Network Supporters

May/June 2007 Issue: Page 88

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They are among the advertisers' biggest cheerleaders, but are they sharing your secrets with your competitors?

Many merchants and affiliates develop very close relationships with their account representative at the networks. These network reps often take on many roles including problem solvers, helpers, mentors, sounding boards, cheerleaders, and sometimes they end up being cherished friends.

Many of these representatives are juggling multiple client relationships as well as their daily interaction with colleagues and peers. The account reps are usually big supporters of their clients and while the relationship between the network and its merchants is a partnership in many ways, it's best not to forget that the account reps ultimately work for the network. And the goal of the networks is to make money.

And that's where potential conflicts begin to arise. As a network you want to have efficiencies and leverage strengths. If one representative has experience dealing with the specific challenges and issues of a particular vertical segment (whether it's those selling online mortgages, insurance, shoes or flowers) then having a single person deal with all those clients might be the most effective way to maximize your resources.

However, from a merchant's point of view this might create a conflict of interest. If you are a merchant selling flowers online, you don't want the same person handling your account having access to all your proprietary information and also managing the accounts of your competitors.

"I think it could be a benefit and liability for the merchant," says Shawn Collins, co-founder of Affiliate Summit. "If all goes well and you have a rep with good insight, that's great. But if you have someone that you suspect has a reason to help someone else over you, that's not a good feeling."

Collins says those uneasy feelings could easily be amplified since each of the networks offer different levels of service.

"I would probably have some concerns if the same rep was working on the same verticals – especially if the network was managing the account," he says. "If you've got one company paying $1,000 a month to the network and another paying $10,000 and they are in the same vertical, I'd be worried that the one paying more was getting much better attention. I'd also be worried about shared intelligence even if it was innocent or inadvertent."

ShareASale.com President and CEO Brian Littleton says his network is very aware of the situation and asks "each client who their competitors are, in their minds, so that we get a comprehensive list as well." He says in "any area where a ShareASale representative is in front of sensitive data, we take as many steps as we can to make sure that it is not shared directly or indirectly with a competing merchant," Littleton says.

LinkShare President Steve Denton says that his company helps quiet merchants' fears by giving them direct access to their affiliates. That's not the case with some other networks – most notably Commission Junction.

"It's your channel; you should have that information," Denton says, who admits that tact could be a liability if a merchant decides to leave. However, he says he thinks the upside of building a partnership outweighs that.

Denton says that for LinkShare it's all about the service level the merchant has bought into. LinkShare offers two levels of service: one where the merchant purchases tools to help them run their own program; another whereby LinkShare runs your program for you.

"If you bought tools from us and I'm not running your program, then you can be put in a vertical category," Denton says. "I don't see a conflict there because it's just a tool set and the playing field is level. But if I'm running your program – recruiting affiliates, extending private offers, etc. – then you can't have the same reps working on accounts in the same vertical. I would not have direct competitors in the same portfolio. They may roll up to the same VP. We have Dell and Apple, Wal-Mart and Target, Macy's and Bloomingdale's. But the same reps don't work on those accounts."

Gary Marcoccia, marketing director at affiliate network AvantLink, says that in the company's top two categories – Outdoor Gear/Recreation and Special Occasions – AvantLink has seen "that the more merchants from those respective categories that come in, the better all programs seem to do. This is because each program brings quality affiliates, adding even more specialized affiliates per category to draw from and attract."

But what if a merchant is working with a CPA or ad network? Generally the merchants that do business with ad networks are looking to get leads and conversions. They are not paying them to deal with branding guidelines.

"In essence you bought shelf space in a store, you can't expect much more. You didn't buy an exclusive network. The attention goes to the guy that pays the most and has the best-selling product. Welcome to the world of distributed commerce," Denton says.

Merchant Vann's works with two different networks and according to Matt Ranta, affiliate manager at Vann's, "Fiscally, it can be in a network's short-term best interests to promote one competitor over another based on the analysis of commission and conversation rates," he says. "But, ideally, if competing merchants both were working with a single network, they should be offered equal services and opportunities from separate representatives so as to assuage as much as possible a potential conflict of interest. Unfortunately, is seems that this is not always the case with some networks."

A Taxing Experience

Some companies worry about conflicts when competitors simply join the same network. For TaxBrain, the problems started last November when Intuit and H&R Block also joined Commission Junction after leaving LinkShare. For four years leading up to the point, TaxBrain had enjoyed being the only tax preparation program with a big affiliate presence at CJ. Even though its rivals had much larger overall brand recognition with consumers, TaxBrain had more success using affiliates.

TaxBrain got wind of a competitor joining CJ when TaxBrain's No. Continued on Page 2...

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