Why Allowing Publishers to Bid on Your Trademarked Terms is Good for Business

We're not talking about pure trademark bidding here, but what's referred to as Trademark+ (or TM+) where affiliates will bid on the trademarked name plus another term like "merchant coupon" or "merchant discount".

This has been a very long-standing debate in the industry. It comes up with every single program we manage without fail and is a very difficult argument to win.

Most merchants view this as "cannibalism" to their business. They feel (usually very emphatically) that these sites are doing nothing but claiming sales for customers that they would have gotten elsewhere. They firmly believe that any publisher doing so does not bring them any incremental value so don't see why they should pay the commissions or partner with these sites at all.

Well, do I have a surprise for you! We've actually proven with a couple of solid case studies that the complete opposite is true.

For years we've been arguing the following points when it comes to trademark bidding for affiliates, but it was always theoretical and our words against theirs. We could never really prove it and often lost the argument:

1. It increases traffic and conversion rate by targeting consumers looking for something of more value than what they'd find by simply searching for the merchant's name. They're likely searching for things like coupons or discounts.
2. We're allowing affiliates to leverage the merchant's name to bring additional traffic to their own site where they are providing an added value to help close the sale for the customer.
3. It helps clear out the space and cut down on competitors bidding on trademarked terms.
4. While yes, it may give the affiliates some "easy money", they are all more than happy to give the merchant added exposure and value because they are allowed to do so.

However, this is no longer theoretical, we now have proof thanks to a couple of clients that were kind enough to share their analytics of their entire site with us.

Here's a summary of the two case studies we put together:

Merchant 1: This merchant had been with us for a number of years and allowed TM+ bidding for all publishers. Around May of this year, they decided to make a policy change and disallow all publishers from doing this (much to our protest). After three months of running the new policy terms, we did an analysis to see how this affected sales and traffic. Here's the results we found:

•  Affiliate sales had been trending about 8% up from last year, but after the change, we were down 20%. A net loss of approximately 4,000 transactions.
• The merchant's PPC traffic was supposed to have picked up the difference since that's the marketplace we shut down for the affiliates. PPC traffic only picked up an extra 2,000 transactions. Only half of what we lost from the affiliates. That's a 1:1 ration. For every customer we "saved" we lost another.
• Furthermore, we looked at Google Analytics' new Assisted Conversion reporting (check here for an explanation of these reports) and found that the assisted vs. last touch ration for affiliates dropped by 12%. Meaning, that for every 100 customers that were closed by affiliate sites, we may have lost an additional 12 that would have hit an affiliate site somewhere during their online shopping.

Merchant 2: This was a relatively new merchant we had started working with. Their policy had been extremely tight and did not allow for any TM bidding. So we made our case and started opening up the marketplace for select affiliates around last May. Here's the results we found for this one:

• Affiliate traffic increased by 42% and sales increased by 85%. Affiliate conversion rate increased by 30%.
• Overall site traffic increased by 47% and sales increased by 92%. Overall conversion rate increased by 30%.

We were able to clearly show here with these two studies that :

1. Disallowing affiliates to practice TM+ bidding can result in a loss of sales for the overall business.
2. Introducing the policy for affiliates will significantly boost overall traffic and sales.

What we see here is that by limiting an affiliate's methods of gaining traffic, they have little incentive to promote a merchant's offers. At the end of the day, they'll go where the money is.

By allowing them to do this, yes, we may be paying more for some sales we would otherwise get, but we gain a much higher return in the long run. When dealing with affiliates, one must always remember, this is about building relationships. When doing anything at all to an affiliate program, the first thing that should go through your mind is "Will this hurt my relationship with this publisher and could I lose additional and future sales?"

Like we already mentioned, most affiliates are more than happy to provide added exposure and placements on their site in exchange for these rights. In fact, we had a featured spot on one of the sites for Merchant #1 for about two years running. A few weeks after the policy change, that affiliate had to pull the spot in favor of a higher bidder and we lost that incremental traffic.

So have I convinced you yet? I always find it so mind boggling the lengths I have to go to in order to make people more money....