A panel discussion during December's Search Engine Strategies conference in Chicago highlighted an industry-wide debate on whether businesses are better off managing their own search engine marketing or trusting affiliates to generate traffic.

Lisa Riolo, vice president of client development at Commission Junction, voiced the question -- as well as another: "Who Kidnapped My Keywords?" -- aptly the title of her presentation on the panel.

In the space between those two questions lie all the reasons to work with affiliates ... and all the reasons to think twice about doing so.


Affiliate marketers (also called "affiliates," or "publishers") refer traffic and sales to the online merchants they promote, and are compensated only when they do -- hence, "pay-for-performance." Riolo highlighted a number of tactics engaged by affiliates, such as e-mail campaigns, software applications, Web site promotions, and -- perhaps most importantly -- paid placement in search engines.

Because affiliate compensation is based on buyers they send to e-commerce sites, publishers are interested only in search placements that pay off for them. They keep a keen eye on costs, too, since they have to pick up the tab for their own per-click keyword charges.

The squeeze zone between affiliates' costs-per-click and their cut from the sites they promote is where publishers have honed their skill at finding the best performance placement. Indeed, they are highly motivated to do so.


So what are the good news/bad news views on using affiliates? According to the panel, affiliates can and often will:

• Increase the volume of visitors to your site, adding potential for increased conversions. That means sales, with next to no effort on your part.
• Increase brand awareness with greater visibility in search engines, both organic and paid listings.
• Find those elusive price points of profitability on popular keywords in paid listings.

• Confuse customers by altering the experience of finding your site.
• Up the ante for keywords you must bid on, including your own brand name -- "kidnapping" important keywords altogether.
• Jump ship to your competition if your program isn't lucrative enough.

For one thing, Jupiter Research's Gary Stein, also on the panel, said that competition in keyword advertising from merchants' own affiliates can pose difficulties for their brands.

When it comes to affiliate loyalty, Oilman Promotions owner and founder Todd Friesen put it bluntly: "We're out to make the most money we can, anyway we can," he said during the discussion. "At the end of the day, what matters is the check going into the bank."

Added Riolo, "The pay-for-performance model demands efficiency; [publishers] wouldn't be where they are if they weren't making money."

Still, she recommended that online merchants do their best to work alongside affiliates.

"If you shut off affiliate advertising, your competitors may take over their spots," she said. "It is easier to manage your affiliates than your competition ... Build complementary efforts. Protect your interests. Get affiliates in line with what you want to do."

One clear benefit to maintaining an affiliate program, naturally, is that publishers help extend your reach in selling products and services.

"You're best off with a frictionless market," Stein said. "The gap between users' desires and fulfillment closes to an extreme degree when affiliates promote your brand."

Another benefit to having loyal affiliates is that because of their business model, they will know for sure what's converting -- so they can give merchants really good information.

As a result, panelists suggested that merchants restrict bidding on trademarked terms by affiliates. They also suggested e-tailers let affiliates handle the best keywords -- which have the greatest potential for profit, but also are likely to be the most competitive.

But to confuse the matter, tactics that keep affiliates finding new ways to make money (such as by exploring new keyword campaigns) are also ultimately lucrative for e-tailers -- so tight control might not always be the best move.

As a result, the bottom line is that e-tailers need to be aware of the risks of working with affiliates -- and the risks of not doing so.

"There is no complete answer for any one advertiser," said Performics President and CEO Jamie Crouthamel. "It's a complex set of trade-offs between getting robust search results versus controlling your brand and customer experience."

Added Stein, "It's all about negotiation."

Anne Kennedy is the managing partner of Beyond Ink. A version of this story originally appeared on SearchEngineWatch.com.