{{ searchResult.published_at | date:'d MMMM yyyy' }}

Loading ...
Loading ...

Enter a search term such as “mobile analytics” or browse our content using the filters above.

No_results

That’s not only a poor Scrabble score but we also couldn’t find any results matching “”.
Check your spelling or try broadening your search.

Logo_distressed

Sorry about this, there is a problem with our search at the moment.
Please try again later.

UGC within the voucher code space has been a contentious issue for quite some time prompting many a discussion at the IAB Affiliate Marketing Council and earning itself a reference in the Voucher Code of Conduct. 

However, the affiliate industry to date has struggled to find any real consensus on how this area should be managed and regulated, and as a result one of the key players in the market has embarked on its own version of UGC within voucher codes with a 'social codes' platform.

UGC and voucher codes

Firstly, let’s clarify what we mean by user generated content (UGC) within the voucher space. Essentially it’s where consumers share voucher codes across the internet for others to use via several means such as website forums, email, social media etc. 

This isn’t something that is new. Voucher codes have been shared across the internet for several years with some large website portals, and TV celebrities playing a key part in facilitating this. 

Retail Me Not, one of the biggest players internationally, recently stated that a third of its content came from their community of users posting discounts for others to use. Clearly this is a huge and growing part of consumer behaviour and it’s clear to see why UK companies would want to be part of this in order to remain competitive. 

At the recent affiliate conference this subject was a hot topic, which bubbled over in to some fairly tense altercations in some of the sessions. 

voucher codes

But if this has been around for several years and is clearly a growing sector, why so much fuss about another player entering the market? 

The key issue appears to be that advertisers are concerned about the spread of their codes across the internet, and resisting this change by trying to keep tighter control. 

I understand this reaction but there does have to be some responsibility from the advertiser. The best way for advertisers to retain control over the codes they use is to distribute unique codes, so that a code can only be used once. 

This completely negates any incentive for customers to share codes.Voucher code sites and affiliate networks maintain that this is the best way to work but unfortunately many advertisers still don’t have this functionality in place. 

So, there needs to be an element of accepting responsibility that codes will be shared across the internet, regardless of whether that is through an affiliate website or not. That is reality. 

The problem with commission

But, there also comes a different problem. Voucher code affiliates are paid on a cost per sale basis, and if a voucher code is used that was not meant for that affiliate or even in many cases the channel, should the advertiser be obliged to pay that commission? 

This is where some contention comes into play. No, the advertiser is not obliged to pay that commission and most affiliate networks have systems in place that allow them to identify whether or not an 'illegitimate' voucher code was used.

If this is the case, they can decline the sale so that the affiliate is not paid a commission and then reward it to the correct affiliate where applicable. This all sounds relatively straightforward, but there is now an added layer of contention. 

The affiliate can also see how many customers they are delivering to the advertiser but not being paid upon, which results in the perceived ROI for that advertiser decreasing. This could result in the advertiser not getting as much exposure on the affiliate site as they had done previously. 

The affiliate is in their rights to do this, you can see why this makes sense commercially, yet we can now also see why it has ruffled the feathers of many on the advertiser side.

In the conference this question was thrown at the panel I was on and I was accused of not having an opinion either way on this, but I’m happily sitting on the fence on this matter, as I can see both sides of the argument. 

Affiliates need to constantly develop and ensure that their business is sustainable. All the numbers point to UGC being part of that sustainability, yet they need to ensure that they don’t harm relationships with the advertisers that are fundamental to that sustainability. 

Advertisers also need to realise that they can’t control consumer behaviour and the sharing won’t stop, as such the only way to mitigate the risk is to develop a system of unique codes. 

However, let’s not forget that sometimes the viral nature of the internet is the beauty of it and advertisers might just want that code to go viral. So don’t shoot yourself in the foot by damaging relationships with some of the key partners that can drive that volume for you. 

I think this is an area that will continue to foster debate and contention, yet it’s also an area that is largely influenced by customer behaviour. We cannot fully control, monitor or change this, so we need to work with it the best we can for both the advertiser and affiliate. 

I foresee that more of the UK voucher sites will start to dip their toes in this space, so there is a need to readdress the current Voucher Code of Conduct and ensure that we have best practices in place, which are adhered to across the industry. 

Helen Southgate

Published 26 November, 2013 by Helen Southgate

Helen Southgate is UK Managing Director at affilinet and a guest blogger on Econsultancy.

5 more posts from this author

Comments (13)

Comment
No-profile-pic
Save or Cancel
Avatar-blank-50x50

PaulPiper

What is the allusive 'recent affiliate conference'??

about 3 years ago

Avatar-blank-50x50

Niam J26

Yes agreed Helen, this is a hot topic and it seems like the debate is really kicking off.

about 3 years ago

Avatar-blank-50x50

Mark London

UGC codes is pretty old news, it's just people have now found their voice. Just not sure how it can be managed and monitored and more importantly, come across in a good light

about 3 years ago

Avatar-blank-50x50

Anonymous large high-street merchant

Honestly think that this article misses a few key points.

This particular affiliate is using it's market share to force merchants into accepting it's terms. Merchants don't want to do it - but if they don't then they will lose valuable sales. Large merchants are upset but are worried about taking a stance on their own.

This is the main reason that merchants are getting pissed off and why it's a big issue but what is the solution? Hard for the networks to act, the IAB are about as useful as a chocolate teapot as usual so what should be done? Also how long before the same affiliate starts saying that unless they stop working with other voucher code sites they will do the same? If they can see that this tactic works then who knows what is next. As a large merchant who do many sales in the affiliate industry I think it's a disgrace and is making us strongly consider moving away from this channel.

"The best way for advertisers to retain control over the codes they use is to distribute unique codes, so that a code can only be used once.".

Sorry - but I honestly believe this is a cop out.

The development time to implement this is pretty hefty and it's then even more work to integrate unique codes into emails, catalogs and other marketing channels... Then you'll also find that plenty of affiliates also can't support it, so it's a pretty expensive task with very little reward.

I don't have the answers but something does need to be done here and I know many other merchants like us are thinking the exact same thing.

about 3 years ago

Avatar-blank-50x50

Chris Garner

As a network we are able to prevent illicit Coupon Code Scraping and the issue around User Generated Content Codes with our technology which is able to attribute coupon codes back to their original source despite what the cookie says. It works across all devices including iOS, Android, desktop, and in-app purchases, and can include CRM, Radio, Social etc.

This is a hugely important factor as we are able to allocate coupons to official affiliates and our technology prevents coupon affiliates earning commission on coupon sales which were not attributed to them.

For example, if you use a code in CRM we can exclude that code automatically from generating commissions even if an affiliate were to publish it on their site. With 50% of sales coming from coupon sites, this solution is the only one that can stop contamination of commission and sales in this manner. Case studies from Thrifty and Dealsdirect are available on request.

Here’s another example. Affiliate A is given an exclusive code through our system and a user of Affiliate B's website posts the code it scrapes from Affiliate A. If the consumer was to click Affiliate B’s website and purchase using Affiliate A’s exclusive code, our system assigns the full commission to Affiliate A despite the cookie being Affiliate B’s. This negates the issues around sites that scrape coupons, and our clients benefit from the viral nature of coupons without paying unnecessary commissions.

about 3 years ago

Helen Southgate

Helen Southgate, UK Managing Director at affilinetSmall Business Multi-user

Anonymous Large High Street Merchant – thanks for your comments. If an affiliate is forcing its terms on any advertisers then that is a problem and I would obviously not support that. I understand if they are suggesting that Merchants may get less exposure if they don’t pay for all codes, going back to my point around them seeing their share of traffic / sales being threatened by other sites using UGC. This isn’t forcing terms so perhaps we need to be careful on the perception this gives which could be unfair. If an advertiser cannot see incremental value from the affiliate by using these codes then I would advocate standing your ground and would support the advertiser fully in that. It is in the affiliates hands to prove their value; they need to accept that they have to do this in order to get the advertisers to buy-in. If they don’t do this then why would an advertiser simply pay on these sales, I understand and support that. However, if this is simply about not wanting to pay more commissions then that is an issue if in fact that affiliate is adding value and driving incremental sales.

In terms of unique codes, I disagree that this is a cop out as this goes beyond just the affiliate channel. This allows the advertiser control over their voucher codes both on and offline. I worked Client side for 4 years, in my first week I had to deal with the fall out of a code being used illicitly on an affiliate website. That was a painful experience. We developed unique codes to stop this happening again. Yes it is expensive, takes resource and is not always the easiest to manage but it enabled us to manage codes through the affiliate channel much more effectively and tactically to great advantage. There is a huge danger of ignoring this as UGC is only going to grow and this problem is not going to go away and is not simply limited to the affiliate channel. I raised this issue 4 years ago at the IAB council regarding another affiliate partner, so it’s not a new issue.

I would strongly disagree that the IAB is about as “useful as a chocolate tea pot”, it has done some fantastic work over the years which has been hugely beneficial to the industry and this is unfair to all of those that have put their own time and resource into it over the years. However, in this matter I think as an industry we have not done a good job and something went wrong somewhere. We should have been having these debates 6 months ago, not after the horse has bolted. I wasn’t involved in the conversations at the time but as I understand it those involved in the discussions could not come to a consensus agreement, which perhaps given the nature of this is understandable. It should however have been communicated better within the industry and I think networks should have done a better job to mediate between the affiliates and advertisers.

about 3 years ago

Avatar-blank-50x50

Matt Bailey

Firstly, fair play to Helen for having the decency to come out and say something about this. Most others have been noticeably quiet on the matter.

My main concern is that this activity is in direct contravention of the published IAB AMC Voucher Code Regulations that 9 major UK affiliate networks have signed up to and have their names on.

The code states that "vouchers must only be monetised with the permission of the relevant Advertiser or any of that Advertiser's respective licensors or licensees", and "vouchers must only be published in accordance with the instructions of
the relevant Advertiser".

Therefore publishing codes sourced from their members where permission has not been expressly obtained is in breach of that.

There is a clear policy stated on the IAB AMC website stating what will happen if this code is not adhered to, but it seems that those networks are unwilling to do something now that it is a big affiliate breaking the rules.

I think that this is why people feel that telling them to sort it out themselves is a cop out.

Matt Bailey
Head of Product, Performance Horizon Group

about 3 years ago

Helen Southgate

Helen Southgate, UK Managing Director at affilinetSmall Business Multi-user

Hi Matt - I think the code of conduct, like most best practice guidelines, has grey areas and I agree that some of the activity around UGC falls into these grey areas and could be argued as being within or outside of best practice. I think this is a problem and something that has been attempted to be addressed but perhaps didn't quite go as far as it needed to.

However, it's important to note that no advertiser is obliged to pay commission on these codes. Most (if not all) networks have systems in place to handle this so a breach of the code here isn't possible.

I don't think we're telling people to sort it out themselves by having unique codes. It's just that clearly this solves the situation so would always be advisable. I know not all Merchants have this or will have but then that is why the networks devised ways of declining sales that were not allocated to particular affiliates to help mitigate the issues.

about 3 years ago

Avatar-blank-50x50

Joel Tobias

Advertisers: For god's sake, stop being dictated to by what is essentially a voucher code website. OK they might be a highly trafficked, well established, global media company but at the end of the day it's a Voucher. Code. Website. If you are not happy with the way in which they are treating you, or the way in which they are doing business, walk away. End of. There are plenty of other voucher code websites to choose from!

I fully understand that cutting ties with a dominant affiliate will probably hit your bottom line (or if you are an Affiliate Manager, let's call it your personal goal) but why not talk to your marketing or eCommerce director...if that is you then talk to your CEO. Explain to he/she that your numbers might drop for short time period because you are cutting out a partner that is no longer good for the business. Get their buy in! Soon enough you'll be making the revenue up.

To summarise, stop blaming the industry and start remembering that (if you are a large national retailer) chances are you are probably a lot more heavyweight overall than the affiliate that's winding you up.

about 3 years ago

Avatar-blank-50x50

Ricki Jones

Thanks for the post Helen - always good to hear people raise these issues for further discussion.

Omnicom Affiliates are indeed one of the 9 networks that have signed up to the current VCoC. On a general note, the council does some excellent work in the industry to ensure that standards are met and adhered to. However, naturally in such a fast paced environment, things are going to happen that sometimes slip through the net and it is important for the IAB AMC to continue to work on these and identify them on an ongoing basis.

Now, with my Omnicom Affiliates hat on - I tend to agree with Matt here, the terms in the VCoC are pretty straightforward in that if this isn't something that has been agreed and OK'd directly from the advertiser, then this it is a breach of the Code. Again, much work was done recently to remove the ambiguity in the VCoC and one such solution was to place the onus on advertisers to give the final "OK" for what publishers could monetise or not. Like it or not, there are some advertisers out there that don't have an issue with voucher codes "going viral" so it really does need to be looked at on a case by case basis.

Ricki Jones
Head of Affiliates & Lead Generation
Omnicom Affiliates

about 3 years ago

Avatar-blank-50x50

Nathan Salter (OMG)

Hi, I Chair the IAB committee that worked on the code. Lets not forget that that committee is sat on by industry players (networks mostly) and collectively we produced the code. Many of these issues were indeed talked about (a lot). It's back on the agenda again so the same industry players will be collectively reviewing and hopefully working out what needs fixing and if it's fixable. The points all seem valid to me but illustrate the point that it's not straight forward and there is no magic wand (other than technology).

about 3 years ago

Avatar-blank-50x50

Mark Andres

Oh I love a good debate :)

Some great comments above! It nearly everyday now that I'm having a conversation with a merchant and they bring up UGC... Mainly Social Codes.

It's clearly not what merchants want, but this is a massive opportunity for all the other publisher sites out there that play by the rules. More and more merchants that I speak to are giving out their marketing leading exclusive offers to sites other than VCUK... And UGC is one of the reasons they are doing this.

What I think you will find over the next 6 months, is stronger growth rates from the other top publishers sites, because merchants don't want to be told what they can and can't do, and they will start to understand that they can get the same or even more overall traffic and sales by working more closely with publishers who are willing to work in a way that is incremental for the merchant.

about 3 years ago

Avatar-blank-50x50

Coupon Codes website

Well this is very interesting blog I need to buy the coupon codes with the affiliate marketing

almost 3 years ago

Comment
No-profile-pic
Save or Cancel
Daily_pulse_signup_wide

Enjoying this article?

Get more just like this, delivered to your inbox.

Keep up to date with the latest analysis, inspiration and learning from the Econsultancy blog with our free Daily Pulse newsletter. Each weekday, you ll receive a hand-picked digest of the latest and greatest articles, as well as snippets of new market data, best practice guides and trends research.