For Affiliate Marketing, Bigger Is Not Always Better

NEW YORK – Though affiliate marketing has thrived in recent years, top practitioners caution that businesses need to keep a tight rein on affiliate programs to avoid potential legal issues and brand damage.

Speakers at the Direct Marketing Club of New York’s panel discussion of performance-based online marketing yesterday praised affiliate marketing as a cheap, effective channel.

For the most part, said David Rogers, an affiliate marketing specialist at Brooks Brothers, it is risk-free. Shawn Collins, director of affiliate marketing at ClubMom, said ClubMom would not have survived the downturn without it. Yet their bullishness was tempered with the need for caution in handling such programs. Rogers said managing them required vigilance.

“You’ve got to work with them to understand how their business works,” he said. “You only have two things to control the affiliate relationship: goodwill and remuneration.”

Rogers said Brooks Brothers allows fewer than 10 of its affiliates to use its trademarked terms in search marketing, since it would occur even if the company forbid it. The affiliates handle the keyword bidding and do arbitrage between what they pay for a keyword click and the conversions Brooks Brothers pays for. Rogers said the company is commited to protecting its brand against unauthorized use, but has found that allowing a limited number of affiliates to use the terms gives Brooks Brothers control over how its brand is represented.

Prakash Bharwani, senior manager of interactive marketing for 1-800, said he took a different approach because letting affiliates use trademarked terms potentially could dilute the terms.

“We want to keep as much control over the brand as possible,” he said.

Most paid search providers let trademark owners lodge complaints against companies infringing on their marks. Google is enmeshed in a legal fight with American Blind & Wallpaper over whether it can show paid links to competing sites when search terms contain a trademarked term.

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