“Lifetime Revenue” from an affiliate program

Posted on February 28, 2008 
Filed Under Affiliate Management, NZ Affiliate Market

As businesses progress through their usual cycle, many end up going under or need to change their business model and invariably the affiliate is the one left in the lurch when the contract terms they agreed to at the start of the relationship with the program turn into something completely different.

I was talking to a website owner recently and his argument for not launching an affiliate program was that a potential purchaser would not be interested (or at least would frown on) contracts that exist with publishers (the affiliates) that are based on a lifetime revenue model.

Most affiliates who have been around the block before have had a relationship with an affiliate program cut off early due to some form of sale, merger or change in management where the affiliate program is no longer seen as a good idea and the clause in their agreement which usually says something like “we can do what we want to these contract terms” gets used and the affiliate looses all of the hard-earned and built “lifetime revenue”.

It would be great to say that there is an easy answer to this issue for the affiliate but there just isn’t. Trust is the single most important thing in an affiliate relationship as it’s the only thing that’s keeping the affiliate promoting the brand. When this trust is broken for business reasons there’s little re-dress.

The best an affiliate can do is to make sure they are not putting all their eggs in one basket so that their entire revenue stream is not dependent on one particular affiliate program. Letting other affiliates know through forums and posting around the web about their experience and what has happened is a positive thing for the community as well.

If you have some experience you’d like to share about an NZ affiliate program feel free to post it in the comments here.

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Multi-tiered affiliate programs or sub-affiliates

Posted on January 1, 2007 
Filed Under Affiliate Management, Affiliate Programs

There are many people in the affiliate industry that consider multi-tier affiliate programs to be a negative thing for the affiliate community. The negative association appears (from what I have seen) to be linked with issues regard pyramid scheme style programs. This can often lead to affiliate programs who have no relationship to these types of schemes being labelled as un-trustworthy, merely because they allow sub-affiliates to exist.

The ability to promote to other affiliates about a specific affiliate program and receive a commission for bringing that affiliate into the program, to myself, is a natural occurance. Why would an affiliate program not want new affiliates and why would the promoter not deserve a cut? It is the reason for affiliate programs.

Regardless of your stance on this, most affiliate programs that I have come across globally allow promotion to sub-affiliates although the revenue to the promoter is not usually very high as the margins are cut back significantly for the affiliate program when more than one person is involved. The key here is for the program to be very up-front with any joining affiliate when they have signed up through another affiliate’s tracking link.

Interestingly, in New Zealand affiliate programs, I have yet to find a program that allows for sub-affiliates and the promotion of the affiliate itself. I am unsure if this is a techincal issue, as many New Zealand affiliate progams are developed in-house and are therefore not as technically advanced as other larger programs, or if this is a larger issue with the New Zealand affiliate market believing there are problems with multi-tiered affiliate programs.

As I research further into the New Zealand market and the programs available we will see.

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