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Industry Responds as Bloomberg Calls Whole Affiliate Industry “Shady”

Industry Responds as Bloomberg Calls Whole Affiliate Industry “Shady”

PerformanceIN

The affiliate marketing industry has responded to an article from Bloomberg which claims that ‘affiliates’ have been buying large amounts of online ad space on Facebook to flock ‘shady’ products and score a quick fortune.

An article from publisher Bloomberg has caused some controversy within the affiliate marketing industry, claiming that ‘affiliates’ have been using Facebook ads to not only push ‘shady’ products online but also make a significant amount while doing so.

Referring to an in-house illustration of the affiliate marketing model, Bloomberg explored how sellers of false products such as miracle diet pills, instant muscle builders and male enhancers, had been buying large amounts of online ad space on Facebook to run campaigns and earn commissions for each sale generated.

Within the piece, the writer claims to have met some of those involved at an affiliate conference in Berlin, where some of those at the top said they would learn the latest schemes and trade tips on social media and search platforms, with Facebook at the core of their strategy.

Some reportedly claimed that Facebook has “revolutionised” scamming due to building tools that stores user data and its targeting algorithm, allowing the platform to do all the tracking automatically.

More alarmingly, many referred to the affiliate software Voluum as the platform they use to track their campaigns; the company’s founder, Robert Gryn, even said himself that users place about $400 million worth of ads a year on Facebook to flock such products and score a quick fortune. You can read Gryn's full response to the Bloomberg article here.

“White hat vs black hat”

The controversy around the article from a high-profile publisher such as Bloomberg is that the affiliate marketing model is blanket-referenced as just one black-hat side to a wider, broader and legitimate marketing discipline. Within the wider digital marketing industry, this could have a damaging impact on those operating honourably, as stakeholders are led away from a distinction between “long-term sustainable businesses” and “short-term burn and churn practices”.

But if the article has done anything, said PerformanceIN founder and director, Matthew Wood, it has brought to light an “identity challenge” within the industry to separate itself from individuals using manipulative tactics to convert users to a sale.

“Whilst we could wait until the FTC [Federal Trade Commission], native advertising platforms or Facebook themselves to crack down on such behaviour, there will always be backdoors, cloaking and innovative players looking to bypass efforts by platforms to enforce standards,” said Wood.

The writer’s evidence is also based on the associated activity and delegation of just one conference, which does not necessarily represent the ethics and standards of the industry at large, a sentiment that was echoed by a number of marketers PerformanceIN reached out to.

Hanan Maayan, founder and CEO of Trackonomics, admitted that there is no industry - whether consumer goods, finance or health services - that is “immune” from scammers and fraudsters but indicated that the article fails to make a clear distinction between the industry and the individual scammers that operate, using the term “interchangeably”.

Meanwhile, Acceleration Partners’ UK MD and head of the Internet Advertising Bureau UK’s Performance Marketing Council, Helen Southgate, said that referencing the fraudsters as “affiliate” is tarnishing the good, honest and hard-working people involved in the industry.

Overall it is important to see this as just one view and while the article can be viewed as not wholly representative, the affiliates Bloomberg references do exist within the industry. If something is to be gained from the Bloomberg piece, says Wood, it’s a further realisation that the white-hat industry has to make additional efforts to stamp out and reject the illegitimate side of the industry for its own benefit, especially when events still exist that “encourage such activity or turn a blind eye”.

What are your thoughts on Bloomberg’s article about affiliate marketing? Leave your comments in the section below.

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Mustafa Mirreh

Mustafa Mirreh

In addition to managing editorial on PerformanceIN, Mustafa reports on the latest day-to-day news updates from the world of digital marketing, while also doing social media promotion, live reporting of events, article features and interviewing key industry players and stakeholders.

Based in Bristol, Mustafa graduate with a marketing degree before delving into the world of music journalism through self-starting an online blog and collaborating with other publications. Now he has joined the PI team and has set his sights on succeeding in digital marketing.

Read more from Mustafa

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