Most companies that value digital protection of their brands already have the habit of actively monitoring their competitors. However, few of them usually pay attention to what is done by their partners and affiliates. That's where great danger lurks: the undue commission. But what exactly is this practice? How is it carried out? What are their impacts on company profitability and, mainly, how to prevent them from becoming a legal issue?
What is undue commission?
Affiliate marketing is a growing trend in the corporate world, after all, it allows for more flexibility, reduces costs, and increases the visibility of your products and services. However, it is essential that the policies outlined 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 the case in instances of undue commission. "Neles, the affiliate breaks the agreement and exceeds what was established to gain financial advantages, 'stealing' organic traffic from the main company to profit from conversions that would not occur in sponsored campaigns." This practice combines brand bidding with the misattribution of what was previously agreed upon between the headquarters and the affiliate," he states.
Undue commission, misappropriation of funds and brand bidding
The unauthorized use of a company's institutional keywords by a competing company is called brand bidding. But when this practice is carried out by a partner or affiliate company, it is called attribution diversion.
According to Mariotto, these occurrences, which have been dominating the current corporate judicial debate, happen when the affiliated company maliciously uses the sponsored campaigns of its partner. That is, they unfairly seek to raise their links above even the main brand to earn commissions.
This can involve several situations, such as:
- Fraudulent click:when a click is registered on an affiliate link artificially, that is, without there being a real intention to make a purchase or take action;
- Duplicate sale:when the same sale is attributed to more than one affiliate, generating duplicate payments;
- Improper cooking:occurs when a cookie is placed on a user's device without their consent, with the aim of incorrectly attributing a sale to an affiliate;
- Violation of program rules:when the affiliate uses unauthorized methods to promote products or services, such as spam, purchasing paid traffic without authorization, etc.
One of the main issues with improper commissions is that they can affect brands in various ways, both in the efficiency of their paid campaigns and in their relationships with partners and expenses.
Check out below the three main negative issues caused by misappropriation of funds and undue commissions:
Increase in the brand's institutional CPC
Since the company's keywords are being used in an unauthorized manner, it is common for undue commissions to increase the cost per click of campaigns.
In this way, the brand cannot see significant returns in its marketing strategies, since this value is being changed.
Increased financial expenses
This, which is one of the main consequences of unauthorized commissions, is also one of the brands' worst nightmares. After all, any unnecessary expense reduces the amount that could be invested in actions truly aligned with the company's objectives.
However, to address this increase in expenses, it is necessary to consider the entire context involved in these cases. This is because, in addition to the increase in institutional CPC, this type of unfair competition also increases the company's expenses on commissions and actions that did not generate a return or real value.
Furthermore, there is still the risk that these processes will become judicial, which, in addition to involving financial investments, also involves wasting a large part of the team's time in resolving bureaucratic and slow litigation actions.
Increasing distrust between affiliates and advertisers
Finally, another main result of attribution deviations and improper commission payments is the creation of a constant atmosphere of distrust between advertisers and affiliates. After all, they can generate false accusations and break the harmonious bond that existed until then.
Branddi has put together three practical tips to help your brand deal with its partners in a more transparent and positive way.
Tip 1: Create clear and objective rules for your affiliate policy:Establishing clear guidelines on what is or isn't allowed in your brand's affiliate program reduces the possibility of "gray areas." That is, everyone will know what is or isn't expected and will be aware of the boundaries that cannot be crossed.
Tip 2: Perform regular audits:The conduct of 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 the terms and unique elements of your brand is an essential step to identify suspicious occurrences before they harm your company.
