“…we have decided to continue at 0% commission rates through this quarter…”
A message sent out by one merchant to all its affiliates on a major network today (names redacted)… quite a few programs across several networks have been sending things like these out as a matter of fact:
We hope this email finds you well and safe.
In light of the ongoing economic climate due to COVID-19, we regret to inform you that we have decided to continue at 0% commission rates through this quarter. Please know this decision was not taken lightly. Due to the continued reduction in marketing budgets this year, all advertising channels continue to be adversely affected. We are working closely with <NETWORK NAME> to prioritize and notify you as soon as possible.
Again, we cannot thank you enough for your continued partnership with us. Our leadership team is fully aware of the value your partnership has brought to the company’s growth and are grateful for your ongoing support, patience, and understanding as we work through these challenging times.
There you have it… the management team is “fully aware of the value your partnership has brought to the company’s growth” and calculated that that value is exactly…. zero.
And they “cannot thank you enough for your continued partnership with us”… a zero percent commission is an interesting way to say thanks, for sure.
It certainly seems that even in 2020 a large number of marketing teams are still stuck in the 1980s when advertising budgets were a lump sum set at the beginning of the quarter, the performance of which was untrackable and only vaguely connected to the bottomline if at all, and therefore an easy expense to be killed off whenever conditions were tight.
Nobody seems to have told them that looking at affiliate commissions this way, given that they’re a percentage of actual sales driven, makes no sense whatsoever. That’s like setting all your commissioned sales people to zero commission and hoping that things improve.
Show goes on.