I’ve just read through another post about network payment problems, this time by John Lammerton. It seems to be a particular problem with Directtrack driven networks, of which a large handful have cropped up in the UK in the last couple of years.
For those affiliates who haven’t seen the network side of Directtrack, you should be aware that the system allows a process called ’syndication’ which works as per the following example. The numbers quoted are just for the sake of easy maths.
Merchant X strikes a deal with Network A to pay their affiliates £1.30 per lead.
Network A pays their affiliates £1 per lead and keeps 30p for themselves. Pretty standard stuff.
If the merchant wishes, Newtork A can then, at the tick of a box, allow other Directtrack newtorks to pick up the deal, or ’syndicate’ it. This is much like a 2nd tier programme that many of you will be familiar with.
Network B decides to promote the offer, but they only get the £1 that Network A pay them. They therefore pay their affiliates 80p (for example) and keep the 20p for themselves.
This model is great for a new network as they have instant access to a number of deals to launch with, however it presents some problems for affiliates and merchants
1) Their network has no direct contact with the merchant, so if things go smelly, they have noone to fight their corner.
2) Directtrack has a very high proportion of lead campaigns. These need a lot of careful management to avoid fraud and generally guarantee quality. A two tier system does not give the transparency for merchants to manage their campaigns as as a single tier approach.
With no transparency, the likelihood of a leads based programme performing badly, and the merchant refusing to pay goes up sharply.
These two factors together means that there seems to be a higher risk of non payment on these syndicated programmes.
There are a couple of things that affiliates can do to reduce this risk and increase your payout though:
1) Before you run a campaign, test one of your links, then do view>privacy report in IE, you’ll see a report like this one for the Ciao campaign on PrimeQ
After the PrimeQ link you’ll notice one from affiliatemarketing.direttrack.com.
Follow this and you’ll find yourself at Afform, the network run by Submission Technologies , known to most as the team behind Greasypalm.
Log in and you’ll find a campaign offering 69p a lead rather than PrimeQ’s 28p a lead. In addition, by dealing with a network that is closer to the client you’ll be more likely to be informed if there are tracking problems on the campaign or if there are issues with the leads you are providing. You are also less likely to get get tarred with the same brush as the 2nd tier network’s other affiliates if someone sends a slew of low quality names to Ciao.
2) The second thing you can do is call up the network and get confirmation of which merchants are paying up-front and which are being invoiced after the event.
For a retail client this should make no odds, they have their money from the consumer before they have to pay up, but companies do go bust and leave affiliates out of pocket more often than we’d like. If the networks has the cash up front your risk is reduced. For lead campaigns, the merchant has more work to do to turn a profit after they have paid for the lead, so there is a higher risk of them running out of cash before you get paid. For new, or rapidly growing programmes this is well worth knowing.
I hope this helps a few affiliates get better results, with lower risk from their campaigns, and encourages more merchants to think carefully about the risk taken on by affiliates, and make prompt payment by their networks a priority.
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