If you’ve spent any time on the internet, you’ve almost certainly seen their ads:
- “One Amazing New Trick that Can Shed 10 Pounds in 2 Days!”
- “Risk-Free, Limited Time Trial of America’s #1 All-Natural Weight Loss Supplement”
- “Breaking News: See Why Doctors Call this One Weird Ingredient the Secret to Lasting Weight Loss!”
The fact is, more than any other industry, nutritional supplements companies are notorious for in your face-, too-good-to-be-true advertisements just like these. Many of us would like to think that we’re too internet-savvy to be sucked into this kind of overhyped marketing, but the reality is that if it didn’t work, then supplements companies wouldn’t spend money to run them.
However, what you might find surprising is that nutritional supplements companies often aren’t the ones paying for these ads. But we’re getting ahead of ourselves. First, let’s answer two questions: what are these ads, and who’s posting them?
The New Wild, Wild West: Say Hello to Affiliate Marketing
Let’s dive right in, shall we? These outlandish ads are usually posted by third-party individuals and/or businesses who get paid by the supplements companies to drive traffic to their websites. Affiliates might earn a commission based on each customer that clicks on one of their ads; based on each customer that purchases a nutritional supplement through one of their ads; or some combination of the two. This type of revenue sharing is formally known as affiliate marketing, which is just a fancy way of saying that someone gets paid a commission for referring business to a company.
At first glance, this type of revenue sharing might seem harmless, especially considering the fact that almost all high-traffic websites run them, which is part of the reason they’ve become so prevalent. But is this really the case? Read on to find out.
How Does Affiliate Marketing Work? Why Do Companies Use It?
Let’s start with an example: If you’re a new company set to release your first nutritional supplement, it’s likely that you’ll quickly realize the immense cost involved with traditional advertising methods, such as print ads, search engine campaigns (e.g. Adwords), radio and television commercials, and the like. So, instead of going this route, you decide to open up an affiliate program. Here, you’ll pay your affiliates a certain amount of money for every customer who clicks on one of their ads for your product, and will also pay them an additional amount of money for every customer who purchases one of your products after clicking on the same ad.
So why do so many nutritional supplements companies use affiliate marketing? In short; because it works. In fact, according to this article, the affiliate marketing industry is comprised of more than 200,000 businesses and individuals, accounts for well over 20 percent on all online sales, and is expected to pay out more than 4 billion dollars to affiliates in 2014.
Ultimately, the low risk, high return model of affiliate marketing means that these third-party companies can do all the legwork, put your product in front of potential customers, and you won’t have to pay them a dime until they start referring clients to you. This performance-based model gives affiliates a strong incentive to aggressively market your supplement, and to boost your sales—while also boosting their bottom line. But herein lies the problem.
How to Identify the Difference Between Good & Bad Affiliate Marketing When Purchasing Your Next Nutritional Supplement
As we can see, affiliate marketing is enormously effective, and is even more lucrative. But wherever there’s a lot of money to be made, there are going to be an enormous number of people willing to do whatever it takes to “earn” your hard-earned money. Despite this, the reality is that most affiliate marketers are legitimate businesses that use widely accepted methods of earning commissions. Unfortunately though, the shysters of the bunch often give the industry a bad name. So what’s the difference between good and bad affiliate marketing, and how can you identify the difference?
First, keep in mind that each affiliate is basically an independent business in their own right, and is responsible for their own marketing (after all, this is what you’re paying them to do). However, the reality is that for many of the less-than-stellar supplement companies, there is little to no oversight on what their affiliates are doing. In some instances, it’s even the case that the supplements companies themselves are the ones engaging in deceptive tactics, and who often band together to work against the customers’ interests. So, next time you’re purchasing a nutritional supplement, keep an eye out for the following:
Fake articles and blogs (also known as farticles and flogs)
Have you ever researched a nutritional supplement you’re interested in, and find that your online search returns a ton of results that point to seemingly legitimate online reviews, articles, press release, blog posts, and the like? But when you click on the links and read the material, it all seems very similar, and is overly promotional?
If so, what you’re most likely witnessing is content created by affiliates, which is used to promote a supplement and to convince you to buy it. While seemingly legitimate, these farticles and flogs often contain more marketing hype than real information, and it’s not unusual for them to also contain fake celebrity endorsements, doctored statistics, fake clinical trial results, and more. Since you should always thoroughly research nutritional supplements beforehand (see our Complete Guide to Buying Nutritional Supplements), put your skeptical hat on and see how many of these flogs and farticles you can identify.
This often goes hand-in-hand with farticles and flogs. Here’s an example: Let’s say your product’s URL is www.xyzsupplement.com. Affiliates will often “spin off” this URL and create websites that appear to legitimately review your supplement, such as xyzsupplementreview.com, xyzsupplementcomplaints.com, isxyzsupplementlegit.com, xyzsupplementtrials.com, or any one of thousands of other variations. These websites may also contain fake (or at the very least dubious) scientific proof supporting the efficacy of a supplement, in addition to deceptive claims.
Fake discount codes/limited time offers
Affiliates will also often advertise fake discount codes or limited time offers just to get you to click on their advertisements. However, after you click on them, it’s often the case that you’ll end up paying full price, and that there was never a limited time offer in the first place.
Outside of Nutritional Supplements, what Other Companies Use Affiliate Marketers?
The short answer: Almost everyone. However, in addition to supplements companies, it’s especially prevalent for penny auction sites, beauty/anti-aging products, work-at-home schemes, and sites that offer credit reports/background checks. This means that if you’re interested in purchasing one of the products or services, you should keep an especially watchful eye for some of the tactics described above. But why is this?
It’s often the case that these products and services offer some of the highest commission payouts in the industry, which can make them quite lucrative for affiliates. However, since everyone’s looking to make as much money as possible, these high payouts also create an enormous amount of competition between affiliates. As a result, there may be thousands of affiliates promoting a single product at any given time, who then engage in underhanded tactics to make themselves stand out, and to “earn” your click.
Perhaps the worst part of all this however, is the fact that affiliate marketers who engage in these kinds of deceptive behaviors are often given a slap on the wrist—if they’re penalized at all. In fact, one of the most notorious recent cases involved a young man named Jesse Willms, who bilked customers out of more than $100 million in 2009 alone, much of which was made using affiliate marketing techniques to promote his nutritional supplements. After an extensive FTC (the main regulatory body for internet misconduct) investigation, Willms was only forced to pay a substantial fine, but was never charged with a crime. In fact, he’s already on to his next profitable venture.
So what does this mean? This means that, except for consumer advocacy websites like HighYa, and learning to identify many of the tactics noted above, you’re essentially on your own. In other words, it’s up to you to become a more informed, internet-savvy consumer, and to identify affiliate marketing scams before falling victim to them.
Let’s Hear Your Affiliate Marketing Story!
Are you an affiliate marketer who would like to discuss what to look for when shopping online for nutritional supplements? Or, are you a consumer who has some insightful tips about navigating the world of internet shopping?
If so, leave a comment and share your knowledge with the world!