Marketers create affiliate programs to outsource marketing decisions to domain experts

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Marketers create affiliate programs to outsource marketing decisions to domain experts

Posted By: davinder.pk | Posted On: 2008-11-12 | Article ID: 114269

Eric Goldman discusses marketers' liability for the actions of their marketing affiliates Can a claim made by one of your marketing partners land you in court?
This article discusses marketers' liability for the actions of their marketing affiliates .The affiliate liability issue has become red hot recently because numerous plaintiffs have taken aggressive legal positions seeking to expand the boundaries of affiliate liability. In three recent rulings, courts have emphatically rejected these expansive liability arguments. Even so, it seems likely that plaintiffs will continue to look for ways to expand affiliate liability, and despite the favorable rulings, defendants often settle a lawsuit alleging affiliate liability instead of establishing their rights in court.

Marketers create affiliate programs to outsource marketing decisions to domain experts. For example, independent third parties may have better or cheaper access to sub communities of potentially interested consumers than a marketer's employees. An affiliate marketing program compensates these local experts for the work and expertise involved to take the marketer's message to those consumer communities.

When they work properly, affiliate marketing programs can play an important role in the broad "invisible hand" economic phenomenon of allocating scarce resources to consumers who value them the most. For more help visit to:www.ppc-profit-marketer.com.

Affiliate marketing doesn't always have this salutary effect. Affiliate marketing programs create payoffs to motivate affiliate behavior, and inevitably some affiliates will try to obtain the payoff without doing the desired activity.

Thus, even if the marketer would prefer otherwise, some affiliates might do "whatever it takes" to get paid, including using false advertising or illegitimate marketing mechanisms. Further, the fact that the marketer outsourcers some choices to affiliates (a necessary part of any affiliate program) can lead to "diffuse responsibility," in which the marketer and affiliates point fingers at each other if something goes wrong. Sometimes, when there are multiple tiers of affiliates, for more help visit to:www.greatpromotionsite.com. it can become effectively impossible to assign responsibility for the wrongdoing.

To bypass these legal entanglements, plaintiffs have sought ways to hold marketers vicariously (automatically) liable for their affiliates' actions. However, these efforts "break" standard tort law by trying to treat independent contractors as if they are principal-agents without the requisite supervision or authority that typically triggers agency liability.

As a result, over expansive theories of affiliate liability cause marketers to internalize too many costs, curtailing potentially socially beneficial marketing activities or leading to overinvestment in socially wasteful liability minimization schemes. When they work properly, affiliate marketing programs can play an important role in the broad "invisible hand" economic phenomenon of allocating scarce resources to consumers who value them the most.

Affiliate marketing doesn't always have this salutary effect. Affiliate marketing programs create payoffs to motivate affiliate behavior, and inevitably some affiliates will try to obtain the payoff without doing the desired activity.

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