Rick at Frugal Travel Guy writes today about a special offer he had hinted at for the United Explorer card that did not come to fruition. He suggests that Chase may have canceled the promotion because a blogger mentioned the promotion before it was supposed to launch.
I have no insight into this specific case, but that reason doesn’t strike me as correct. Here’s why:
First, allow me two seconds on how the whole affiliate thing works: Credit card companies (referred to as “advertisers” in the affiliate world) will pay website owners (referred to as “publishers” in the affiliate world — OnlineTravelReview is a publisher) for any referrals they give that result in a credit card application. They work through a third party that manages the relationship between publishers and advertisers. They traffic the creative (banners and whatnot) and take care of payment. Most affiliate providers frown on publishers having a direct relationship with advertisers (though not always).
In my full-time job, I head up the affiliate program for the apparel company I work for. In this case, I work as the advertiser in the affiliate arrangement. Affiliate programs are win-win for publishers and advertisers. We pay a 7% commission to any publishers who drive a sale on our site. We believe that, at least in large part, these are sales we would not have otherwise gotten. Although it’s not always the case, we advertisers hope that affiliate sales are incremental business.
Affiliates generate about 10% of our business, a figure that’s roughly in-line with other online apparel companies. When we put out a good promotion, that percentage can double (or more). Affiliates are very, very important to our growth.
Back to this specific case: we have had a number of occasions where we have put out an offer and had to rescind it before it launched. Sometimes our creative was not completed in time. Sometimes we were having technical issues. Legal can sometimes get involved at the last minute. Things just happen, and while we hate to do it, we sometimes do reach out to our publishers to tell them that an offer they were expecting is now canceled.
And we have had publishers mention deals before they go live. I can look at that 2 ways: First, if the promotion isn’t turned on, the customer isn’t going to get the deal anyway, so why do I care? Second, there’s the question of whether knowing an offer is coming will cause people NOT to make purchases they would have made in hopes of getting a better deal down the road.
Let’s assume that was the case here, as FTG suggests. That doesn’t make much sense for Chase, then. If their fear was that people knew about the offer and, hence, would wait for the better offer, then putting the deal off to November (which has been suggested) only exacerbates that problem, with people waiting yet another month.
More importantly, the guys running the affiliate program at Chase have the same types of monthly targets we do: if I were to cancel a major promotion, we will miss our monthly revenue target. It’s that simple. Punishing affiliates by pushing off an offer by a month doesn’t punish the affiliates (after all, they’ll just get paid in November), it punishes Chase. Which seems like an odd reaction.
Given all that, I suspect there is a more mundane reason why the offer didn’t come out. The advertiser/publisher affiliate relationship is symbiotic, and I haven’t heard of an advertiser punishing legitimate affiliates. That sounds a little wacky to me.
Also, since FTG also mentioned that he would like to see the best offers put out into the affiliate channel all the time (sometimes the best credit card offer is not available to affiliates), I’m torn. As a publisher, sure I’d like the best deal. But I also know that in my day job we will give offers to our email subscribers that are not available to our affiliates. We’re trying to manage a whole bunch of marketing channels and as a marketer, I know that having different offers available will help me manage the profitability of those channels. Affiliates will sometimes complain to us about this as well, and I understand their frustration. But we’re looking to do what’s best for our business broadly, not just in the affiliate channel.
If anything, I think this comes down to how the affiliate vendors (ie, the middleman) allows publishers to work with advertisers. As I mentioned above, most affiliate vendors act as a middleman and prevent the publishers and advertisers from speaking directly. We chose our affiliate provider at my company precisely because they ENCOURAGE us to have direct relationships with our publishers (we work with Impact Radius, if anyone cares). It builds a sense of trust that we would not otherwise be able to have. If affiliate companies allowed those direct relationships (where publishers want them) I think that would be a big win for both sides.