Discussing Rebills, Google and the implications for AM

Thumoney

Thumoney

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Jul 3, 2009
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I want to take a look at the current situation with rebills. Those are in general the most popular and best paying offers on the Affiliate Networks.
They are in verticals like weight loss, anti-aging and beauty and many others and high traffic keywords like "acai", "resveratrol" and "weight loss" are the target audience. So just let's say that they are highly popular. ;)

If we look at the merchant, the network, the affiliate, the customer and traffic-source, we have all 5 participants of the party. If there is a sale, the ideal situation would be a win-win for everybody, all would be happy at least to a certain degree.

But that's not the case.
What's the problem here?

I'd say if there is a sale, the following is the most likely scenario (on the long term):
- merchant is happy
- affiliate network is happy
- affiliate is happy (all 3 happy, although a little ignorant and selfish)
- traffic-source has some issues (look at Google: wants to make money but has to keep the customer=user happy, also ethical issues)
- customer may be most likely more unhappy than happy on the long run (rebilled and cant cancel)

As an affiliate marketer it's hard to resist the free trial offers because they promise a great return. Leaving ethical things beside for a moment, it's damn hard to advertise for it. Look at the discussion about review-sites and flogs. Try to get a rebill offer on facebook. Get google-slapped once a week.

There are problems over problems and what's the most important question?

How can you eliminate those problems?


I think there is only one way how these problems can be eliminated. And that is the customer has to get happy mostly. If that happens, also Google or Facebook would not have such a hard time approving Ads to their userbase.

How can that be achieved?

I don't think the rebill risk free trials (RFT) are the problem. But missing transparency in the way they are promoted, mostly on the merchants landing page, are the 1. problem. And the 2. problem is the customer care after the sale is made. So in that way the customer get's the feeling he has been ripped off and scammed and as long as this is the general feeling of the customer there will be a problem with RFT.

What annoys me personally as an affiliate marketer is even if you put your best efforts at campaigns and creatives and so on, due to the nature of the offer you run into problems (you cant even advertise on Yahoo.com, Facebook and partially Google).

I think there has to be an adjustments on the merchants side, where there is more transparency and service, which means cutting some profits short term for all 3 profiting parties. But the whole business-model would profit long term. As a merchant you would be able to build a long term business and not one that gets an F-Rating on the BBB and is annoying to the FTC.

So it looks a bit to me as an "evolve or die" situation. The biggest problem and the forced evolve situation would be the banning of RFT from the mayor search engines. Can this be avoided?

World of Warcraft is a re-billing system and customers pay happily every month. Advertising agencies as well as publishers love to advertise the product. The reason is the customer is happy. Merchants try to achieve that and you will be on the next level of RFT.

What do you think?
 
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+rep for this

I don't see an issue with rebills but there does need to be 2 components to make the model last

1) The ability to CANCEL!
2) A quality product (or at least half way decent product)
 
Rebills are not inherently bad. What is inherently bad is burying the fact that you will be actually charging the customer another $50 every month in size 2 gray font on a white background. Sure you might make gains in the short term, but you put the entire affiliate industry at risk for the long term implications.
 
That's exactly it. The 2 points narsticle made (customer service, quality product) + the 3rd of aeisn which I would call Transparency.

I hope some merchants try to bring this to their next offer. I recently saw an intro page to one of the most popular resveratrol offers out there, stating more clearly the re-billing TOS just below the order button. Although it may be hurting a little short term it's a first step to lasting success.
 
Another huge point is customer satisifaction. In your example, WOW does well because the people they rebill are happy with the service, and have no problems being charged. But when it comes to most rebill products, the product is so crappy, that it only brings out anger in the consumer. If advertisers would actually start providing useful products, then I'm sure more consumers will accept the charge, and not cause much fuzz.

I mean really, how difficult could it be to take a helpful proven product and just turn it into a rebill. Advertisers have gotten so lazy lately, that they rush through the creation of the product, and just wait to reap in the money.
 
Take bizopps for instance.. Is there any value for the the client to renew month after month? None. Imagine if advertisers would give link to Warrior Forum after 2 weeks, then link to DP 30 days after, and finally, secret link to WF a month after! :p

//well, may be not :)
 
Great point. But there's also another issue I see. Who's going to step up to the plate to be the first one and will others follow?

As it stands there is still plenty of traffic sources and these guys are still making a killing so they could care less whether you can or can't advertise on the big 3 and social networks. So are YOU going to come out with this more legit rebill and higher quality product/service and take all the risk with rolling it out? Who's going to promote it for you? The guy making $6 epc on a less legit rebill? You think yours will do better with some red bolded font stating the terms on all 3 pages of your order process?

It all comes down to profit. If there was ONE acai/resv/shitholecleaner merchant then there could be a transition that is made but when you have hundreds competing against each other for millions of dollars nobody cares because it all comes down to profit. Ok, obviously some care more than others but you get the point I'm trying to make.

I think there has to be an adjustments on the merchants side, where there is more transparency and service, which means cutting some profits short term for all 3 profiting parties. But the whole business-model would profit long term. As a merchant you would be able to build a long term business and not one that gets an F-Rating on the BBB and is annoying to the FTC.
Click to expand...
There's plenty of places where you can do 1 time sales of all the popular re-bill products, why aren't you promoting any of that and cutting your profit margins?

When the time comes (probably sooner than later) the merchants will adapt, in the meantime they'll keep laughing all the way to the bank.

Again, I'm not disagreeing with you here but it's because of the above that this hasn't happened yet. And, we don't live in a perfect world so bank as hard as you can till the shit anvil drops at which point things will have to change whether anyone likes it or not. There's thousands of people holding their ccs in the air at this moment shitting bricks about finding THE weight loss solution or THE perfect online business opportunity they've been looking for and I'm gonna go and get my commission before you do cause if I don't and you don't, another affiliate will.
 
You're right here and that's the status quo. It might change the one way or the other and maybe it will just by Google saying "rebills no more". If something of that magnitude happens and the situation gets more edgy, there are two options: one would be for marketing RFT drifting more into the underground and two would be offers showing up, that are Google-conform.

There is also a little opportunity right now. Imagine an acai or resv offer being Facebook compliant right now. I would love to run it, even if I only get an EPC of $1. with CPM paying and a great ad, that would mean a lot of profit. Maybe a starting point ...
 
Thumoney said:
You're right here and that's the status quo. It might change the one way or the other and maybe it will just by Google saying "rebills no more". If something of that magnitude happens and the situation gets more edgy, there are two options: one would be for marketing RFT drifting more into the underground and two would be offers showing up, that are Google-conform.

There is also a little opportunity right now. Imagine an acai or resv offer being Facebook compliant right now. I would love to run it, even if I only get an EPC of $1. with CPM paying and a great ad, that would mean a lot of profit. Maybe a starting point ...
Click to expand...

One slight problem is that for the big 3 or facebook to allow rebills, or allow them freely will require the whole generalization of rebills to change. They all believe that rebills = low quality. A single offer is not going to change that, and none of the big 3 or facebook will manually review that offer and see if it's compliant. The only way we'll see a change in their view is if the majority of the rebills become compliant, and well, that won't happen for a long time.
 
In reply to mGrunin: sure, that wont happen overnight. For starters I can get an acai product up on Facebook without rebills. For instance if I sell it via Amazon. I'm not sure what would happen if the TOS of a rebill would be clearly on the order page. That's theoretically, but it might still be profitable on Facebook right now.
 
Shady rebills won't die by affiliates, advertisers or traffic sources running better offers. They will die with regulation after the FTC shit cans some high profile advertisers, just like ringtones before them.
 
Thumoney said:
In reply to mGrunin: sure, that wont happen overnight. For starters I can get an acai product up on Facebook without rebills. For instance if I sell it via Amazon. I'm not sure what would happen if the TOS of a rebill would be clearly on the order page. That's theoretically, but it might still be profitable on Facebook right now.
Click to expand...


If the TOS of the rebill were to be clearly shown on the order page, then conversions will pummel 90%. The reason why rebills convert well is because the pages for them are typically very attractive and that they appear to cost very little.
 
mGrunin said:
If the TOS of the rebill were to be clearly shown on the order page, then conversions will pummel 90%. The reason why rebills convert well is because the pages for them are typically very attractive and that they appear to cost very little.
Click to expand...

I don't think that's the case. If the trial period was more reasonable in length (i.e. 30 days vs. a measly 14) and the TOS was more visible... it might actually increase conversions. Rebills have been around forever and will continue to be so.

It's a strong an offer as it can get: "Try this risk-free. If it doesn't do everything we say it will - send it back and you pay nothing."
 
How about weeding out the cosumers that can't afford the product initially by positioning the product as a straight sale with a re-bill built in? This will of course lower conversion rates but you are in-turn finding more qualified consumers and clearly state the re-bill terms on all pages. Also you don't re-bill them for $90 like the free-trial guys, you cut that in half at least cause the bottle cost $5. Set-up a sustainable business model that is here to stay and provide A+ customer service with multiple cutting edge products. Just a thought......
 
megatabbers said:
I don't think that's the case. If the trial period was more reasonable in length (i.e. 30 days vs. a measly 14) and the TOS was more visible... it might actually increase conversions. Rebills have been around forever and will continue to be so.

It's a strong an offer as it can get: "Try this risk-free. If it doesn't do everything we say it will - send it back and you pay nothing."
Click to expand...

Slight problem is that many people have already been victimized by rebills that have made it very difficult to cancel their subscription. So even if we flaunt the fact the it's risk free, and money back guarantee, and that they have 30 days to try the product, some people may be afraid that they won't be able to get in touch with anyone to cancel.

Another thing, if people were more aware that they will be charged after an X amount of days, then advertisers would be seeing many more leads not backing out, because almost all rebills are useless and don't work. Thus, there will either be more scrubbing, or payout's would be chopped in half.
 
Rebills have been around longer than the internet. I think the problem right now is that you have certain companies that are selling shitty products with unclear terms. Lots of people are okay with paying $40 / month for something, especially if it works for them. People aren't okay with being billed for a three month's supply of a product to the tune of $180 + dollars.

They also get unhappy when companies do their ridiculous upsells.
 
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