So you’ve got a budding e-commerce startup.  You’re advertising on Google, Facebook, Bing, etc, and you decide one day, “hey, I should have an affiliate program!  I heard CJ is great, let me sign up there.”

You speak to your CJ rep and they tell you about all the wonderful sales that they’ll be generating for you and you create your account, deposit funds, and with a huge smile across your face, you approve a whole bunch of affiliates and sit back and wait for sales to roll in.

A few days later, you start getting a few sales but as you watch your overall sales volume, it doesn’t increase at all.  Then, a few more sales come in, but again, your total sales did not increase by the number of sales that the CJ affiliates generated.  So, you start wondering why.

You start analyzing your sales data through CJ, and you notice that the affiliates generating sales are seeing obscene conversions, 20%, 30%, 40% and even higher.  Well, I’ve got an answer for you, and it’s not pretty.

You see, I used to run a coupon site myself, 10 years ago.  It was called BigBigSavings.com and I made a ton of money from it.  Why?  I had great deals posted on our homepage, and every single day, thousands of people loaded our homepage to see what new offers were available that day.

Unfortunately, many things have changed since those days.  When we approached our coupon site affiliates to ask them to feature PetFlow (our company) on their homepage, every single one of them said that this is not where they generate traffic, “No one goes to our homepage.”

These days, coupon sites generate traffic on their highly SEO’d pages that are specific to a particular merchant.  So, for example, if someone had searched for “PetFlow coupon,” there would be numerous coupon sites listed in organic results, that would list coupons for our site.

And the catch is, in order for the user to see the coupon, they most often have to click a “reveal” link, which immediately opens the merchant’s site in another window, dropping (stuffing) CJ’s cookie.

Now, regardless of whether the user actually used the coupon provided by the coupon site or not, you’re paying for the sale! We have spent countless hours looking through user logs as well as session traffic, and we have seen this over and over and over again.

The consumer is at the point of purchase, has already used a coupon code that was provided to them, then all of a sudden has a CJ cookie deposited, and then completes their purchase.  After analyzing all this data, we decided to stop our CJ affiliate program, terminate all our relationships with coupon sites, and guess what, our sales never declined.

I don’t want you to think that coupon sites are doing anything malicious or illegal, it’s just that times have changed, and people are no longer visiting coupon sites looking for potential deals like they used to when I ran my own coupon site.  Today, the way these sites generate their revenue is when the customer is already at the point of sale, so none of the customers that coupon sites generate are customers that the merchant wouldn’t already have sold their products to, on their own.

So, if you want to offer coupons on your site, here are a few things that you can do:

  1. Bid on your own “trademark + coupon” and offer a coupon for users to use.  Either take them to a landing page that offers a specific coupon, or simply put the coupon itself in the ad copy.
  2. Put a coupon on your site for all customers to use.  If you list the coupon, you’ll provide less of a reason for customers to go searching for it, and they’ll be more likely to make the purchase anyway, because you’re providing a value to them that they were not aware of.  We have a coupon featured prominently on both our homepage, as well as at the top of every page.  Coupons are a great way to reinforce purchasing behavior, and your conversions will be significantly higher if you offer a coupon on your site, for your customers to use.
  3. Stay away from coupon affiliates.  Make partnerships with bloggers and/or content sites, someone who has an audience that is interested in reading the content provided.  It’s not a bad idea to have an affiliate program at CJ, but you should not blindly approve publishers thinking that the sales they’re going to generate are going to be incremental.

 

By Jeremy Schoemaker

Jeremy "ShoeMoney" Schoemaker is the founder & CEO of ShoeMoney Media Group, and to date has sold 6 companies and done over 10 million in affiliate revenue. In 2013 Jeremy released his #1 International Best selling Autobiography titled "Nothing's Changed But My Change" - The ShoeMoney Story. You can read more about Jeremy on his wikipedia page here.

50 thoughts on “Coupon sites are stealing your money!”
  1. Yes it is true, most of my affiliate programs has stopped paying me because of these sites. As most of the people too smart they use the coupon without using your affiliate link and one more problem these affiliate program do not offer you unique promotion or discount coupon code so that if anyone signs up using that coupon code you will be paid.

    1. Oh, my god, so to the people like us who doing the affiliate business online, is there any new ways to make money? Coupon sites are the killer to us? Does the affiliate still have market? I can’t think too long.

  2. On behalf of content sites owners, who create valuable content and often get their commissions stolen by coupon spammers, I’d like to thank you for this enlightening post!

    Hopefully vendors will be more strict with these coupon spammers after reading your post.

  3. A good article. In parts.

    It’s up to the advertiser to make working with voucher codes work. Like you say analyse affiliates, ensure that publishers you work with use negative keywords on your brand terms in adwords where applicable, contruct your codes in a smart way to ensure they are adding value to your bottom line etc.

    Here in the UK the ‘click to reveal’ practice is banned through collaboration with networks, advertisers and voucher sites. I’m always surprised this is not the case in the US market.

    Whilst I agree some ‘old skool’ voucher code websites rely on SEO traffic. Many others have sizable email marketing lists, In addition to decent social media strategy and mobile vouchering through iPhone and Android.

    Matthew

  4. I don’t know if I’d paint all coupon affiliates with the Big Brush you have here, but a lot of the really big money ones are definitely working like this and profiting bigtime from it.

  5. > After analyzing all this data, we decided to stop our CJ affiliate program, terminate all our relationships with coupon sites, and guess what, our sales never declined.

    Sounds like you’re scapegoating affiliates for a poorly managed affiliate program.

    If you shut down the whole program and your sales were not impacted, it indicates to me that you never developed a strong affiliate program to start.

    How many affiliates did you work with one on one to recruit, activate and actually merchandise their sites?

    1. Shawn,

      Definitely not scapegoating all affiliates. The problem with CJ is that there’s no way to differentiate between an affiliate and an affiliate with a coupon site. Some affiliates have numerous sites, and of course, most of the sales they generated came from the one site in their portfolio that hosted coupons.

      Again, I’m not saying that all affiliates are bad, I am merely recommending that e-commerce retailers stay away from affiliates with coupon sites.

      For us, it made sense to terminate our affiliate program and focus our energy elsewhere as we have a limited amount of time and resources, and making sure that we weren’t listed on coupon sites is not where we needed to spend this time. I’m in no way saying that all advertisers need to cut off their CJ affiliate programs.

      1. Hey Alex –

        You could always add to your T&C for your program that coupon sites are not permitted. If they send traffic from a coupon site, then they don’t get paid.

        I think “limited amount of time and resources” is a key issue here, as managing an affiliate program is time and resource intensive – if you are not able to keep track of who is promoting you and how, an affiliate program does become a liability.

        But when proactively managed, it can be a very strong channel. Maybe you should consider outsourcing the management of it.

      2. “Again, I’m not saying that all affiliates are bad, I am merely recommending that e-commerce retailers stay away from affiliates with coupon sites.”

        Very helpful advice! That makes a lot of sense. Love the posts about ecommerce now that I’ve started doing it too. heh…

  6. Sounds like a pain man. I am always afraid to join those kind of websites because of course they will tell you how wonderful everything is. But then once they got your money I can see them turn their head.

    1. This post was written by the owner as the byline says. It was not written by me.

  7. Here’s the major problem I have seen with coupon sites for my eCommerce stores. A customer comes to our site (via our OWN promotions whether it’s from our SEO or PPC), they decide to buy an item, and then on the checkout screen they see a spot to enter a coupon. So they head back out to Google and search for a coupon to use. They find one at a coupon site, get an affiliate cookie placed, and then they go back and place the order.

    So now we are paying a commission on an order that we would have received either way. I watched this closely for one month and saw that around 80% of our affiliate orders were actually for visitors who found our site via our PPC ads! The coupon sites literally drove no new traffic to our sites yet we were paying a ton of affiliate commissions to them.

    Of course, we could eliminate the coupon field on the checkout screen but we run numerous special offers to our customers that use coupon codes. Now we just run our affiliate program in house which has eliminated the problem since most coupon sites just take results from the big affiliate programs like CJ.

  8. First of all, I am an affiliate, though I do not run coupon sites.

    Most of my programs are through LinkConnector, though a few use CJ because the merchants offer higher commissions.

    My biggest comment here is that the issue at hand wasn’t really that affiliate market is bad, or even that CJ is bad – but rather that if you don’t manage your affiliate program, your affiliates will go for the easiest money first, and cannibalize your sales.

    Now, I’ve never run an affiliate program, but one of the reasons I like LinkConnector is because they require that the affiliate manager approve each and every site where the links will be used. It was a pain at first, but I quickly realised that I could use this part of the process to establish a relationship with the sales team at the company I’m promoting. This has been invaluable – for instance, I’ve had merchants allow specialized deep linking – from my domain only – further down the sales funnel than is allowed in the default campaign.

    For instance – if my site is selling widgets, I may have a landing page set up for blue widgets. With the default program, I can link to the blue widget page. This will convert at 5%. After speaking with the sales team and setting it up, I might pass the item ID for a blue widget to a special page on the merchant’s site, which will send the user to their cart with a blue widget pre-selected – this eliminates a step (“Add to cart”), and may boost conversion rates to 10% or higher.

    As a result, the merchant gets better control over their brand by knowing exactly what sites are promoting their product, while the affiliates get a closer and more valuable working relationship with the merchant. Both of them make money through increased conversion rates.

  9. Have you heard of Groupon. What do you think of that couponing space!!. Last I checked Groupon is revered and being valued multiple billions of dollars for a reason. The coupons/deals work!. If only used properly!!. Now, do you have what it takes to make coupons work for you?. May be not based on your story!

  10. Hi Alex,

    It’s true as Shaun pointed out that when not managed well coupon sites can become a liability. I too, think it needs to be said for those who may not realize after reading this article that there *are* well-intended coupon affiliates who *do* add value to a merchant’s efforts, and that they don’t *all* refuse to do anything but steal commissions in the way that you described. There are many who do positive product reviews etc. on “New Product” pages, etc. in addition to using “search by name” or “name + coupon” listings on their sites, and many other ways of promoting merchants to a loyal member base who may never otherwise have heard of the merchant. As has already been mentioned, the key to overcoming this issue is in making sure your T&C covers what is and is not okay concerning affiliates, how you expect coupon affiliates to add value, and also in managing those relationships closely to ensure affiliates are motivated to maximize a merchant’s exposure on their sites.

    And separately, although linked to this topic, it’s worth noting that a lot of merchants don’t give their affiliate programs the time necessary for affiliates to build trust and want to maximize their exposure through added effort etc. – they expect priority listings right off the bat as soon as an affiliate signs up to promote them without regard for how many merchants an affiliate is already working with (and without regard for the fact that the affiliate is not being paid up front for this), when in fact most solid, experienced and worthwhile affiliates are going to hang out and see how things go with a new merchant a while before they begin to put forth the time/effort and often, $$ to build all that value-adding content that the merchants are after. Why? Because they run the risk of working for free in cases where they do build it all up front on blind faith the merchant will be fair and then often the merchant has a knee-jerk reaction to something that could be ironed out in time with proper strategy, choosing to close their program before the affiliate can be paid. That kind of thing leaves affiliates sour and contributes to WHY more affiliates won’t immediately develop quality content right away on joining a program. Just sayin’.

    You make some valid points here, but it needs to be noted that there *are* coupon affiliates (yes, even on CJ) who do bring value to a merchant’s program and there *are* ways to create a win:win in those relationships – time, resources and good management is important. The problem you described above is real, but there are other solutions that *will* help increase both affiliate sales & total sales, vs. just closing a program or not working w/ couponers at all.

  11. PetFlow states that they shut down their entire affiliate program, and didn’t see any sales declines. This must mean that 100% of their affiliate sales were via coupon sites.

    This shows that PetFlow had a 0% conversion rate from all of their ‘Bloggers and Content Sites’.

    If I were a blogger, or content site, and part of the PetFlow affiliate program *I* would be the one that would be pissed off!!

  12. Makais.com stopped taking coupons all together for exactly this reason. The only thing the coupon code box did was encourage our customers to head off to Goggle and hunt for coupons. We ended up paying affiliate commissions on sales we already had. Once we pulled down our coupon code box, coupon affiliate commissions reduced 90%+. I don’t think coupon affiliates are the problem. The problem is the coupon code box that just encourages customers to abandon your shopping cart and go hunting for coupons.

    1. As a consumer, I always want to get the best deal, so if I’m buying something and see a coupon box, that is exactly what I do. I open another tab and do a google search for the site or item and coupon because then I know there has to be a discount somewhere. I think the answer is to pull the coupon code box and make sure you give a great item at a great value with no coupon necessary, and if something is on special then have a special page for it for affiliates/special customers to go to instead of coupons.

      1. Our strategy is to offer great prices with no coupons required. We try to have the lowest possible prices without requiring our customers to go scavenging for coupons. 🙂

    2. I don’t think removing the coupon code box is the right way to go about fixing this problem as customers like seeing the coupon code box, and like entering a coupon to get a bigger discount. It’s all fine and dandy to have great prices and not “have” to have a coupon code box, but it increases conversions, so why remove it?

      Like I said before, affiliate programs are great, affiliates are great. The problem, however, is that there is no way within CJ to differentiate an affiliate with a coupon site from one without one. Simply putting in the “rules” that no coupon sites are acceptable won’t really get you anywhere, and reversing commissions is not what I plan to spend my days doing.

      Again, I’d like to reiterate: I do NOT think anyone should cancel their affiliate programs. What I’m saying is that if your affiliate program extends to affiliates who run coupon sites, all you’re doing is paying for sales you were going to get anyway. Kill the coupon affiliates, and your sales won’t decrease one bit.

      1. There are some hugely succesful mechants that do not use coupons. Zappos is probably the best example. Personally, I hate seeing a coupon code box and not having a coupon. It makes me feel like somebody is paying less than me. I immediately feel the need to Google for a coupon, and this is what a lot of our customers were doing. Makais.com is not anti coupon affiliates, we are just anti coupons. Coupon affiliates can still bring sales via featuring great deals that are not coupons. Coupons may work well for some merchants, but we find it better to just offer great prices straight-up with no coupons.

  13. Am I the only one who thinks this article should have been posted two years ago with the title ‘How to make HUGE commissions with SEO + Affiliate coupons’

  14. Coupon sites kill you on both ends of things. Trying to promote a coupon code is almost impossible and of course with this case study shows its’ hard on the advertiser end as well!

  15. Coupon sites have their place… those merchants saying they shouldn’t pay comish on items already in a users cart (pre coupon surfing) is a double edged sword. Would you rather lower your nets or lose sales to a competitor (with coupons)?

  16. Very simple solution. Get rid of the coupon box. And you can still take advantage of the great sales/traffic coupon sites deliver by having coupon text links. Shopper goes to site, clicks coupon link to activate it. No code to write down or copy. Content sites will be fine because the traffic they deliver won’t ever see a coupon box. And you can have coupon sites in your program as well.

    Simple.

  17. You were there b4 Groupon what happened?
    You could have been somebody, you could have been a contender.
    Only joking:)

  18. The simple solution are coupon text links. Get rid of the coupon box. With coupon text links, coupon sites can use them and you can have them in your program, they do drive sales. For your content sites/product sites, the people they send, never see the coupon box.

  19. As an affiliate marketer I have to agree with you. It’s very easy to promote a coupon for a product and generate commissions without doing much work. Yes, it declines the merchants profits but this is the art of affiliate marketing. I think some merchants would benefit by not offering coupon codes.

  20. I’m not sure exactly why but this blog is loading very slow for me. Is anyone else having this issue or is it a problem on my end? I’ll check back later on and see if the problem still exists.

  21. Hi there! I know this is kinda off topic but I’d figured I’d ask. Would you be interested in exchanging links or maybe guest authoring a blog post or vice-versa? My website addresses a lot of the same subjects as yours and I think we could greatly benefit from each other. If you happen to be interested feel free to send me an email. I look forward to hearing from you! Wonderful blog by the way!

  22. Right on Brother, great layout, nice opinions, fantastic blog. one in a million. 🙂

  23. Your existing posts constantly contain a great deal of actually updated data.

  24. But, Coupon Codes help in converting traffic in to sales. and there are few sites doing lot of article marketing / Social Marketing to drive traffic to coupon pages,

  25. I brought over 30k in sales to one in-house affiliate network so far and I still making them money as I write this… They are not complaining at all 😛 ask for your own digital coupon for the coupons searched for the most on your site.

  26. magnificent points altogether, you simply gained a new reader. What would you suggest in regards to your post that you made some days ago? Any positive?

  27. I definitely understand why merchants would want to get rid of coupon affiliates, but I know if I owned a coupon site, and a merchant dropped me from their affiliate program because I ran a coupon site, I would just feature deals/coupons from their top competitors.

  28. Well the reality is, you DON’T have to offer coupons to offer Discounts! We can make all kinds of discount rules with our shopping cart and we decided 1. we don’t want coupon sites in our program and 2. we realized they just aren’t as useful as special promotions via our discount rules. Discount rules are applied automatically at checkout. No code needed and it works for everyone. Sometimes we have discount rules and we don’t mention it anywhere on the site and our customers gets a good surprise when the add an item to the cart. 🙂

    1. And our affiliates get the same commission for any sale they bring to the site. (so no lowering the commission just because a discount is in effect).

  29. Ok even if you are claiming that coupon sites does not do any good but still you get some traffic and who knows if a person is browsing a coupon site happens to see your logo he may be coming to your site and end up purchasing something.

  30. How is it possible for coupon websites for stealing money!! They are simply providing the valuable information for shoppers for providing coupon information. Even shoppers don’t need to pay a penny to the coupon websites. How do you justify that they are stealing money?

  31. I do not agree with you. Coupon sites does not steal any money but help end users to save their money. I have seen some coupons where I could save 50% on the total bill of my hosting account.

  32. Excellent and detailed review on coupon affiliates. Well, placing coupons on own site/blog for all peoples/customers to be used by taking them to a landing page that offers coupons, it’s really a great idea to implement. Thanks a lot Alex and tweeted 🙂

  33. Very shortsighted post from a typical affiliate manager. Definitely not posted by a marketing / SEO person who knows how to grow a brand.

    Coupon sites offer great value for 3 simple resons:

    1)Affiliate sites and coupon sites can and will offer great value to any brand. Many coupon sites have a large amount of followers, on the social networks, Email lists, direct traffic ect. Coupon sites will pitch YOUR offer to THEIR customers if your brand offers coupons. Needless to say there IS a lot of value in this for a brand.

    2)Coupon sites are HUGE, many online shoppers visit their favorite coupon site when they are looking to purchase something online and simply search for a product offer on the coupon sites. If YOUR brand is not listed on the coupon site you are missing a potential customer. They will simply take the coupon offer from your competitor.

    3) Becoming successful online is all about BRAND Visibility. (Coupon) Affiliates build YOUR brand.
    Every (coupon) affiliate will build links on highly related websites mentioning YOUR brand. Having a few (coupon) affiliates can & will results in having your brand mentioned on several thousands of related websites.
    (In order to rank for a specific product/brand in google affiliates will build links to their coupon sites where they mention YOUR brand in a positive way) The coupon sites contribute to YOUR brands visibility, directly and indirectly.

    I do not operate a coupon site myself, nor am i affiliated to one. Im an online marketeer who specializes in building BRANDS

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