Affiliate Marketing STILL The Only Industry Where Contracts Can Be One Sided?
Affiliate Annoyances, General Add comments
Recently, I’ve had an unfortunate reminder that misbalance (dare I say unfairness?) in our industry is still alive and kicking. Merchants, networks, and agencies still hold all the cards and can simply renege on a contract with no consequences.
I’m not going to name names or bleat on about how unfortunate I am to have been treated unfairly… so I’ll just give you a bulleted list of events below!
- A year or two back I was doing rather well for a particular merchant. As a new agency had come on board, they decided to change the rules on the programme and create a closed group of PPC bidders.
- I was invited to submit an application to be included, and did so.
- I was successful and was made to sign an eyewatering legal document detailing what the scope of my involvement was, and the required time period for me to respond to any of their requests (12 hours).
- I got all set up, and off we went. I always complied with all the contract terms and did everything they asked of me.
- Whilst on honeymoon, I got a communication from the network asking me exactly what I thought I was up to bidding on the terms that had been laid out in my contract. I responded telling them I was in the closed group.
- 23 hours later I was removed from the programme and all my commissions were reversed.
- Naturally, I was somewhat perplexed. (yes, this was on my honeymoon you can imagine how thrilled my husband was). It took me a week to discover the issue.
- “Oh, the agency said they’d previously allowed you to do this, but it had ended. To be honest, the agency didn’t tell us the arrangement had ended either… but there you go.”
So I was made to sign an iron clad contract. The agency didn’t even bother to tell me they’d decided to end the arrangement despite being in posession of my e-mail address, postal address, phone number, fax number, and an undertaking from me that I’d surrender my first born child should I dare to step outwith the boundaries of their agreement.
So This Got Me To Thinking….
Looking back, the contract I signed was completely one-sided. There was all sorts of Ts & Cs to protect the interests of merchant and agency. This is absolutely right and necessary as it lets everyone involved know where their boundaries lie. But where were the conditions to protect my interests as a business parter? I’ve now fallen into a situation where I’ve lost money because they simply could not be bothered to make sure I was informed of what their marketing strategy was.
So Who’s It Gonna Be?
When are all of our networks going to start protecting both parties in a contract of this nature? Frankly, when merchants or agencies behave like this and the network basically says “Sorry, they can sort of do whatever they like to you.” it damages their standing.
In my view, networks standing there with an innocent look on their face saying “It wasn’t our fault.” simply won’t cut it as this industry moves forward. They have a responsibility to both their merchants and affiliates. .
So is anyone going to be brave enough to come up with a *gasp* TWO SIDED contract for their closed bidding groups? I don’t want much. I just want a level playing field. Events like this simply make me lose respect for the rules of the game. Its not at all good for our industry.
Finally…
How many industries treat their valued business partners like this? How many could?
November 24th, 2008 at 12:34 pm
No it’s not the only industry where this happens, it will happen anywhere there are a few large budget-holding players on one side, and many, individually unimportant, players on the other. (Construction is probably another example, think also about the power of the supermarkets over small suppliers).
Merchants will dictate ‘unfair’ terms because they know most affiliates will accept them. Those that don’t can easily be replaced by others that will. Divide and conquer.
This isn’t to say the merchant is always intentionally playing this way – but writing contracts costs money, they have no need to spend more than is necessary on making sure other parties are protected. They may not even know affiliates feel the terms are unfair unless they get feedback – but if affiliates feel it’s a waste of time they won’t bother and it’s fait-accomplis.
Networks on the whole won’t stand the ground for the affiliate, their clients are the merchants. If the network is difficult, the merchant can move elsewhere.
What can an affiliate do:
* value yourself & don’t agree to daft terms, find a better program to work on (& let someone else take the loss)
* act collectively with your peers: this is hard to do, especially if the few influential affiliates get their own deal so aren’t in the community
November 24th, 2008 at 12:38 pm
Sorry to hear about your loss, I never really thought of it like this but it does seem we rely too much on the networks to be legit and play things fair.
Touch wood I’ve not had any bad experience with any networks but I only work with a select few until I take affiliate marketing to the next step.
November 24th, 2008 at 12:45 pm
Sorry to hear this Kirsty, that really doesn’t say much about the network and agency in question. I think that the network and agency should have acted to protect the relationship with both the merchant and affiliate. Especially given that you are a big affiliate which they will probably not do any business with in the future
I guess as an Affiliates its difficult to set your own terms, especially as many affiliates won’t necessarily have the legal / financial / market position to back these agreements. But one thing affiliates of all sizes do have, is social connections and big gobs which are all too happy to name and shame
November 24th, 2008 at 12:50 pm
> When are all of our networks going to start protecting both parties in a contract of this nature?
When they know they’re going to be named and shamed, and held publicly responsible for their actions, by people whose opinions are listened to and who carry credibility. People like you. If you feel you can’t name them then I can respect that, but it’s a shame.
November 24th, 2008 at 1:28 pm
Yeah… I take your point there Andy, but in this case I feel it should be enough to say it happened without having to say who.
November 24th, 2008 at 2:32 pm
So sorry to hear about your experience Kirsty. It’s not right.
Sadly it is all too common in affiliate marketing. We lose tens of thousands of pounds every year through advertisers changing their rules after an agreement has been made and we’ve put in hard work from our side. The wild west nature of this industry and the fact that a few – not the majority – advertisers don’t treat affiliates with the respect a business partner deserves is the number one reason I would want to leave this industry. Sadly, little has changed in years.
November 25th, 2008 at 9:23 am
I would threaten legal action, as you have signed a legally binding document then unless there is something that says they can terminate without any notice, they must give you notice!!
November 25th, 2008 at 7:18 pm
Have you pointed out to the merchant (not their agency) that you’re just going to take you’re just going to promote a competing merchant now?
From their perspective (if their brains are working, which in the case of many is not clear), they’re paying to help us develop a marketing strategy that we get to take with us whenever we so desire, so there’s the imbalance on our side…you can now go support their competitors. Or better yet, have you looked into drop-shipping or another option to be a “merchant” yourself?
They stand to lose more long-term by pissing us off than the other way around.
November 26th, 2008 at 10:37 am
I agree that you signed a legally binding document with a merchant. If they reneged you should at least sue for damages.
I also think that while the network facilitated this agreement the contract was ultimately between yourself and the merchant. Networks have their own obligations and we do the best possible given our circumstances. By that I mean merchants ultimately pay the bills so we have to prioritise (yes I know we need affiliates to drive sales!).
As competition in this industry continues to heat up networks cannot afford the luxury of taking a hard line with a merchant because they could simply migrate to an all-to-eager rival if worst comes to worst. Networks are seen as commodities.
November 26th, 2008 at 10:18 pm
Hi Kristy, dont think ive commented here before
“How many industries treat their valued business partners like this? How many could?”
Plenty. Its horrible that you got burnt like this, but it happens, and im sure now you’ll be a lot more cautious in the future but think of it like this, if im an agency setting up a closed group and getting a lawyer to create a contract. The lawyers charging me £XXX per hour to do this and I want them to cover me thoroughly – to be honest, I don’t want them spending an extra half day making sure your covered as well.
If your serious about creating long term partnerships with people then both parties should put the time in, create a contract thats mutually agreeable and then sign it, and make them sign it.
If its done like this then your covered, they’re covered and because your equally covered you’ll find information flows a lot more freely. If they aren’t open you’ve got them, if they do something like this, you’ve got them, likewise if you step outside of their lines, they have you.
Everyone learns the hard way, i’ve lost a lot of mullah through this sort of thing (in my affiliate roll) and now only work with a few merchants, very closely, and have a very open trusting relationship.
November 27th, 2008 at 2:20 am
The issue here Kirsty is that whilst you hold the merchant responsible for your loss of money here (you’re 100% in the right by the way here by the looks of things) that affiliates can and do just drop a programme at the drop of a hat – so whilst a merchant is duty bound to payout commissions etc, and affiliate can just pick and choose when to promote a programme when they feel like – so lets not forget that companies are subject to the whims and vagueries of affiliates too.
Plus how many times have affiliates actually been sued beyond the loss of commissions for breaking rules? Essentially the penalty for breaking T’s and C’s is $0 as you just lose something you weren’t entitled to in the first place.
Just putting the other side of the coin in view!
November 27th, 2008 at 7:17 am
@ Dan, welcome!! You are of course right, and I agreed with everything you said in your blog post. If I get burned again after this it’ll be all my own fault.
@ Gav I can appreciate the other side of the coin, but merchants rarely get dropped unless something is up with the programme or the affiliate loses the ability to drive traffic. I’ve never gotten up in the morning thinking, “you know what… I just can’t be assed to promote that red hot revenue earner any more. Sod it!!”
November 28th, 2008 at 1:46 pm
Kirsty I personally think if you have 100% legit point then there is no problem with naming the merchant, agency and network. After all its not a witch hunt, you are simply saying that you’ve been mistreated and explaining who was responsible.
Sadly as has already been pointed out, AM isn’t the only industry who treats “partnerships” in this way. However other industries don’t rely on email as a way of communicating. Its bad that companies think when they send an email – it’s going to be read instantly and therefore impose stupid time lines.