When interests clash with business ethics

For a long time, affiliate marketing has been viewed as an excellent place for prospective online entrepreneurs to get their feet wet. However, to execute this concept, the affiliate networks – the middlemen that connect businesses (brands) and marketing partners (publishers) act as the “key” to reducing the overhead of activation. This model has grown violently in Vietnam, but so too have the multiple conflicts of interest exposed, leaving many parties skittish and ill at ease.

From Explosion to Potential Pitfalls

AdFlex was considered the first adopter of how the affiliate network should be done in Vietnam with MasOffer later in 2011–2012. A major turning point occurred in 2015 with the birth of AccessTrade. E-commerce platforms were competing to burn the maximum amount of money to acquire market share; at that same time, most other businesses (brands) were equally keen on jumping on the online sales bandwagon.

In the initial stages, affiliate networks were the ideal model of satisfaction and win-win from all sides. The network platforms acting as intermediaries provided the technology infrastructure, and they received a fee (typically performance-based). Brands have professional tools, technology, and management resources, while publishers can easily pick brands from multiple campaign providers.

Trading Quantity for Quality – The “Nightmare of Junk Traffic”

While the affiliate network model had proven strong for over ten years, it quickly exposed a massive flaw in conflict of interest between those involved. Far behind the glossy numbers of networks such as, “We have hundreds of thousands of publishers, the real question mark is if the traffic these media are going to deliver will convert customers into sales”.

An example in the global market is the LinkShare (Rakuten Advertising) files scandal. The GoldenLink Award-winning publisher was nothing but a perpetrator of deep fraud, causing significant harm to the brand and the reputations of all in the network. This brings us to this incident: does a flashy publisher count translate into a matchless real-life value?

Vietnam is hardly an exception. While affiliate networks love to brag about their number of publishers, they never tell you how much that will put you in the pocket with those working honestly.

When Revenue Outweighs Business Ethics

It’s nothing new, but most affiliate networks in Vietnam work under the same heroic mode: performance makes performance pay (CPA – Cost Per Action). While this seems like a perfectly reasonable approach, it encourages fraud from some unscrupulous publishers.

Above all, Network Affiliate Managers (AMs) work at these networks under the gun, with revenue pressure from the VP+ level, causing an emphasis on quantity.

However, it is just unnecessary to chase rapid revenue campaigns in place of sustainable strategies; non-transparent traffic is unaware and quickly gets “swept under the rug”. Unsurprisingly, the more conversions that can be made, the better it is for the network. But are these conversions worth it to the brand in the long run?

Elsewhere in Vietnam, new brands to affiliate marketing have complained about getting paid the commissions initially but receiving only junk traffic with no real value in return.

Unsurprisingly, this leads many brands to rule out affiliate marketing as a failed strategy prematurely. But the reality is that networks manage the quality of both publishers and the traffic.

A Call for a Fundamental Shift in Mindset and Ethics in Vietnam’s Affiliate Marketing

If nothing else, this indicates that affiliate marketing is hardly a failed concept. And for it to continue to thrive sustainably, more transparency and accountability from the affiliate networks is needed. Decision makers from these networks must overcome the fear of missing out on immediate gains and put together educative discussions, workshops, and webinars to inform stakeholders of the underlying potential fraud risks and help pave the way for better understanding and awareness for brands and publishers.

Brands, on their end, should also be working to gain a broader understanding of how affiliate marketing works in practice. Instead of giving over 100% control to the network, brands should use the network to vet and measure real-life campaign outcomes, possibly developing internal teams to monitor the success of campaigns more closely.

Permate and Its Vision to Transform the Market

Permate is a new generation of affiliate platform that allows brands to publish their campaigns at their convenience, set their commission rates, manage the performance of their campaigns, and communicate with the publishers without any limitations, which differentiates Permate from traditional affiliate networks. Armed with this breakthrough model, Permate can solve the critical problems of the traditional affiliate marketing ecosystem – transparency, paid clicks, and conflicts of interest to carve out a more transparent and efficient marketplace for both brands and marketing partners.

Permate was born at the right moment when Vietnam affiliate marketing needed a paradigm shift in a new mindset and culture regarding operation. Without this kind of significant overhaul, the industry could find itself trapped in a self-perpetuating loop of substandard traffic driven by dubious processes and figures as having no substance and unresolved conflicts of interest.

And let us wait to see how much more the Vietnamese affiliate market will grow since then!