Coupon Sites are Stealing Your Money!
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Coupon Sites are Stealing Your Money!

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So you’ve got a budding e-commerce startup.  You’re advertising on Google, Facebook, Bing, etc, and you decide one day, “hey, I should have an affiliate program!  I heard CJ is great, let me sign up there.”  You speak to your CJ rep and they tell you about all the wonderful sales that they’ll be generating for you and you create your account, deposit funds, and with a huge smile across your face, you approve a whole bunch of affiliates and sit back and wait for sales to roll in.  A few days later, you start getting a few sales but as you watch your overall sales volume, it doesn’t increase at all.  Then, a few more sales come in, but again, your total sales did not increase by the number of sales that the CJ affiliates generated.  So, you start wondering why.  You start analyzing your sales data through CJ, and you notice that the affiliates generating sales are seeing obscene conversions, 20%, 30%, 40% and even higher.  Well, I’ve got an answer for you, and it’s not pretty.

You see, I used to run a coupon site myself, 10 years ago.  It was called BigBigSavings.com and I made a ton of money from it.  Why?  I had great deals posted on our homepage, and every single day, thousands of people loaded our homepage to see what new offers were available that day.  Unfortunately, many things have changed since those days.

When we approached our coupon site affiliates to ask them to feature PetFlow (our company) on their homepage, every single one of them said that this is not where they generate traffic, “No one goes to our homepage.”  These days, coupon sites generate traffic on their highly SEO’d pages that are specific to a particular merchant.

So, for example, if someone had searched for “PetFlow coupon,” there would be numerous coupon sites listed in organic results, that would list coupons for our site.  And the catch is, in order for the user to see the coupon, they most often have to click a “reveal” link, which immediately opens the merchant’s site in another window, dropping (stuffing) CJ’s cookie.  Now, regardless of whether the user actually used the coupon provided by the coupon site or not, you’re paying for the sale! We have spent countless hours looking through user logs as well as session traffic, and we have seen this over and over and over again.  The consumer is at the point of purchase, has already used a coupon code that was provided to them, then all of a sudden has a CJ cookie deposited, and then completes their purchase.

After analyzing all this data, we decided to stop our CJ affiliate program, terminate all our relationships with coupon sites, and guess what, our sales never declined.

So, if you want to offer coupons on your site, here are a few things that you can do:

1)      Bid on your own “trademark + coupon” and offer a coupon for users to use.  Either take them to a landing page that offers a specific coupon, or simply put the coupon itself in the ad copy.

2)      Put a coupon on your site for all customers to use.  If you list the coupon, you’ll provide less of a reason for customers to go searching for it, and they’ll be more likely to make the purchase anyway, because you’re providing a value to them that they were not aware of.

3)      Stay away from coupon affiliates.  Make partnerships with bloggers and/or content sites, someone who has an audience that is interested in reading the content provided.

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Alex Zhardanovsky is co-Founder of Epic Advertising (fka AzoogleAds) and has been in the online advertising space since 1999.

He recently co-founded PetFlow.com, an online retailer of pet food & accessories.

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Written by Pace Lattin

Pace Lattin is one of the top experts in interactive advertising, affiliate marketing. Pace Lattin is known for his dedication to ethics in marketing, and focus on compliance and fraud in the industry, and has written numerous articles for publications from MediaPost, ClickZ, ADOTAS and his own blogs.

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13 Comments

  • [...] Coupon Sites Stealing Your Customers? Are Coupon Sites Stealing your Money? Interesting read about affiliate link stuffing. The coupon provider's CJ link subs for yours! [...]

  • [...] What is PetFlow’s current affiliate model and relationship? Why did you stop using Commission Junction? We work directly with publishers an do our own media buying.  I still believe strongly in affiliate marketing, but CJ was not a good partner for us.  I wrote a post about why we chose to stop working with CJ. [...]

  • [...] What is PetFlow’s current affiliate model and relationship? Why did you stop using Commission Junction? We work directly with publishers an do our own media buying.  I still believe strongly in affiliate marketing, but CJ was not a good partner for us.  I wrote a post about why we chose to stop working with CJ. [...]

  • [...] What is PetFlow’s current affiliate model and relationship? Why did you stop using Commission Junction? We work directly with publishers an do our own media buying.  I still believe strongly in affiliate marketing, but CJ was not a good partner for us.  I wrote a post about why we chose to stop working with CJ. [...]

  • [...] What is PetFlow’s current affiliate model and relationship? Why did you stop using Commission Junction? We work directly with publishers an do our own media buying.  I still believe strongly in affiliate marketing, but CJ was not a good partner for us.  I wrote a post about why we chose to stop working with CJ. [...]

  • Jim Banks says:

    The last click wins attribution model will always reward coupon affiliates and punish everyone else who has been involved in the journey that is typically a lot more complicated now than it ever used to be.

    Given we are in this global recession and with the proliferation of coupon sites available the end user will frequently add in a coupon search at the end of their process. They were going to buy the product anyway, they just want to get it cheaper. That's cool, but the merchant is still going to pay out commissions.

    How about everyone adopts the attribution model employed by Tagman, so everyone involved can take a piece of the pie? Or how about the commissions paid to coupon affiliates are reduced by the amount of the discount. That last point is not really going to be viable.

    I know a lot of merchants realise they have to offer coupons, but secretly they hate them. it's good to see a merchant with the stones and the stats to decide to not go with it as a model. I am sure for genuine clients Pet-Flow will offer plenty of discount coupons but just not in that initial acquisition model.

    Here in the UK Harrods never had a sale, until they were forced to do so by their customers, who voted with their feet. We also had a store called John Lewis which never opened on Sunday or Monday but is now open 7 days a week.

    I'm not a fan of coupon affiliates as a model, but that is a just a personal ethics point. Some of my best friends in the business run that as their model and they are crushing it at the moment, so the clients like them.

  • It’s good to see some of the challenges from the merchant’s point of view. So often, I feel like a program I want to join regards me as more of a threat than a partner, and it takes a lot of work to overcome that initial hesitation on their part. As an affiliate, it feels like I have a lot more to risk and am sticking my neck out a lot more (running ads with no guarantee of pay, spending time optimizing sites in a ridiculously competitive market, etc.) and so it’s good to see a merchant expressing some of the challenges on their end as well.

    Jonathan
    Jonathan Kraft recently posted..Mara and Fabrizio’s WeddingMy Profile

  • Sherriff Bunkus says:

    More Bunkus from your friend Alex….seriously stop posting crap from your friends. Alex is a failure. While at Azoogle his affiliates did the same coupon+trademark bidding strategy (Vistaprint for example).

    This is all bunkus.

  • Nick J. West says:

    Thank you for your clear explanation as to why and how. Our e-commerce clients will get a good read from it. Thanks again!

  • Regardless of whether buyers use coupons provided by coupon sites or not #ecommerce merchants are paying for the sale! http://su.pr/5ab4cV

  • Reima says:

    Cookie stuffing very often happens with big affiliate networks or cpa networks very often. Tips listed here are very general, to deeper understand cookie stuffing it is better to join forums dedicated to it (they are on a blackhat side of internet marketing and usssualy with paid membership). I am sure it is possible to find out technical mechanism to overcome cookie stuffing. But it is for big players, if you are a small fish like me, follwing general advices listed here will be just fine.

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