Coupon sites seem to single-handedly power the affiliate industry, especially for retail affiliate programs. Many in the affiliate industry swear by these sites. My friend Brook Schaaf of Schaaf Consulting – one of the leading outsourced program managers (OPM) for affiliates – recently advocated for the value of coupon sites, but also acknowledged some of the complaints publishers have about these URLs:

I think coupon sites are an excellent value add. Beyond online and offline deals, they have a natural affinity for loyalty, price comparison, community, and more. At the same time that the coupon vertical is growing, I perceive a simultaneous growth in the myth that coupon sites don’t provide value because orders “would have happened anyway” or some similar logic.

He may well have been talking about me, since I’m one who tends to propagate this ‘myth.’ I think a lot of coupon site revenue is not “incremental revenue” to publishers; when a consumer goes to an etail site, adds an item to his shopping cart and is about to check out, and then sees an “enter coupon code” link, and ends up finding a coupon via SEO from a coupon site, I question how much work the coupon site did to earn their affiliate commission. Moreover, if in fact the sale ‘would have happened anyway’, the merchant has lost tons of money here when you add up the affiliate commission, affiliate network fee, OPM fee, and the coupon discount.

I tend to think that Google agrees with my side of the argument; they hate it when the SERPs are filled with coupon site after coupon site, especially when many of these sites are optimizing against merchants that either don’t currently have a coupon, or don’t offer coupons in the first place. Indeed, Zappos apparently got so annoyed by coupon sites trying to get affiliate revenue by SEOing around “zappos coupons” that they’ve create a page called “The Truth About Zappos Coupons.” The page is pretty clearly attacking coupon site SEO:

Don’t get confused either. Some sites might try to offer you “Zapos Coupons” or “Zoppos Coupons,” but don’t let them fool you. There is only one Zappos.com and again we do not offer Zappos coupon codes. They may try to get you by using terms like:

  • Zapos Coupons”
  • Zoppos Coupons”
  • Zappo Coupons”
  • Zappo’s Coupons”
  • Zappo.com Coupons”
  • “Zappa Coupons”

But again, don’t let them fool you. They are not going to give you any discount since Zappos Coupons are not offered.

Today I was browsing the Google Code labs (the place where Google releases code that they are in early public testing stages) and noticed something that I thought might be a Google attempt to push coupon sites out of the organic results. It’s called Google Coupon Feeds and Google describes its utility as follows:

Google coupon feeds enable businesses to provide coupon listings that will be included in Google search results. Coupon feeds enable merchants to easily distribute coupons for free via the web. Consumers can also search for, print and redeem coupons for free. This service brings tangible value to both merchants, who can use coupons to find new customers who are very likely to make purchases, and for customers, who can find more competitive offers for the products and services that they buy.

Hmm, a way for merchants to upload coupons directly to Google that will be “included in Google search results” and “brings tangible value” to merchants and customers. Sounds just like a coupon site, except for perhaps the “tangible value” that is difficult to see on coupon sites, at least from the merchant perspective.

Granted, right now this product is in beta and is not anywhere near ready for primetime; after all, you need to be comfortably formatting and uploading a feed to Google, something that anyone who has worked in the comparison shopping business knows is not a core strength for most merchants. But the fact that this program even exists tells me that at least Google understands the value of couponing and may well be thinking about ways to monetize this traffic themselves instead of leaving it to affiliates.

Indeed, since Google acquired Performics and their affiliate program (now called the Google Affiliate Network or GAN), you could potentially see Google using this coupon feed and uploading all participating GAN merchants’ coupons through it. It could either be an argument for merchants to join the program (Use GAN and you will get actually free traffic from coupons in SEO, instead of traffic from coupon sites who use your affiliate link and then get the SEO traffic themselves), or perhaps even a way for Google to monetize these coupons themselves (append an affiliate link to the coupon listings and directly take the affiliate commission for themselves!). While I doubt that Google would ever do the latter and attempt to actually monetize SERPs through affiliate links, the former could be a good selling point to any merchants sick of questionable traffic from coupon site affiliates.

Americans love coupons, and more and more Americans are turning to the Internet to find the latest and greatest deals. Google loves pushing out middlemen, and coupon sites often fit that definition. And merchants are wary of gray-hat affiliate techniques, not least of which is the “cookie stuffing” that can often occur on coupon sites. Perhaps the expiration date on coupon sites might not be too far around the corner.

3 Comments

  1. Jeff Zwelling August 17th, 2009

    Great post. I share your same concerns regarding coupon affiliates and moreover, I gave Brook, who manages XXXX.com's affiliate campaign, special access to XXXX.com's Convertro account. The results were interesting. Both of us were right. While it was clear that many of the cookies dropped by the coupon affiliates were dropped within seconds, if not milli-seconds of the conversion event, an equal number of coupon affiliates actually drove incremental traffic. What was more interesting was the frequency of coupon sites following a content site – the consequence being that the content site doesn't receive a commission on a sale that they actually introduced. The challenge of course is creating a program to reward the first affiliate rather than the last – a task that not only is difficult in CJ, but causes your EPC number to look artificially low.Do any of the other affiliate programs enable merchants to allocate commissions to the first affiliate as opposed to the last? Have any merchants tried implementing anything like that? I ask because it would be easy with Convertro to calculate the appropriate commissions and then fire the pixels off accordingly.

  2. David Rodnitzky August 17th, 2009

    Great comment Jeff. I am pretty certain that none of the affiliate networks allow you to attribute revenue to first click versus last click, or even to attribute revenue across multiple affiliates.More importantly, though, I think the data you observed with Brook that shows the percentage of revenue that is actually incremental and, well, detrimental, is very important for merchants to understand. I suspect that some merchants are almost entirely incremental, some are almost entirely detrimental, and some are in between. But anyway you slice it, if you have this data you can kick out the detrimental affiliates and give performance incentives to the incremental affiliates!

  3. Anonymous October 14th, 2009

    I see a lot of coupon site bashing recently. A couple of points areconveniently overlooked:"Content" sites and "Coupon" sites are not mutually exclusive. If your'e a content site, why not offer you site visitors the coupons the merchant offers?People in a https secure shopping cart will open a new tab or browser window to search for a coupon.= No cookie or benefit for the coupon site.

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David Rodnitzky
David Rodnitzky is founder and CEO of 3Q Digital (formerly PPC Associates), a position he has held since the Company's inception in 2008. Prior to 3Q Digital, he held senior marketing roles at several Internet companies, including Rentals.com (2000-2001), FindLaw (2001-2004), Adteractive (2004-2006), and Mercantila (2007-2008). David currently serves on advisory boards for several companies, including Marin Software, MediaBoost, Mediacause, and a stealth travel start-up. David is a regular speaker at major digital marketing conferences and has contributed to numerous influential publications, including Venture Capital Journal, CNN Radio, Newsweek, Advertising Age, and NPR's Marketplace. David has a B.A. with honors from the University of Chicago and a J.D. with honors from the University of Iowa. In his spare time, David enjoys salmon fishing, hiking, spending time with his family, and watching the Iowa Hawkeyes, not necessarily in that order.