Are coupon affiliates good or bad? Below is a list of opinions, facts and myths about coupon sites as well as tests to measure their value in a very detailed Q&A format.
Questions & Answers to Working With Coupon Affiliates:
- Coupon sites DO NOT add value
- 70%+ of referrals are new, they are a customer acquisition channel (myth bust inside)
- They will do “SEO” for you as a promotional method (solution in this section)
- Because I work with coupon sites, high-value adding partners won’t work with me
- I have attribution tracking set up so I’m good to go
- They have a high EPC, so they’re good
- High conversion rates mean they’re a good partner
- Will setting commissions lower or to zero solve the problem
- How can I tell if they’re poaching my shopping cart
- Coupon sites increase AOV (some good tips here)
- How can I test if coupon sites are adding value (this is the section you want to read most)
- How do I remove them from my program
If there is one that I missed or you would like to add to the list, please send me a message through the contact form or include it in the comments section below. However, I ask that you backup and provide a reliable reference or reasoning for anything that you claim or I will not publish the comment.
Before we get into these topics, it’s important to define what coupon sites are. I break them into three categories.
- Traditional – sites that post deals and coupon codes.
- Deal sites – these post weekly specials, products on sale and coupons for stores. They can also be frugal bloggers or loyalty sites. Sometimes a deal site has a coupon section, but mainly focuses on promoting specific products instead of stores and store coupons. (a food blog which has food, grocery and other niche related coupons)
- Couponware – this would include software, browser helper objects and anything that intercepts an end users experience, shows a coupon and tries to take credit for a sale.
Also, for the record, I am NOT against coupon affiliates and I do not hate them. I just work with them differently than most affiliate management companies. I also set additional restrictions in the affiliate programs I manage and enforce them.
Now, grab a coffee or a glass of wine and lets talk about coupon affiliates and discover if they add value or not.
Coupon Sites DO NOT Add Value
This is true and also false. If the coupon site is showing up for your URL or brand name + modifiers like coupons, vouchers, deals or promo codes, they probably aren’t adding much if any value. In many cases this type of engagement can cause more harm to your company than it can good. But don’t kick these sites out right away…you need to be smart. I go into this later in the post with ways for you to test if your coupon affiliates add value and how to remove them.
With that said, as long as they are not abusing your trademarks like I mention above, there are value-adding ways to work with these types of partners. Yes, coupon affiliates can drive top of the funnel traffic and sales.
- Newsletter drops
- Placing you on pages that show up for non-branded terms “halloween coupons, christmas deals, black friday sales, etc…”
- Social media shares (if they have an active and engaged audience)
- Buyer/gift guides
- Blog posts
- Forum posts and stickies
The trick to having them add value instead of poaching your cart is to make sure they have an active and engaged audience and that the traffic is NOT using your brand. If you sell Halloween costumes and the coupon site DOES NOT have a page for your brand + coupons, and only puts you on the page that shows up in Google for “Halloween Costume Coupons”, then sales that come here are probably value adding (even if they aren’t the first referrer in the attribution line).
Here’s a screen shot of traffic for phrases like “Halloween Coupons” and Google Trends for it. There are phrases that these sites can show up for with a higher volume and this type of generic traffic is also top of the funnel and normally high value adding.
If your coupon affiliates share your deals on social media and sales come through the links on Facebook, Twitter and Pinterest (without using your brand as a hashtag, etc…), this is another way to add top of the funnel traffic. If they do a newsletter drop and you get a burst of traffic and sales that does not match your site’s own traffic patterns, this also brings value to your store value (even if the customer is a repeat and not a first time shopper). The coupon site in many of these cases initiated the interest or helped to close the deal and brought you the customer. That’s also why their conversion rates will normally be very low on these types of promotions.
70%+ of Referrals Are New, They Are a Customer Acquisition Channel
This sounds great! It’s usually the excuse given to small brands or new companies on why they should keep coupon affiliates in their programs. It is almost always inaccurate as well. The person saying this is normally leaving out one important thing.
When did the coupon site interact with your customer in the sales process?
I do a ton of affiliate program audits. When the program has a heavy reliance on coupon sites and the company has been told they are customer acquisition because the coupon affiliate’s referrals are 50% (or higher) new customers, we look at the time of the click to the close of the sale as a first step to determine true value of the coupon affiliate.
If the average PPC, SEO or top of the funnel customer takes ten minutes from getting to your site to finish checking out, but a specific coupon site only takes 4 or 5 minutes (from the time their cookie is set), chances are they are intercepting the shopping cart and not bringing you new customers. Ask your tech team or use your analytics or attribution tools to see what the average time from when a person reaches your coupon code box to checkout is. If this matches your coupon affiliates average click to close time…it’s fairly obvious they are poaching your shopping cart.
The coupon affiliate’s referrals are technically new customers, but the coupon site is NOT acting as an introducer or an acquisition channel. Instead they may be seen as parasitic because they are intercepting your shopping process and taking a piece of the revenue from you instead of introducing new customers. You could also argue that they help to close the sale and this could be true in some cases. The tests I mention below can help to determine this for you.
Remember, if the time stamp is similar to what I mentioned above, they may just be intercepting and poaching the commission from you. That’s why you need proper multi-channel attribution and a non affiliate manager or network person to evaluate fairly. Here’s a graph and another explanation of it below.
In the image above you see the arrival time of your customers by channel. The thick black line is the time when a shopper gets to the coupon code box in your checkout. PPC takes 7 minutes, SEO takes 10 but the coupon affiliate takes 3 minutes which is also the same time an average shopper reaches the coupon code box and checks out. This is a very good indication that coupon affiliate is poaching your shopping cart.
The next step in proving this is to look at the original source. If the customer found you through PPC, SEO results, a cross promotion with another company, or even an offline ad or PR coverage, that is your customer acquisition channel. If they left to find a coupon code at checkout, clicked the coupon affiliates link and came back to finish checking out, that coupon site was not the customer acquisition channel.
If you want a “proof is in the pudding” way to tell if the coupon site is or is not the customer acquisition channel, pull the last 10 or 20 sales where the coupon site got credit. If you really want to get a good feel, look for your coupon affiliates that have very high conversion rates and short click to end of sale time. Now call those customers and tell them you’re doing a quick satisfaction survey to see how you can make your site/store and their experience better. Your first question should be “how did you find us?”. If the answer is anything but that coupon site by name, the coupon site is probably not your customer acquisition channel.
If these tests turn out to show the coupon site is not introducing the customer, then they are NOT your customer acquisition channel and you should begin testing where you have added value. I have a section on this below. We get the same results almost all of the time and it saves companies a ton of money by identifying where you gain and lose money. This is absolutely worth setting up and running (especially if you’re entering busy season).
If you’re a small company or brand, knowing who and where you can build customers is vital to success and this should be a priority for you. Again, do these tests now so you don’t have to pay commissions to partners who are not introducing new customers and may not be adding any value.
They Will do “SEO” For You as a Promotional Method
Doing SEO and adding value are 100% different. When you ask a coupon affiliate what promotional methods they are using, if they say SEO, ask them for what terms they’re trying to show up for or to show you an example of SEO that they are doing for other brands/companies. They will more than likely show you pages optimized to show up for those companies trademarks, URLs or brands + words like coupons, deals or promo codes. This is when you know if they have your best interest in mind or their own.
Doing SEO to show up for “Back to School Coupons” or “Travel Deals” or “Coupons for things to do in XYZ city” brings traffic in that you do not have access to. However, that takes a ton of work and effort and does not guarantee affiliate commissions. That is why many coupon affiliates will show you they build “dedicated pages” for your store and optimize those for the search engines. This is what you want to be careful of and avoid. That is how they poach your shopping cart. They may also say they are driving relevant traffic or high-converting traffic.
This is a 100% accurate statement. What traffic is more relevant or higher converting than people who are already in your shopping cart and checking out? If they can INTERCEPT YOUR customers as they checkout, that almost guarantees they earn a commission and also means you have to pay out on sales you did all the work for.
The solution here is to add a section to your program TOS and agreement that coupon and deal affiliates are not allowed to build pages that try to rank for your URL or brand + coupons, deals or other variations.
Include examples in the section saying they cannot use your URL or Brand + modifier in the:
- Title tag
- H tags (H1, H2, H3)
- In the copy at more than .5% keyword density
Some coupon affiliates will agree to that. If they refuse, you can offer them an alternative to modify their Robots.txt and .htaccess files to tell Google and other search engines to block the dedicated page from being indexed. (This is different than no follow so don’t get confused).
This will let their site continue to rank whatever it wants, with the exception of a page that is built to rank for your trademark or URL + modifier. If they tell you this is too much tech time, tell them it isn’t and send them a simple meta tag for the header of that page. You can find it in Google webmaster support here.
If they cannot or will not do the above, you need to make a decision on if you want partners intercepting your customers and if you want to pay them for poaching your own customers from your own shopping cart.
This is where proper multi-channel attribution is vital and to ensure it is being measured by a third party that has a lot of experience with coupon sites and is not afraid to recommend pulling them from your program. If the person/company who is running the tests continuously defends the coupon sites, you are probably not going to get a fair or unbiased response.
Because I Work With Coupon Sites, High-Value Adding Partners Won’t Work With Me
This is true, but only partially true. Many new people to affiliate marketing don’t know to look for coupon affiliates showing up for a brand’s URL + coupons. Some of them will still join and promote you, but when they learn more about tracking and see they could be losing sales to these coupon affiliates, there is a chance you could lose these top of the funnel affiliates and their trust forever. Others will pass you over without ever contacting you and now you lose the opportunity to have their top of the funnel traffic and sales. Now you’re chasing away a new customer acquisition channel and paying people to intercept your shopping cart. Neither one makes any financial business sense.
Its the same as handing someone who is about to pay full price at your cash register a 20% off coupon and paying the cashier a bonus for lowering your margins. It just doesn’t make any good financial sense.
Setting the coupon affiliates commissions lower or to zero is also not a solution since the value adding affiliate will still think their cookie can be overwritten. You are still missing the partners, chasing them away and stopping your company from being more profitable by having them.
I Have Attribution Tracking Set Up so I’m Good to go
This is also mostly false. Attribution tracking or commissioning means that if there is another cookie from an affiliate before the coupon site (or second, third or fourth click occurs), that first affiliate gets credit and the coupon site (or affiliate further down) does not. Another form is to split the commissions by each partner in the attribution line. It can also be set up so that if the coupon site has a cookie set within X minutes of the time to the sale closing, they don’t get credit but a partner further up does. Neither of these are good solutions.
Remember, the top of the funnel or value adding affiliate is going to evaluate your program without contacting you. They have no way to know if your attribution based commissioning structure will help them, if it works or even exists. By allowing coupon affiliates to show up for your trademarks, you chase them away and miss on their traffic and sales. This is a missed opportunity for your business and missed revenue you should have had.
The next issue is if they do join and notice they’re not earning what was promised. If your program is supposed to pay 10% commissions but they’re getting 5% or 8% because you have split commissions with coupon affiliates, you’re really going to aggravate them. This could cause them to pull you from their sites and you lose the traffic source because you allowed someone to poach your shopping cart and their revenue.
They Have a High EPC, So They’re Good
This is another false metric. EPC’s are almost always only relevant when it’s looked at on a partner by partner basis. If the partner has a high EPC, check to see if they’re poaching your shopping cart. Coupon sites and trademark bidding affiliates normally have the highest. They intercept your shopping cart or customers who are looking you up by brand and setting their cookies during the process.
Because these are people who already knew about you, the conversion rates are normally higher than other affiliates and channels resulting in a higher EPC. I use high EPC as a way to detect fraud, not reward a partner. Low EPCs also do not mean bad traffic or low value affiliates.
A coupon affiliate that does a newsletter drop for your company could be sending top of the funnel traffic. However, because this traffic is not intercepting your customers at checkout, but is being exposed to people who may not have thought about shopping with you that day, you’re getting top of the funnel visitors. This results in more clicks but less sales and a lower EPC.
High conversion rates mean they’re a good partner
This is probably false. It is important to know how the coupon site or promotion is interacting with your customer. If they are showing up for your store name + coupons in Google, they’re going to have a high conversion rate and are probably just poaching or intercepting your customers at checkout. If they do a newsletter drop or only place you on a page that shows up for “Christmas pajama deals”, chances are their conversion rate is extremely low, but they are being a top of the funnel traffic source.
Knowing why their conversion rate is high or low is the most important thing. Once you know this you can then determine if they are a good partner or a bad one. I go into more testing options below.
Will setting commissions lower or to zero solve the problem
I answered this in the section about attribution commissioning and high-value partners. No, setting a coupon site to a zero commission DOES NOT SOLVE THE PROBLEM. It creates more.
- The coupon affiliate links are still live. They can still overwrite a top of the funnel partner’s cookie and poach their commissions. This causes them to be less likely to continue working with you or to promote you.
- Top of the funnel affiliates will sometimes do a search for your store name + coupons and see them active. This may cause them to never join your program. You’re now chasing away new traffic sources.
- You may still be paying the networks and losing money. Look at your contract. Does the network charge you on total sales or what the affiliate makes? Even if you’re only paying the affiliate 2%, the network could still be making more off the actual sale amount. That is one of the reasons why I like ShareASale, as of today they go off of what the affiliate makes instead of total sales so your company saves more money.
- Your top of the funnel partners may eventually come to you and ask for higher commissions because they feel the coupon sites is “stealing” their commissions. Now you’re out more money or you risk losing a new traffic and actual customer acquisition channel.
Lowering a coupon affiliates commission or setting it to zero is not a solution. It can be almost equally as harmful as continuing to let them intercept people who leave at checkout to find a coupon code.
How Can I Tell if They’re Poaching My Shopping Cart
This is easy. There are many ways to tell. Here is a bullet list with two of the simpler ones. (There are other options above and below)
- Pull a timeline report – if a coupon affiliates time from when they set the cookie to close the sale matches the average time of a shopper who reaches your coupon box to close, they’re probably poaching your shopping cart. Your tech team can see this for you. UX tools, some analytics and most attribution tools can normally help you find this too.
- Have them create their own traffic boosts – If their traffic normally matches your own sites overall traffic, they’re probably poaching your company’s site through adware, the coupon code box or trademark bidding. The easy way to prove this is to make them show an increase in traffic AND SALES while monitoring to make sure their conversion rates remain stable. If they can do this, they may not be poaching your cart. If they cannot increase their traffic and sales without your other channels or own promotions, then they’re probably poaching your cart/site or your other channels traffic. This is the easiest way to know and takes little to no work from your end.
In the chart above you see the blue line which is your own company’s sales. The red line is the affiliate that is poaching your shopping cart. You’ll see the red affiliate’s sales patterns match your own company’s sales patterns. The green line is a value adding coupon site. It’s sales are independent from your company’s sales which is why it peaks and slows at different times.
Coupon Sites Increase AOV
This is half true. Coupon sites on their own might be able to entice people to add more to their cart (this would also in theory increase the time from the cookie being set to the sale closing because the person is shopping on your site again instead of just continuing to check out). If this is true, it can be a good thing. The reason it is a half truth is that you can do most of it without them and in order for coupon affiliates to increase AOV (in many cases), you have to help them.
How to Increase AOV Without Coupon Affiliates:
The first option is to have wording at checkout that says “add $xy more and save 10% or get free shipping”. You could do a tiered deal or savings like spend $XY and save 10%, spend $XY and save $15% or spend $XYZ and save 25%. Another option is buy 1 item save 5%, buy two and save 8% and buy three and save 10%. These are all ways that coupons on your own site can help to increase your average order value. If you offer these same options to your coupon affiliates, this is how they make the case that help increase AOV. In theory, yes that can be true and a good thing.
Remember, increasing AOV can be done without the coupon affiliates being in your program so you don’t have to further reduce margin and profitability. You may also want to include a note on your own site saying that these are the only active deals and that your customers won’t find anything better by going to Google or to a coupon site. This may help to prevent having to pay commissions from someone leaving to find a coupon code.
Bonus tip: you can offer the free shipping or save XY% after checkout on the confirmation page by saying “add XY product now and we’ll ship your order free” or whatever the offer is. This is another way to increase your AOV by offering a coupon.
How Can I Test if Coupon Affiliates Are Adding Value
There are a ton of ways to see if coupon affiliates are adding value or intercepting and adding little to no value. The trick here is to have real and controlled testing in place. This is why it is important to NOT allow the test to be done by your affiliate manager, the network, your agency or anyone who insists that affiliates showing up for your brand + coupons in Google adds value. You need an unbiased third party that has experience with shopping cart poaching, adware and attribution. There are not many and you’re welcome to contact me for recommendations by using the contact forms on this page or in the top right of my site.
I mentioned the first test inside the 70% new customer acquisition Q&A. I also gave you other things to think about in the EPC and conversion rate answers. You can find a few more in the poaching my cart and AOV section. If you’re ready for some more, here you go.
Have Them Create The Same Increase in Traffic And Sales on Their Own.
Repeat from above – The easiest way to see if a coupon site is intercepting your shopping cart (or other traffic) is to look at their traffic patterns. If their traffic and sales increase to match your own and your other channels’ patterns (during large sales, newsletter drops, when you spend more on PPC), then they’re probably poaching your shopping cart or intercepting your own traffic. Proving this is simple.
Give them a unique deal or code and ask them to create the same burst of traffic and sales that you see during your own sale. Their conversion rates should be equal to what you normally see during the spikes that your company generates without the partners and the volume of sales should match too. To give them a fair try, give them the deal before you run it yourself. If they can produce the spike while maintaining their standard sale conversion rates, they could be adding value. If they can only produce these spikes when your own site has them, they’re probably poaching your shopping cart and other traffic.
Start Touch Point Testing
This one is tricky, but easy to measure. Touch point testing is when you add and take away customer touch points to figure out where value is being added, where you should spend more money and what you can eliminate touch points without causing financial harm or damage to your company. When doing touch point testing for coupon affiliates, there is a very simple one.
You’ll start by testing the coupon affiliates that show up for your URL + coupons in Google, Bing and Yahoo.
Start by increasing spend on PPC or Media. Now watch the impact across all channels.
- Coupon sites that do not show up for your branded terms should stay consistent.
- Coupon sites poaching your other channels like PPC will increase and decrease (but only if there is an increase in sales from the channel you increased on your own). Remember, their sales are dependent on people reaching your checkout.
- Coupon affiliates that poach your shopping cart will increase and decrease during these tests (and they should match the channel you’re altering fairly closely).
- Affiliates that add value (ones that have their own traffic), will stay consistent.
By testing different channels and seeing which coupon affiliates grow and decrease based on your tests, you can now determine who is poaching from specific channels, from your overall efforts and also which top of the funnel partners you can help as well as hurt by altering channels (think of review sites and mid-funnel partners).
Have Them Pull All Dedicated Pages
One thing you can do, but most will refuse, is to have them pull all dedicated pages or pages that show up for your trademarks or brands. First go to Google, Bing and Yahoo and type in your brand or URL + the word coupons (or whatever you label your coupon code box “promo codes”, “voucher codes”, etc…).
Now look at the sites showing up as well as the affiliate IDs on their links. (some automonetization tools work as a backdoor and may give the coupon affiliate access to your links after you remove them. Make sure you check your automonetization tool partners’ referring URLs to see if this happens. They are normally very good about blocking the parasitic coupon affiliates if you ask them too). Next, send an email to all of those sites through the network and through their site letting them know they have to remove those pages or they’ll face being removed from your program.
Once those pages disappear from the search engines, chances are that those coupon website’s sales will disappear almost 100% too. If this happens, then that possibly means they were intercepting your shopping cart and your company is now saving money. If they cannot remove the pages, you can always use the solution outlined in the SEO bullet in this post with modifying their robots.txt and .htaccess files. The goal here is to ensure they are no longer showing up for your trademark, brand or URL terms with modifiers (yourbrand.com coupons, yourstore promo codes, your website vouchers).
Revenue Line Testing
This one is tricky but the most accurate because it also includes attribution testing. I have a tool I use for this, but it is fairly pricey and my clients have to pay for it themselves. Instead of only looking at clicks to close and what causes an increase and decrease, it looks at your revenue in addition to these.
You may find that even if you reduce overall sales by removing a touch point, your ROAS is much higher and you can now invest in the higher revenue channels increasing your company’s overall profitability. These tests almost always result in us removing all partners (not just coupon sites) that try to poach or intercept the person at checkout. Not all the time, but most of the time. Unfortunately I cannot share any of this data because I delete it after the project is over, but if you contact me I can send you some of the tools to use. If you hire me we can set them up and run the tests, but this post is about helping you, not pitching you our services.
Revenue line testing also provides a big case to keep review sites for highly competitive and high cost products. This also includes comparison sites for expensive and highly competitive niches (brand vs. brand or which is better, XY brand vs. XY brand). We also normally find out that some of our PPC keywords which are barely or not profitable are actually profitable by removing the affiliates that intercept your shopping cart at checkout (in a smart way, not just pulling the plug).
If the tests show that coupon affiliates who intercept your checkout process don’t add value and you need to remove them, keep in mind that the affiliate channel will tank in sales, but because you are no longer paying them commissions but the sales are still occuring, other channels and total company revenue increases (in theory and if done/measured correctly). The short version, affiliate sales tank but overall company revenue rises…but only if you remove them in a smart way.
How Do I Remove Coupon Sites From My Program
If you decide you want to remove some or all of the coupon affiliates from your program, you can. It is up to you and your company to define what adds value and how your program should be run. If you do decide to remove them, do it smart. Here are some recommendations.
- Begin optimizing your own sites and properties to rank for your URL and brand + coupons, promo codes, vouchers (if you live in the UK), etc…
- Add strict guidelines to your program’s terms of service about what you allow and do not allow with regards to partners optimizing to rank for your trademarks. Now write to each affiliate that optimized for these terms and give them options to stop their pages from ranking while also letting them know that if they do not comply, they will be removed.
- Set up a leapfrogging timeline and attribution based commissioning model for the short run. If you only set them to 0 commissions, the sale won’t properly fire back to other partners in the timeline. This will depend on the network or tracking technology you use. Once they’ve been removed from the program and the cookie life has expired, you can now remove that specific attribution commission rule and return to normal if you’d like.
- Contact each of the sites who are promoting you in a way that you do not allow and let them know about the changes to your TOS. Do this right when you update the TOS, 3 days before you remove them and the day before so they have fair warning and can make the required adjustments.
- Give the coupon affiliates you’re planning on removing at least couple of days to respond (they might be on vacation or swamped if it’s the holidays). It is the fair and nice thing to do, just in case they’re willing to comply and only send top of the funnel traffic.
- If they do respond, let them know they can stay if they remove the pages and promotional methods that break your TOS and remind them of the date this has to be completed by.
- If the partner has still not responded within a reasonable time period and you’ve added the new restrictions to your TOS while making every effort to let them know, then take whatever action you feel is needed which can include removing them from your program. Remember, any cookied sales can still potentially show up.
The important take away is that coupon sites can and do add value, but only if you work with them in a smart way. You have to ensure they are not intercepting people checking out of your shopping cart and that they are adding top of the funnel or mid funnel traffic.
Affiliate managers, agencies and the networks will give you a lot of good-sounding stats and statements about coupon affiliates, but if you really dissect them, you’ll see that some of them may not be 100% accurate. Test each theory yourself and then re-read this post. You now have everything you need to know about how to work with coupon affiliates, if they are adding value or if you need to remove them or find an alternate way to work with them.
Feel free to leave a comment below if I left something out, if you want more detail or you’d like to add to this post. If you disagree, you’re welcome to comment as well, but you need to provide solid reasoning as to why.