Managing Partners & Affiliates For Branded Terms

[gslama]

Hi All, I am currently working with a client who has entered the PPC market after thier Affiliate Partner sites have had full reign on thier brand terms.

Since we have been fairly aggressive out of the gates, it has caused a situation where we are just as competitive on Brand as we are for General terms - and the escalation in cost for these keywords has been staggering.

Has anyone in the past worked with a company and it's affiliate to limit bids on Brand Terms? Is this considered price fixing? My feeling is that the brand should have the ability (legally and contractually) to say who can bid on thier terms and how much they can pay (with engine specific brand policies aside).

If anyone has any insight - your thoughts/successes would be greatly appreciated!

[Marcia]

gslama, the issue with the PPC providers and engines with regard to trademark bidding is a pretty clear-cut one. The major issue is that of dealing with the company's affiliate sales force, which I assume is pretty well established by this time.

I am currently working with a client who has entered the PPC market after thier Affiliate Partner sites have had full reign on thier brand terms. Right. And unless I'm mistaken you're working on their SEO and PPC campaigns rather than as their affiliate manager. And apparently there's been a sales force that's been using PPC that's been contributing to their bottom line (and branding) - and realistically, now that the company wants to start out doing their own PPC, what they want to do is shut their affiliates out if it.

Since we have been fairly aggressive out of the gates, it has caused a situation where we are just as competitive on Brand as we are for General terms Aggressive marketing can take on many forms and use many avenues, but keep in mind that affiliate marketers can play a critical role and contribute a huge amount of exposure for a company's branding. Also keep in mind that affiliate marketers don't get paid for *giving* a company branding exposure without compensation - if's FREE for the company; they only get paid by performance, i.e. conversions/sales.

and the escalation in cost for these keywords has been staggering. Is that *only* from affiliates bidding, or others as well, such as competitors?

Has anyone in the past worked with a company and it's affiliate to limit bids on Brand Terms? Is this considered price fixing? I don't do PPC for affiliate marketing, so no - I haven't had to deal with or work with it. But there are companies that don't allow affiliates (or anyone) to bid on their trademarked, branded company names, and yes, it's legal to and no, it isn't price-fixing. It's trademark protection.

I have had an amended policy email from a merchant that expanded prohibitions to forbid doing ANYTHING on a site that would give affiliates higher search engine rankings in organic on their name. Totally unreasonable, and I immediately refused the change in terms and terminated their program, as did many others.

My feeling is that the brand should have the ability (legally and contractually) to say who can bid on thier terms and how much they can pay (with engine specific brand policies aside). No, you can't dictate how much people can pay - that would be price fixing and wouldn't sit well with any parties concerned.

If anyone has any insight - your thoughts/successes would be greatly appreciated!Well, if it's costing your PPC client more money now, it's also costing the affiliates more money to do PPC. If they weren't having a decent conversion rate, they wouldn't continue to do PPC advertising - it's as simple as that. The ROI has to be worth it. You'll have to deal with the engines directly about allowing other parties to bid, you have no control over them otherwise. But if you don't, and just forbid affiliates, who's to say that competitors won't bid high and still keep the prices up?

Another consideration is that there may possibly be PPC-only affiliates who will drop out of the program - and some of them may have their PPC adverts going to pages on their sites that do a great job of pre-sell, therefore increasing conversion rates. You'll have to consider the company's ROI, comparing their margin through affiliate sales vs. their margin through their PPC efforts.

Also keep in mind that you, being the SEO/PPC person and not the AM, are moving into territory that not only could cut sales by eliminating some of the sales channel and consequently profits, but if there is a dedicated AM, any such action taken will heavily impact his/her relationship with affiliates, and he/she is the one who will be taking the heat for it.

Weigh all the factors, if there's an AM include them in this decision, and if the company goes ahead and disallows PPC bidding on the trademarked brand name, be very definite and very tactful and careful how this is communicated to affiliates who have all along been doing PPC - and contributing to the success of the company's branding.

Sure, you can legally do it - just consider all the factors involved.

[jimbeetle]

It might be worth looking whether affiliates are adding value.

If the affiliate PPC marketers are simply directing traffic to pages on the affiliate sponsor's site, without any added value, then yeah, I'd say the cost of that traffic is being unnecessarily bid up and not worth paying a commission on resulting sales since you can bring it in yourself at a lower bid.

On the other hand, if the affiliates are directing traffic to their own sites, marketing to different audiences with different voices, using different sales techniques, different presentations, etc. -- all the things that make affiliate programs worthwhile -- then that is very valuable traffic. No marketing or advertising campaigns can appeal to all possible customers. You wouldn't want to cut these affiliates off.

This is a tough balancing act. I wouldn't go to cutting off any channels until you find exactly where that affiliate PPC traffic is coming from, what the different flavors each contribute, and exactly how well the sponsor's PPC campaigns perform in relation to the affiliate campaigns.

[gslama]

Thank you both for the responses.

At this point the affiliates have major strengths over the current site from a conversion standpoint, so there is no move to push them out. We are just looking to make this more effecient for all the players involved.

The Cost Escalation has certainly been due to partner competition (not competitors) - actually increases in CPC over 30% in one month. Therefore I am finding the need to reverse the cycle here.

I have also received a response from a tier 1 search engine - and although they would not directly address whether they consider managing what position partners can attain for brand terms as 'price fixing' - they did mention that actively managing partner positioning is a good way to manage CPC and they would recommend it.

Will keep you posted on how it goes!