The Amazon Associates Program - The Pros and Cons
I was asked by another WA member recently to give my thoughts on the Amazon Associates program. Then immediately after I got asked why I use Amazon instead of say Chewy or PetCo or PetSmart. If you didn't catch it, I'm in the pet care niche.
Given this I just wanted to sum up my thoughts on Amazon's program so people have a clear picture of it. Note I've had a great experience so far with Amazon so I definitely lean on the positive side.
- Amazon is a well trusted name in eCommerce which means people buy stuff from Amazon all the time.
- Your Amazon affiliate link isn't only good for the products you referred someone to the site with. If they make ANY purchase at all you get credit for it. As an example, over Black Friday someone bought $2,000 in legos after clicking a link from me. I got paid for it. I promote pet care related items.
- Amazon has the largest set of items available of almost any Affiliate program and they are branching into services too. Most of Amazons programs provide bounties if people sign up for them.
- You gets tons of free creative images directly through their API. No need to go find your own product photos or manually download/upload them (which is against ToS by the way).
-Great built in reporting capabilities and up to 100 affiliate link categories built in. This means you can categorize your links to see where traffic is coming from. - Using Amazon doesn't stop you from adding other links on your site. You can use multiple affiliate programs at once.
- They are super reliable and trusted. I have been paid every day right on time with direct deposit to my account.
- They've introduced 'OneLink' which basically means if someone from another country is reading your site and clicks over to Amazon you can still get credit for a sale. OneLink basically introduces the equivalent product for someone in the UK even if they clicked on a link for the product in the US. A great perk for those of us with sites that have international appeal.
- The 24 hour cookie. This is a drag, but given the way people shop on Amazon so frequently it is expected in my opinion.
- The pay scale in certain product categories is lousy. And I would assume it will continue to slowly decrease as Amazon continues to get more dominant in each space. If you're selling low value products Amazon might not make sense unless you have tremendous site volume.
- They do pay on a 2 month delay.
- They do have lots of restrictions in their operating agreement around things you're allowed to do: you can't post prices, you can't say 'See it on Amazon', you can't redirect links (through a service like Jing/Bitly) for centralized reporting purposes.
A Mathmatical Example:
So let's take a look at some of the math. Should I keep Amazon, or should I go register for Chewy? Well that all depends on the value of the items my site promotes. Let's assume I am promoting dog toys which have an average value of $5.00.
Amazon pays 8% per sale and Chewy pays $0.30 per click. See the table below for the payout differences of 100 clicks with a 5% conversion rate.
Then look at it for a $100 item, or a $200 item. You can do this for all affiliate programs.
So What Do I Do?
There's no simply answer. If all you want to do is maximize short term revenue you could easily go ahead and switch things over to Chewy. Or you could even consider having certain pages on your site point to different affiliate programs depending on the pay scale you might achieve.
But you have to keep in mind that you should be doing what is best for your end customer, not just for you. The best payout might be from Uncle Joe's Dog Toy Shack. But who knows what Uncle Joe is making and whether or not he'll be in business six weeks from now.
Always put the interest of your customer at the top of your list of things to do and the money will start to come in later.
If you have any questions or thoughts to add please let me know in the comments below!
Recent Comments
35
Hi Craig,
I have been an Amazon Associate for several years. I got some clicks on the Amazon link now and then, but no sales. Some members have said that if they don't get any sales during a certain time period they are dropped by Amazon.
I haven't had any sales yet am not dropped. It makes me wonder if I really am an associate?
Bill
Hi Craig,
I go to Amazon Associates screen that shows clicks and sales.
Like I said it shows a few clicks but so far no sales.
I must add what I show on my website for Amazon. I have a link for a Lockheed Constellation which can lead to any aircraft model they have. I also advertise with a link for Amazon Prime.
Bill
Huh, that is surprising then! I wasn't sure if you were tracking your links through Bitly or Jing or something, that's the only reason I ask.
Might as well leave it going if it is still logging clicks. At some point I'm sure it'll convert to a sale!
Hi Craig,
Thanks for your reply. Maybe since I have been an Amazon Associate for several years, there might be an old "grandfather clause" that was prevalent several years ago?? Otherwise, I will leave a "sleeping dog lie"
Bill
Thanks for your detailed information...a lot of factors to consider but keeping the customer in mind is good advice.
Debbie
You are so right...our choices of what to do should definitely encompass that "always put the interest of your customer at the top of your list." That will help with many decisions.
Thanks, Craig. I am not on Amazon Associates yet because I got messed up with a scam that had me on there, and membership was canceled by Amazon due to lack of sales. So now I have to wait until I have more traffic to my site before I can reapply. Appreciate knowing it's worth the effort. Carol
Hi Craigrut,
Thanks for this very useful information on Amazon.
I think you're on your way to your first $million.
Let me know if I can assist you achieve that target .
Regards
Johnlogs
I think the biggest factor in all this is trust. I don't think you can beat Amazon for security, delivery and returns, etc, although they are not always the cheapest.
i know they have 'peculiar' T&C but didn't know you couldn't say 'See it on Amazon'. Is that a direct quote or are there specific phrases you can't use?
Ian
Based on their terms of service you can't use the term 'Amazon' anywhere in your links or descriptions. At least that is my understanding from my last read of the operating agreement.
I know you can't use 'Amazon' in a link but surely you must be able to say something like:
xyz is available from Amzon:
xyz link
No?
Otherwise how do people know where they're being sent? :-)
I know they don't like you printing price but in a couple of my reviews I've said 'Amazon usually has the best prices'. Is that ok?
What do you do?
Ian
The only way you're allowed to list prices directly is to pull them from the Amazon API. They need to always be accurate and they need to show the price from Amazon and the 3rd party vendors that sell the same product.
Most of my links say something like 'Find the best price' or 'Check it out now'.
I know you're not allowed to directly quote Amazon reviews either.
I'll have to dig further on even mentioning Amazon. I swore I saw that in the ToS somewhere, but I don't have time to read it right now. So don't take my word for it :).
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One other negative on Amazon - no cross-device tracking. If someone finds your post and clicks through from their phone, but completes the sale via their desktop, affiliates don't earn a commission even if it's within the 24 hour cookie period.
Certainly a bummer...but I would assume unless an item is added to a cart by a logged in known user that almost no online retailer does this reliably.
Many online retailers don't even have the technology to tie customers together across devices after the fact let alone at the time of transaction.
Ah, I'm happy to tell you about cross device tracking. It does exist for much of the affiliate world outside of Amazon. I work for Awin.com, and we can track a user from their phone to their tablet to their laptop to their desktop to make sure that the right affiliate earns the commission. It follows the click, not the item in the cart. You'll get that type of technology from networks, but because of the metrics and scale required to do so, you won't get that from in-house affiliate programs, and never from Amazon.
Thanks Jeannine. I'm actually already quite familiar with cross device tracking.
"Much" of the affiliate world is a very relative term. I'm admittedly less familiar with affiliate marketing networks and programs but I was under the impression in house programs made up a much larger portion of programs than networks do. Granted, I've never done any research on the topic so I probably am wrong!
I also work in digital marketing as my day job and many of my clients, both large and small, are unable to stitch this type of data together effectively. This includes many organizations in the fortune 500.
You can only do what you say if someone has authenticated from every device you're referring to or if they've unwittingly revealed themselves by doing something like providing a credit card number that gives you a unique ID to work with behind the scenes to tie it together.
It is simply not possible to accurately perform cross device tracking until someone authenticates. This requires a login or a reveal of some sort on each digital property in question, whether that's a mobile application or a website or a mobile website.
There are of course companies that do fuzzy matching and predictive analytics around who a customer is across devices, even if they don't reveal themselves, but in my opinion affiliate networks and programs have almost zero incentive to invest in these types of analytics/capabilities so they probably never will.
Okay, I’m glad to get into specifics. Awin.com, CJ and LinkConnector.com all have one version of cross-device tracking, while Impact and PHG use a version which is less definitive. That’s 5 networks using some form for sure. I’m not sure about Rakuten, but I do know for sure that Amazon does not use cross device tracking.
No, there are more programs on networks than in-house programs. Some companies do both. In-house programs can't compete from a technology standpoint with programs on a network. Networks can amortize the cost of developing new technologies across all their programs, while an in-house program would have to bear the burden for a single program. And the cost is significant!
If you think about it, there’s really much less reason for a Fortune 500 company to work on this type of technology. Affiliate networks are paid on the override of sales made for merchants by affiliates, so they have a huge incentive to do this and do it properly. Thus it is critical to track every sale, both for the benefit of the affiliate and the network.
Yes, indeed the technology does exist, and authentication is possible without involving personally identifiable information. I can’t go into too many specifics, but we do have a fair amount of information on it on the Awin.com website. Networks ultimately build user databases numbering in the millions. The definitive version is called “deterministic” – the transaction is 100% confirmed and commission is awarded. The fuzzier kind is called “probabilistic” and can have an accuracy as low as 25%.
Affiliate networks can also track users across multiple merchants, while in-house programs and Fortune 500 companies can only track within a single company. Within the world of cross-device tracking, the latter is called a walled garden, in that those companies can only see the path on their sites but not the rest of the journey.
Awin has chosen to use the deterministic method because we believe the 100% accuracy is required to be fair to both merchants and affiliates. I’ve done hour-long presentations on it at the Affiliate Management Days and Affiliate Summit conferences.
Sorry for the novel long response. It seems we have much to talk about :).
In House Versus Network:
I suppose that makes sense. No sense building out the infrastructure and dealing with the administrative hassle yourself if you can just pay a cut to the network. I often have the same build versus buy discussion for the marketing software I work with.
I would say that fortune 500 companies have a huge incentive to deploy this type of technology, more than an affiliate network in my opinion. Affiliate networks aren't the ones paying marketing dollars to put their content into the marketplace, the affiliate is. Sure, the network gets paid when the affiliate gets paid so there is an incentive there and of course the affiliates demand accuracy and desire to be paid for their efforts. But if there is nobody in the market is providing the service then affiliates are out of luck. In this case it sounds like multiple networks to provide the service so I guess my point is moot. /facepalm
That being said I think large multi national corporations tons of incentive in cross device tracking because it allows them to understand how people interact with each point of engagement and determine whether each of those points of engagement is driving sales. Marketing Attribution is one of the big buzz words these days as I'm sure you already know! Tons of organizations waste millions if not hundreds of millions of dollars pumping out lousy content that does nothing or potentially even hurts them. If they could effectively track across devices and interaction points they could determine where to allocate budget far more effectively.
And a network in the millions is impressive indeed, but I'd say take a look at an AT&T or a Verizon. These companies have a massive incentive to invest in this tech on their own because each of them has potentially 100 million subscribers or lost subscribers in their database. If they can uptick conversion rates by even .1% on a big campaign then that can add up big time as you mentioned.
Tracking Technology:
As to the technology itself...What you're saying is someone revealed themselves on one site and you basically have a cross device tracking cookie or ID deployed that lets you keep tabs on them. This in exactly what a DMP like Krux/BlueKai/et. does, but it DOES require you to say 'Hey it is me!' at some point on every device otherwise you're just marketing to or engaging with a mostly unknown entity until a conversion point.
I agree with you and with Awin that deterministic is the way to go, most probabilistic companies are starting to disappear with GDPR type regulations (more below).
And while cross merchant information is useful, it is largely useful to the Affiliate Network, not to the actual participants in the network. Sharing that information across companies is likely not only illegal (or becoming so), but also unethical without massive legal agreements built into the contract. I'm sure to some extent you can anonymize it and aggregate it, but that data has a more limited use the more it is aggregated.
I'll be very interested to see how cross device and cross platform tracking continues to be handled going forward as GDPR type regulations become more prevalent worldwide. Especially here in the states where we are starting to see individual states pass laws around it for companies based out of that state.
Cool that you present at the summits! I saw your post on free passes in your profile. Very impressive! Keep up the great work and thanks for sharing all your knowledge with me here!