Be Free Follows CJ’s Lead in Addressing Affiliate Problems

In an effort to fix some of the issues plaguing online affiliate marketing, Be Free is preparing to launch a program that would reward “affiliate-friendly” merchants in its programs — while making it harder for less desirable merchants to participate.

The Marlborough, Mass.-based firm provides the infrastructure for merchants to place pay-for-performance ads on publishers’ sites, with both Be Free and the publishers receiving a cut of the sales commission. Under the new program, merchants participating in Be Free’s affiliate program are eligible for commendations — represented by a special icon — if they meet certian performance criteria, such as timely and accurate reporting and payment, and good working relationships with publishers.

While the effort is described by efforts as a way to reward standout merchants, the program — and similar ones like it undertaken by others in the industry — hint instead of something rotten in the state of online affiliate programs.

Earlier this year, Be Free competitor Commission Junction rolled out a service in which the commissions and payout records of merchants was made open to all affiliates. Sources close to the firm described the effort as a way to subtly encourage unprofitable, low-paying (or non-paying) merchants to exit, since they represented a burden on CJ’s ad serving infrastructure, and weighed down overall payout figures.

Once it goes into effect next month, Be Free’s new program — called Acclaim — will reward “good citizens” among the company’s merchant roster, said Sam Gerace, the company’s co-founder and chief technical officer.

“The term ‘affiliate’ started out … as a way that represented these publishers like television affiliates,” said Gerace. “This resulted in merchants not thinking of affiliates in the right way, and not realizing that they were sales partners, and not treating them as sales partners. [Merchants] need to engage in a [full] partnership, or they’re not going to get value out of the relationship.”

Specifically, among the qualifications for the special icon are stipulations that merchants must pay affiliates monthly, within 35 days of the agreed-upon payment date. They must also provide partners with two weeks’ advance notice of any changes in compensation, and Be Free with “timely and accurate” information on transactions.

Merchants are also encouraged to use Be Free’s automated payment scheduling tools and to communicate monthly via e-mail with partners.

Naturally, such rankings are expected to cause merchants to either clean up their acts, or could result in affiliates migrating to new merchants.

“Be Free realizes there was some tension in community between affiliates and some of the merchants,” said a source close to the firm. “Being the intermediary, they wanted to step in and try to encourage the merchants to be more affiliate-friendly.”

Additionally, there’s a fundamental reason for why firms like CJ and Be Free are increasing their efforts to discourage underperforming merchants. Since the dot-com bubble burst last year, the affiliate marketers — like all online marketing firms — have been hit with a slew of new financial pressures. And by trimming the deadwood among merchants, the efforts aim to help the affiliate marketing companies focus on the most profitable relationships — the ones with large, recurrent payouts.

While that might be the case, Gerace said the effort comes more as a result of “maturation” in the marketplace, and of affilates’ needs.

“You’re seeing a much savvier marketing partner in the sense of the affiliate, who understands that all merchants are not equal … and they can better structure their marketing relationships to profit by this,” he said. “We, who are in a position to guide, can help to provide a roadmap … to help the right partners find each other. The idea is to give affiliates as much information as we can to help them make informed marketing decisions.”

Gerace said that because the company was still reviewing merchants’ eligibility, the exact numbers of recipients — and drop-outs from the program — wouldn’t be known until late next month.

“I don’t expect a lot of backlash, because we’re asking about sensible business practices,” he said. “By and large, we have sensible merchants out here who understand the partnership aspect. The kind of terms seem patently obvious to anyone who’s ever worked in any real business … and we’re giving merchants time to reform their behavior.”

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