Compliance: Protection in the performance

channel

An Affiliate Window whitepaper on brand protection and publisher standards

within the performance space and the future of UK principles within affiliate

marketing

First Edition, February 2014

Prepared by the Affiliate Window Compliance Team compliance@affiliatewindow.com

2

Contents 1.0 Introduction ................................................................................................................................ 3

2.0 The compliance team .................................................................................................................. 4

3.0 The three stages of compliance ................................................................................................... 5

3.1 The first stage .......................................................................................................................... 5

3.2 The second stage ..................................................................................................................... 8

3.3 The third stage ......................................................................................................................... 8

4.0 Review of the year ..................................................................................................................... 10

4.1 Reasons for removal .............................................................................................................. 11

4.2 The international picture ....................................................................................................... 12

4.3 New developments ................................................................................................................ 13

5.0 Beyond the network: regulatory challenges ............................................................................... 15

5.1 Inside the industry ................................................................................................................. 15

5.2 Outside the industry .............................................................................................................. 16

6.0 Standards in 2014 ...................................................................................................................... 17

7.0 Further reading .......................................................................................................................... 18

3

1.0 Introduction The performance channel is a complex network of many different online strands bound by a

common commercial metric: cost per acquisition.

Under the auspices of the CPA model, the spectrum of promotional methods that can make up a

typical affiliate programme present network quality challenges that require ongoing vigilance and

potential investigation.

This is where the network’s compliance function comes to the fore. Network compliance isn’t just

about weeding out rogue publishers engaged in unethical or non-compliant activity, it also helps

assimilate new technologies within the channel to ensure existing publishers are treated fairly as

well as acting as the gatekeeper to the network in the first instance. Additionally, as online channels

become more and more influential, there is a role for compliance in ensuring wider regulatory

initiatives are dealt with effectively.

Compliance within the performance channel is an often overlooked but critical component of any

affiliate network’s offering. It is still primarily performed by affiliate networks and in an era of

increasing third party platforms, automated technology solutions and agency-led programmes,

should not be something that is diluted.

With Affiliate Window tracking nearly 30m sales in 2013 and recording almost £2bn in advertiser

revenue across 1,600 retailers, we have an obvious obligation to ensure these transactions are

delivered ethically and within the spirit of the performance industry.

The intention of this document is to raise awareness not create concern. We believe the

performance channel is a robust, compelling and effective route to market for thousands of brands

but in any industry that has a relatively low barrier to entry there is always the risk of isolated

individuals seeking to game the system.

In this white paper we want to offer guidance on the role of the Affiliate Window Compliance Team,

its processes, some statistics from 2013 and offer some insights into the main factors that could

impact on publisher standards in 2014 and beyond. We also want to arm performance marketers

with the necessary information they need to manage compliance on their own programmes.

4

2.0 The compliance team Affiliate Window’s dedicated compliance team came into existence in 2011. Prior to that the

publisher approvals and investigations function sat within the Publisher Services Team.

We made the decision that the complexity and level of technical acumen needed to keep on top of

affiliate promotional methods required a team comprised of deeper knowledge regarding linking

methods, website creation and software capabilities and therefore our compliance team was born.

In the three years since its inception, the team has been tasked with upholding Affiliate Window’s

market leading standards and strong ethical stance. This is a difficult balance to strike due to the

nature of the channel, with tens of thousands of active publishers at any one time, it means there

will always be the potential for rogue or unethical activity to exist, but the team’s purpose is to get

us as close to that 100% compliant mark as possible.

The team sits separately from the publisher team as we believe it should be a separate entity that

doesn’t have vested interest in favouring certain publishers or publisher types over others.

Given Affiliate Window’s core goals are centred on transparency and ethical performance marketing,

the role of the team is central to our day to day business. We believe general publisher standards

will become an increasingly important part of a network’s role due to both internal and external

scrutiny: scrutiny both from brands and companies investing in performance marketing as well as

wider industry regulators who will seek to ensure consumers are protected when exposed to digital

marketers across all online channels.

5

3.0 The three stages of compliance Compliance is important for a number of reasons. It is broadly pitched as trying to prevent:

• Advertisers paying for commissions not intended for a publisher as a result of nefarious

traffic

• Increased PPC costs and lowered ad rankings due to unauthorised brand bidders

• Damage to advertiser & network relationships

• Damage to other publishers’ activity.

• Misrepresentation of brands

• Poor impression of the performance channel

• Potential criminal consequences

In dealing with these points, we need to consider the appropriate compliance measures that occur

within an affiliate network or supplier in tackling them. It should be common now for every

intermediary to have processes to address advertiser and publisher questions about how each is

handled.

If we consider where instances of some or all of these can occur we should divide this list into three

core areas that need to be covered: entry to network, entry to a programme and ongoing

monitoring.

The compliance team will usually be involved at the first and third stages with account handlers and

advertisers responsible for publisher approvals onto their respective programmes.

3.1 The first stage

Affiliate Window invests most heavily in the first stage and this is where it is critical that a company

being used to perform publisher approvals has invested in the tools and resources to investigate

every application thoroughly.

It is obvious common sense that if a compliance team can identify and prevent the vast majority of

unethical activity at entry point to the network then it mitigates the work that will be needed further

down the line in monitoring publisher traffic.

Due to the significant investment, proprietary procedures and complexity of the checks and balances

we use in handling applications to the network, we cannot reveal the exact details of our publisher

approval procedures. There is however one requirement that remains unique in the market proving

controversial since it was implemented nearly ten years ago.

When we announced to the market that we would require every publisher to make a £5 payment on

joining the network, there were a significant number of commentators who claimed it was a revenue

generating exercise rather than one designed to enhance network quality.

The reason for the £5 payment has always been so that we can check the identity of the applicant

against the information they supply. It enables us to ensure that the publisher has an account and is

6

not, in the first instance, duping the system. A theme that runs throughout this document is that we

are not just protecting advertisers from potential unethical activity, but we also want to ensure that

legitimate publishers’ traffic is also secured and not hijacked by rogue elements. It is the first stage in

our approval procedure and allows us to cross reference a number of parameters in a wider process

that makes available over 20 pieces of information for the team to verify the publisher’s identity.

Incidentally it’s worth reiterating we credit all £5 fees back to the publisher upon successful approval

to the network and will always refund the £5 fee on request should an application not be accepted.

The £5 payment mechanism isn’t fool proof and isn’t designed to be definitive. We also run

additional identity checks, operate a detailed ‘traffic light system’ based on an algorithmic report of

the publisher’s details and will request every publisher has a working website they can demonstrate

belongs to them. The systems are designed to flag inconsistencies and non-matching information

but we also manually check every application to the network regardless of how much of the data

supplied fits.

One of the additional reasons Affiliate Window launched its detailed publisher profiling database

(known as Darwin) was to request extra information above and beyond that requested as standard

in the channel. Again, this should be seen as a positive step in increasing transparency in an industry

that has suffered from reputational issues in the past. It was modelled on the IAB Affiliate Marketing

Council’s Ethical Merchant Charter that seeks to build open and respectful relationships between

both publishers and retailers.

The scale of the challenge

To give you some idea of the number of applications we receive, Affiliate Window register an

average of 30 to 50 new publisher submissions every day, therefore the resource invested in

processing these, coupled with the money spent on third party and proprietary tools, shouldn’t be

underestimated.

Regarding the number of applications we approve versus those we reject, this graph shows the

status of publisher approvals for the first half of 2013 across the network including approved,

rejected, those that were abandoned at some stage during registration and also those removed at a

later stage (more on this later):

7

In total more than 14,000 publishers showed interest in signing up to the network in 2013 of which

60-70% on any given day are successful.

You can see a significant number do not make our initial quality threshold for entry to the network

and are rejected. This could mean we are turning away valuable publishers from the network so we

always allow a right of reply and will sometimes reverse decisions on appeal. We may also ask for

additional information or proof the publisher owns the web property they have signed up with.

We will cover the publisher removals section in greater detail later in this document.

Remember: If you’re registering as a

publisher, provide as much information

as possible and ensure you fill each field

in appropriately as all data is cross-

checked and any anomaly investigated.

To find out more about how to ensure

you stand the best chance of being

approved onto the network, check this

post from the network’s Compliance

Blog.

As part of an occasional series, the team also takes a look at how email authentication helps

ensure compliance standards. Read more on the compliance blog.

8

3.2 The second stage

The second stage of compliance is carried out by the network account handler or advertiser contact.

This is the point of entry to specific programmes. It is increasingly common for advertisers to require

the additional application to their programme stage as an extra filter.

The vast majority of our bigger brands have approval based programmes and should assess and

process new applications as quickly as possible.

SMEs may consider this an unnecessary barrier to entry that, when removed, allows them to

compete on a more even footing with bigger advertisers. It is worth remembering that the removal

of the manual approval system means any publisher signed to the network can join a programme at

any time regardless of their perceived suitability or match for the brand.

Approval will inevitably depend on the relevancy of the publisher’s promotional methods and

information they supply. Networks will differ in how their programmes are set up: Affiliate Window

will flag how many pending publisher applications there are to be processed in the programme

dashboard.

The Affiliate Window system allows for the full profile to be viewed in order for advertisers to make

sound judgments about the publishers they want to approve onto their programmes. It shouldn’t be

underestimated the importance as a publisher of supplying as much information as possible as an

advertiser may make the wrong decision based on the perceived lack of detail or opaqueness of

promotional methods listed.

3.3 The third stage

The third stage of compliance is the area that remains contentious, open to interpretation, difficult

to evaluate and monitor as well as demanding of additional resource.

In essence it’s the ongoing checking of existing publisher activity on the network to ensure

compliance with both individual programme terms and conditions and Affiliate Window’s general

network publisher agreement as well as general upholding of wider industry standards.

This is no mean feat. When you consider we have more than 12,000 sale active publishers in any

given month, not to mention the thousands more who are traffic and banner active, recording

millions of clicks and impressions every day, there is a requirement and care of duty to guarantee

the efficacy of the clicks and transactions. Again, this protects both advertisers and agencies that

may be involved, as well as legitimate publishers.

The types of activity the team typically actively monitors are as follows:

Duplicating: Clones of legitimate sites

Spamming: Sending mass emails/lack of opt-in permission

Domain Squatting: Creating misspelt sites

Diverting: Deceptive links, cookie stuffing

9

Faking: Inflating a programme’s clicks

Stealing: Using stolen credit cards

Brand Bidding: Bidding on merchant terms

Rule Breaking: Contravening network T&Cs and the IAB AMC’s codes of conduct

One significant area that historically blighted performance marketing and still causes issues in

certain countries is adware and spyware. Publishers use adware to automatically trigger affiliate

cookies based on what is being browsed online for. So for example, a consumer visits

www.exampleretailer.com, and then the adware on the user’s machine forces a publisher’s link to

load in a pop-up (or pop-under) and drop the cookie.

Adware advertising is usually done through Pay per View (PPV) networks whereby a publisher bids

on search terms according to a PPV model. Pop-unders will then appear if the visitor’s PC is infected

with the adware used by the PPV network. It is worth considering that much of this activity is

designed to hijack the user journey by earning money for adding no value to the advertiser in driving

the sale. Existing affiliate cookies, according to a typical advertiser de-duplication model, will also be

overwritten. Not all pop-unders are from adware/PPV networks.

No UK affiliate network tolerates adware and spyware. A gentlemen’s agreement was reached in the

early stages of UK affiliate marketing that all networks would seek to identify and stamp out any

such traffic on their networks.

The problem is much of this activity can be difficult to manually identify. In response in 2007 Affiliate

Window created a piece of proprietary software aimed at catching adware and spyware.

In essence the technology is able to search for adware and spyware and automatically find it, rather

than the network being reliant on manual detection.

It is probably fair to say that adware and spyware is far less common in the UK than it used to be and

poses a minor concern, partly because publishers know there is a good chance it will be caught on

our network, but continuing to raise awareness will hopefully result in it being stamped out

altogether without causing much alarm. It is also fair to say it is far more prevalent in other markets,

most notably the US. We’ll briefly cover compliance standards in markets outside the UK later in this

document.

You can read this article by Affiliate Window from 2011 that addresses unethical activity, including

software aimed at diverting commissions, within the performance channel.

Returning to general unethical or suspicious activity on affiliate programmes, often common sense

will help identify where it is occurring. We advise our account handlers at Affiliate Window to check

for some tell-tale signs, for example this non-exhaustive lists illustrates some of the metrics we’ll

consider:

High conversion rates

Poor quality websites driving high sales’ volumes

10

Publishers being evasive or difficult to get hold of

Masked referral URLs

Statistical anomalies and unexplained peaks or spikes

Traffic redirects

Large volumes of sales occurring at abnormal hours (outside of UK working hours for example)

Affiliate Window will monitor for all this activity and more using manual detection as well as

proprietary and third party tools.

Third party tools

It is now quite common for networks and agencies to use software designed to monitor the paid

search space. Companies such as Brand Verity and The Search Monitor offer a range of services

designed to help advertisers and third parties run ethical affiliate programmes. Additionally Affiliate

Window uses a fraud detection tool that advertisers can pay an additional fee to have enabled on

their account.

A key task in 2014 is to carry out an audit of all the tools and technology the company utilises to

ensure they remain fit for purpose and help push the industry’s continued efforts to secure

additional marketing budget.

By employing a range of technology across the variety of publisher activity that makes up a typical

programme we know we catch unethical traffic but we’re also hopeful it has minimised the number

of affiliates who feel they can break Affiliate Window’s network terms and conditions. We feel it

sends a clear signal to them that we work actively to catch any such traffic and will act swiftly and

decisively to remove it.

To find out more about our range of compliance tools and services and specific information about

the various procedures we use please email the Compliance Team for more information.

4.0 Review of the year As part of our efforts to shine a light on the work the network does we can share for the first time

the investigations the compliance team undertook in 2013 and categorise removals by the type of

breach committed.

11

In 2013 we removed 154 affiliates (or approximately three per week) for a variety of breaches. The

geographical breakdown of where these publishers operated according to the four territories

Affiliate Window is active in can

be seen here (note, some

publishers operated in multiple

territories):

These 154 publishers generated

just under 0.12% of

commissions across the entire

network. The majority of

payments were withheld from

payment.

In other words, for every £1,000

in commission the network paid out, £12 was withheld because of the activity of these publishers.

15 (or 10%) of these publishers sought an invite code from Affiliate Window to avoid the £5 network

charge. We issue these codes in an ad hoc way but control their distribution and monitor publishers

receiving them. This also hopefully demonstrates that the charge is a way of deterring potential

unethical applications.

4.1 Reasons for removal

If we then consider the reasons why these publishers were removed from the network we can see

the split across five different types of violation:

14%

4%

71%

6%5%

Affiliate suspensions

PPC violation Domain squatting Deceptive practices

Multiple accounts Adware

70%

24%

4% 2%

Geographic breakdown

UK US Canada Ireland

12

The term deceptive practice is used when a publisher intentionally promotes an advertiser with the

sole intention of deceiving the network. It is used to lump together a series of miscellaneous

methods of unethical traffic that aren’t clearly defined by the other categories. For example one

such method is ‘false sales’, or, in other words, when a publisher uses techniques to generate sales

that are not determined to be genuine:

Iframes and traffic cloaking are additional deceptive practices that are likely to account for a sizeable

chunk of unethical publisher traffic.

4.2 The international picture

Due to the network’s primarily UK focus applications from this country inevitably outweigh all other

territories, but we do see activity from across the globe. There are many reasons for non-UK

publishers running non-compliant activity, not least that culturally the performance space differs

from country to country and what is acceptable in one place may not be in another.

It is worth bearing in mind that the UK operates close to any notion of a ‘gold standard’ of

performance marketing when compared to other markets which again can cause confusion amongst

overseas affiliates who may be running what they believe to be perfectly acceptable campaigns in

their home territories but that fall foul of UK networks’ terms and conditions.

The chart below shows where the publishers removed from the network were based globally. This

data is taken from the country of registration provided upon sign up to the network.

Australia1%

Canada4%

China2%

Europe1%

France1%

India1%Japan

1%

Jersey1%

Morocco1% New Zealand

1%Norway

1%Portugal1%

Russia1%

Serbia 1%

Spain1%

UK59%

USA24%

13

Aside from the UK and US there is a smattering of removals from countries across Europe and Asia.

There exists a perception that much unethical activity occurs outside of the UK and whilst that may

be the case, we know our initial vetting procedures weed out the majority of these applications in

the first instance.

We often find publishers have enjoyed success in their home country and then start expanding their

business overseas, falling foul of stricter guidelines, particularly around purchased PPV traffic.

It is also worth considering that the UK is one of the most mature affiliate markets in the world and

less developed markets may have looser terms and conditions and less rigorous controls. It is not

uncommon for us to have to explain to publishers based outside the UK that their traffic (that they

believe to be perfectly legitimate) is not acceptable here.

A classic example is bundling of software. A common phenomenon in the US, many consumers have

cookie dropping software installed on their machine as a result of ‘bundled’ software: that is, by

agreeing to download a possible unrelated piece of information, video or piece of software they

then find additional programmes installed on their PCs. These could be toolbars or rebate catchers,

typically intended to capture or interrupt a sale at the last minute in order to claim click credit for it.

We wrote a piece on why toolbar bundling doesn’t offer any value for the performance channel for

the Affiliate Window compliance blog that you can read here.

4.3 New developments

Given performance marketing is part of a technology industry that is ever bending and changing as

well as attempting to mould commercial models to new technical solutions, there is also the

opportunity for publishers to try and see this as an opportunity to see new ways of pushing unethical

activity.

In the past year or so, we have seen a new variation of domain squatting that involves using free

hosting such as Google’s Blogspot or Wordpress and combines brand name discount code, voucher

code or coupon code or variations within the site’s title.

This is a very effective method because these sites rank very easily and high up in search engines.

There are additional layers to this technique: it relies on a combination of SEO methods, but the use

of advertiser name plus keyword helps the site rank quickly.

Additionally, last referrer information can be hidden using this method. The site owner hides the

origin of where the traffic is coming from. Typically because publishers have deliberately employed

these methods with a view to deceive, they know they are breaching network terms and conditions

and when found the account will be terminated.

Another variation of domain squatting seen in the last year is the use of misspelt domains and

making use of scraped content from legitimate sites, for example http://telegrarph.co.uk/

14

Previously domain squatting publishers would simply redirect users to the advertiser, now they are

using the official site’s content to deceive the user into believing that they are on the actual site.

Finally another trend that we have seen recently is a number of publishers exploiting free web based

email.

This is a deceptive method that involves the user signing up to a high page rank website and

spoofing the website identify to get onto the network.

15

Far from concerning people reading this document, we want to assure people we are aware of all

these methods and constantly monitoring the space to find them. We also want to contextualise the

problem: a handful of instances have been found and they are typically caught swiftly before any

financial damage can be done.

5.0 Beyond the network: regulatory challenges This document primarily deals with checks and balances inside the performance channel and

Affiliate Window’s approach to dealing with network compliance, but there is an additional aspect of

standards that applies to all industries that our channel is being increasingly challenged on: that of

external regulation.

This shouldn’t alarm or shock us: as any industry grows in size and influence so it opens itself up to

greater scrutiny. Rather than ignore it the most positive approach is to anticipate and then deal with

it head on, hopefully emerging stronger.

5.1 Inside the industry

The performance industry is fortunate in that it has a robust regulatory framework already in place,

made possible by the work of the Internet Advertising Bureau’s (IAB) Affiliate Marketing Council

(AMC).

The AMC was formed nearly eight years ago initially providing a platform for companies to come

together to discuss issues the channel faced.

16

Growing from a talking shop into an active body looking to create a common set of standards, the

Ethical Merchant Charter was the first piece of work released. Outlining for advertisers a checklist of

best practice when launching, and subsequently managing, an affiliate programme it was the

template that Affiliate Window used when building the profile aspect of its interface.

Subsequent to the Charter, codes of conduct went one step further, requiring networks to commit

to upholding a set of rules based around a specific issue with collective action based on failings by

affiliates or advertisers to adhere to them.

The most noticeable code of conduct remains the Voucher Codes, Code of Conduct now in its fourth

iteration.

A second code followed dealing with downloadable software and toolbars. Additional best practice

advice was published that explored the issues surrounding retargeting, mobile, and product feeds.

The work of the AMC is designed to be supportive and guiding rather than overtly punitive. It is often

a difficult balance to strike: the voucher code, code of conduct was a classic examples of companies

asking the AMC whether how they had configured their site was compliant with the code because

the text didn’t make explicit reference to the minutiae of how a site should be constructed.

The answer is relatively straightforward: the standard every publisher should work towards (in any

walk of life) is to produce content that adds value and doesn’t seek to dupe or confuse consumers.

A criticism of the AMC is that it lacks teeth. Again, this is an inevitability. In an industry that has so

many complexions and competing interests there will always be parties that feel not enough is being

done to punish bad practice or highlight publishers who are breaching codes of conduct.

Fortunately the incidence of this is rare: it is usually difficult to name and shame individuals as it is in

everyone’s interest to try and resolve issues as swiftly and collaboratively as possible. Inevitably

some parties, in a fiercely competitive landscape, will also seek to make political capital from any

investigations. It is a testament to the strength of the networks’ combined efforts that breaches are

few and far between.

The AMC’s work is generally a great place to start for any performance marketers. The full range of

codes, guidance and best practice can be accessed via the AMC blog.

5.2 Outside the industry

Besides the work of channel practitioners to create a recognisable set of standards, non-

performance marketers are also turning their attention to the digital industries.

Recently industry regulators such as Ofgem in the energy sector, The Financial Conduct Authority as

well as Ofcom, dealing with telecommunications, have encountered performance marketing in

various guises and have sought to make demands upon the channel.

17

This is to be expected. As mentioned, with the growth of publisher sites and the increasingly

prevalent role they play in consumers’ lives, inevitably they will attract attention from outside

bodies.

We need to be alert but this shouldn’t concern the performance industry. We have a robust self-

regulatory framework that shows we’re a grown up industry and we’re used to dealing with external

bodies who want to understand our business model better. We also have a collaborative framework

that helps us act in a timely and effective way.

This will become an increasingly important trend in 2014 and beyond. More work will need to be

done and it will be important for us to cement relationships with regulators and extend our reach

beyond our current sphere of influence.

It is likely price comparison will be an area the industry needs to tackle in order to give external

regulators confidence that consumers are being offered the best deals in the most transparent ways.

For further updates remember to follow the insights from the Affiliate Marketing Council.

6.0 Standards in 2014 The major headline for 2014 will be that we operate in a £1bn industry. That’s a significant

proportion of brands’ marketing budget they are investing in the channel.

We have a duty to ensure it is wisely spent on ethical traffic that delivers high quality leads and

valuable customers. This is no mean feat given the huge number of publishers that operate in the

space and the sheer breadth of promotional activity the channel offers.

Remember, every digital discipline, be it Display, SEO, Paid Search or Email has its own challenges

around standards and ethics. That they may be less understood may be part of a general lack of

willingness to expose them. It’s our intention to lay our cards on the table and offer as much

transparency as we can.

We are not saying that performance marketing has a bigger problem than other channels, more

we’ve invested heavily in creating a framework to mitigate any negative impact and are happy to

discuss this with any company we work with.

Affiliate Window spends a substantial six figure sum every year on compliance procedures, tools and

technology to ensure advertisers are confident in how they’re spending their marketing money.

Hopefully this document has gone some way to contextualising what that looks like and the

complexity of this vital network function.

The purpose of this document is to cement confidence in performance marketing, rather than scare

practitioners. We need to be honest about the rare possibility of unethical publishers entering the

space and offer transparency about how we will tackle it.

18

Similarly compliance and industry efficacy isn’t just about dealing with publisher traffic, it is about

recognising the role publisher sites play in consumers’ lives and how this is being scrutinised by

external forces. The framework that exists that Affiliate Window has been an integral part of since its

inception, will continue to play an important role in communicating the professionalism and strength

of the channel.

It is a complicated picture but one that is necessary. Hopefully this document goes some way to

shining a light on this most vital of network functions.

7.0 Further reading Affiliate Window Compliance blog: Occasional advice on trends found on Affiliate Window’s network

as well as how to tackle potential issues.

iPensatori: A US site that seeks to expose unethical performance marketing, updated by two leading

lights in the business.

IAB AMC: The AMC’s blog, rarely updated but a useful repository for the collective guides and best

practice documents

The IAB: The IAB’s official site

Additionally, don’t forget to sign up for the Strategy Newsletter in order to

receive monthly updates from the team.