Letters: Brand-name bidding can be of benefit

27 March 2008

Having read James Little's letter on affiliate brand-name bidding (NMA 13.03.08), I feel he's being very linear in his opinion. It's not fair to accuse affiliate managers and networks of deceiving their clients.

We advise clients on how to maximise their sales volumes through affiliate marketing, and a strategy incorporating brand-name bidding will often result in higher overall sales at a lower CPA.

Allowing an affiliate brand bidding rights allows it to invest those profits into generic activity. This has been shown to increase volume through generic search activity, at a fixed CPA (the agreed affiliate commission), giving the merchant additional sales.

Bid prices in the generic space are high and conversion is proportionally lower than via a brand search. Affiliates that are permitted to bid on brand are given very strict targets for the ratio of brand versus generic sales split, and the networks we work with manage this very effectively.

Secondly, affiliates populate the search space very effectively on brand extension terms, which accounts for as much as one in three searches not arriving at a merchant's site, according to Hitwise. By permitting affiliates to bid on certain key brand extension terms, rogue and competitor listings can be eradicated.

The alternative is to invest in generic paid search via a dedicated paid search strategy only. It's rare that a direct search campaign will result in a lower CPA than a merchant gets through the affiliate channel, and in our experience this has resulted in a drop in overall sales volumes via the paid search channel as a whole.


From Matt Brown, MD, Hatmatic