Affiliate Marketers and Brands Beware of Outsourced Affiliate Programs

Beware Marketing CompaniesLast week I was supposed to be enjoying a wonderful baby moon ahead of the baby boy being born.  Instead, I awoke one morning to find an email in my inbox that said Commission Junction Removal: Non-Bona Fide Transactions:

This letter shall serve as notice that your publisher account has been terminated and removed from the Commission Junction Network and transactions may be reversed (“charged-back”). This termination and removal is the result of non-bona fide transactions performed on your account in violation of the Commission Junction Publisher Service Agreement you agreed to follow. Non-bona fide transactions include, but are not limited to, false, self-inflated, and/or duplicate leads or transactions.

You are not eligible to rejoin the Commission Junction Network and any attempt to do so shall be null and void.

Needless to say, I was shocked and annoyed.  I have never done anything on any of my sites to ever purposely generate non-bona fide transactions.  Plus, if you’ve followed my income stream reports, you know that I’ve been really focused on growing my affiliate income this year with some success.

So, I had to spend the rest of my vacation week dealing with this on and off, and here’s the story.

 

Non-Bona Fide Transactions

Of course the first thing I do is reach back out to Commission Junction and see what the heck is going on.  Their first response was a generic copy and paste from their Terms of Service, but it was a good starting point to understand what they were accusing me of.  Here’s what Non-Bona Fide Transactions are considered:

You must promote Advertisers such that You do not mislead the Visitor, and such that the Links deliver bona fide Transactions by the Visitor to Advertiser from the Link. You shall not cause any Transactions to be made that are not in good faith, including, but not limited to, using any device, program, robot, Iframes, or hidden frames. You may or may not be compensated for Transactions where You or Your agent are the Visitor. Multiple Leads from the same individual, entity or IP address may be considered non-bona fide Transactions. You shall not earn Payouts for non-bona fide Transactions.

Non-bona fide transactions can be explained by the CJ Publisher Service Agreement available at http://www.cj.com/psa-us.

That’s good to know because:

  • I have never mislead a visitor
  • I have never used any devices, programs, robots, iFrame, or hidden frames to make transactions not in good faith

The last one is a tricker, kind of catch-all statement, but nonetheless doesn’t apply to me:

  • Multiple leads from the same individual, entity, or IP address may be considered non-bona fide transactions

There is nothing to stop someone from attacking me (How People Get Attacked Online) or even unintentionally sign-up twice, but I can tell you for certain I never encourage it.  Plus, I have some other tools to help prevent this as well.

 

My Interaction With a Third-Party Outsourced Marketing Firm

The real breakthrough came, most likely unintentionally, when I was clearing out my spam folder.  I received an email from a company I’d never heard of before (a Marketing Company), in reference to an affiliate program I had through Commission Junction, that said:

Hi Robert,

Your site looks great, however, we received 4 fake leads from you.  Any idea how that could have happened? 

Of course I had no idea how I generated just 4 fake leads, but I told him I’d be happy to partner and look into it using my click tracking stats and server logs.  Here was my response:

Hi Patrick,

Thanks for reaching out.  I don’t quite know what you mean by fake leads?  For the ZZZ program, payouts only occur when accounts turn into paid correct?  How would an account be fake if they setup payment?

P.S. I also haven’t received any affiliate payouts from the ZZZ CJ program – any insights?

Well, my response email was sent at 10:09am, and I received the Removal Notice from Commission Junction at 4:25pm.  No other interaction took place in between.  Follow up emails?  Ignored…

Well, at least I knew what affiliate company was to blame for this and where I needed to start my efforts.

 

Getting in Touch With The Brand

After failing to deal with this marketing company, I looked to dealing with the brand directly.  I emailed their customer support and pinged the CEO and Chief Marketing Officer on Twitter.  The email didn’t do anything, but I was nicely surprised to the that the CEO responded to me on Twitter with his email address several hours later.  That was impressive.

I then sent him this email:

Thanks for reaching out on Twitter.  I’ve been doing business with ZZZ for over a year, and regularly write about ZZZ on my business site Entrepreneurship Life.  Beyond being a customer, I’ve also been a great affiliate for you, sending hundreds of customers your way.

However, I’ve recently been contacted by Patrick at ZZZ Marketing, who is handling your affiliate program via Commission Junction, and it has all been down hill since dealing with them and your Commission Junction affiliate program.   

I’ve been monitoring click statistics from my page.  The page ranks high organically for a lot of search terms.  As a result, I have a good CTR on all the programs listed on the page, and am always looking for ways to monetize.  

I’ve been a ZZZ user, and as a result, I’ve also been part of the internal referral program, which I get about 7-10 sign-ups per week, which a handful turn into paid accounts and actually pay a commission (I’m a fan of this system BTW, and have since switched back).  

However, I noticed that you launched the CJ program via ZZZ Marketing.  Being a long-time CJ user, and given that your program was paying per lead, and not just a converting lead, I thought I would switch in order to increase my referral revenue. 

Upon switching, though, I noticed that I wasn’t receiving any commissionable events.  I had the program live for over 30 days, with 0 sign-ups according to CJ.  However, during the same period of time, my click tracking was registering the same volume as prior, when I was getting 7-10 sign-ups per week.  

Then, earlier this week, Patrick from ZZZ Marketing contacted me out of the blue saying that I was sending bogus leads to him.  I find that hard to believe, but that type of thing will always happen.  I NEVER expect to get paid for anything bogus, and I assume that’s why you’re paying a marketing company to monitor your affiliate sales.  As such, I don’t expect to get paid for anything not valid, but I was not paid for any leads generated over the prior 30 days…none.  And from casual conversations with others in the affiliate program (no hard facts here, but working on getting some), it sounds like ZZZ isn’t paying anyone, or at least paying them correctly.  

When I brought this to Patrick’s attention by responding to his initial email request, he never responded, but instead, fraudulently reported me to Commission Junction as falsifying data.  As a result, my account has been suspended while I work it out with them…

Long story short – ZZZ isn’t paying your affiliates.  I called their bluff, they falsely reported me, causing me to lose thousands of dollars from other affiliates I use through Commission Junction.  I have never falsified, lied, committed fraud, etc. and I hold my reputation and that of my sites in the highest regard, and regardless of the monetary value of the loss, I will not stand by and let this company accuse me of this outrageousness.  

On your end, you need to pay close attention.  I know I’m not the only one, and it makes companies like mine, who send a large amount of business your way, really reconsider if I should continue to promote your products.  Even more so, should I write about it?  I know that ZZZ directly isn’t responsible, and I’m currently leveraging your internal referral program, but the acts of the companies you outsource to make me reconsider doing business with your company.

I have no direct request from you, but I highly urge you to reconsider doing business with this marketing company, as they are bad news for your brand.  If you need anything to back this up (click logs, server logs, analytics), I’m happy to provide it.  I’m not an expert, but I can definitely connect some of the dots and see where the disconnect lies.  

Thank you for reaching out and listening.

Well, the CEO responded first thing the next morning, which I have to give him great credit about – and he forwarded the email to the appropriate people within his company, and I got nothing but immediate responses from their CMO and the person who manages their affiliate program internally.

Apparently, there were already some concerns about outsourcing the affiliate program, and here was the response from their CMO:

Thanks for sending over this feedback.  I really do appreciate it and we will be looking into this in depth and taking immediate action. 

The CJ affiliate program is a new pilot project we have launched in the last couple of months and ZZZ was highly recommended as a company

That could help get things off the ground.  

At this point, like you… I have had a few concerns that I will be taking up with Patrick directly and we will be taking pretty direct action to ensure the integrity of our program, the management of the program and ultimately… the quality of our affiliates & their experience with us remains high.

This program was put in place specifically for affiliates like yourself to earn more with us, outside the standard referral program we have… so your experience is concerning to say the least.

What I can tell you for certain is the following: 

1)      Thank you for bringing this to our attention.  We take this seriously and action will be taken.

2)      We are committed to making our affiliate program work and to build strong win-win relationships with affiliates such as yourself.

3)      We are early in the CJ process, but learning quickly.  New systematic measures for assessing lead quality and reporting fraudulent activity will be put in place shortly.  We understand the impact of being suspended can have and we will be making sure we put a fair process in place that both protects our program, but also respects our affiliate base.  I apologize for the hassle this situation has caused you.

4)      We are putting pretty significant efforts now to ensure that the technical side of our affiliate implementation is sound and to ensure that empty leads in our system are in fact incomplete… as opposed to a technical glitch on our side.  We appear to be in good shape now, but in light of this situation we will do another round of testing to be sure.  

Once again, I appreciated their response, and they got things going from their end.

 

Getting Reinstated at Commission Junction

Now that I had made contact with the brand, I still had to get things resolved with Commission Junction.  This was still easier said than done.

On the brand side, the internal affiliate manager called Commission Junction, and let them know what happened and that this was an error.  Commission Junction requested this in writing, which the brand did for me (once again, superb).

I also contact Commission Junction and let me know of the situation.  The trouble was, I got this response…

Please note that the advertiser’s request does not determine reinstatement, that is only CJ’s decision. Therefore we will let you know if a change is made, but as it stands the account is to remain as is.

I can understand Commission Junction’s perspective on this one, but really?  I continued to work with both the Brand and CJ, and got this response from the internal affiliate manager about 3 days after the suspension from Commission Junction:

Hey Robert,

I wanted to let you know that I spoke to CJ yesterday and they have lifted the suspension on your account.  Initially they said it was temporary, but I later provided them more detailed information that should close the case.  I’m waiting for confirmation and will keep you posted.

I want to thank you again for bringing this awful matter to our attention, and for being so gracious during this process.  You should also know that our program will no longer be managed by ZZZ Marketing.  Thanks again for bringing this to light.

It took about three days, a lot of emails, and a lot of stress, but I was able to get my Commission Junction account reinstated.  As an added side note, I’m glad that the stupid marketing company that did this lost their contract with the brand.  Serves them right!

 

Lessons in Outsourcing Affiliate Marketing for Brands

This story holds a lot of lessons, for both brands and for affiliate marketers.  On the brand side, brands really need to know who they are doing business with and what that means for their brand.  Any company that a brand outsources to is now a representative of their brand.  That could be good or bad.  In my case, it was really bad.

I’ve since learned that it is extremely common for brands to outsource their affiliate marketing programs, because it isn’t something they’re good at, and it allows them to focus on their core business.  The trouble is that there is a potential conflict of interest: marketing companies are paid on commission as well, so if they claim that the affiliate sales were false and don’t pay the affiliates, those commissions flow right into the marketing company’s coffers.

But brands rely on these affiliates to share the benefits of their companies, not the negatives.  Imagine you’re a brand, and you’re trying to get your message out there.  A big name site wants to promote your product, and they become your affiliate.  However, your marketing firm that manages the program doesn’t pay them.  Instead of getting positive reviews, the site shares their story.  Now, when a customer searches in Google for your brand, that negative review on the big site shows up top…  That’s not a good thing for brands.

Second, brands have to realize that, in the lead generation business, you’re going to get bogus inputs on your system from people wanting to try it out.  I think that brands are completely valid in not paying for these leads, but they cannot expect a website to be able to prevent them.

In this specific example, I sent around 7-10 leads a day to the brand.  Over a month, that is 300 potential leads.  If 4 of them were bogus, that is a 1.3% bogus rate, which I think is pretty good.  Definitely not spammy.  Should a brand jeopardize a bigger relationship over a 1.3% bogus lead rate?

This is what brands need to realize.

 

Lessons Learned for Affiliate Marketers

For affiliate markers, it is essential that you remember these key lessons from my story. In searching for solutions to my problem, I came across countless forum posts from people experiencing the same thing.  It’s hard to know for sure if they were legitimate or illegitimate issues, but nonetheless, this is a prevalent issue.  As such, there are several key steps that affiliate marketers can take to protect themselves.

Honesty and Transparency

The first thing that you can do is be honest and transparent.  Sorry if you read this entire post and were looking for a loophole.  There isn’t one – at least one that will save you in the end.  The best thing that you can do is be honest with your readers and with your affiliates.  Ensure that your links are properly setup and that your readers understand that these links could be affiliate links.  As Pat Flynn has said many times, loyal readers will be happy to pay you for your recommendations, so just be honest.

Leverage Technology

However, it is important that you leverage technology that can help protect you, or at least keep accurate records.  I use Pretty Link, and I highly recommend it.  It’s a free WordPress Plugin (there is a paid Pro version), and it offers click tracking on all of your affiliate links.  So, if you encounter and issue like this, you can easily export your records on all your affiliate links and provide them to the affiliate marketing company or brand.  The report include the IP address and time, so the brand can correlate the clicks on your links with the registrations on their end.  This can be an invaluable tool to help troubleshoot any affiliate tracking issues.

Know Who You’re Dealing With

Next, you need to know who you’re dealing with.  This can be tough because not all affiliate companies are transparent about who is the best point of contact for.  At Commission Junction, you can get some clues from the contact information on the company profile pages.  The biggest clue is who is the point of contact – i.e. is the email address from the company, or is it from a marketing firm or other entity.

**Note that none of these below are the companies I had problems with, and I highly recommend these affiliates**

Here is an example of an affiliate program run by a marketing company:

Marketing Company Affiliate Program

 

Here is an example of a company who uses Commission Junction to manage their affiliate program:

CJ Affiliate Manager

 

Finally, here is an example of a company who manages their own affiliate program:

Company Managed Affiliate

 

Once you know who you’re dealing with, you can direct your inquires to the right place.

If you can’t easily find someone who is in charge of the program, reach out to the affiliate marketing company like I discussed in How I’m Developing My Affiliate Income.

Don’t Stand For The Unjust

Finally, it’s incredibly important that you don’t stand for the unjust.  If you feel like you’re not getting compensated appropriately, reach out to the affiliate marketing company that manages your program.  Offer to show them your click tracking logs from Pretty Link.  The sad thing is that tracking issues are incredibly common in the industry, simply because of how the technology interacts across various platforms.

However, every now and then, there will be an unscrupulous marketing firm that is out to make a buck off of bloggers and website owners at the expense of the brands they are supposed to represent.  In those cases you need to take action.

I’m extremely proud of how the brand handled themselves in this situation – I’m not mentioning them because they only deserve the positive that is mentioned in my true affiliate post.  As for the marketing firm, they got the best thing possible – dropped by their customer.

Hopefully this post serves as inspiration and a blueprint for what to do if you ever find yourself in this situation.  And remember, there are lots of different affiliate marketing programs out there.  If you’re not satisfied with how your affiliate marketing company is working, check out my Comprehensive Affiliate Marketing Program List and sign up with another company!

Have you ever had trouble with your affiliate marketing company?  Have you heard of companies outsourcing their affiliate marketing programs?

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Comments

  1. One of the strongest written affiliate marketing articles I’ve ever written. Thank you for sharing this horror story. Sorry to hear that things went so awfully. As I begin looking for affiliate opps, I’m glad to have this heads up that all is not what it seems.

  2. This is a great post. Thank you for sharing this information. My blog is not nearly as successful as yours, but I would prefer to not make any mistakes if I can avoid it. You did a great job of getting to the root of the problem, and you helped all new bloggers by sharing your experience.

  3. Fantastic job of being proactive. The lessons from this apply far beyond just affiliate marketing.

  4. Wow, that story was insane! Good for you for sticking it out and getting some resolution. The affiliate world is pretty new to me so thanks for including so much detail!

  5. wow, sorry to hear you have had such a bad experience on commission junction. I actually think it’s a little crazy on CJ part that they will suspend then account of a valuable website over the word of one company. They should get both sides of the story before making any decisions, at least that’s how it makes sense in my mind. I’m glad you were able to get your account reinstated, but that still stinks!

    • I see it similar to the AdSense horror stories. CJ makes money from it’s advertisers (even though it depends on the publishers), so if the advertisers have an issue, you’re gone. Sad, but at least there are some ways to fight back with a little education.

  6. Very interesting article–thank you for sharing your experience!

    About six months ago I worked really hard on building a free resources page with affiliate links to things that will not cost my frugal readers anything to sign up for. I have tracked all of the clicks on my website using a plugin. Unfortunately, I have made a whopping $1 so far, even though there have been hundreds of clicks per link. It just doesn’t seem right…and now I am a bit suspicious of it! I contacted CJ (where most of the links are through) and asked if everything was working right on their end. They said it was. What do you think I should do next?

    • I just ran though your site and I think you should write a post about something to do with credit. Then, near the bottom of the post, highlight Credit Karma and how it was a valuable tool for you (just like you have on your resource page). I bet you’ll see more commissions come through that way.

      I’ve never had a lot of luck with a resource page – even though some people really believe in them. I do the best with in-post affiliate marketing.

  7. Roberts, thanks for being so open in sharing this. This has never happened to me, but it’s great information for somebody dealing with this problem.

  8. Well done in sticking with it to the end. Seems pretty insane to go to that length because of one bad affiliate. Good story and something I will certainly keep in mind going forward.

  9. I did not know much about affiliate programs and just got schooled in it tonight. Very well written. I can see the frustration one can have losing on potential commissions because of the actions of a 3rd party.

  10. Wow, what a pain! Being honest and transparent is the only way to do things on the internet when it comes to money. It will come back and bite you if you aren’t!

  11. Robert, that’s wild!
    In business, we always want to focus on our core.
    And this means outsourcing.
    But that also means that you have to increase management of the items that you outsource!

    With that said, I had NO idea that CJ.com was putting multiple companies in their database.
    Maybe it’s just my ignorance, but I thought that CJ.com WAS the 3rd party marketing company handling the affiliate program for the companies.

    But based on your article I’m seeing that it looks like they handle some directly and that they also are an avenue for other marketing companies as well.

    For now, I’m just going to have to trust that it’s all being measured correctly, as it’s not any major income for me at the moment.

    Thanks for the post Sir.

    • CJ is just an affiliate management company – i.e. tracking clicks and paying people. They don’t necessarily run the marketing of your firm – which is where some companies outsource to marketing firms while others keep a team in house. It’s important to know who you’re dealing with.

      • But those are the exact dots I’m not connecting.
        If CJ is tracking the clicks and paying the people, then why was ZZZ marketing company even involved with that aspect?

        • ZZZ Marketing is handling it the affiliate program for the company. So, say you’re Ford. You want to boost your online presence, but you don’t know where to start. So you contact ZZZ Marketing, who creates an affiliate program on your behalf (and probably a lot of other online marketing as well).

          You could do Ford Internal Marketing -> CJ.
          Or Ford -> ZZZ Marketing -> CJ

          In many cases, ZZZ Marketing will handle a lot of online marketing for you in general, not just affiliate programs.

          • Thanks Robert, it clicked.
            So on CJ, to you the ZZZ company literally “is” the main company since they represent them.
            Got it now.
            I guess the parent company could be dishonest just as easily as a marketing company then.

            Hate you went through the heat.
            Glad you called the bluff.
            Hopefully ZZZ Marketing got the Axe.

  12. Thanks, Robert, for the detailed story of affiliate marketing and potential pitfalls. I have seen elsewhere that actually getting paid for the leads and sales that you generate through referrals can be tricky.

    I’m just getting started at blogging and looking at the different affiliate marketing programs to diversify my income streams a little. Any advice on when in the life of a blog one should pursue relationships with affiliate marketers? I have heard if you apply too early (when your blog is new) with too little traffic you might get denied and not be able to re-apply for six months. Any insight into what level of traffic or age of blog will lead to good chance of getting approval at affiliate marketers? 100+ unique visitors/day, 300+ pageviews (that’s about where I am now 1 week into blogging)?

    I’ll probably post this question at the Yakezie forums too (not sure if you participate there).

    Thanks for any insight you might have!

    • If you’re going to work through a major company like Commission Junction or FlexOffers, you’re really not too small – they cater to sites of every size. The trick is having a post that gets good organic search traffic, and then putting in relevant links to companies that the readers will use. Some of my best affiliate posts get only 1-2 visitors per day, but I am able to convert them each time.

      • Thanks for the reply, Robert. I have a solid keyword search already. I’m kicking butt on “crappy 401k” (#2 behind Forbes). That and a couple bucks and I can get a cup of coffee!

        I’ll give CJ or flexoffers a shot then. I’m really pumping away at getting solid content on my site right now, since that is the way to keep people coming back for more and get linked elsewhere.

        Thanks again for the helpful blog. I spent an hour here yesterday reading out of your archives! Congrats on successful monetization here and your other sites as well. Looks nice!

        • Thanks for the kind words. You might want to take something in that post and highlight what makes a good 401k plan. Then, show firms that offer these – like TD Ameritrade or Vanguard. Then, see if you can join their affiliate program and you’ll get paid for the referral.

          If you want motivation or answers to your questions, I urge you to check out our free mastermind here on the site and ask anything: http://beatthe9to5.com/FreeForumAccess

          • Justin RootofGood says:

            I’ll look into that. I’m already promoting Vanguard for free on my recommendations (they are one of the key ingredients to me retiring at 33). But it would be nice to get paid too! Bonnie on their social media team always laughs at my clever FB posts, so I might start there.

            Adsense already serves a boatload of vanguard ads to my page and my target demographic would benefit from their services (well, anyone would).

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