UK - A guide to Affiliate Digital Marketing
It is of ever increasing importance in the UK premium rate market that affiliate marketing is controlled and that any potential risks are managed.
- 40% of all complaints to the UK regulator are related to digital marketing of a premium rate service.
- Over 350 complaints of this nature are received every month by the Phonepaid Services Authority.
- Fines of up to £200,000 have been issued to Premium Rate providers, based on affiliate marketing.
What are affiliates?
Affiliates are individuals and companies that are paid by the network they contract to (Affiliate Network) to drive traffic to your service from their website or service. Affiliates are usually paid when a consumer makes a purchase - this is known as the CPA model, meaning cost per acquisition (you pay the Affiliate Network). Affiliate marketing is considered a legitimate and efficient method of advertising.
In most cases affiliates drive genuine traffic to premium rate services, often through hosting banner adverts or sponsored links, as well as other methods; however, there has been Phone-paid Services Authority tribunal cases where consumers engaging with premium rate services have been misled on their journey to the service website - examples of the most prominent illegitimate practices have been outlined in the guidance note issued by the UK regulator, Phone-paid Services Authority (PSA).
Misleading practices that will not be tolerated:
Consumers promoting premium rate services (PRS) to friends on Facebook without pricing information
Promotions offering video content (that would otherwise be unavailable or costly) on the condition that the consumer completes a survey - the survey then leads to a PRS subscription service.
Promotions offering supermarket vouchers on the condition that the consumer completes a survey - the survey then leads to a premium rate subscription service.
Legitimate ad banners being served in a frame that masked the essential pricing information of the premium rate service.
Transparent iFrames that took a click on an innocent part of a site and redirected the consumer to a premium rate service.
Avoid campaigns that involve the following:
- Use of the word “free” if the end result is a premium service.
- "Locked content" adverts that require the user to unlock any content.
- Surveys that lead to a premium service that are not clearly advertised as chargeable.
- Any type of link jacking, click jacking, like jacking or similar practice.
- The use of iFrames – these can block vital regulatory information and pricing.
- When using affiliate marketing please declare all activity to txtNation - we can help police this and protect your service from regulatory issues.
- Use affiliate networks you know and trust that have robust contracts.
- Use banners and adverts that the txtNation compliance team have reviewed.
- Invest in affiliate campaign tracking software. Reverse engineer your end user's journey.
- Train customer service agents to identify the customer journey: txtNation train staff to highlight trends in customer complaints and how the end user ended up using a service - this aids in the detection of misleading marketing. Consider speaking to your account manager about our customer care packages.
- Keep logs of all correspondence and agreements with affiliate marketing networks - showing Phone-paid Services Authority that you have kept records will help mitigate any unauthorised activity from affiliates.
- Always respond honestly, promptly and in full to any formal or informal contact from Phone-paid Services Authority, copying in firstname.lastname@example.org.
Please also refer to the latest guidance documentation provided by the Phone-paid Services Authority:
AIME Interim Guidance Note – Affiliate Marketing 18th July 2013
Level 1 providers (This applies to you if you have sub-clients, yet use txtNation's connectivity):
Any Level 2 (L2) customer who uses affiliates must be treated as higher risk than a L2 that does not, or is not, dependent on affiliates.
If you have an L2 that states they do not use affiliates, you should review their product / service to understand why they would not be dependent on affiliate marketing. If you view their service as “likely” to use affiliates in the future, then place them into a higher risk category.
For L2 customers that use affiliates, or are at risk of doing so:
- Consider operating the customer service line for the L2.
- Train your customer service to spot issues that may be caused by an incorrect promotion or misleading consumer journeys. Escalate immediately if either is discovered.
- Look for unusually successful new services, or services that have a sudden surge in traffic - ask your L2 to explain the increase.
- Ask for copies of affiliate contracts, copies of advertising and affiliate analysis data.
- Ensure that your L2 is doing their utmost to assess and manage risk - ask for proof of this.
- Ask Phone-paid Services Authority for monthly complaint analysis - respond to anything that looks odd.
- Document everything so that you can show (if asked) that you have considered and managed the risk.
- Check for similar feedback across different L2s – they may be using the same affiliates.
Level 2 providers (this applies to you if you use txtNation's connectivity for your service):
Ensure contracts with affiliate networks forbid tampering with your advertising and creating misleading promotions to drive traffic. Ask Affiliate Networks for reports of non-compliant behaviour of affiliates on other merchant promotions as an indicator.
Ask for liability clauses.
Insist that affiliates do not subcontract, or if they do, that the liability clauses are back to back.
Explain to your affiliate network(s) the role of the Phone-paid Services Authority, the fee-issuing capacity of the PSA and the premium rate service market. These should be reflected in the liability clauses.
Insist on traffic analysis and an explanation of how an affiliate is driving traffic.
Treat any surge in traffic as suspicious and query the affiliate network for explanation (in writing).
Be prepared to suspend payments if anything suspicious is occurring.
Be perceptive to customer complaints that do not have logical explanations - use 'probing' questions on such customers to establish an understanding.
Treat more than a 0.2% complaint to transaction ratio as suspicious.
Ask your L1 for monthly call analysis on their customer care and Phone-paid Services Authority customer care.
Be prepared to break ties with an affiliate network if they cannot control their affiliates.
Report issues with affiliate network(s) to your L1 provider, and, where appropriate, to Phone-paid Services Authority.
Document everything that you have done to mitigate risk.
Finally, please ask for advice - txtNation have a vast wealth of experience in regulatory matters; we are able to refer you to UK legal and regulatory experts that are able to represent you, should you ever need to attend a Phone-paid Services Authority tribunal.