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.

With Children's Day approaching, the market enters a period of strong activity, driven by high sales expectations. According to a survey by the National Confederation of Shop Managers (CNDL), in 2023, commerce moved approximately 18.8 billion reais, a significant increase compared to the 13.7 billion recorded the previous year. The growth trend is expected to continue in 2024, bringing great opportunities for the toy, electronics, children's clothing, as well as entertainment and food sectors, which stand out as the main beneficiaries during this time of year.

The marketing and business strategy specialist, Frederico Burlamaqui, points out that children have a significant influence on the family's purchasing decisions, especially when it comes to gifts and products related to leisure and entertainment. "The importance of marketing actions aimed at children goes beyond mere product sales, as it also establishes brand branding from an early age, creating long-term loyalty. However, campaigns need to be carefully planned, considering both the sensitivity of the audience and legal restrictions," he states.

Frederico explains that Children's Day not only boosts the market but also serves as a thermometer to assess brands' ability to innovate and connect in an ethical and strategic way with such an influential and, at the same time, protected audience. "Some companies have been betting on different strategies, ranging from creating personalized products to multichannel campaigns on social media, TV, and even in the world of online games and apps aimed at children. It is important to keep in mind that brands need to be authentic and create an emotional connection with children, using simple and fun communication. Additionally, the use of young influencers, YouTubers, and licensed characters has proven to be an effective way to reach this audience," comments the expert.

With competition for attention on social media, companies have been seeking more personalized and continuous strategies to keep their consumers engaged. One of the most effective tools for this is the email newsletter. The direct, continuous, and personalized communication offered by this channel can strengthen the relationship with the customer and ensure long-term retention, building a loyal and engaged base.

A study by DemandSage found that 89% of marketing professionals already use emails as the main retention method, surpassing other strategies such as social media and mobile marketing. This occurs because retaining existing customers is significantly more profitable than acquiring new ones — a 5% increase in retention can boost profits by between 25% and 95%, according to WiserNotify's analysis.

SecondFabio Soma, specialist in innovation and creator of the M.A.G.O. Method, which helps entrepreneurs and content creators achieve success with their newsletters, content personalization, active feedback, and offering recurring value are the main differentiators of this format. Sending content tailored to the customer's interests demonstrates that the brand understands them. By using behavioral data and purchase preferences, companies can better segment their contact lists, ensuring that the newsletter is truly relevant to the recipient, explains the expert.

Loyalty and trust

Personalization not only increases open rates but also contributes to building a closer and more lasting relationship between brands or content creators and their consumers. The frequency of sends associated with useful, exclusive, and relevant messages helps keep subscribers engaged with the company or producer, preventing them from drifting away over time. "This can include exclusive promotions, information about new products, or even educational content that adds value to the customer's daily life," emphasizes Soma.

Additionally, newsletters provide the opportunity to cultivate a trusting relationship with subscribers, which consequently increases retention. "Especially for companies that invest in email marketing, transparency in communications, such as updates on an order, process changes, or service improvements, enhances the perception of credibility," says the expert.

Exclusivity and appreciation

Another key point to keep customers engaged is active involvement. According to Soma, by using newsletters to request feedback, participate in polls, or send personal reports, for example, the company or content creator demonstrates that they value the opinions of their subscribers. "Whether through surveys or interactions in campaigns, customer responses provide the brand with valuable information that can be used to adjust and improve its services," explains the specialist.

Brands that use the format can also create loyalty programs and exclusive offers for their subscribers. Soma highlights that rewarding customer loyalty with discounts or benefits is a powerful retention strategy. "When the customer feels there are clear advantages to continuing to consume with the company, they become more resistant to the competition," he concludes.