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When travel firms First Choice, Thomas Cook and Thomson announced steps to manage how their affiliate partners bid on brand terms on search engines, it highlighted a major issue for marketers that combine a search-marketing strategy and affiliate networks. The move, earlier this year, effectively placed a 'ban' on the affiliates bidding on the companies' brand terms on Google. The reason? It turns out that the client's (merchant) and partners' programmes can clash.

While a brand pays commission to partners to promote its wares, it also buys search terms to push its products directly. The problem is, affiliates also realise the value of search engine marketing and, in many cases, are more adept at it. Thus the two sides end up bidding for the same terms, driving up costs and often pushing the brand's listings down the search results.

James Briscoe, head of online marketing consultancy Unique Digital, which has Barclaycard and Waitrose among its clients, says: "Recent Google policy changes have made the management of affiliates and search trickier. With only one slot allowed per visible URL, it pushes affiliates and search into a bidding war. Without a defined strategy and governance procedure, listings and returns will fall into chaos."

Matt Simpson, group director at online media agency Starcom Digital, which works with Cadbury Schweppes and Barclays, has been handling affiliate marketing for clients for five years. He reckons: "Search versus affiliates has emerged as one of the must-answer scenarios for clients in the online acquisition market. There is little doubt that there is a place for search and affiliates on an acquisition-based schedule. However, the realities of getting them to work in harmony is not one that many people have experience with. Affiliates and search are great distribution channels. Those who combine them best will secure the biggest market share online."

Clients are seeking an approach that gives affiliates the freedom to market themselves effectively (and make money for their partners) while protecting a brand's efforts to use search, and control how its image is represented online.

Andrew Burgess, managing director of Equimedia, an agency that handles direct-response campaigns for a host of financial firms, takes a hard line: "To effectively manage the network, brands should keep affiliates on a short leash. Ideally, contracts should be restricted with non-brand hijacking clauses. If affiliates break the contact, they are taken off the network."

Understanding value

Celine McElwee, senior search partner at agency i-level, says: "Advertisers can easily manage the impact of affiliates on their CPC costs by implementing 'maximum bid' policies, which affiliates must adhere to. It's about understanding the value of your direct and indirect sales, and that your affiliate and search marketing strategies can complement - not harm - each other."

McElwee suggests stopping affiliates bidding on merchants' brand terms, enabling brands to control how their name appears in search results.

This should have a minimal impact on affiliates since brand terms are poor performers anyway. It is rare for anyone looking for a holiday to type a travel operator's name into a search engine. "It is possible to run a programme well without allowing affiliates to bid on brand terms as search is just one vehicle that affiliates will use to achieve sales," she adds. "Affiliates can counteract this potential loss with a careful bid strategy that focuses on more generic terms."

Paul Flynn, retail manager at i-level, adds: "Advertisers must think very hard about whether to let affiliates bid on brand terms and the implications. It is vital that any restrictions on an affiliate campaign are not only communicated to all, but also that restrictions are strongly enforced."

For some, the route to success is to control the strategies of affiliates so they don't conflict with the client but fill any gaps. By leaving ultra-specific terms to affiliates, or encouraging them to bid on lesser known search networks, a brand can focus on core terms and use its affiliates to give it reach elsewhere.

Martin Talks, chief executive of digital agency blue barracuda, says: "Affiliates can help a business get a bigger share of the available traffic at a good ROI. To run one and not the other will deny the business a share of traffic." But, "don't suffer affiliates that are merely brand-sitters. Allow more freedom for affiliates that work at providing traffic over a wide variety of terms."

If the affiliate is the expert, why not work with it to decide a programme?

John Lervik, chief executive of Fast Search and Transfer, advises brands to focus on a search engine-marketing strategy based on the behaviour of affiliates. "The problem with running a programme without allowing your affiliates to bid on relevant search terms, such as a brand, is that you're likely to reduce the attractiveness of such programmes to affiliates and impose operational burdens on the company."

The problem for merchants is that the affiliates often seem to hold the power and to gain good reach it is vital to be a popular retailer.

That means looking after affiliates' interests.

Of course, the ultimate solution for eliminating conflict is to drop the search strategy altogether and just run the affiliate programme. Maziar Darvish, chief executive officer of network Affiliate Future, advocates this: "It is financially risk-free: the media costs are borne by affiliates, not the company. It is low cost: the brand doesn't need to employ any expertise. And while a dedicated search-engine advertising strategy is likely to concentrate on a limited set of keywords, affiliates are likely to spot and cover all permutations, combinations and generic phrases.

If total outsourcing is not an option, a solution is to 'divide up and communicate'. A client could maintain a list of keywords that are 'banned' for affiliates ... terms on which their in-house or outsourced search-engine advertising is concentrating."

Brand reputation

In the end, preventing affiliates from using search when they are often among its most adept users is not an option. Lervik notes: "It is difficult to justify imposing restrictions on certain forms of marketing as the same arguments for eliminating an affiliate's ability to use search advertising can be applied to any type of marketing." In other words, affiliates can also advertise themselves via a poster or TV campaign, so where do you stop?

Essentially, the conflict is over branding. Clients want and need to keep their hard-earned brand reputation intact by managing how it is represented to consumers. So, to maintain the effectiveness of their affiliate and search-marketing strategies, the onus is on the client and its agencies to manage both.

"The key to harmony is to leave affiliates with enough access to the keywords that can keep their yields high while keeping clients from competing against themselves," concludes Simpson. "Allowing affiliates to bid on your brand name can be beneficial to both parties, but it's all about the rules you set."

TIPS ON USING AFFILIATE NETWORKS

1. Protect your brand and trademark(s) to prevent competitive bidding.

2. Set realistic targets for affiliates in paid-search, particularly if they're bidding against a direct merchant, which is likely to see higher response and conversions.

3. Set clear guidelines for individual affiliates, programmes or resellers, and ensure these are adhered to (contractually, if necessary). Guidelines should include:

- Keyword targeting: which words, including trademarks, are affiliates allowed to bid on and which should they not target due to brand misrepresentation.

For example, 'cheap'.

- Copywriting; what messages can affiliates use in both paid-for and organic search-engine listings, and which should they avoid?

- Content quality on affiliate web sites or splash pages: do you want your brand to be associated with this site?

4. Understand the value of a direct sale versus an indirect one to your business: often, it will be cheaper to allow affiliates to bid on the more expensive keywords, as long as the conversion rates allow for their targets to be met.

Thanks to i-level.