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Social media affiliate models and the dangers of the sub network

by Dave Tinneny | 12.06.2012

Social media remains an elusive, yet incredibly tempting proposition for brands and retailers alike. Tapping into a captive audience of millions, who will recommend products and services to their friends, which will in turn generate consistent, incremental sales is becoming something of an obsession for many companies. With General Motors pulling its annual $10 million advertising spend from Facebook just days before the much anticipated IPO, questions are beginning to circulate again as to how effective these campaigns are.

Enter the snake oil salesmen… ok, that might be slightly dramatic and disingenuous, but it seems that countless of brand new companies are offering the ultimate remedy for monetizing ‘fans’ and ‘likes’ which uses an attractive, relatively affordable, affiliate CPA model.

Several companies operate in the same way – You sign up with the company, who will create an account for you. If you want to share a link with your friends, you run it through the company’s website first, which will turn it into an affiliate link. If one of your friends buys through this new link, then the company will give you a cut of the commission. You can then take it out of your account after you reach a certain threshold. “Money for nothing” as Dire Straits once said.

In the UK we have ‘Have you Seen’ and Digital Animal’s ‘Fandistribution’. The US has ‘Referly’ and there are countless also others worldwide competing in the same space which operate similar models.

Unfortunately, it just sounds too much like a sub network for my liking. Even if you have no idea about affiliate marketing, you can infer from just reading the name that “sub network” is not a good thing. Sub literally means under, below or beneath. It should come as no surprise that suspect and fraudulent activity has long been associated with this model and that the general feeling among affiliate managers is that it’s just not worth the hassle.

The downsides of sub networks are pretty obvious.

  • No relationship with the sub affiliates – Relationship building is a key part of the industry, which is why I make sure to attend every networking event diligently (Disclaimer: There’s usually free food and booze also). Making the most of your ‘virtual sales force’ is a lot more difficult when you don’t even know who they are.
  • Complying with the programme terms – This is a huge issue for me. With a sub network, you lose almost all control that you would normally retain over brand and how it is presented. Fussy about the spelling of your brand name? Good luck with that…
  • Suspect activity – Unfortunately, sub networks attract everyone who’s been kicked of the major networks for bad behaviour. Do you really want the heart breaking task of ensuring they’re all compliant, when you don’t even know who’s doing what? That’s a lot of trust to place in a network, even if they have all the best intentions.

I’m a huge fan of innovation and new technology in the affiliate space. It keeps everything interesting and evolving. Unfortunately, I don’t wish to give free reign to anyone with a Facebook account to go promote my brands. As usual though, I’m prepared to give these companies a chance to prove themselves. Maybe they’ve figured out how to overcome all of my misgivings? There’s only one way to find out…