Multiplicit Blog

Thoughts, opinions, help and advice for affiliate marketers and mobile users in the UK.

BBC Building

What can happen when affiliates or agencies go rogue

It must be everyones nightmare. A giant institution finds something they don’t like about your advertising and picks a fight. This happened to a company I worked for ten years ago. The dust settled many years ago so I thought it could be a good example of how affiliates can be an asset and a risk, often at the same time.

Background

In around 2010 I went to work with a marketing company who sold “health and wellbeing” supplements. They knew me from my time at a leading affiliate network and as they were growing fast they asked me to help scale up their ability to accept and process payments.

I am not going to write the name of the business because they are still a going concern and it wouldn’t be fair if this article competed or ranked for their brand name in search engines. The name is in the radio show embedded below if you’re interested.

The business model was directly imported from a successful operation in the US, and generated 100% of sales from affiliates. When I got there I was surprised at how much they were selling. It was a freemium product linked to a subscription plan – so customers were tempted by the free trial, and paid a subscription if they didn’t cancel.

So what was the product? Don’t laugh… but it was Teabags. Not just a few teabags – they were selling millions of pounds worth of teabags every month.

I want to point out that at the time this company was no better or worse than many others in the same space. Accusations like “they hide it in the small print” just weren’t true. Warnings and descriptions of the subscription model were prominent across the entire website. Consumers were so driven by receiving a free product that they just ignored them.

Products like this were and still are the staple of lots of affiliate networks across the globe. The products have moved with the times, (think CBD and crypto trading) but it is still very much an active industry.

The key to their (apparent) success was their choice of marketing partner. They had flirted with most affiliate networks in the UK without much success before one specific partner took off in spectacular fashion.

I hasten to add that I was not managing this affiliate program – I was working on other projects as their “chief techy”.

A Bad Day.

On a lovely sunny afternoon I was called into the MDs office. “Steve, can you record a BBC Radio Show on the computer thingy?”. Erm, yeah, probably. Why? “let’s just listen to it first”.

I wasn’t concerned. A competitor had recently caused a stir with some adverts that blurred the lines between advert and editorial content so I thought it would be mainly about them. Sadly not.

Want to listen? Here it is. It is the first item on the show (1:10) and it lasts about 10 minutes.

If you don’t have time to listen here are some highlights:

A successful fraud relies on winning the trust of your victims. So, hijacking a trusted brand a trusted brand is perfect if you can get away with it. It so happens that one of the BBCs most trusted brands, the BBC news website, has been cloned for fraud.

This was news to us. You can imagine how we felt in the office. It got worse:

…They are fraudsters and they are committing criminal offences.

Detective Inspector KW from the Metropolitan Police e-crime unit

Just in case listeners hadn’t got the message:

This is straight fraud isn’t it, there is no doubt about it?
Absolutely.

This was the most damaging in my opinion – without any chance to reply, a senior Police officer had just said “no doubt about it, they are guilty”. Wow. It went on and on and on. At this point I was mentally updating my CV (best case) and wondering how I’d survive in prison (worst case).

They even advised existing and previous customers to call Action Fraud because their credit card details were at risk. In 10 minutes, equipped with incorrect information and a bit of self righteousness they tried pretty hard to ruin the business.

Later that afternoon

Well, as Aunty Beeb promised, the domain name and web hosting for the website were suspended at around the same time as the radio show. I got everything back online within two hours.

That is one of the strengths of businesses using the affiliate model – especially when nearly 100% of the traffic comes from affiliates. The main asset is traffic, and that can be directed anywhere you like. In this respect we were quite lucky – websites are easy to replace. If they had gone after the payment and banking facilities that would have been much harder to restore.

I simply published a staging website using a spare domain name and asked the affiliate network to update their links to point to the new website address. Shortly after all the banners and links sprang back to to life and the sales machine carried on. It was actually quite a good day for sales.

Was this the right thing to do? In hindsight, perhaps not. Not because it risked upsetting the BBC – we were still furious so we were quite pleased about that. However, it also meant continuing with the network and affiliates who caused the issues in the first place.

After I got everything back online we were called back into the office. The MD seemed happy. “Great news chaps. We don’t need to sell teabags any more. We’re going to sue the BBC.”

Shortly after, I resigned.

So what actually happened?

You have probably guessed by now, but the activity which caused all the fuss wasn’t directly done by the merchant. It was an affiliate.

An affiliate had purchased millions of pop-up and pop-under adverts displaying a fake web page that was a blatant copy of the BBC Health website. They had broken every rule that had been set for them prohibiting doctors recomendations, fake endorsements and more. Someone from the BBC saw one of these ads, and the rest is history.

As the radio show notes, the affiliate subtly changed the “BBC” logo to “BBG”, but that didn’t make the site any less illegal. The actual content on the page contained glowing recommendations and promises of massive weight loss, all verified by a legion of made up doctors.

The BBC had spotted one advert but we soon realised that the entire affiliate program had become lawless. Digging deeper, most of the sales came from incredibly aggressive, misleading and risky paid media activity. Pop-unders, malware, misleading content… if it could be used to promote the product then someone somewhere was probably doing it.

This was made possible because the merchant used a blind affiliate network. With these networks the merchant makes an offer available to the network, and they promote it using their network of affiliates.

The reason it went so badly was because the affiliate program was so lucrative. It attracted a lot of affiliates and encouraged the network to let them do whatever they wanted.

When you use a blind network you don’t know who your affiliates are. You simply purchase traffic and sales from the network. They are responsible for policing the affiliates and making sure they follow the rules. The BBC identified that the publisher or at least their website was based in California – that was actually more than we knew about them. It also made sense based on what we learned later.

When the program launched and started making good returns the American owners of the network took a closer interest. More aggressive publishers from the American market were recruited to cash in. They even shipped a new team of account managers across the pond to manage them.

The Fallout

  • The company didn’t get taken down. To the best of my knowledge the threats of prosecution never really materialised.
  • The focus quickly moved from the BBC and the police to the role the affiliate network played. They were responsible for policing the rogue affiliates and had really let the merchant down.
  • That particular episode of the radio show was removed from the BBC archives pretty quickly. The promised follow up never happened.
  • Changing the domain name for the brand had very little impact. That temporary domain that I activated 10 years ago? It’s still in use as the main business url.

The company changed direction. One benefit of all the frantic affiliate coverage was that it had always driven customers to established websites like Holland and Barrett to research the product.

One well known retailer in particular had been receiving thousands of searches every day, despite not selling it. Good retailers do monitor this, and now the product is available in a lot of reputable high street stores.

Things I don’t know

As you would expect the lawyers got involved and legal broadsides were fired in a range of directions. I don’t know any of the legal outcomes because by that point I had left the business.

Pretty soon after the network who was responsible stopped trading. A lot of the staff and some of their old clients popped up at a new network doing similar things. I have bumped into a few of them over the years and they said the network just picked up where they left off with their best staff and most lucrative clients under a new name.

I think it is safe to say that eventually, the merchant “won”, whatever that means. The Police and the BBC backed off, they removed the radio show from publication, and I didn’t spend my 30th birthday in the clink.

Luckily all the negative attention didn’t do them in completely, but their main source of customers was now gone and they had to start from scratch. Checking in a year later, everything had changed. The product was different, the subscription model had been scrapped, and the brand was available in popular high street stores.

Whose fault was it?

In my opinion most of the buck stops with the people executing the affiliate program, (the blind network), but there was a lot of blame to go around.

  • The police / BBC got it very wrong. They didn’t do enough research and went off half cocked. Whoever allowed the story to be published on the radio really didn’t do them any favours.
  • The merchant was quite happy accepting the sales. They could have ridden the network harder, but that’s hard to justify when money is just flooding in. In truth they were happy treading the thin line between following the rules to the letter and making pots of money.
  • The affiliate network quite simply encouraged the activity to make as much money as possible.

The network had definitely been told what the boundaries were. They were to avoid fake testimonials, fake brand names, fake endorsements (like the BBC) and especially claims like “verified by doctors”. While I wasn’t directly involved with the affiliate management, I definitely let them know when I spotted problematic content, as did all of my colleagues.

Thoughts and learnings

You can decide who was responsible yourself, but this whole situation happened because everyone – the merchant, network and affiliates – benefited from simply passing responsibility down the chain.

Nowadays I firmly stay in the mainstream affiliate market, but that doesn’t mean dodgy publishers will stay in their lane. You need to be aware that a lot of affiliates are happy to bend or break the rules if they think they’ll get away with it.

As soon as you give up control or visibility over what affiliates do the risk increases exponentially.

I learned a few things that have shaped how I manage affiliate programs today.

  • The average layman, even “fraud specialists” and the police just don’t know what affiliates are. They are likely to hold the brand responsible for whatever they see.
  • In this case there just wasn’t enough control over the program. The sector we are talking about has always had quite a flexible relationship with the rules, but in this case they lost control altogether.
  • “Blind” networks can enable and amplify this sort of risk.
  • Knowledge of the local market is key. The blind network was led from the US, which has different standards and conventions.
  • Don’t use paid sources for testimonials for your product or site. While the idea of purchasing testimonials is to protect you from harm and provide positive content, in truth they often do the opposite. The BBC picked up on it and they were dead right – they were nonsense.
  • Affiliates often think they are being clever by doing things like changing “BBC” to “BBG” but it’s a load of rubbish. Silly things like this just make it easier to identify and catch them. Long may it continue…

The most important lesson

The most important thing in e-commerce is the ability to sell your product and receive the money.

That might not feel like something an affiliate manager should worry about, but a rogue affiliate can easily put this at risk. What if the BBC or the police had managed to freeze the bank accounts or asked VISA to block future payments?

I was able to restore the website in short order, but I can’t pull new banking facilities out of a hat. That would have been game over.

Sub-networks

We have been talking about dodgy affiliates in a portion of the industry that is known for being quite ruthless and dodgy. There is, however, a relatively new type of affiliate you need to be aware of. They can introduce some of these weaknesses to any program, regardless of what they sell.

Some affiliates operate Sub-networks. You accept one publisher on to your program and they distribute your link to their own network. Well know sub networks include Skimlinks and Viglink.

I’m not going to brand them all as a risk to your affiliate program, but you should be aware of the basic premise.

In effect they are blind networks of publishers who you don’t have much control over.

Like blind affiliate networks, you can’t always see who is promoting you. You have a relationship with the owner of the sub network (because they are your affiliate), but not their publishers.

There are a few main types of sub network:

  • Technology / link rewriting
    Services like SkimLinks and VigLink provide a snippet of code that turns any normal link on a website on a page into an affiliate link. It is very useful to monetise forums and other user generated content.
    The larger ones do provide an interface to mange your sub affiliates, but access is limited – you may be charged for access, or it may only be available for larger partners.
  • Blog / content networks
    Some publishers claim to provide links or deals to a network of dozens or hundreds of websites who wouldn’t apply to your program individually. The promotion methods they use vary a lot – but banner ads are common.
  • Psuedo-networks
    Some publishers repackage programs from other networks into their own offering. They are in effect pretending to be a complete affiliate network. Behind the scenes they are closer to cashback sites, and they use the same technology (clickrefs) to pay the correct member / sub-affiliate.

What do I need to keep an eye out for?

As a rule sub networks are fine to work with. With the exception of a few psuedo-networks who are very easy to spot, they largely just provide the service they say and don’t push the boundaries. However, it is relatively easy for a few bad players to hide within a sub network.

For example, some publishers use sub networks to get access to working affiliate links after they have had an affiliate application rejected.

Most of these affiliates do offer a suite of tools to manage who can promote you, but they aren’t available to everyone. Some only allow their largest merchants to use them, while others charge for access. If you can get access to these tools you really should.

Comments

No Comments

Leave a comment

Your email address will not be published. Required fields are marked *