Are Affiliates who buy urls with your name in it bad?

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I recently got chewed out by an Affiliate who applied to one of my programs.  His entire pitch (which actually isn’t his but a very old con artist one) is to buy merchants trademark names with the word coupon, or review, or a misspelling and then build the site around the domain name or trademark.  When I told him that this is not allowed and will not be allowed in the program he flipped out and gave me an entire earful of how he is adding value to the program.  The thing is that he is actually not adding any value to my Client by doing this.   I would make more money yes, the Network would make more money, the Affiliate would make very easy money but my Client would be losing out big time.  So in answer to the question, Are Affiliates who buy urls with your trademark or name in it bad?  My answer is 100% of the time yes, they are bad for you directly.  Let me go into why I feel this is bad and then also give an example to where it could be considered gray hat instead of just a purely bad practice.  It is called typosquatting, trademark optimization and in some cases people may refer to the people who do this unethical or parasitic.

The thing is that if an Affiliate is buying or they have no good intentions for you or your company.  Their goal is to optimize the site to compete with you for your own top ten listings in the search engines.  They want to poach your current traffic and your current customers and that is why they are buying urls that are trademark keyword rich so that they can more easily rank for people searching for your trademarks.

The people searching for your trademarks are already your customers and you spent a lot of time and money building your brand so that they know about you and can find you.  Why should you have to pay Affiliate commissions when you did all the work and some con artist decided to take the easy route.  You shouldn’t and if for some reason you do or you are then you should think about your revenue model and how profitable your current Marketing efforts actually are.

Suppose you buy tv ads with the hopes of bringing in new customers (this also applies to radio, magazine, ad serving, etc…).   You spent a  bunch of money on your ads and got the person to shop and broke even or even turned a small profit on that first sale.  You did your job, sent the products, built their loyalty and earned their trust.  Now when it is time for them to shop from you again they search Google or Bing for you and all of the sudden find an Affiliate site because it says there are reviews available or they get  confused as to which site is the actual real site so they click the Affiliate site first.  Even though you spent the time and money to pay for that customer and you gave amazing service so they would come back, that Affiliate is optimizing for your trademarks and if their links are clicked you have to pay them for your hard work, even though you did all the work and they did next to nothing.  The Affiliate knows exactly what he or she is doing and can easily fool or trick new Marketers or unknowing Merchants into thinking that they are adding value or driving legit sales.  This is the same issue with Parasites, Loyaltyware, Couponware, Reminderware, Shoppingware, PPV, Trademark Bidding, etc…  All of these are Merchant parasitic (poaching on the Merchant’s own traffic and customers) a vast majority of the time and should never be allowed.

Affiliates who buy your domain plus a word like discount or review will argue that they are helping you because they are keeping competitors out of the top ten listing for your trademark.  Sure they may be doing that but at the same time you could just as easily buy those same urls in house, throw up 6 articles and optimize it to do the same thing and not have to pay commissions for people who are already customers or who you brought online through your own advertising dollars.  This type of theft is very common and you may even find that some Affiliates who do this may send a redirect through another site so you don’t even see that the referring site was the one with the trademark in it.  If someone tries to pitch this to you or pitch that if the person types in a misspelling then they will redirect the person back to your site using their software then just say no to them.  They are not adding value to you and they should not be paid for your current customers.   Optimizing for your own trademarks is very easy and simple and will cost a lot less than if you have to pay commissions on each sale, trust me, it is not worth working with these guys.  I did mention though that there is an example where it could actually be value adding for a Merchant, but at the same time it will be at someone else’s expense.

Suppose you are the manufacturer of a product.  You can sell directly through your site or you may only sell through partner and retail partner sites.  You find out that some Affiliates are buying your trademarks and trying to join your Affiliate program to use them.  You reject them because you are one of the smarter Merchants out there and care about your company’s bottom line and revenue.  Your retail partners however may not care as their own sales are what is a bit more important to them.  This Affiliate then decides to take your trademark and because they are getting traffic specific to your product they can send it elsewhere since you do sell retail, on Amazon or in other channels like CSEs.  This also works with types of products like cereal or tvs that are more general but I want to leave those out for now.  Now instead of having the traffic come to you they can send it to other companies who carry your products or product lines.  Although this is not a value add to you, it is a value add to your retail partners since they can now reach out to people looking for your brands and trademarks and start to make money off of them and your hard work.  Although it sounds bad for you as the manufacturer, it actually may not be.

If the retail partners keep getting sales, they keep buying from you.  Sure they are taking some of your online sales but at the same time they are also selling in their retail shops and that is an audience you may not be able to reach on your own since you don’t have that retail space or their customer and their brand loyalty.  The other time it is a benefit is if you don’t sell on your site directly because you don’t want to compete with your retail partners.

In this case you are keeping customers happy because they can find your products and you are keeping your retail partners happy because they can increase their online sales from your work at branding and bring in new customers.  If you are selling on your site though and you do want the online sales, this would obviously be a bad thing though.  So what can you do?

You can lower the margins on the products that you sell to retail partners so they cannot afford to let it be pushed through the Affiliate Channel.  You can stop selling to some of your retail partners all together.  You can put it in your agreement as a buyer that they can only sell offline and in retail shops or you can also just do your own SEO to knock the other sites out of your top ten listings.

There are a ton of things you can do to stop this from happening but the key to taking action is to know what to look for.  The first thing is to make sure your Manager is always writing and getting responses from everyone in your program regardless of who they are or how much the Networks recommend them.  That he/she knows who they are and how they drive traffic but most importantly does not approve them in if they know the history and will remove them or take action instantly when this is found.

As Merchant’s get smarter and the bad guys get trickier it becomes a cat and mouse game.  That is why I don’t share how I catch this happening, especially with adware and trademark bidding but you can hire people like me, Kellie Stevens or use software like Brandverity and Poachmark to help you catch this type of behavior and protect your bottom line.

Thank you for reading this post and please feel free to leave a comment below if you have anything you would like to add that would benefit other readers.

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