How Affiliate Adware Affects Your Revenue

[Note from Rae – This post is a guest post from Adam Riemer. When I published my affiliate marketing glossary, he showed a very impassioned stance on Adware, as well as an amazing amount of knowledge on the topic with his comment. When he offered to guest post to fully explain what Adware is and what effect it has on both affiliates and merchants, I immediately said yes. And since I’m in California at SMX West all this week, the timing was perfect. ;-) Enjoy.]

Quick disclaimer. 1. I blocked all logos, brands and URLs from the Adware. This is about how it can affect your channels and steal from you. 2. If you want anything explained or are confused, leave a comment and I’ll respond and explain it in a different way.

Adware terms and definitions

Here is a glossary with jargon from the post you may not understand.

  • Toolbar, Browser extension, BHO (browser helper object) – These are types of Adware that appear on your or inside your browser like firefox, safari, internet explorer, opera or any other type of browser you use to go online. They are used to activate upon reaching a merchant’s site and set a cookie, overwrite another channel and to modify other websites, search engine’s and user experiences online.
  • Couponware, reminderware, loyaltyware – These are forms of toolbars normally used by coupon, loyalty and cash back or charity sites to make the Adware sound happy and positive. If you think about the name, it is meant to activate when the person hits your site to show coupons, remind you of coupons and cause a potential full priced customer to now get a discount, reduce your margin and cost you money.
  • Shopping windows and helpers – These are small windows that stay open and display ads as you browse the internet, entice you to click on them when you reach a Merchant’s website or show coupons when you hit a site they are affiliated with.
  • PPV, CPV, PopUps, Pop Unders, interruptive, interstitial – These are types of Adware that react based on the content of your site, the search querey you run on search engines like Google or the URLs of the Merchants. This is Adware and not PPC or real search marketing. It has no way to activate without stealing traffic and using someone else’s hard work.
  • Reminders – These are things that pop up when the Adware recognizes a URL or site or they change colors to let you know you can save money. They are smaller and can come in the form of icons, characters or even people that pop up out of the bottom of your screen or on your desktop and can still be nasty pieces of Adware that are hard to remove.

How Adware can steal from you and hurt your bottom line

Affiliate marketing, when managed properly is one of the best channels you can rely on. It provides you with a network of content sites and search or social media marketers that send new and incremental customers to you on a rev. share or no risk basis to your company.

Unfortunately, almost every program I see is overrun with coupon code box poachers, trademark bidders and/or Adware companies. These types of partners are what give a negative name to some people for Affiliates.

However, if you find an ethical Affiliate Manager or Affiliate Management Company you can have a value adding program and your other channels will have an accurate measure of their success, without their sales being poached by Adware and coupon partners.

Here are 5 ways Affiliate Adware effects your company and/or your revenue.

5 types of Affiliate Adware and How it Works

1. Adware poaching sales from paid search

Adware screenshot 1

One of the scariest things for a company to see is the loss of revenue from an Affiliate Adware application taking credit from a sale that should have been from SEO. In the image above you’ll see I did a search query for a fairly expensive term.

You’ll notice that next to the company’s own paid ad there is an icon. The icon is there to help entice a click. As the ad is clicked (with or without the icon being clicked depending on the application) the person (with many of these types of applications) is redirected through the Affiliate’s link to set their cookie and then to the Merchant’s site or landing page. T

hey no longer go directly from Google to the Merchant but the Merchant still pays for the Google click. Because of the redirect, the Affiliate’s cookie is now set and if a sale is made the Affiliate will get credit for a sale that the Merchant paid for with a PPC ad that they paid for.

Instead of giving credit to PPC (depending on your company’s internal tracking) the sale is now given credit as an Affiliate sale, your company has now spent money on a PPC ad, the commission paid to an Affiliate, a discount if any coupons are used and also a network fee (depending on the network you are on).

This is a huge loss, especially because you have to spend money to convert the sale with PPC and now incur additional costs for a sale that was stolen from you. An even less value adding scenario is if it was a URL or trademark bid.

If the ad or click came from your trademark, this is a returning customer or someone who saw your ad and was coming to your site anyways. Now you have to spend all of these fees again for someone who already knew about you and was coming to shop anyways. This is a very large revenue loss and the money should never have been given to the Affiliate Channel.

These Adware applications are live on many of the major networks and numerous Affiliates that run these applications are partnered with hundreds and even thousands of Merchant’s meaning they are probably in your company’s program and poaching sales that other channels like PPC should have earned. One thing to look at with transactions is an attribution line or what other channels, besides Affiliate the same is credited to.

This same sale may end up being credited through Adwords because it did start with a click from Google PPC, and unless their tracking is overwritten, it will also appear inside the Affiliate Network. What you need to look at in this case is the adwords click and when the Affiliate cookie was set. This will show you the theft.

The cookie can be set on your site or just after or during the click from Google. That is a huge sign that it is Adware or coupon box poaching and you are being stolen from. Now your attribution is messed up and your company doesn’t know where to properly spend it’s money.

It may turn out that PPC is a lot more profitable off of numerous terms than you previously thought were break even or just not working. This also costs the PPC department money, Google money when the company thinks PPC isn’t working as well and credits the wrong channel.

2. Overwriting SEO generated sales

Adware screenshot 2

In the image above you’ll see that there are regular search results showing up like you would expect. However there is an Affiliate toolbar or browser extension on the person’s browser and icons next to the SERP results. When I click on the link to go to the site, I first redirect through the Affiliate’s site and then go to the Merchant’s site.

Because of this, you tracking may show that the sale was referred from the Affiliate’s site, may not show that it was actually your own SEO work and because a cookie is now set, the Affiliate will get credit for the sale if the customer purchases. This path would eat the sale from SEO and give credit to the Affiliate, if the person hadn’t been to your site before.

There is no way to know that they actually came from search, unless you have them tagged from somewhere else. Analytics is not dependable either, unless you get 100% of search queries and the Adware application is not blocking it.

Now your SEO department is losing sales and you are spending money on sales that were never earned in the Affiliate Channel.

3. Adware replacing Google Adwords Ads with Bing Ads on Google Search Results

Adware screenshot 3

This is a scary one for PPC people and for Google. The screen shots are being provided by Kellie Stevens from AffiliateFairPlay.com as I don’t want to download these applications onto any of my systems. What happens is that a Bing partner has created an application that is showing a bing ad over the top of Google search results.

By pulling what would have shown in Bing and recognizing the querey done on Google, the Adware application knows what ads to show and can stop your PPC efforts from getting all of the exposure off of your top terms.

4. Affiliate Adware overwriting another Affiliate’s cookie

Adware screenshot 4

This is a scary one for any legit Affiliate. If you follow the three pictures, in the first one I am on a well known Affiliate Site for mobile phones and accessories. I go through a post and see an ad or Affiliate link. (In the top picture you’ll see a text link.) When I click on the link an Affiliate Cookie should be set for this Affiliate.

Without Adware on my browser, this Affiliate would get credit (unless the person sees a coupon code box and the Affiliate Manager or Management Company allows coupon sites to rank for URL or trademark + coupons, etc. which lets people who leave for a coupon site enable the coupon sites to poach the sale.

This is another type of theft that ethical and well managed programs do not allow. You should try typing these terms into the search engines and if any active Affiliates are showing up for your company or programs you promote. If active Affiliates are showing up, you are potentially losing sales from your channel or your own sites and losing sales or money to couponers who add no value to these sales.).

Because I have a toolbar on my browser, when I go to the Merchant’s website a few things can happen depending on the application.

  1. The toolbar redirects through their own link or takes me to their site first and then redirects to the Merchant’s site to look like a real referral and so they can steal the sale from the legit partner.
  2. If there is no redirect, I may be taken to the toolbar Affiliate’s own site first and shown a coupon code to get me to click. This would also be bad for the legit partner.
  3. When I get to the Merchant’s site, a screen or ad would show that either displays a coupon code, says coupons are available or says click her to get cash back. This click could also replace the original Affiliate’s cookie and steal their sale.
  4. Parts of my browser and toolbar will change colors letting me know I can save if I click on it.

This is one of the more common types of behaviors you can find on almost all major networks. With the toolbar I downloaded above, almost all of the things above have happened. I was taken to the Adware Affiliate’s site, the legit referring Affiliate’s cookie has been replaced and I was prompted to click and get coupons directly on the Merchant’s site.

This particular well known site and name brand does this over SEO and SERPs, PPC, Comparison Engines, Internal Email Lists, Social Media sites, etc… The reason it does this is that it waits until it sees the Merchant’s URL and then activates. Because of this it can overwrite and steal from any and every channel including offline advertising.

This is also one of the reasons many people think that Affiliate Marketing doesn’t work and they don’t use Affiliate ads on their site.

With coupon sites ranking for the Merchant’s trademark + coupons and these Adware applications, the cost to your company is huge.

  1. You will scare off legit value adding partners.
  2. Your company loses sales to people who never sent you a new customer and poached sales from you.
  3. You are paying commissions, network fees, discounts or coupons, salaries and sometimes bonuses on sales that were never earned.
  4. Your competitors that manage their programs correctly will gain the value adding partners and it will be twice as hard to get them to rejoin your program since they don’t trust you because you allowed this to happen in your program.
  5. Affiliate’s and site owners talk to each other and your company can be blacklisted for other programs that carry the same product lines, and you’ll lose the trust of that entire group and network of potential value adding partners. The smarter smaller companies will get the sales and you’ll be losing customers you would never have had without them.

5. Injecting ads and copy into Merchant’s sites, other sites and over other ads

(Please refer to the screen shot in section 3 for the injection over Google.)

In this case the Adware application is showing ads on top of another Affiliate’s ads and/or over their site and the Merchant’s site. This can also happen on any other site you are looking at.

This type of Adware can also have the capability to read the content of your site and turn your own Affiliate links into their Affiliate Links, replace your cookies or ad links and ads to your copy when you didn’t actually place it there. Not only are they taking credit for your hard work and you pre-selling the products or services, they are injecting ads and copy onto your site changing the user experience.

This can increase your bounce rate, hurt the site experience and cause the user to not want to come back again. Here are a few more negative things that can happen.

  1. If you have advertisers or get paid on a click basis, your ads are being blocked and your Advertisers are not getting the click throughs or exposure they need. The visit should however still show impressions if you sell ads on a CPM (cost per thousand impressions) basis.
  2. If you wanted an ad free and clean site, this visitor isn’t being exposed to your copy or content the way it should be seen. Instead they are seeing what the Adware creates and a distorted version of your site.
  3. If the ads are something you are opposed to or the ads that are shown are offensive, the people visiting could now associate that with your site and you could lose a reader or visitor for life.
  4. If you had your own links or Affiliate ads on your pages and site, this Adware can now replace it and take credit for your sales and steal your commissions.

I have never seen an Adware application that was positive or beneficial to a Merchant or a legit Affiliate.

Because the networks don’t educate you on Adware (Two of the largest networks in the USA have parent companies that run their own toolbars in their networks and in almost every other network) and because most Affiliate Managers have no way to be trained in Adware and incremental value, it runs rampant in the industry and can steal from every channel and legit partners.

Steps to see if your Affiliate program is adding value

The first step in seeing if you have a value adding affiliate program is to run a few quick tests.

  1. Type in your URL + coupons into Google and Bing. If the top ten results or any of the ads are active Affiliates, you have an issue and are being poached from in my opinion.
  2. Go through those top ten sites and ads and take the company name and search the name or URL with the term toolbar, download, uninstall, etc…. Another option is to look for browser extension or helper on their site. This will normally pull up results and show you if you have a partner with toolbars, etc. You will have to download them and test them to see if they are active and how they work. Some Adware sites actually hide them from the main site and use other ways to install Adware onto computers. I have an example below.
  3. Check the FAQs and Terms of Service for the sites. Some of the sites that use downloadable software will have instructions on how to use it, install it and how to uninstall it from your computer and browser. See below.

Adware screenshot 5

On a final note, not all visitors actually start from, use or have ever even heard of the site they download the Adware from. I was at a Kristin Chenoweth concert and she usually brings a charity for rescued animals with her to help rescue animals (which is awesome).

The charity she brought with her in DC was handing out cards for an Adware Affiliate asking people to just log on and download the browser extension. In exchange for the download, the Adware Affiliate will donate an instant $10 to the partner. When you read the actual page on their site it says for a new person who isn’t part of their network they will get the $10. They also emphasize that you have to add the Adware to your computer so they can get a donation. If you don’t add the Adware then they will not get donations.

This pulls at people’s hearts and really gets them to install the Adware, not knowing what is actually happening to their computers. Above is a screen shot directly from the animal rescue’s site with the Affiliate’s name and URL blocked out.

Why Networks and Affiliate Management Companies Don’t Kick Them Out

This is something that most people wonder when they find out what is happening. The truth is that not everyone has your best interest in mind. You or your Manager doesn’t know how to look for it and the sales look like real referrals so it is very hard to catch. Because you don’t suspect anything, they assume you will never find out.

Other times the networks parent companies have their own applications and are running it in their networks and other networks. Depending on the network your program is on, or if you are in house, they are probably in your program as well. The more programs they join and add, the more they can poach and earn.

Now you pay them for sales they didn’t earn for both commissions and for network fees if you are on the network they own. If they poach from your PPC or paid channels, you now lose money from that channel and if the person uses a coupon code you lose even more margin possibly making the sale not profitable anymore.

When you are on a network you are also probably paying to help to support a compliance team which is clearly not in your favor or best interest if this is happening. It’s the same as the Networks not educating Merchant’s on how to stop coupon sites from ranking for your trademarks. The reason they don’t is that they’ll lose a ton of money.

The only legit Affiliate Management Companies you will find are the ones that walk you through this and help you remove the theft. The networks usually don’t like us very much because we remove the theft from Adware and coupon sites ranking for your trademark or URL + coupons, etc.

If you are being managed properly, your top ten and probably twenty Affiliates will all be content sites and you will be able to see where your banners and links are. If this doesn’t sound like your top ten or twenty list, you more than likely have an issue and need to rethink your strategy and your program.

This Affiliate industry is one of the best because there is no risk, unless you have an uneducated manager or someone who simply doesn’t have your best interest in mind managing your program. It is important to run the tests I mentioned above and see what is happening in your program.

If any of these are happening, you probably need a new manager, new management company or you can contact someone like myself and I will help to educate you and work with you or your in house Affiliate Manager to clean out the theft and help build a value adding program.

Quick summary

Adware can be installed by downloading a game, a screen saver, installed in the form of a shopping helper, coupon finder and even just as a browser extension from a well-known brand. It can show ads on a site, not show anything but force a click or perform an automatic redirect.

It can activate the minute someone hits your shopping cart by targeting the coupon code box, the URL or the keywords on the page like check out, confirm, your order, etc. Other forms will modify search engines like Google and some will just pop up over a Merchant’s site, redirect through an Affiliate link and take credit for sending the sale, even if they never click the link.

No matter how you define it, in my opinion it will always hurt you as a Merchant and costs you more money than it will earn you.

About Adam Riemer

Adam Riemer is a long time online marketing veteran. With more than 10 years of experience in SEO, Ethical Affiliate Management, Adware and Theft detection as well as PPC and Sales Funneling. He enjoys helping his clients scale with clear and measurable results. Visit his blog or follow him on Twitter, Facebook or Google+.

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Comments

  1. Eye opening post; thank you very much. I never knew a lot of this stuff, and it has caused to me reconsider a couple of my advertisers.

  2. No problem Meg. One thing you can do is write to them and send them this post. Then you can work with them at cleaning the program. If your Manager is active and cares they will begin to clean their programs and in theory you should start to earn more.

  3. I appreciate the information. I need help with this Adam. I am not a member of affiliate marketing however when I pull my url + coupon up in Google my site is listed on the page and when I click on the links they go to pages for coupons for my competitors. How do I contact you to see if I can clear this up? Thank you.

  4. Do you know any merchants that state in their T&C’s that toolbars are not allowed?

    • Hi Jessi,

      Here is an example I wrote for one of my clients. I have others if you need them. The trick is enforcing them and some of the networks, including one of the largest in the US will not let you include this in your TOS or they will change it so it cannot be enforced. Their lawyers review all T&C changes and will potentially modify it to allow this behavior.

      Company name enforces a zero tolerance policy for adware. Adware as defined by company name is any software, toolbar or device that can set a cookie without a click, show an ad over another person’s website or take credit for a sale that was not referred off of the Affiliate’s own website. Adware can include but is not limited to toolbars, BHOs, reminderware, couponware, loyaltyware, PPV advertising, interstitial advertising, contextual advertising, etc… If found using this type of method, all sales, regardless of origin will be immediately reversed and the Affiliate will be terminated with or without warning.

      Adam

      • In your experience, once you have identified these partners and informed them of the zero tolerance policy is there any way to salvage the relationship or do most of these Affs just terminate? Is there a work around other, than them dissolving their toolbar (seems a little farfetched that that would actually happen)?

        • Most of them will never agree to removing you and if they do, they “accidentally forget” you were supposed to be excluded. When you tell them they can no longer rank for your trademarks or urls + coupons they always flip out because now they cannot steal from you and will lose a lot of money….depending on how big of a partner you are for them. When you kick them all out you’ll notice other channel’s climb but Affiliate will drop. I have never come across an actual case that i have seen myself where we lost a single sale by removing the partners from the top ten SERPs an kicking out adware. The remaining legit coupon sites that will add no index, etc… will still add you to their newsletters and be able to prove actual incremental value because nothing will be poached. Please feel free to contact me if you want me to look at your program.

          • Sorry one more thing. By continuing to have them, you basically now have to test and infect your computer on a daily basis during the holidays as well as someone with a different IP and location to make sure you are not in it. The extra work is insane and will make you less effective as a manager because your time is being spent monitoring people you know are doing things that can have the potential to steal from your company instead of working with the partners and growing your partners that add value. One of the services I offer is helping to remove the bad players from your programs and help clean it up. Kellie Stevens also does program audits and will show you who is doing what, but she doesn’t manage programs. Like I said, please feel free to reach out to me if you’d like to talk about it.

  5. Ken O'Donovan says:

    Interesting write up Adam and I found your pictures do tell a thousand words.

  6. Very insightful article. We picked up alot of these tricks that our publishers were using to game our affiliate program. I put an end to everything I could, but we still have the coupon affiliates ranking high in organic search, so my solution for them was to drastically reduce the commissions for coupon publishers and we currently only offer them a 2% commission. I know it’s not a perfect solution, but it’s a negligible amount of marketing $’s and was the easiest fix without pulling them all out of the program.

    • Hi John,

      I just did a scan and you have almost every well known adware Affiliate and toolbar coming through your program. The bigger issue with just reducing their commissions is that you are still chasing away the value adding partners who would send you new sales. By allowing the coupon sites to rank for your trademark + coupons your legit partners cookies will still be overwritten if someone leaves your site for a coupon code and they set a cookie. That is not a solution for an Affiliate friendly program and you will still never gain all of the content sites that you could have had.

      You should look through these sites that are ranking for you. You’ll definitely find toolbars, etc… in your program.

      Adam

  7. Brilliant article! Affiliate ‘piracy’ is something I’ve thought about from time to time both as an affiliate and as a potential affiliate program manager but this is the most useful write up I’ve seen on the various forms of it and how they work. This should be required reading for anyone in affiliate marketing.

    • I agree. I usually bring this up when i speak at shows like Affiliate Summit and some of the SEO and SEM shows I talk at. I usually get a few people’s mouths to drop during live reviews when we show them how their “trusted partners” are driving sales.

  8. wow………still learning new stuff everyday, thanks for this, didnt even know that was possible.

    where can i read up more about this subject?

    Jason

    • I have a ton of posts on my blog about this. You can find it by clicking on my name here. You can also hire Kellie Stevens and she can give you an insane amount of information and data on it.

  9. Very informative!! This is an article that taught me a lot. I didn’t know these things were possible. It is frightening that someone could be stealing all my clicks! I plan to read this over and over to keep these things fresh in my mind. I’m not sure at this point how to go about keeping stuff like this from happening, but at least now I am aware of what can happen.

    Thanks for a great article!

  10. It’s refreshing to read about educating merchants on ethical behaviors and promoting value first and foremost for the merchant. I feel so outnumbered typically being the only one in the affiliate space surrounded by Display, Content or Email folks so they don’t always know why you can’t just let things be… I’ll be sure to come here more often ;)

  11. Hello Adam,

    You are the man brother! I’ve always known that there was nefarious activity with adware, coupon sites, etc…

    …but I do have some more information that maybe you can help me with?

    I have 2 questions:

    This is a little off-topic — but still related to getting commissions stolen as affiliates…

    #1) How do we know… or can we test our affiliate wordpress sites to see if there is any nefarious activity from any plugins, themes, etc. that maybe installing scripts, that can steal our commissions when we redirect to merchant sites?

    I mean, is there any way to find out if plugins like AddThis -or- Related Posts aren’t stealing our affiliate commissions?
    —————————————————————————————————————————–
    #2) I think there is something phishy going on with Twitter — and maybe not Twitter, but maybe some of the other apps I have installed –> Hootsuite, Tweepi, & SocialOOmph. Let me explain…..

    For the past 3 years I have built up to a following of currently 80,000 followers between 3 accounts… which are related to affiliate marketing & MLM. And I send out 85% high valuable content — mostly quotes, self-help videos,(not promoting anything) — and about 15% promotion to opt-in pages(tools & systems to help people build their business). So, I do it right! And I never spam.

    I do about half automation(hootsuite) –and– half manual(retweets/replies/mentions).

    But it just boggles my mind that out of the last 3 years and now totaling 80,000 follower, I don’t think I ever got 1 sale from these twitter campaigns.

    But whats even crazier — is that when I pause these Twiiter campaigns & Apps from running (don’t use hootsuite -or- other Apps/ Don’t Tweet / Dont Follow / etc..) — then it seems like more sales come…

    …This just seems like its way beyond coincidence…. how could more sales come in with a lot more traffic from 80,000 followers.??

    So, I know that adding social media applications like can maybe install scripts, of cookie stuff, etc..
    but i dont know about SocialOOmph, Tweepi, Hootsuite,

    So just wondering if you have any knowledge, data, or feedback on this.

    In Many Thanks,
    Peter

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