out to me with my comments in the parentheticals:

  • Do the Endorsement Guides describe any practices that are not deceptive or unfair? (maybe for us, we think we should be able to use the word “affiliate”?)
  • What is the degree of compliance with the Endorsement Guides? Do covered businesses and others following the Guides’ suggestions self regulate…such as through trade associations? (We know that many, many affiliates do not comply. If most are not complying, what incentive is there for the ones that are?)
  • What burdens or costs have the Guides imposed on small businesses in particular (OPMs, I think this could include you)
  • There are a few questions regarding the reviews of free and discounted products as well as incentivized consumer reviews.
  • This is a big and important one so I am just going to copy it all in!! “Some endorsers (including the authors of some product reviews) include affiliate links that can be used to purchase the products they are endorsing. Should the Guides address such links, and if so, how? To what extent do consumers expect that these endorsers are compensated for purchases through those links? If so, what compensation arrangements do consumers ordinarily expect? To what extent would knowing of such compensation affect the weight or credibility given to those endorsements? Is there a distinction in terms of either consumer expectations or the weight ascribed to an endorsement between affiliate links to a product’s marketer and affiliate links to one or more retailers? If so, how, why, and how should that be addressed? “
  • What disclosures, if any, do advertisers or the operators of review websites or review platforms need to make about the creation, collection, processing, or publication of reviews or ratings in order to prevent those reviews or ratings from being deceptive or unfair? (This one seems to come out of that settlement from last week that I mentioned above. Does it mean they ARE focused still on the publishers when it comes to affiliate links versus the advertisers when it is social media influencer marketing?)

This is just a sample of the included questions. The FTC clearly knows that their Guidelines are not really useful, not being followed, and don’t have as much teeth as they want them to. Now is our opportunity to help set the course going forward. The Federal Register notice gives more information on how to submit your comments (including online or paper). While the date isn’t set yet, it will be around April 13, 2020.

How do you think the Guidelines should be changed? Should they be enforced more or less?

 

Check Out OptinMonster and Enter to Win It for a Year

by

OptinMonster Contest

I don’t tend to run a lot of contests on this site, but when a company I use myself approaches me to give away their product, I jump on it!

It’s been almost 3 years since I wrote the post “Why You Need to Get OptinMonster Today.” Since that time, I have continued to use it myself on all of my sites. It’s one of the few paid tools that I use to grow my blogging and affiliate businesses.

Thanks to OptinMonster, THREE lucky winners will be getting a year of it for FREE! Plus, everyone who enters will get a special surprise after the contest ends.

Even though my post above gives more specifics on why I use OptinMonster, I want to break it down very simply:

You need to build your lists.

How many times have you freaked out when your Google ranking dropped for a keyword that you relied on for traffic? How many times has Facebook changed its algorithm so that your fans are not seeing your posts as much and you lost money? Although there is nothing wrong with building your site and your social to get all of that “free” traffic, you can’t ever rely on another site to sustain your own.

Because of that, you need to build your following and build your email lists. According to Statista.com, 85% of people check email at least once a day. That’s higher than visit any social media platform. As of 2017, there were 3.7 billion global email users, and that number is expected to grow to 4.1 billion by 2021. People still read email.

The best way to grow your email list is to get people who are reading your posts to sign up for it. It’s the only way to guarantee that they are really interested in your content. What good does it do to buy or trick people into signing up for your list when you are likely paying for every email you send and those people may not even really be interested?

OptinMonster helps you target the people who are visiting your site in ways that are most likely to get them to sign up for your list. There are so many customizable options including the timing of when people will be asked to sign up and where the sign up boxes show up.

Check out OptinMonster for yourself and enter below to win one of three 12-month subscriptions. Thanks to OptinMonster for sponsoring this terrific opportunity!

 

a Rafflecopter giveaway

Key Takeaways from New FTC Disclosure Settlement

by

Just when it seemed like things were getting quiet with the FTC regarding disclosure and I was thinking that the new administration didn’t care so much about it, a new settlement was announced today regarding commercial endorsements. (If you want to see all of my research and updates on FTC disclosure, this post tracks them: Affiliates Take Note: New FTC Disclosure Guidelines)

The basic facts are that PR firm Creaxion Corporation paid two gold medal Olympians (Carly Patterson Caldwell and Jake Dalton) to promote a mosquito repellent on their social media during the 2016 Olympics (back during the Zika virus outbreak). They also partnered with Inside Gymnastics magazine to get endorsers and promote the product. The PR firm “drafted, reviewed and monitored” social media posts and advertorials made by the endorsers, and the magazine often reposted the endorsements on its own social media.

The allegations that apply to us most as influencers or affiliate marketers were that 1) the endorsements were not “independent experiences or opinions of impartial users” because they were part of an ad campaign, and 2) the endorsers “failed to disclose, or disclose adequately” that they were being paid for their endorsements.

Here is an example from the appendices that is particularly interesting to me:

It says “Made it back to the US! Thanks fitorganicusa for protecting me during my trip in Rio!!” The FTC is reiterating that “thanking” the company isn’t enough of a disclosure because it doesn’t indicate clearly that you are being paid. Recall that they did tell us this in a press release back in 2017 “Some of the letters addressed particular disclosures that are not sufficiently clear, pointing out that many consumers will not understand a disclosure like “#sp,” “Thanks [Brand],” or “#partner” in an Instagram post to mean that the post is sponsored.” I bet I see 100 “thank you” type “disclosures” a week on Instagram. Not sufficient!

Click here to see all of the examples used in the complaint. 

Agency Responsibility

The results of the settlement were in line with what we have seen from the FTC thus far. It focused on the agency responsibilities.

  1. The agency has to provide the endorser with a clear statement of their disclosure responsibilities.
  2. The agency needs a system to monitor and review the disclosures.
  3. The agency must “immediately” terminate or cease payment if disclosure is not adequate. However, they can give an endorser time to remedy it they think it was inadvertent.
  4. The agency must keep reports of the monitoring.

We are seeing this same basic results in almost every disclosure/endorsement case.

Key Takeaways for Affiliate Marketers and Influencers

After diving into all of the documents, here are my key takeaways from the settlement:

  • The FTC is still pursuing disclosure cases, but it can take years for them to come to an end (this is from 2016 and is just now at the settlement phase). Does that mean we will be seeing more and more as influencer marketing gets bigger?
  • The influencers were not a party to this settlement but rather the PR Firm and the magazine. Did the influencers get out early or is the FTC still focused primarily on the brands? We did see them target the influencers with letters last year but no settlements yet.
  • Agencies are clearly bearing most of the responsibility (and sometimes the brands) in failure to endorse cases.
  • Instagram is a big target of the FTC.
  • This is the second time that the FTC has told us that “thanking” a brand is not a sufficient disclosure.
  • The FTC is establishing a very systematic approach to the education, monitoring, and tracking of endorsement relationships.

Although I don’t think that anything new came out of this settlement, I think that it gives the FTC more teeth to continue to go after others for actual money and not just cessation of activities in the future. The more that the FTC continues to lay this foundation, the better chance they have in future cases.

Are you still seeing affiliate marketers and influencers who fail to properly disclose? Do you think this type of action by the FTC will create changes?

Affiliates: Be Prepared to Lose Commissions

by

Last week I wrote an article for the PMA entitled Affiliate Marketing and ITP 2.0. It was a basic overview of ITP 2.0 and the impact it can have in general on affiliate marketing. I want to take that a step further and show affiliates just what is at stake and how they can help prevent it.

If you make any money in affiliate marketing,
you need to read and understand this post.

I’m not sure how much more emphatic I can be than that. There’s a good chance you are going to start losing commissions as early as this afternoon, depending upon when the Safari update takes place (now we are hearing perhaps September 24?).

Because Safari is the default browser for Apple products such as iPhone and iPad, this change is going to affect your traffic significantly.

Here are the steps you need to be taking.

Step One: Assess the Possible Impact to Your Site

The first thing you need to do is check your analytics to see how much of your traffic is Safari traffic. The easiest place is through Google Analytics. I’m not an analytics whiz, but you only need a basic understanding to figure this out.

Go into “Audience” “Technology” “Browser & OS” and look at the list for the last 30 days. You don’t even have to do the math–Google does it for you. You’ll see Browsers broken down. Add together anything Safari as a MINIMUM, but also know that Firefox is rolling out something similar soon.

As you can see, for one of my sites, my Safari plus Safari (in-app) are a total of 16%–not a huge amount of my traffic.

But the news is much worse for another one of my sites where Safari traffic alone is 44%. Safari plus Safari (in-app) plus Firefox account for 51% of my traffic on that site.

That means between 44% and 51% of my third-party tracking cookies may be dropped in the next few weeks.

If you are up for a little math, some networks will show you the browsers used for your transactions. For example, in CJ you can run a transaction report and add the columns “Concluding Browser” and “Initiating Browser.” Run the report, export it, and total up your commissions for each browser type. Then you will know the percentage of actual commissions you are receiving through Safari transactions.

Step Two: Check With Your Merchants

The next step is to start checking to see if the merchants you are working with have updated their sites to be compliant with the new standards. A lot of merchants are making changes by the hour. The easiest way to know if they are compliant is if they tell you. However, I’ve only had 2 merchants (out of about 1000) tell me that they are. The next best thing is when a network helps you find that information easily.

In ShareASale, merchants are now being marked when they become compliant so you can easily look for yourself.

Jane was one of the first merchants to reach out to me that they are compliant and sure enough, you can see their account flagged in ShareASale with a green flag and the words “ITP COMPLIANT”:

If the merchant isn’t on ShareASale and other networks don’t start adding these flags, your only choice is to reach out to the merchant or the OPM and ask them if the changes have been made. So far I have been having luck with that, even if the merchant’s response was a date by which they hope to be done.

Step Three: Mitigate Your Damages

Depending upon how many merchants of yours are compliant by the time the update is rolled out, you have a couple of choices on what to do.

First, drop the merchants that are not compliant if you can easily replace them with merchants who are. How much it is worth to you will depend upon how much of your traffic you figured out is Safari and what percentage of your sales come from the non-compliant merchants. If it isn’t a lot or if they have responded that their changes will be made very soon, it may not be worth changing out the merchants.

Second, alert your customers to the change. This obviously won’t work for every site but will work in specific circumstances. For example, as a loyalty site, I can tell Sunshine Rewards members that they will not get their cash back if they continue to use Safari. This will prompt them to use something else when they do their cash back shopping. It is only a temporary fix until other browsers implement similar cookie dropping policies. But it may buy me time until my merchants do become compliant.

Third, negotiate with your merchants who are NOT compliant for some type of make good (some tips on how to negotiate a better affiliate deal in general). You can show them what percentage of your traffic is Safari. Use that data to come up with a fair number that the merchant will use to compensate you for based on your overall sales. For example, you will receive a 20% bonus at the end of each month to account for the untracked sales.

Is This Really a Big Deal?

Assume for the sake of argument that the ShareASale Top 100 list is representative of all merchants. In actuality, they are probably better managed than most merchants and more likely to be following issues like this. But let’s just use them as the best case scenario.

As of today, 22 of those 100 merchants are ITP 2.0 compliant. That is 22% of their best merchants. Now use my 44% Safari traffic from above. Doing a little bit of math, this means that I will lose 78% of 44% of my commissions–or a total of 34%

If the Safari rollout happens today, I will see an immediate drop of 34% in my affiliate revenue.

Let that sink in. That’s basically my company losing 10% of its revenue when Apple flips a switch. Are you prepared to lose 34% of your revenue?

Obviously, these numbers are going to get better over time as more merchants become compliant. However, they will also worsen when the other browsers make their changes. Can you afford to go into Q4 not taking measures to protect your affiliate revenue?