Hunch’s business model is very straightforward: when Hunch proposes a result to a user trying to make a decision, the result page may include a link to an external retailer offering the product or service for sale. Hunch would share in any resulting sales via affiliate marketing relationships. We’ve been testing a variety of affiliates in these spots lately, but one we’ve decided to drop is Best Buy. I’ll explain why.
Hunch users who end up on a result page represent highly qualified traffic; someone landing on a Hunch page for a Nikon camera is there precisely because they just answered a handful of questions designed to help them find the right camera for them. So we tend to see solid post-click conversion when users click through to an external site to browse for product availability or detailed product information.
We signed up to the Best Buy affiliate program through Commission Junction, and tested Best Buy links in several topics for which we already had a history of strong post-click conversions. While CJ’s reporting platform showed nearly the same ad impressions and affiliate clicks for BestBuy as we tracked internally, CJ reported not just a lower post-click conversion rate than we had historically seen, but actually zero. Several more days went by, clicks were still flowing to Best Buy, but they reported zero resulting sales.
We decided to test this by buying some merchandise ourselves. Two of our employees, on two different days, followed Hunch affiliate links to Best Buy and then bought something. CJ still showed no sales activity. Houston, we have a problem.
I emailed the Best Buy affiliate team on Aug 29th to report this, attaching receipts for our sales, and inquiring about all the other qualified clicks we had sent them. They replied on Sept 1st that they’d look into it and that we should “alllow two weeks to do so.” On Sept 10th they emailed back to say they had determined that both orders were, in fact, valid, and that we should allow “up to two days” for them to show up in CJ reports. No explanation about what happened or why, nor any reference to the real issues about what happened to all the other qualified clicks we had sent them. (side note: irritatingly, they sign their emails not from a person, but anonymously as “BestBuy.com Affiliate Team”) I wrote back to ask them to provide a further explanation.
On Sept 15th they wrote back to say our links were formatted correctly and they didn’t have further info, but we could contact their technical support staff if we wanted.
As of today, 19 days after I originally wrote them, we still haven’t received credit for the items we bought (not our greatest concern, but hardly confidence-inspiring), nor have we received any explanation for what happened to all the other qualified clicks that seemed to have gone into some type of Best Buy black hole. I’m not interested in dealing with their technical team (that should be the role of their affiliate team, as an intermediary), and as a result we’ve discontinued our relationship with them.
CJ reports that Best Buy’s 3 month epc (or “revenue paid by the advertiser to the website publisher per hundred clicks, over a 3 month period”) is just $6.85. That’s just 7 cents per click – far below what Best Buy would be able to purchase qualified clicks for from one of the major search engines. Now you could argue that I should have seen that metric in advance (I did) and stayed away (I didn’t)…I thought, as I suspect many other sites do, that our traffic is so highly qualified that we should expect much higher conversions than Best Buy’s historical average. Note that AJMadison, another respected electronics and appliance retailer, has an epc that’s three times that of Best Buy’s, at $19.10.
Over time, based both on these average metrics and each affiliate’s actual experience, you’d expect affiliates to increasingly migrate away from low conversion partners like Best Buy and towards higher conversion alternates. But my gut tells me that with such a strong brand name, Best Buy can afford high affiliate churn because they likely have such strong interest with new potential affiliates joining the program. I don’t know whether in Best Buy’s case this problem is a deliberate strategy or just negligence and poor execution, but either way it doesn’t inspire confidence in affiliate marketing systems.
Bottom line: for cpa-driven affiliate relationships to work, there has to be trust and reliability in the system for accurate post-click reporting and payments. So it’s disheartening when even a big brand like Best Buy can have such a complete failure in their affiliate model, as we experienced above.
One implication of all this: I would gladly pay a 3rd party to conduct “real transaction” audits on the sites with whom I have an affiliate relationship. I’m not talking about click matching, but actually buying a low-priced physical good from time to time (and perhaps then returning it later for a refund). This approach couldn’t be efficiently scaled to take representative frequent samples for a given affiliate, but still, at low volume it could potentially identify the most egregious offenders. Because as we found out with Best Buy, where there was smoke, there was fire. Anyone know of any companies that do that kind of affiliate auditing?