December 10, 2014

3 Misconceptions about Coupon Cannibalization in the Affiliate Channel

coupon sites blowing affiliate budget

Throughout our industry merchants are deciding that coupon sites have either less value or no value when compared to other publishers in their affiliate programs. This assumption is leading to lower commissions and outright exclusion from programs for these types of publishers. While the argument of whether or not coupon sites have value has been, and will continue to be, discussed like a hot-button political issue, there are a few misconceptions about their role in the affiliate channel and how we can interact with them to continue to build profitable relationships.

#1 Channel cannibalization is only affiliate related
If affiliate marketing is the red-headed stepchild of a company’s marketing channel spread, then coupon sites are quickly becoming the slingshot that is used to cause trouble in the executive’s eyes. Much like affiliate marketing in general, coupon sites are not given a fair shake right out of the gate and many allowances made for other channels are not given to coupon sites. The bottom line is that in order to make the right decision for your program it is very important to approach the issue with an open mind.

#2 Cannibalization of the affiliate channel via coupon sites is uncontrollable
The largest misconception is that cannibalization of the affiliate channel via coupon sites is uncontrollable. Many networks actually have quite an array of tools at your disposal now that can help you control a coupon publisher’s footprint. Impact Radius, for instance, allows you to control what codes are assigned as commissionable or not, allowing for tighter control of channel promotions. You can also utilize tracking technology to assign commissions based on at what point that consumer makes his purchase in the channel funnel.

#3 The best way to deal with the issue is to cut commissions or the entire vertical as a whole from the program
Finally, the best way to keep coupon sites from taking sales from the affiliate channel and other channels is to control the messaging on the coupon sites through the promotions you offer. Many programs simply make cuts or completely take coupon sites out of the program, but in doing so they leave a lot of meat on the table. Leverage your coupon publisher’s ability to get promotions out to consumers by creating strong promotions for areas in your offerings you’d like to see more sales. Do you have a product that isn’t performing well through all channels? Create a special promotion for it and push that offer out to only coupon publishers, any sales you see will be incremental.

If you’re interested in learning more about the role of coupons in affiliate, download our free introductory slide deck.