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Refer.ly (YC S12) Lets Regular Folks Earn Affiliate Revenue (techcrunch.com)
110 points by dmor on May 14, 2012 | hide | past | favorite | 60 comments

I love it. It sounds like a few people here have been thinking about a similar idea, and you can count me in as well. The truth is, my company would be happy to pay out 10% of any order if it resulted from a genuine recommendation. Of course anyone experienced with the affiliate world can figure out a way to capture that money, but it's not really available to your everyday Facebook user. Maybe Refer.ly will fix that. Using Viglink is smart.

Unfortunately, the ecommerce company for which I work has had to completely abandoned affiliate marketing. Almost all of our affiliate fees were going to scammers who were using Google Adwords and bidding on our brand terms. Of course that was against our policy, but we had no way of stopping them out of the gate. They would even copy our exact ad so that when we searched our own name, it would appear at a glance that it was in fact our ad showing up (same display URL and everything). Eventually we just had to shut the whole thing down. I hope Refer.ly can figure out a way to avoid these scammers. I imagine it will be difficult.

With this business model, I wonder if it's possible to act as an aggregator for the Amazon affiliate system? Amazon pays out a higher percentage based on how much volume you bring in. If Refer.ly acted as a single affiliate with Amazon, but they in turn paid out affiliates to thousands of different Refer.ly users, then each user would then be getting the highest possible affiliate percentage from Amazon, right? Because together they would qualify for the volume bonus. I haven't looked into it, but I'm guessing Amazon must have some rule against this.

> I haven't looked into it, but I'm guessing Amazon must have some rule against this.

That seems to be the case, so they'd have to make a special arrangement with Amazon to do so.

> 9. ... nor will you create links formatted with your Associate’s tag for, or display such links on, a site that is not your site.


I wouldn't start with amazon associates, there are plenty of smaller affiliate networks who would love to help out and promote this service.

Amazon associates presents a big tracking challenge because their system seems to be designed to give up as little data as possible. It is by far the hardest network I have come across to login as a user and retrieve transaction data in an automated way.

The thing is affiliate marketing has a ridiculously low ROI if you're NOT bidding or ranking for brand terms... for most products, especially if you're a no-name.

Affiliate marketing is a huge business - it's why DoubleClick, ValueClick, LinkShare are such huge profitable companies - millions are generated through affiliates every year. The dirty secret is that 90% of that revenue comes from people already searching for that brand, not through new discovery. Think coupon sites: People searching for Newegg coupons obviously already plan to buy it from NewEgg.

I've spent a lot of time working with affiliate marketers over the past decade and I wonder how Refer.ly is going to handle compliance with the new FTC rules around compensation disclosure.

Effectively if you're promoting a product in exchange for compensation, that relationship must be disclosed at the genesis of the click and according to the FTC no compensation is too small to be in violation w/out disclosure.


FTC regs are covered in our Terms and FAQ, and its the responsibility of the sharer to disclose.

BUT that being said, I think there is a big opportunity here - to make the disclosure automatic AND possibly even user friendly. Right now disclosures are really ugly and create friction in the user experience, maybe we can fix this.

And if the refer.ly brand becomes widely known and recognized, that would help too. Definitely something we want to help sharers do in the most streamlined way possible

An interstitial or an iframe could be interesting, and provide the disclosure.

Agreed, my personal preference is an iframe from a user experience perspective although from an engineering standpoint this could be a nightmare. The interstitial is somewhat industry standard, but feels very high friction. Thoughts on which is better in your opinion?

I like the iframe idea - it could actually be interesting to try to write the disclosure as marketing copy to join Refer.ly.

EG "[Firstname] thought you'd love [product name] from [vendor]. For spreading the love [firstname] gets a referral fee if you buy! Find out how you can start making money referring friends to products that you love too with Refer.ly today!"

The problem comes from frame breaking javascript. Something a non-trivial number of sites use to avoid click jacking.

Forget refer.ly, how is Amazon going to cope with this in general?

They added a few lines to their FAQ saying "comply with the FTC guidelines". The program terms already said that you must comply with applicable federal and state laws. It's been over 2 years since they came out, it's not a question anymore.

Isn't it the blogger/affiliate's obligation to disclose possible compensation, not the retailer?

I might not be popular here for saying so, but I have to get this off my chest. I think it is a pretty great move by the FTC to make it outright fraud to shill, and I'll tell you why I think so. Please indulge me a little.

The reason is that information doesn't generate itself. If you Google BlackHole5000 coffee extruder review, the BlackHole5000 coffee extruder being this great industrial high-pressure coffee maker, and you don't find a single review, that means in a way there is this 'commons' that is empty now. If there is no Wikipedia article on it (maybe there shouldn't be) there is also an empty 'commons' there. Now compare this with a Wikipedia article being there and being informative: (say the BlackHole5000 is extremely notable, as destiny would have in 20 years) if someone were to completely blank that page out or vandalize it beyond usability, then until this issue is rectified it's pretty clear that they have taken someone from a 'common good.'

Now my argument is that if people take the time to post their review of the BlackHole5000, for me to find, that is also kind of a public good. (After all, they're free to browse if you can find them, etc.) If Google and every search engine were to be completely buried in SEO spam, such that the legitimate reviews are impossible to find, no matter what, by anyone, then it's pretty clear the public loses something. It's like air that you can't breath anymore because it has too much pollution in it. A lake can literally be too toxic for anyone to camp by it, even if it doesn't belong to anyone.

Now what may irk some people here even more. What if we don't completely bury the legitimate reviews, but only adulterate them with paid shills? Before I get to this, let's take a simpler example of attacking a public scientist or activist's message by 'poisoning the well' (attacking their credibility in a false and underhanded way, just to keep the audience from appreciating the message.) In my world-view, there are whole fields and areas of human endeavor which have NO credible scientists and are ALL opinion. To me, the freely available opinions of credible researchers who have invested months or years into understanding to tell me about it is also a kind of 'public good.' There is no reason anyone has to lie to me about how photosynthesis works, and YET it is part of the public good that I can do a google search and immediately get to credible opinion on it. Luckily, photosynthesis is one of the few areas of humanity where there is simple, credible agreement.

If someone were to add a bunch of 'poisoning the well' type junk, then photosynthesis would be like the effects of smoking on the human body, would be like the causes of automobile accidents, would be like labor conditions in China, would like a million different subjects that just have opinions on them but no real credible consensus for anyone who searches. We should cherish credibility and it should be a crime to knowingly "poison the well" in my humble opinion.

Now we return to what I was saying about paid product reviews. In this case, genuine customer satisfaction is also a kind of "public good" -- if you dilute it, it disappears, and if you dilute it enough no one reasonable would ever search for "BlackHole5000 review", since the result is as good as guessing: no relationship with customer experience.

But if it becomes ILLEGAL to dilute it in this way, and these laws work, then something magical can happen. Suddenly, if people know that googling for reviews 'works', then if the BlackHole5000 is off the charts, then anyone who is curious enough to try the Google search will see this, try the BlackHole5000 and within a few years it is a cult icon that truly deserves a Wikipedia article. Which never would have happened if customers knew that searching for reviews online was useless.

Basically, if we want to live in a world where better products win, then I think we should cherish the 'public good' that is customer opinion on that product. The most obvious objection about free speech already doesn't apply to being able to say whatever you want to sell your product (e.g. 'the BlackHole5000 cures cancer our studies find', without any mention of the FDA) so why should you be able to pay others to talk about your product as though they weren't paid?

Basically, it's hard enough to get people to put up a genuine review that is useful, period. (It takes work and thought). We should cherish the few results, when they happen.

And just to add something so it's not all about product. Imagine the surgeon who will do your next operation happens to have been sued for malpractice, and lost, on this very operation, by not one but three former patients. But you wouldn't know that by Googling his name, which you do, because rather than invest in training to better himself, he pays someone to SEO fake patient reviews of his excellent work, burying the negative reviews (which only a fraction of the affected patients take the time to write): these negative reviews could save your life or quality of life. But they won't. (This is especially true if you are very, very rich and can shop around for the true gem of a surgeon. Assuming you can find him or her...)

That was exactly the first thought that came to my mind.I'm working on web app to manage prom. campaigns based on affiliate products so I know how it works and I completely don't understand how refer.ly works...What happened with my link what I pasted there for example..

Cool idea but a couple of concerns:

1. With a sub-affiliate model, affiliate scammers will be all over this (especially if there is no real vetting process). These are the type of links that Twitter spammers would love to pump out in the wild.

2. Would any of this traffic be incremental for a merchant? For example, if my buddy asks me what TV to buy wouldn't I tell him my true opinion regardless of the payout I received?

3. Right now it looks like they're using Viglink (http://www.viglink.com) for affiliatizing (at least for eBay). I would seriously wonder how willing merchants would be to get onboard directly.

I'm excited for innovation in the affiliate space (which is sorely needs), but this is a really tough problem. Fraud and incrementality are two things that need to be addressed before a merchant would be willing to sign up (esp. if they don't have much budget free to work with).

Ok, I signed up in hopes I could get refer.ly started for my company. I don't see any option for business owners.

Just found this: "How Can I Check Whether You Have Rewards Available for a Specific Link?

Referly provides rewards for purchases made on thousands of websites. Stay tuned, we look forward to offering a directory in the future. For now, if you have a specific question just drop us an email."

Are you kidding me? How do you launch without this feature? I feel like you just wasted 5 minutes of my time and that leaves a nasty taste in my mouth.

Edit: Where do I go to delete my account?

Sorry to disappoint you. For teh sake of getting this out the door and in the hands of users we haven't built our a directory page yet but its in the works - we move fast. You can also request a specific product/reward here (not yet publicly linked on the site) http://refer.ly/business.php

But if you still want to delete your account just email support@refer.ly and we'll take care of that right away

I think the issue is more that without a directory your product is useless. How can I see when I'm going to get a reward if you don't tell me? I've signed up like the person you replied to and I've shortened 2 links, but there's no indication if I'm going to get a reward and if that's the case what incentive is there for me to use the link?

At the very least can there be a tick or cross next to the links to confirm whether or not your system supports it? The cynic inside of me wants to say that you don't actually have all these companies signed up, but I doubt you would lie so brazenly... although how you had the time to sign up thousands of retailers and no time to build the product into a usable state confuses me.

Hi, Referly's designer here. Yeah, those big huge brands really do have affiliate programs set up that we integrate with and it's an interesting design challenge you brought up, some way to indicate that a site's a recognized vendor in our program before you decide whether to share the link.

This is where I think it helps to throw an app out into the wild and see what sticks, because our idea was more that you could use it as a link shortener in general and that some portion of them would earn money. That wouldn't be the primary reason to share (it'd be to track your influence and show clickthrough rates) but it'd be a nice-to-have bonus if it did, right?

> although how you had the time to sign up thousands of retailers and no time to build the product into a usable state confuses me

They don't need to "sign up retailers", just join their existing affiliate programs. Affiliate networks like Commission Junction get them 1500 merchants and 62% of the top 500 retailers just by clicking some buttons. I'm sure you could establish relationships with the top affiliate programs fairly quickly while personally contacting very few of them. Now skim off some of the commission while paying the rest to your users as rewards, and you have a business.

Providing a check mark or some kind of validation as to whether or not a link is covered for rewards is a great idea, I've added that to the list of potential features.

I understand the cynicism - the entire affiliate world is pretty shady, which is why I'm so determined to disrupt it. We are using 3rd party services to help us get reach across top merchants online. Sounds like this part of the service needs more attention earlier than we thought - thank you.

Saying the entire affiliate world is shady is intellectually lazy. There are many areas of the industry that are very stable and mature.

Which areas are stable and mature? Countering a generalization with another generalization does not an argument make.

You're right, I should say it is widely perceived as shady by people who don't know much about it.

I have this idea myself for many years and even had a friend build his funded startup around this concept for the past year or two.

The biggest issue is with compliance with the companies. There is a reason the affiliate process is vetted and takes alot of steps to make sure your serious about promoting. You indirectly represent the end company when promoting your aff link.

When you have someone blasting their affiliate link all around the web and on twitter it doesn't sit well with the end company and they usually bear the brunt of the compliants.

Good luck on the idea. If you can make it work the all the props.

As a affiliate who LOVED promoting on twitter and would see up to an insane $40 EPC on tweets, a freinds influence is great.

$40 EPC? That would be $40 per every click you get from Twitter.

yup i would get up too $40 EPC for some tweets but usually averaged in the $15-$30 range.

when you create value, people will click and most likely buy. on twitter, you can see what exactly is on their mind so it becomes pretty transparent what they specifically want when they tweet.

I'd focus more on the analytics than the affiliate revenues. Most bloggers I've spoken with on the topic say the visibility/analytics they have on their affiliate revenues is poor. Most affiliate programs will give you click data but beyond that you really have no idea what's being bought, what's driving your affiliate revenues, or the value of your visitors.

I had a blogger friend recently pitch a project to a luxury brand and one of the first things the brand asked for was ROI and purchase data on the blog. She could piecemeal some of it but it's a challenge.

On the flip side, advertisers/brands are asking for more ROI and conversion data to identify who is actually driving sales.

Is there not a US equivalent of Quidco (http://www.quidco.com)?

For genuine friend-to-friend recommendations, I'd rather refer a friend of mine to make a purchase through Quidco and have them claim back the full referral fee themselves (minus a £5/year subscription), than pocket the referral fee myself.

If I was linking to a larger group, why should I go through Referly and not set up an affiliate account direct with the merchant? In the UK, at least, there are large networks like AffiliateWindow, CommissionJunction, etc. that allow you to sign up with numerous merchants using a single interface...

Seriously, this. I just checked my Quidco account - I've made £283.13 cashback via Quidco in the last two years. The vast bulk of that from big ticket purchases (e.g. flights, hotels) where I've remembered to log in to Quidco first.

By contrast, the amount of money I could make from recommending books, movies etc to friends via a Referly would be in the pennies.

To sum up: Quidco, I just remember to login before I buy a big ticket item, and literally make hundreds of pounds. Referly, I have to convert all of my product links to Referly affiliate links in the hope of making pennies.

They have a Firefox add-on too, which brings up a little bar at the top of the page when you visit one of their partners, advising you that you could earn cashback.

In the US, that would be mypoints.com -- or airlines, hotels, etc. have sites that allow you to earn miles when you shop through them. (American Airlines' is called https://www.aadvantageeshopping.com/ -- a truly horrible URL, but I have gotten many miles posted to my account from that site.) Mypoints gives you lower payouts but you can redeem them for all kinds of gift cards, etc. AA, et.al., give you higher payouts but of course they are in harder-to-redeem airline miles.

As far as I know, though, Amazon doesn't participate in any of these, as they don't like "middlemen" dealing with their affiliate program. Wonder if refer.ly will have similar issues down the road with Amazon.

First of all, congratulations on your new venture!

Correct me if I'm wrong, but as I understand it, refer.ly is basically a middleman. If that's so, I have a couple questions:

1. What incentives do I have to sign up with refer.ly instead of going directly with companies that run affiliate programs?

2. What makes refer.ly different from existing middlemen like Commission Junction?

The key difference right now is that you have 1 signup, and you're done... that's our minimum viable differentiation (for now)

Are you sure you're not trying to simplify a process that just can't be simplified anymore than it already is?

For instance, how are you going to handle the veritable smörgåsbord of unique terms and conditions that come attached to each merchant's affiliate schemes? How are users going to be informed of these terms?

Perhaps more importantly, how are you going to deal with people who violate these terms? What happens when one of your users starts using your links as part of a Google AdWords campaign, bidding on keywords that a merchant specifically prohibits?

What happens when a user starts sending your links in the form of unsolicited emails, or starts offering an incentive for people to make a purchase through a referral link — both practices that are commonly prohibited by affiliate schemes?

Thank you for answering my questions. I sincerely wish that you succeed in your mission.

Nice idea. I see this benefiting influencers and folks with larger number of followers on social channels, but everyday folks are unlikely to see any significant revenues here IMO. The fact that influencers are more likely to adopt it means it has good odds of taking off in popularity though.

Someone like Pinterest doing this implicitly and crediting users (with non-monetary perks even) might have a better chance of impacting the average user I think.

I'm looking forward to seeing how this progresses though. I hope the team shares how it's working out for users a few months down the road.

Thanks! I think non-monetary and group rewards will be huge, because unlike cash they are something that can be made available to a very broad set of users.

We plan to be as open as we can week to week about our progress, and how our users are doing with earning cash and other rewards. We'll be blogging...

I spent 5 minutes trying to figure out how it works without signing up and gave up. The site is very skimpy on details. What are the typical commission rates? How do the commissions compare to Amazon affiliate rates? What is the advantage of using this service vs. existing affiliate programs? Feels like you are trying to appeal to the naive by just saying "magically get paid by talking about products"

And what % of the commission is Viglink taking since it's their affiliate links?

Judging by its appearance, I'm guessing this won't have any business options? Would be nice to have a centralized product like this that saves me from having to find/sign up for each individual affiliate program. Plus having all the analytics data in one place, too.

Right now it seems to be super early stage. No database of affiliate programs that they have and you can't even withdraw rewards (earnings).

> Would be nice to have a centralized product like this that saves me from having to find/sign up for each individual affiliate program




This is super helpful. Thanks!

I'd love to learn more about the business options you are looking for (danielle@refer.ly is my email). We're using a bunch of servies on the backend to get the maximum affiliate coverage we can, and from your comment and others here it sounds like that's pretty high priority.

We're tracking earnings right now, and we tried to guess how long it would take before the first person earns $10 -- and we think it might be a few days to a week, so by the time they're ready to claim their $ we will have the UI for that... or we can reimburse them manually.

I believe it would be best if the company gave users Karma as opposed to money. When someone suggests a store and you know they will earn $ if you buy from it, you start to doubt their motive. With karma, I do not have to worry about this, and latter the score can be used to spot "influencers".

There are a few problems here. FTC disclosure, affiliate tax laws and mostly that icky feeling people get when they get spammed, especially by friends.

But in the eyes of YCombinator, I don't think this matters, because they aren't betting on refer.ly. They're betting on the woman who's founding it. PG's been pretty open about betting on the people and not the idea. Based on the article (and Dave McClure's glowing recommendation) it seems like a pretty sound bet.

Now, all I need is an API that a service like Ifttt.com can hook into.

I'd like to use this service in between the others I use. (When I Like something on facebook, it gets tweeted, for instance...) I want it to be able to shorten my link and it get tweeted automatically. Doable?

Definitely doable, I love Ifttt and seeing Referly API + Ifttt would be a dream come true. API added the feature request list, thanks!

This just seems like a wrapper around Viglink? Not entirely sure what the value add is here other than shortening URL's.

Viglink IMO take 25% off the commission, which means 75% is available to go to Refer.ly/User. Not sure what percentage Refer.ly is planning to take for themselves but might not leave much left for the user.

As someone who has built a platform that aggregates all the affiliate networks into one place, it's a royal pain. Viglink take away that pain, but for a price & in order to provide the best value to your users in the long run you'll probably have to become an aggegrator yourselves.

I read the name as "reefer".ly

That's hilarious. I was jamming out this design all weekend and never once did it occur to me, then I get this and a few tweets about it. Let's call it an unintentional in-joke then :)

I don't know.. I'd feel a little sleazy sending a referral link to a friend.

I imagine this would self-correct eventually. If my friends did nothing but send me referral links... well, I think I could stand having one fewer friend.

That is going to burn down so fast when the affiliate sharks starts biting. Affiliate is basically the webs version of HFT -- millions can be made, and lost, in a matter of a few minutes.

If I was interested in having people refer customers for my SaaS app, is there a way to sign up for refer.ly to generate and track these sort of referral links?

I think you're looking for something more along the lines of "roll your own affiliate program" - check out http://www.hasoffers.com/ (I have no affiliation with them, other than they're a local Seattle startup)

I wonder if all these companies registering their domains in Libya will get bitten by it at some point.

How is this different to LinkShare, TradeDoubler etc?

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