LinkShare Moves to Curb Predatory Marketing

Saying unethical marketing practices are on the rise, affiliate network LinkShare said Thursday it’s brought makers of shopping plug-ins into the fold through a new member agreement that requires them to abide by strict rules against gaming the affiliate system.

The technology makers signed LinkShare’s new “Anti-Predatory Advertising Addendum,” a supplement to LinkShare’s regular affiliate agreement, requiring makers of toolbars, browser plug-ins and e-wallets to ensure their technology does not obscure the originator of a click-through.

The practice of affiliate hijacking has raised hackles in the affiliate marketing industry. Some browser plug-ins, which come bundled with popular free software, have confused affiliate networks by making it appear that a click-through came from them, rather than from the legitimate originating site. Affiliate sites have complained these plug-in are, in effect, stealing revenue from them.

LinkShare said it had reached agreements with “nearly all of the major players,” some of whom altered their technologies to comply. The company said TopMoxie, ShopAtHomeSelect and FatWallet all signed agreements. An agreement was also reached with Wurld Media, which makes the shopping technology bundled with popular file-sharing program Morpheus.

“While we wholeheartedly support technological innovation that brings additional value to consumers, we’re also seeing new technologies that have either crossed the boundaries of ethical application or created gray areas in the legal landscape,” said Stephen Messer, LinkShare’s chairman and chief executive. “We hope to demonstrate a firm stance on ethical marketing and to foster respect for the affiliate community and the efforts of LinkShare affiliates.”

The company said it is in the process of determining which affiliate members would need to agree to the addendum and contacting them. Heidi Messer, LinkShare’s president and COO, said the company is ending its relationship with one uncooperative affiliate, JambaFind.

Affiliate marketing is popular with small, niche-oriented sites to drive customers to e-commerce plays, such as Amazon. The programs allow the affiliates to take a cut of the sales their leads generate.

In the field since 1996, LinkShare boasts the largest pay-for-performance affiliate marketing network on the Internet, with more than 10 million affiliate relationships, including AT&T, OfficeMax and J.C. Penney.

However, the wild world of affiliate marketing has become home to its share of predatory advertising. A major problem has been the proliferation of technology that critics call stealware, which can redirect a commission by replacing one affiliate’s identification code with another.

Some makers of Napster-like file-sharing software, such as Morpheus, have been identified as engaging in unscrupulous practices by hijacking affiliate links. Earlier this year, Amazon reportedly kicked Morpheus out of its affiliate program. In May, Morpheus altered its software and agreed to the terms of LinkSmart’s anit-predatory advertising addendum.

In September, Be Free, another leading affiliate marketer, proposed cooperation between the affiliate marketing industry and makers of shopping plug-ins, which are cobbled onto popular free software.

In November, LinkShare and Be Free joined with other affiliate network providers, Commission Junction and Performics, to discuss the problem at an Internet Affiliate Marketing Association-sponsored meeting in New York.

“LinkSmart’s policy is one of inclusion,” Heidi Messer said, noting how the record industry’s approach to file-sharing programs failed. “Excluding them is not the way to solve the problem.”

LinkShare said its ethics agreement is more iron clad than other affiliate networks’ codes of conduct, since it requires technological changes for compliance.

“If you want to participate in the LinkShare network, you cannot use technology in predatory ways,” Stephen Messer said. “Because technology is the source of the problem, technology is also the way to solve it.”

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