Information and incentives in online affiliate marketing
By: Ben Edelman, Wesley Brandi
Contributors: Brandi, Wesley, author; Harvard Business School
Series: Working paper / Havard Business School -- 14-041; Working paper (Harvard Business School) -- 14-041
Publisher: Harvard Business School
Published: 2013
Place of publication: Boston
Language: eng
Number of pages: 27
Description: We consider alternative methods of supervising staff who have significant discretion and whose efforts are subject to both incomplete information and skewed incentives. Specifically, we examine online affiliate marketing programs in which merchants oversee thousands of affiliates they have never met. Some merchants hire specialist outside advisors to set and enforce policies for affiliates, while other merchants ask their ordinary marketing staff to perform these functions. For clear violations of applicable rules, we find that outside advisors are most effective at excluding the responsible affiliates -- which we interpret as a benefit of specialization. However, in-house staff are more successful at identifying and excluding affiliates whose practices are viewed as "borderline" (albeit still contrary to merchants' interests), foregoing the efficiencies of specialization in favor of the better incentives of a company's staff. We consider implications for marketing of online affiliate programs and for online marketing more generally.
Notes: "November 2013"--Publisher's Web site.

Includes bibliographical references (pages 26-27).