Affiliates close rank after ASOS CEO calls them "grubby"

2. "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)

4. "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.

6. 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.

8. 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.

10. 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.

12. "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?

14. 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.