There can be substantial drawbacks to an affiliate marketing programme which arise from the fact that your affiliates are mainly motivated by money. It follows that some of them may be unethical techniques to increase their revenue. Potential disadvantages are:
Incremental profits or sales may be limited
You may be cannibalising business you would have achieved anyway.
Affiliates may exploit your brand name
This particularly be case where affiliates exploit brand names by bidding on variations of it (for example ‘Dell’, ‘Dell computers’ or ‘Dell laptop’) or by gaining a presence in the natural listings. Here there is already awareness. It is important to prevent this and many affiliate programmes exclude brand bidding, although affiliates can have a role in displaying competitors from the listings for brand terms.
May damage brand reputation
Your ads may be displayed on sites inconsistent with your brand image, such as gambling or pornography sites. Alternatively, creative may be out-of-date which could be illegal.
Programme management fees
If using an affiliate network to manage your campaigns they may take up to 30% of each agreed affiliate commission as additional ‘network override’.
Programme management time
Affiliate marketing is founded on forming and maintaining good relationships. This cannot be done through the agency alone and marketers within a company need to speak to their top affiliates.