How Did We Get Here?

As you can imagine, writing for a publication like ClickZ means lots of email feedback. Most emails ask for advice, grind an ax, or offer thanks. And I am always happy to receive all three types. But one recent email caught my attention because it was none of those things. It came from a reader I’ll call Sam. He had a suggestion:

    Write something about “Affiliate Programs That Don’t Pay.” Here is my story.

    In December 2000, I had over $500 in my affiliate account. I earned that money, but I haven’t seen my check yet. When I contacted LinkShare, they told me that they did not receive payment from them and I have to call them. I called them, but nobody picked up the phone, then I emailed them, and again nobody answered. Right now it’s May and I don’t have my check.

    So why are companies starting affiliate programs if they don’t want to pay?

Unfortunately, Sam’s story is a familiar refrain these days. And while Sam is certainly upset about his $500 (and rightfully so), the point of the story is much bigger than $500 or USLaw or even LinkShare — though it certainly seems to be one of the usual suspects. Right now, nonpayment and program closings are dominating the conversation.

In many cases, the culprit is a bad business model, so no one is getting paid — not employees, not creditors, and least of all affiliates. Welcome to Chapter 11. In other cases, Company A buys Company B — and of course buys only the assets, not the liabilities. The result is more nonpayment. Finally, some programs just never pay — and their affiliate network providers apparently let them get away with it.

And so, just like most every other profession — medicine, law, and politics included — affiliate marketing has a checkered past. Worse, affiliate marketing seems to have a checkered present. Don’t get me wrong, there are plenty of success stories, but right now most affiliates think the sky is falling. And unless some more reasonable minds prevail, the future of affiliate marketing may not be any brighter.

Sales Versus Marketing

I’ve really puzzled over why things are this way, and I’ve come to think that it’s the legacy of Dilbert — the curse of modern-day corporate organizational structures.

In most companies, you find sales departments and marketing departments. In really big companies, you might find several flavors of each, such as enterprise sales, distributor sales, and retail sales, with both field and inside salespeople. Marketing looks similar: marketing communications (marcomm), channel marketing, field marketing, product marketing, public relations, and so forth.

And this is where the problem starts. What is affiliate marketing? Is it part of your sales strategy or is it a marketing initiative? I have yet to find a company in which the affiliate marketing program is managed through the sales group. (If you know of one, tell me.)

That means marketers are usually in charge. But marketers are used to managing frequency and reach advertising campaigns (basically making use of a bunch of spreadsheets and a few creative types) — but not accounts, not real people, and certainly not relationships. Making the switch to building and managing relationships is apparently beyond the interest of many marketers. You’d think they’d at least hire an agency to do it for them, but in most cases that answer is also a resounding “no.”

To make matters worse, at many dot-coms, affiliate marketing falls to the biz-dev (business development) group. And most often, biz dev fits into a middle ground between sales and marketing. It has all of the rainmaking attributes of sales but with less of the ongoing follow-through and none of marketing’s quantitative and qualitative rigor. Biz dev is there to close the deal and move on (a necessary role, to be sure).

And so it is no wonder that as a rule, affiliate programs are relegated to second-class status. They have no organizational champion. No seat at the table, so to speak. As a result, it is the exception to find affiliate marketing behaving like a real sales channel, complete with clear lines of communication, ongoing sales material and training, and regular commission payments.

You Are the Weakest Link

And so here is my solution and my challenge. First, to affiliate marketers: If your company has an affiliate program and you’re not treating your affiliates the way you’d want to be treated, please quit — now. You’re ruining affiliate marketing for the rest of us. You apparently don’t need affiliate marketing — and, reciprocally, affiliate marketing doesn’t need you.

Next, to solution providers: Show some leadership and proactivity. You don’t need one more subpar program in your network. You particularly should realize the damage caused by a few bad apples in the barrel of affiliate marketing. Do we really need 5,000 merchants when fewer than a few hundred account for some 80 or 90 percent of total industry revenue? Have the courage to fire clients that don’t get it — after you make them pay their outstanding bills.

In short, what we as an industry need right now is vision. OK, check that. I’ll settle for on-time payments.

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