Affiliate marketing: know the risks when it is poorly implemented

Most companies that value the digital protection of their brands already have the custom of actively monitoring their competitors. However, few of them usually pay attention to what is done by their partners and affiliates. This is where a great danger hides: the improper commission. But what is, after all, this practice? How is it carried out? What are its impacts on the profitability of companies and, especially, how to prevent it from becoming a legal issue?

What is undue commission?

Affiliate marketing is a growing trend in the corporate universe, after all, it allows more flexibility, reduces costs and increases the visibility of its products and services. However, it is essential that the policies determined in the affiliation agreement are followed.

For Gustavo Mariotto, CSO of Branddi, a company specialized in combating unfair competition in the online environment, this is not what happens in cases of improper commission.“Neles, the affiliate breaks the agreement signed and extrapolates what was determined to gain financial advantages, “roubing organic traffic of the main company to profit on conversions that would not happen in sponsored campaigns. This practice combines brand bidding to the deviation of attribution of what was agreed between parent and previously affiliate”, he says.

Undue commission, misallocation and brand bidding

Unauthorized use of institutional keywords of a brand by a competing company is called brand bidding. But when this practice is performed by a partner or affiliate company, it is called attribution diversion. 

According to Mariotto, these occurrences, which have dominated the corporate judicial debate today, occur when the affiliated company maliciously uses the sponsored campaigns of its partner. That is, they unfairly seek to elevate their links above even the main brand to earn commissions. 

This can involve a number of situations, such as: 

• Fraudulent click: when a click is artificially registered on an affiliate link, that is, without the real intention of making a purchase or action;
• Duplicate sale: when the same sale is attributed to more than one affiliate, generating duplicate payments;
• Improper cooking: occurs when a cookie is inserted into a user's device without their consent, with the aim of incorrectly attributing a sale to an affiliate;
• Violation of the rules of the program: when the affiliate uses methods not allowed to promote the products or services, such as spam, buying paid traffic without authorization, etc.

One of the main points about improper commissions is that they can affect brands in many different ways, both in the efficiency of their paid campaigns, as well as in the relationship with their partners and spending. 

Check out the three main negative issues caused by misallocation and improper commissions:

Increase of institutional CPC of the brand

Because company keywords are being used in an unauthorized way, it is common for improper commissions to increase the cost per click of campaigns.

Thus, the brand cannot see significant returns in its marketing strategies, since this value is being changed. 

Increased financial spending 

This, which is one of the main consequences of improper commissions, is also one of the worst nightmares of brands. After all, all unnecessary spending decreases the amount that could be invested in actions really oriented to the company's goals. 

However, to deal with this increase in spending, it is necessary to consider the whole panorama involved in these cases. This is because, in addition to the increase in institutional CPC, this type of unfair competition still increases the company's expenses with commissions and actions that have not generated return or real value. 

In addition, there is still a risk that these processes will become judicial, which, in addition to involving financial investments, still involves the waste of time of a large part of the team in resolving bureaucratic and slow litigation actions.

Increased distrust between publishers and advertisers

Finally, another main result of misallocation and improper commission payment is the creation of a constant climate of distrust between advertisers and affiliates. After all, they can generate erroneous accusations and break the harmonious link existing until then.

Branddi has put together three practical tips to help your brand deal more transparently and positively with its partners.

Tip 1: Create clear, objective rules for your membership policy: establishing clear guidelines on what is or is not allowed in your brand affiliation program reduces the possibility of the existence of”. That is, everyone will know what is or is not expected and will be aware of the boundaries that cannot be crossed.

Tip 2: Perform regular audits: conducting regular audits ensures that all affiliates remain compliant.In this way, your brand can form much more aligned and lasting partnerships.

Tip 3: Prioritize constant monitoring: actively monitoring your brand's unique terms and elements is an essential step in finding suspicious occurrences before they hurt your business.