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Matthew Wood: Is Ethical Affiliate Marketing at Risk of Being Usurped?

Matthew Wood: Is Ethical Affiliate Marketing at Risk of Being Usurped?

Three years ago I left the day-to-day management of PerformanceIN to invest in a seed round and support vouchercloud; the UK-based publisher, which at the time was looking to incorporate a strategy to build revenue from its app and website. The company did just that, and was the fastest-growing affiliate on multiple networks consistently each quarter.

Vodafone purchased a majority stake in 2012, we hit the revenue targets in subsequent years and my job was done.

Since returning to PerformanceIN last August, I’ve continued to have a vested interest in affiliate marketing, which for argument’s sake I see as part of the wider umbrella of performance marketing. It’s the industry I fell in love with 16 years ago, and I even retain the four-digit Affiliate Window publisher ID to prove it.

The first offer all those years ago was promoting a sweepstake for a CPA of 60p. From there I was hooked, and affiliate took me on a journey through content, blogging, product feeds, cashback and vouchers.

Since then an army of retail, finance, travel and fashion brands have excelled and matured, tightly managed by in-house teams, agencies or by the networks themselves. We founded a4uexpo, now PMI, off the back of affiliate marketing coming of age, and the a4uAwards, now the Performance Marketing Awards, to recognise best practice, innovation and excellence. We’ve all come a very, very long way and the affiliate marketing industry is worth a reported £9 billion in the UK alone.

Whilst the transformation has happened, affiliate marketing as it is represented in Europe (outside of the UK) has changed beyond recognition, and I’m not convinced that it’s been entirely good news.

With the growth of mobile we’ve seen new business models arrive that have attached themselves to affiliate marketing. This includes subscription billing, app installs, CPA (for health products, pills, binary and creams), Facebook advertising and the entire world of buying and selling traffic through exchanges.

Whilst these verticals and traffic generation techniques and models are not new, they are attracting a great deal of attention, and the people within them are making serious amounts of money. The subsequent ‘pops’ or ads result in hundreds of millions of tracking events each day, all on a first-touch basis.

Are these traffic types and models part of affiliate marketing? Yes, by default as affiliates look to convert via landing pages for a CPA. However, they also bring a whole new world of challenges with ad quality, monitoring and fraud that advertisers need to consider.

We’ve all seen the manipulative conversion strategies, clickbait and wild, often unsubstantiated claims littering our social feeds and websites.

Take the ads that promise the answer to skin-aging worries in the pop of a pill. Click through and super-persuasive copy presents itself; a page with reviews naturally based from people near your location will face you. Offer your email and you’ll receive a drip campaign over the coming days pre-selling the product. It’s incredibly smart stuff, but are these manipulative ads in any way ethical? In most cases, no.

For that reason, it’s no wonder traditional, data-led affiliate marketing, where you receive commission determined by the value of a basket, continues to attract a skeptical eye when this type of activity is labelled in the same way.

But that’s not the end of the problems. In what we call traditional, retail-based affiliate marketing, incentivisation remains a strong business model. Voucher code and cashback sites dominate revenues for many traditional networks. More recently, retargeting technologies have also jumped up the roster. They know it, we know it, but is this good news?

Is affiliate marketing in an innovation drought, waiting for the next big thing to arrive? The networks are searching for it and numerous options have been touted. Or if we consider where the revenue is going, perhaps it’s already arrived in some of the more shadowy corners of our industry. I’d be keen to hear of your thoughts.

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Matthew Wood

Matthew Wood

Having spent time as managing director of vouchercloud, building a fantastic team, steering product & strategy and achieving treble digit YOY growth - Matthew is now back at where it all began and his ultimate passion, PerformanceIN.

Matthew is a 16-year industry veteran and behind the Performance Marketing Insights conference series, the Performance Marketing Awards, and the ceremony's European counterpart which debuted alongside PMI: Europe in Amsterdam this year. 

Matthew is also co-founder and non executive director of Optimus, an award winning digital performance marketing agency and remains an Investor at vouchercloud after the investment by Vodafone PLC in 2012.

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