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December 04, 2006

Is BlockBuster Inc. Ripping Off Affiliates?

posted by MR WAVETHEORY at 12/04/2006 01:53:00 PM
I have been testing out the BlockBuster Affiliate program to see how it converts. BlockBuster Inc. (NYSE BBI) offers online DVD rentals and the first month is $9.99. It is very similar to NetFlix, Inc. (Nasdaq NFLX). However, after one month with the program, I found that I have received a significant number of click thrus on the BlockBuster affiliate ads but zero conversions. The number of clicks I received was in the thousands so when I checked my conversion stats, it was simply unbelievable that not a single click led to conversion.

I decided to investigate the issue further and I found that

1) Performics, the company which provides the affiliate ads, was tracking clicks properly. Performics was doing their job.
2) BlockBuster was not tracking conversions on their landing pages. BlockBuster's landing pages did not include my publisher ID in their landing page and sign up submission form.

Here is how I discovered what was going on.

I went to the BlockBuster affiliate landing page and I did a view source on the landing page.

What I found was that the action URL for the form was:

/signup/rp/processRegPlan/c.firstMonth999/p.25216/r.<refid>/pc.perf004/

You can clearly see that the refid is filled in because it says refid in the URL. I expected it to be much less obvious, however, it could not have been more obvious that BlockBuster was not replacing the refid field with the refid tag from affiliates. Because the refer id is not filled in, that means that when a visitor clicked on the BlockBuster affiliate ad, they would be from an unknown source and I would not receive credit for the conversion when they signed up for a trial.

I have written to Performics to get them to fix this problem and I have it gets resolved promptly, but there are several lessons I learned from this experience.

  • Many BlockBuster affiliates were not receiving their commissions for directing paying customers to BlockBuster. By simply testing the link, you can see that BlockBuster was not crediting affiliates with referrals. I don't know how many affiliates this affects. However, the last time I checked, I have seen BlockBuster ads all over the Internet, including on Netscape, Yahoo!, and countless other portals.
  • If I give BlockBuster the benefit of the doubt, then BlockBuster forgot to fill in the referid from affiliates and this was a careless mistake. However, if you believe that this was an intentional mistake, that means millions of dollars of affiliate commissions could have been unpaid and uncredited. The affiliate industry already has a tarnished reputation for causing the proliferation of spam and it really hurts the credibility of affiliate programs when a large company like BlockBuster fails to properly track affiliate referrals. I really don't know what to make make of this.
  • Always reconcile your click thru figures with your conversion figures. I only discovered the discrepancy between the click-thru and conversion when after receiving hundreds of click thrus, I still got zero conversions. Simply put, this is very hard to achieve because click to conversion typically ranges from 10-25%. That means for every 100 clicks, I should have received 10 to 25 conversions. However, after receiving several hundred clicks, not a single click converted. Always do your own homework.

I have written positively about BlockBuster in the past regarding their in-store return service and I am very disappointed in BlockBuster. I sincerely hope this was an honest mistake on their part and I hope they will fix this problem immediately.

Update: Below is an email from Performics regarding the BlockBuster affiliate program dated November 8, 2006 from a reader. The email subject is "BlockBuster Tracking is Currently Down." As of December 4, 2006, the problem is still not fixed.

Dear XXXX,

We appreciate your support of the Blockbuster Online affiliate program. Unfortunately due to a recent site re-launch by Blockbuster, order tracking is currently not available. Please be assured that Blockbuster is working to correct this problem as quickly as possible. However, while orders are not currently being posted to ConnectCommercesm, Blockbuster and Performics are working together to reconcile orders that are booked during the outage.

A follow-up e-mail will be sent as soon as the situation is resolved.

Thank you for your participation in the program and we apologize for any inconvenience.

Regards,

Allison
Program Manager for Blockbuster Online
BlockbusterAffiliates@performics.com

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