January 4, 2006, 12:00 AM

Better Watch Out

(Page 2 of 2)

However, undertaking such an extensive review and monitoring can be a heavy burden for individual retailers. As a result, one of the beneficiaries of the ruling will be affiliate management companies, which are geared up to deal with many affiliates and who understand how affiliates operate, industry observers say. “It’s one of the reasons retailers choose to work with a network rather than having an in-house affiliate program,” says Elizabeth Cholawsky, vice president of marketing for Commission Junction.

At Commission Junction, more than a dozen people monitor affiliate activities on a daily basis and many of those functions are automated, Cholawsky says.

But it is possible for retailers to run their own affiliate marketing program as long as they do appropriate reviews and constantly monitor affiliates’ activities, she says.

Despite these efforts by the major affiliate networks and industry groups such as the Email Sender and Provider Coalition, there will continue to be unscrupulous affiliate marketers. And this FTC action by itself may not be enough to persuade retailers to keep a closer eye on their affiliates, says Jeff Molander, CEO, Molander & Associates Inc., an affiliate marketing consulting company.

Long-term changes

“There’s a lot of revenue and sales leads tied up in affiliate programs so massive change isn’t likely overnight,” he says. “Based entirely on their past behavior regarding adware and spyware-related issues, I believe most retailers will completely ignore this ruling-that is, until the FTC makes an example out of someone.”

Some retailers argue that the FTC requirements don’t apply to them because they don’t allow their affiliates to engage in e-mail marketing on their behalf, Molander says. Yet many of the same retailers admit that they don’t have any reliable means to ensure their affiliates don’t use e-mail, he adds.

But there already are moves by many retailers to downsize affiliate programs, which would make it easier for them to keep tabs on their affiliates, Molander says. “In an environment where affiliate relationships are fewer and quality driven, these FTC mandates become simpler to adhere to,” he says.

linda@verticalwebmedia.com

For the Internet Retailer Guide to Providers of Affiliate Marketing Products and ServicesClick Here

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