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ASOS CEO Nick Robertson has managed to offend the entire affiliate marketing community by describing some of them as "grubby little people in grubby studios".

Mr Robertson told NMA last week that the company is planning to resurrect its affiliate activity as part of an increased online marketing focus after a period of brand-building in the offline arena.

His blunt choice of words has offended the world of affiliates with the result that it will now take a brave network or affiliate publisher to take the etailer's shilling in the future.

The ASOS co-founder said:  "I'm not saying we couldn't do more in the online marketing space. Next year we'll reintroduce affiliate marketing, but as it should be. No silly commissions being paid to grubby little people in grubby studios growing income at our expense, getting in the way of genuine sales."

Among those affiliates who have taken offence is US-based affiliate Shawn Collins, an influential blogger and founder of Affiliate Summit. 

His thoughts on the ASOS slur - in the form of a song - have been uploaded on to YouTube and make for entertaining viewing.

Expressed in more prosaic form, Mr Collins says on his blog: "I can’t really imagine what the motive is behind that statement, but if he really anticipates relaunching the affiliate program with that perspective, I think he’s in for a rude awakening.

"I don’t think affiliates are going to be willing to promote ASOS, and in all likelihood there will be some sort of boycott against the brand and affiliate program by affiliate marketers."

Clarke Duncan's post on this is also amusing reading although it will be more sobering for the person or agency tasked with kickstarting ASOS's affiliate marketing activity.

ASOS, which is still thriving despite being forced to shut down temporarily after the Buncefield oil depot fire at the end of 2005, will survive to fight another day.

But there is a lesson here for online retailers that it is wise for them to work in partnership with affiliates rather than attempting to alienate them.

According to E-consultancy figures in our Affiliate Marketing Networks Buyer's Guide, affiliates helped to generate more than £2 billion in UK online sales during 2006.

For more information about who affiliates really are, read our UK Affiliate Census Report published at the start of this year in association with Affiliate Program Advice.

Anyone interested in affiliate marketing should also read our recent Roundtable briefing.

Linus Gregoriadis

Published 13 March, 2007 by Linus Gregoriadis

Linus Gregoriadis is Research Director at Econsultancy. Follow him on Twitter or connect via LinkedIn or Google+.

139 more posts from this author

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Jon Bovard

Jon Bovard, Director of eCommerce at A well known Telco

Whilst his words were harshly worded, I potentially might know why he said this.

At one stage a source close to ASOS told me that "affiliates generate 30% of sales for ASOS!"..

Comments like that made me wonder. Particularly when this was almost 3 years ago when online fashion volumes were much lower than now.

Potentially there were a bunch of regular ASOS customers who casually or incidentally visited certain nefarious/dubious type affiliate sites. Meaning existing ASOS customers regularly pickup a 30 day ASOS affiliate cookie. And as a result these regular customers form a continuous stream of payouts to affiliate sites.

Fundamental question is whether those affiliate sites were actually delivering 'genuine value' (in the form of new customers with high lifetime value) or just managing to intercept a robotic bunch of high value customers who coincidentally visited an ASOS affiliate site every 30 days.

This concept of affilites getting "in between" regular customers and the retailer is a real headache. Web analytics people have coined this phenomenon "non linear conversion funnels"...
http://www.clickz.com/showPage.html?page=3596566

There is no easy cure for this problem.

about 9 years ago

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Jess Luthi

"At one stage a source close to ASOS told me that "affiliates generate 30% of sales for ASOS!". Is this supposed to make your statement more credible?

"Potentially there were a bunch of regular ASOS customers who casually or incidentally visited certain nefarious/dubious type affiliate sites." Really?
Since you are so in the know... name them!

So what you are saying is that some affiliates were encouraging ASOS customers to keep reactivating the cookie... clever customers, what was in it for them?

Or are you saying that affiliates were colluding with the ASOS customers, so now affiliates are not only grubby they are now fraudsters? This just gets better.

30% of all online sales is actually quite embarrassing, shows that there other online and offline marketing initiatives were not working and the affiliate program was plugging those big holes.

Affiliates served a purpose as Nick states, he had to cut costs simple maths..

Shhhhh come a bit closer, I got this from a good source too ;0)

about 9 years ago

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Clarke

>“This concept of affilites getting "in between" regular customers and the retailer is a real headache.”

Yeah must be a nightmare for a Merchant that hundreds of Affiliates promote products so much better than they do, how dare a customer go off and search for a product they wish to buy and end up seeing an Affiliate who is promoting that product only to end up on a site they have previously bought from, disgusting behaviour and frankly if I was a Merchant with very few brain cells I would cancel my Affiliate program as can’t be paying Affiliates for driving users back to my site after they bought from me thanks to the efforts of another Affiliate.

One small problem, the customer is always going to do things you don’t like and Affiliates are going to keep promoting products so one little thing that can’t be measured by retailers very effectively is how many people end up going off to buy from the competition because they killed off the many routes and paths across the Internet that lead back to them all because they thought they save a few pounds by doing so.

Seriously Merchants need to wake up and start thinking less short term “one off sale” and “the customer is all mine” and start thinking about how can I keep Affiliates focused on promoting my brand long term driving not only new customers but keeping my message at the forefront of consumers minds online, there was a reason why these customers bought via the Affiliate channel in the first place, maybe that message appealed to them more than the other activities, maybe it’s a combination of them all but why remove an ingredient to online success?

At any rate if I was to compare what you are saying to say PPC spend, are you recommending that because some users will keep searching for you and not visiting directly (even thought they know fine well what you web address is) that you should shut down PPC to save some money and leave the customers open to your competitions message.

Fact of the matter is ASOS want to return to the Affiliate space it wasn’t all bad and they know this or why would they wish to come back. What was said had everyone up in arms because it paints a very backward view, one that an industry generating over £2 billion in UK online sales during 2006 doesn’t have to put up with and the good, the bad and even the grubby had a few words to say on the subject, it went world wide with support from Affiliates all over the globe.

Merchants have full control over a program. If they want the very best from it then they should speak to the best in the industry and listen to what they have to say, and not just make decisions without consulting them first. Every Affiliate in the ASOS programs when they where on Paid On Results and TradeDoubler could have been removed at any time should ASOS have wished, they could have laid down any rules they wanted so if anyone is to blame for it not working the way they wanted it to work it’s ASOS not the Affiliates and not the Networks. To be honest if they came back to Affiliate Marketing in any other way I would have wished them all the best, because by saying you want to come back you just told everyone “by the way if done right there is great money to be made from this Affiliate Marketing lark”… if a Merchant wants to know how to do it right, drop me a line and I introduce you to the right people.

about 9 years ago

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hero

"Potentially there were a bunch of regular ASOS customers who casually or incidentally visited certain nefarious/dubious type affiliate sites. Meaning existing ASOS customers regularly pickup a 30 day ASOS affiliate cookie. And as a result these regular customers form a continuous stream of payouts to affiliate sites. "

It's called CRM - Customer Retention Management. Obviously ASOS wasn't that good at retaining existing customers and affiliates had to reconvince them about buying again and keep those customers coming back again and again. But this is just one of the trees in the whole forrest Mr Robertson failed to see.

"Fundamental question is whether those affiliate sites were actually delivering 'genuine value' (in the form of new customers with high lifetime value)"
I'm sorry, but whoever told you that affiliates are there to bring you new customers only is very much mistaken - their main focus is to bring you the business that you fail to bring in for yourself - and keeping your existing customers is far more important and more lucrative for you in the long run.
Which is the reason why affiliates shouldn't be bringing in a huge percentage of your sales - it means you are failing miserably in all other online marketing activities. Don't blame them if they are costing you the world, you aren't doing your job properly - would you prefer to have missed out on those sales altogether? Yes, your cost would be minimum then, obviously.

about 9 years ago

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Keith

30% of online sales via an affiliate programme is the sort of ratio all good affiliate programmes should be aiming for, and something I would be pleased for any of the merchants we advise to achieve.

If the merchant is not capitalising on the lifetime value of those customers and getting them to return to the merchant direct (whether by online presence, email marketing or offline marketing (after all if they have bought the merchant knows their physical mailing address so that ought to give them a major competitive advantage in the 'noise' of getting that customer's attention for a repeat purchase) - then the fault lies with the merchant and not the affiliates - merchants, particularly of the ilk of ASOS are after all supposed to be master marketeers - yet it is often affiliates who show more initiative in thinking of new and innovative methods of user retention.

Any merchant who thinks affiliates are 'stealing' their customers frankly needs to be educated and educated promptly - affiliates are your unsalaried sales force, they are on your side, give them the right tools, the right training, the right motivation and they will be in your boat, sharing the oars with you, not sitting in another boat, banging their oars in the water trying to sink your ship.

Nick Robertson's remarks were at best misguided (or deliberately designed to spark publicity - in which case the stunt badly backfired) or ignorant (which I doubt as deep down Nick knows all too well what affiliates are capable of) or badly worded, if what he really meant was to target the adware and brand name pirates - in which case he should have thought more carefully about his words - as someone much wiser than me once told me "when speaking (or writing) in public, always make sure your words are soft and sweet, as you'll never know when you might need to eat them later"

Either way - I'd personally like to thank NR - I have often used ASOS in my affiliate training sessions for an example of how a good affiliate programme can turn sour, now I have a whole new session on how to turn your affiliates into a whole negative pr campaign ;-)

about 9 years ago

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Wouter

Jon,

I am a bit astounded by your remarks.

Of course it is possible that an existing customer clicks on a link to a merchant from an affiliates website. Is this the affiliate's fault? Is he / she therefore a grubby person in a grubby studio?

It is not too difficult for a merchant to prevent this from happening though. All they have to do is tag the affiliate ID to the customer's account. In combination with the visitors registration date the merchant can easily work out if the affiliate should still be paid or not. Of course this is something you should make clear to your affiliates if you do this.

Just like the merchant can ask from every network out there to have signup validation (in other words the merchant can check the affiliate out before allowing him / her into the affiliate program).

As Clarke in his reply points out, maybe the merchant should also stop any PPC campaigns. Because hey, there are customers out there that always seem to click on those funky little ads on the right hand site of Google's search engine results. Or maybe they ended up on one of these thousands of sites where some dubious AdSense affiliate publishes the PPC adverts on his / her scraper site. Naaa, much better to stop all PPC campaigns...

Something you might want to take on board is that search engines only show one or two results from the merchant's website for the search term. So for example if someone was searching for ASOS than most likely number 1 (and maybe number 2) in the results shown would be ASOS. If they would not be, I would be really worried. Now, who are going to appear on number 3 to 10 on that first page? The affiliates? Or some other websites, maybe even competitors?

In case of competitors, would you as a merchant not rather pay 10% of a sale to the affiliate and put the rest of the profit margin in your own pocket? And yes, this is not 90%, but better to have the remaining 25% or 50% or whatever the profit margin is than that it goes to your competitor? Right or wrong?

Now lets say the visitor is looking for blue widgets. What do you, as a merchant, rather see on the first page of search results in Google... mostly links to your site or links to your site and most others to your competitors???

Last but not least. Should repeat customers not come back to the merchant's website through marketing activities of the merchant him / herself. A newsletter to all your customers springs to mind??? No need for the visitor to go to Google, MSN or Yahoo, type in ASOS and then click on result number 3 to 10 instead of result number 1 or 2... because the link is already in the newsletter.

If the affiliates once generated 30% of all online sale than certainly they did a better job in covering all bases than ASOS did in her own efforts of marketing their products.

about 9 years ago

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Dennis Harnisch

Too Bad for this attitude!

about 9 years ago

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Allan Gardyne

Let's assume CEO Nick Robertson isn't stupid. Perhaps this was an idiotic attempt at link bait - attracting lots of attention to an affiliate program which many affiliates had probably never heard of until now. If so, let's hope it backfires.

about 9 years ago

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Kieron

I don't think Nick Robertson would even know what link baiting is judged by his ignorant comments that show his lack of understanding of the online sector and affiliate marketing. I prefer to call it as I see it.

about 9 years ago

Jon Bovard

Jon Bovard, Director of eCommerce at A well known Telco

The fact of the matter is that ASOS is growing at 65-70% year on year for the past 2-3 years.

You guys can moan all you want about the language he used but ASOS are obviously doing something right. Particularly when you can pull the plug on your affiliate system and still consistently grow that quickly.

about 9 years ago

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Clarke

No one is disputing ASOS is growing and by wishing to come back in to the Affiliate Market place they clearly wish to grow some more. Lets not forget that Affiliates where very much involved in the early days of growth and many customers that return to buy some more came via the Affiliate route.

And thank you Jon for allowing us to "moan" that is very kind of you. We see it as standing up for our industry when people make derogatory comments.

about 9 years ago

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hero

"You guys can moan all you want about the language he used but ASOS are obviously doing something right. Particularly when you can pull the plug on your affiliate system and still consistently grow that quickly."

Would you advise your clients to do just that then?

about 9 years ago

Linus Gregoriadis

Linus Gregoriadis, Research Director at Econsultancy, Centaur Marketing

I should add that I've put in a call to ASOS to get further comment from Nick Robertson and will add accordingly if he comes back to me.

about 9 years ago

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Jess Luthi

Allan: Hey... one of my heros, you and Declan Dunn and Neil Durrant (respect Yo!) Sos had to say that...

Jon: "Moaning" is this what we are doing? Oh... for a minute there, I thought some one had not only attacked an entire industry with a blanket statement, but forgive me for thinking there was freedom of speech, I must be in china then, (looks out of the window) Nope no pandas here. Ill continue...

Simple maths Jon...

Affiliate refers a new visitor (average order basket at the beginning £35.00, not confidential info, its in the public domain) affiliates gets £3.50 + network @ £1.05 = total commission payable £4.55. So its cost ASOS £4.55 for acquiring a new customer? Nope not quite, lets say a customer comes back and orders a further (I will be very generous here) say three times within the cookie of (I cant remember if it was 90 or 120, lets say 120 days) lets keep the basket at £35.00. This new customer has just cost ASOS £18.20 in total, after the cookie expires ASOS own the customer. If we take into account for overheads, let’s say the customer cost ASOS, £20.20 ( I have added £2.00 for odds and ends). But the customer has bought goods x 4 (goods have mark ups, they are not selling at cost) ASOS could not as long as I was there tell me what the life time value of a customer was, thing is they didn’t know then. They probably do now, well I hope so. ASOS has moved on substantially in terms of infrastructure, there was very little at the beginning. By the way, who said affiliate marketing was cheap? Its pay on performance sure, but you still have to pay, no such thing as a free lunch, but what makes affiliate marketing so great, you eliminate the risks of other media channels, its been proven time and time again. You have to stack it up against CPC, CPM, Monthly Tenancy and so on, all risks. It’s transparent and measurable and it works. But when you have little else going on other then your affiliate program then there is no marketing balance.

You are all looking at this from the outside in and speculating, from the inside looking out, we were limited in so many things, proper web analytics, proper tech support, lack of technology, poor communication. The affiliate manager having to manually put together product feeds should give you all a clue, including the ones for Kelkoo (arrrgggg). The early years and the success that came with it was down to a group of very dynamic people who were able to improvise and think on their feet. SEO was there and was done by shock, horror… an affiliate and dare I say paid on a revshare (Oh yeah they got rid of him the year I left, great cost cutting excercise... this is how clueless ASOS used to be, our SEO guy, he was very good but part time and again limited by the software which we had which was great pains with a non upgraded v.2.dinosaur. We had no budget for ppc, no one but myself even knew about what ppc could do, the affiliates did and do, so it made sense to let them do it in ASOS's absence...and guess what… the ppc affiliates put there hand into their own pockets and took the financial risk and we paid them a rev share. In some cases they were making a loss.

Jon: Do me a favour hunny, go do a search on celebrity fashion in google… ASOS Number 1 on natural search (well done), but look at who is bidding on google adwords? They all used to be ASOS affiliates, not ASOS’s competitors.
All that money leaking away. I can go on and show you dozens of ASOS leakage right now on their site, the holes that affiliates plugged b4.
So don’t talk to me about how great ASOS is, we all know that they are, no one is disputing that. But its because of the affiliates that they became so great and if I was a share holder I would be concerned about the money ASOS has lost since terminating their program. Another example of ignorance, I told them not to register the name ASOS because other people had already registered domain name extensions, now look at the mess, youtube ASOS TV

So calling my friends and my colleagues and even my competitor’s “Grubby little people….” I think not!

I know if ASOS launch an affiliate program they will of course get affiliates, and ASOS will go on to do greater things, of this I am sure of. I don’t think any one is naive enough to think otherwise. It’s great having the money to buy the technology and marketing now and aint hindsight such a wonderful thing, ASOS had neither back in the days of yore and on a final note they were not too proud to add ASOS affiliate program stats in your shareholders prospectus.

By the way Jon, I know a good affiliate marketing consultancy agency you could refer to ASOS, but they said they were too busy washing their hair, pass me the shampoo.

about 9 years ago

Jon Bovard

Jon Bovard, Director of eCommerce at A well known Telco

I think i will leave this one be. There is obviously a lot of emotion here so i wont continue.
Apologies if I have upset anyone. I did not intend to.

jon

about 9 years ago

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Simon Hill, Digital Strategist at Contevo

Any Ecommerce manager who has been around the block a couple of times will understand his sentiment. Many affiliate marketers are experts purely at placing themselves between a brand-aware customer and the sale... essentially arbitraging off all the marketing the Ecommerce company is putting out there.

2 months ago

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