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I don't follow. Where did the extra $200K in sales come from and why is he not happy about it? It sounds like there is a pool of customers that will not finish

by eps 13y ago

I don't follow. Where did the extra $200K in sales come from and why is he not happy about it? It sounds like there is a pool of customers that will not finish the purchase unless they can google "kogan coupon" and hit few coupon sites beforehand (even if to leave these sites emptyhanded). So the affiliates appear to help convincing on-the-fence visitors and push sales to completion. If anything, it's a clever hack. Not sure why he's so pissed.

gkoberger 13y ago
There is no extra $200k (which should have been the first sign -- "we're making $200k less, but the affiliates are making $200k more!"). And since they don't actually give out a coupon, it's doubtful it helps anyone but the affiliates.
- avalaunch 13y ago
  But he never says that. He doesn't indicate whether revenue increased, decreased, or stayed the same - something that would have been really nice to know.
rgbrgb 13y ago
I can't speak to what is actually happening but I can correct your misunderstanding. The author thinks that the users who had visited affiliates' fake discount code sites (and not found discount codes) would have completed their transaction anyway if those sites had not existed.
- martin-adams 13y ago
  I got the same impression. I believe the true value of these particular affiliate marketing partners are down to this very point. Do they help convert lost sales, or do they claim ownership of sales that would have completed? The article does not explain this. What evidence suggests that those customers would have completed anyway, and has this only displaced revenue rather than increased it.
antr 13y ago
I came here to ask the same question. The post comes across as if those $200k were on top of baseline revenues.
- johnward 13y ago
  Right. He made it seems like he got an additional 200k in revenue and then proceeded to reduce commissions to zero. Some might call this scamming the affiliate. After the affiliate has put the work in to drive the traffic to your site then you fuck them over on commissions. To be honest there is a lot more fraud on the advertiser side of the deal. Conversion shaving, reducing commission on high performing affiliates, non-payment by advertisers. Affiliate take on a great deal of risk, especially when they PAY to generate traffic.
  - antr 13y ago
    I don't think this is "scamming the affiliate", but simply testing the price elasticity of demand. Nothing wrong with that. By simply testing different pricing models the author observed this demand anomaly, which leads him to uncover the platform's modus operandi. I just wanted to point out that that part of the story is not that clear/well explained.

by eps 13y ago

gkoberger 13y ago

There is no extra $200k (which should have been the first sign -- "we're making $200k less, but the affiliates are making $200k more!"). And since they don't actually give out a coupon, it's doubtful it helps anyone but the affiliates.

avalaunch 13y ago
But he never says that. He doesn't indicate whether revenue increased, decreased, or stayed the same - something that would have been really nice to know.

rgbrgb 13y ago

I can't speak to what is actually happening but I can correct your misunderstanding. The author thinks that the users who had visited affiliates' fake discount code sites (and not found discount codes) would have completed their transaction anyway if those sites had not existed.

martin-adams 13y ago
I got the same impression. I believe the true value of these particular affiliate marketing partners are down to this very point. Do they help convert lost sales, or do they claim ownership of sales that would have completed? The article does not explain this. What evidence suggests that those customers would have completed anyway, and has this only displaced revenue rather than increased it.

antr 13y ago

I came here to ask the same question. The post comes across as if those $200k were on top of baseline revenues.

johnward 13y ago
Right. He made it seems like he got an additional 200k in revenue and then proceeded to reduce commissions to zero. Some might call this scamming the affiliate. After the affiliate has put the work in to drive the traffic to your site then you fuck them over on commissions. To be honest there is a lot more fraud on the advertiser side of the deal. Conversion shaving, reducing commission on high performing affiliates, non-payment by advertisers. Affiliate take on a great deal of risk, especially when they PAY to generate traffic.
- antr 13y ago
  I don't think this is "scamming the affiliate", but simply testing the price elasticity of demand. Nothing wrong with that. By simply testing different pricing models the author observed this demand anomaly, which leads him to uncover the platform's modus operandi. I just wanted to point out that that part of the story is not that clear/well explained.