On Internet Business

Affiliate Marketing – caveat emptor?

Posted by Michael under Affiliate Marketing, Online Retail

The past two weeks have seen a small but hot war take place in the British travel marketing sector as affiliate marketers found out that one travel company had different pricing policies for consumers arriving direct or via an affiliate.

UK-based accommodation site VivaStay is offering cheaper rates per night for booking hotels to users arriving direct at site, with a price hike of up to £4 for those who land via an via an affiliate link. Fascinatingly, their own terms and conditions state: Lowest Price Guarantee: We at vivastay.com are committed to offer our customers the lowest possible price in the industry for the products and services we provide. For this purpose, we have contracted the industry’s most renowned land arrangement providers in order to pass the best prices on to you. Hmmm …

Lawrence Target of CheapBeach was testing links for his new site when he discovered that customers using affiliate links to get to VivaStay would pay a premium. He said ‘For Vivastay to sneek in the implementation of this added hidden charge to the customer from an affiliate link is outrageous. Thankfully not all merchants and travel providers are quite so underhanded. “It is an affront to the very fabric of Affiliate Marketing and I suspect that other affiliates will also be dropping them like a stone, how can you work with a merchant you just can’t trust, it only works if both parties are in synergy, a proper partnership, that is what achieves the best returns.’

Danny Gallo who is ‘Marketing and Sales’ at Viva Travel, VivaStay’s parent company, responded to the concerns at the A4U forum, used by many European affiliates. His comments are interesting: We at Viva Travel have looked in to the issue concerned and take your points seriously as no-one wants to damage brand integrity. After much discussion in the team it has been found that the issue raised is indeed occuring and as [forum name removed] pointed out, the issue is in regards to the commission paid out whereby if the prices were identical to the direct prices (users visiting our site without using an affiliate link) then we as a company would suffer a loss. However, when customers use the discount codes available to them the prices are much lower than going direct. I agree with [forum name removed] that this should perhaps be more transparent and we are looking in to ways that this can be enhanced to accommodate this. As to whether this is allowed, we are not sure as we have not been advised that this is against any rules and this is the first time that this has been brought to our attention. I’m not sure also as to whether it’s allowed that affiliates use coupon codes or make transactions via their own referring sites, as [name removed] has done which not only reduces the price of the purchase but also awards the very affiliate a commission for their own purchases, which we find in itself to be unfair and guilty of a similar “crime”. Again, as this is not stated in any rules per se, we are not to follow suit and make any accusations. Lastly, we would expect any affiliates to approach us first directly rather than posting a demeaning post with attempts to damage the brand. This would enable us to rectify the issue for all concerned in an amicable manner beforehand.

However, affiliates claim the practice definitely damages their own reputations. A disgruntled blogger said: How can you legitimately build up a loyal readership on your site once the readers realise they are going to get screwed every time they follow one of your recommendations? …. how is that fair to the affiliate who sent the traffic, when they get paid nothing for a converting customer?

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