Dash.com has put a new twist into the affiliate model. Like ebates.com, Dash.com returns a portion of the affiliate revenue to their members, which makes shopping through them a great deal for their members. And like Alexa.com, a Dash.com toolbar, dashBar, is installed at the bottom of your browser window, making shopping through one of their merchants only a click away. Background
Affiliate: Affiliates are sites that place banners and buttons on their own pages. These ads are linked to merchant sites. Affiliates get paid based on sales they generate through their own sites. Affiliates make choices about which banners and buttons to post on their sites based on their own calculations of which merchant their visitors will be likely to shop from and which merchants have the best commission structure. Merchant: A site that sells something. Affiliate programs are one of the cheapest ways for a merchant to drive traffic to a site. Unlike pay per view or pay per click programs, affiliate programs pay only on performance. Affiliate Reporting Service: The middleman. The links to a merchant from an affiliate are usually routed through the Web server of an affiliate reporting service (they call themselves other things, but this is basically what they are), such as BeFree or LinkShare. These middlemen track the clicks and permit the merchants to track sales and other activities, and ultimately to pay affiliates. Most merchants do not run their own affiliates programs from the reporting and payment perspective, but outsource to an affiliate reporting service. |
However, Dash.com and their nifty dashBar have gone one step further than providing this handy access to merchants in the network: They can virtually steal sales from other affiliate merchants. If you happen to have the dashBar installed, go to www.overtheweb.com, click on the link to a book at bn.com, and watch what happens. The dashBar gives you a message saying, "Barnes and Noble is a dash affiliate, but the link you are following will not result in savings on your purchase. In order to get cash back from dash, click ''dash savings'' below." (The alternative to clicking the "dash savings" button is clicking the "no dash savings" button.) Is this a brilliant business model, the death knell of affiliate programs, or a really bad decision by Dash? Before I answer that, let''s see what this means:
For consumers, Dash is a great shopping agent, putting money back into their pockets. To members of the Dash Network, it means more traffic. To affiliates, this means that every link on your site to a merchant that''s in the Dash network is a potential opportunity for Dash to override your affiliate link. Bottom line: no cut from the profits for you.
From my perspective, sites with affiliate links have three options:
- Use plug-in detection software to determine whether the dashBar is installed when a visitor comes to your site, then show banners and bullets only for merchants that aren''t part of Dash''s network when you detect the dashBar. This isn''t a trivial solution, but BrowserHawk can help you do this if you''re already doing some sort of CGI processing on your pages.
- Scream bloody murder to all the merchants that you and Dash have in common that Dash is "stealing" your sales (louder still if your clickthrough rate is staying the same, but sales are falling off).
- Be an active affiliate only of merchants who don''t allow Dash into their programs.
To merchants, this is even more interesting. Not only does the dashBar re-route all links from affiliates to the actual site, but if one of your customers types in the URL for www.bn.com, for example, s/he will get that friendly message from Dash. It defeats the purpose of using the affiliate program to bring new customers to your site, because dash guarantees that every subsequent sale to these new customers will incur affiliate commissions, thus reducing merchants'' profits.
What are your options?
- Keep dash in your affiliate program knowing that it might create ill will with your other affiliate programs. Evaluate the traffic dash brings you and decide whether the affiliate-relations headache is worth the revenue.
- Kick dash out of your affiliate program unless they agree to stop intercepting traffic from other affiliate sites.
For dash, it''s probably not too late to apologize and stop intercepting traffic. I''m sure you guys over at Dash sat down with your lawyers and convinced yourself that this is a great service to your members, but in the end you''re still taking money right from the hands of the other affiliates.
Finally, the affiliate reporting services. Start doing some policing on your own. Start tracking, if you''re not already, the remote address of all clickthroughs. Suspect trouble if the same remote address (that''s the IP address of the customer''s computer) comes to you twice in less than 15 seconds. When you suspect trouble, read the history file of the customer''s browser to see whether the next to the last click that was made was to the same merchant (technically speaking, it would have been to your own servers, since all clicks route through the affiliate reporting service).
Forrester reports that while only 13% of e-commerce is attributable to affiliate programs, it will be up to 21% by the year 2003. Everyone needs to take action against these kinds of rogue programs to keep the affiliate model, which brings lots of smaller sites to the table, alive and profitable for all players.
Alexis D. Gutzman is an E-commerce Technology Author and Consultant and author of The HTML 4 Bible, FrontPage 2000 Answers!, and ColdFusion 4 for Dummies. She can be reached at agutzman@internet.com
