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Competitive Analysis of Affiliate Programs

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1 Competitive Analysis of Affiliate Programs

2 Dictionary Affiliate: A member of an affiliate program. This independent person or website has submitted information about himself to a form, been accepted into an affiliate program, and will advertise the products/services of the program manager, from his website, in exchange for a commission or other reward. (Also called associate) Affiliate ID: When someone joins an affiliate program, he will be assigned an 'affiliate ID' by the tracking software used by the program manager. The affiliate ID is the program manager’s way of identifying whom, how many sales, and how much commissions for any given affiliate. Affiliate link: When someone joins an affiliate program, he will get an 'affiliate link' from the program manager. An 'affiliate link' is usually generated by the tracking software being used to manage the program. An affiliate will cut and paste his affiliate link into a web page or , to advertise the products/services etc. sold on the merchant's website. The affiliate link is a gateway. When an affiliate's visitors or mail recipients click on his Affiliate Link, they are redirected the website of the merchant. Affiliate Program: An organized way of managing a collection of e-partnerships between websites. In an affiliate program, a representative of an online business (webmaster, program manager) creates partnerships with other webmasters to advertise and promote his products/services, in return for a reward. These partnerships, or synergies, are created with the goal of increasing sales. A well-managed affiliate program can also help substantially in raising brand aware-ness, obtaining qualified lead information and raising search engine rankings. Affiliate Program Directory: A listing of affiliate programs available for joining. Affiliate Program managers submit their information to affiliate directories, hoping for qualified affiliates to join their programs and help market their web-site/products/services. ASP: (Application Service Provider) A means of providing software through the Internet, rather than installing the software. The Application Service Provider hosts the application for you, and you simply access the application via the web. Associate: see affiliate Auto responder: A software that will automatically send messages that you create, on a schedule that you decide, to a submitted address or list of addresses. Banner: An rectangular shaped image that merchant's use to advertise their website. A good affiliate program manager should provide several different ban-ners of various sizes, as well as text advertising or other creative, to help you promote his website.

3 Dictionary Category: A category is group of anything, with something in common. When you join an affiliate program, you may be asked to choose a category of interest. If you are an affiliate program manager, you may set up categories to differentiate between groups of affiliates. Click-through: Refers to the action a visitor takes when they are referred from one web site through an affiliate link or advertisement and are taken to another web site. CPA: (Cost Per Action) A way to measure online advertising, where a rate is set for every action that is taken by a user. CPM: (Cost Per Thousand) A way to measure online advertising where a rate of cost is set for every thousand impressions, or views, of the advertisement. Commission: Paid to affiliates, commissions = money or rewards earned for the sale of a product, promotion of a website, or the submission of qualified lead in-formation to a merchant’s website from an affiliate website. Cookie: A message given to a Web browser by a Web server. The browser stores the message in a text file. The message is then sent back to the server each time the browser requests a page from the server. Cookies help identify users. If you are an affiliate joined to "Bob's Web" affiliate program, and a visitor comes to your website, passes through your affiliate link, and visits "Bob's Web", a cookie will be placed in the visitor's browser. This cookie will communicate your Affiliate ID to "Bob's Web" affiliate program soft-ware, and the software will log a click through. Credit Card processor: A service that uses a transaction processing software, and enables a merchant to accept credit card payments. Credit card processors are relevant to affiliate programs, because the software they use often works with affiliate tracking software, to tell the merchant which affiliate (if any) is due a commission. CTR: (Click Through Rate or Ratio) The percentage of clicks for the number of advertising impressions displayed. E-Commerce: Business that takes place electronically, over the Internet. Entrance: The page on a merchant's website that an affiliate link takes you to when you click on it. HTML: An acronym for Hypertext Markup Language. This is the authoring language used to create documents on the Web. HTML is what defines the layout of a web document by using a variety of 'tags'. For example, the html tags <p></p> are used to make a paragraph and <i></i> are used to make the text between the tags appear in italics. HTML is relevant to affiliate programs, be-cause the affiliate links used redirect visitors to a merchant's website are written in html with tags that look like this <a href></a>. Basic knowledge of html is necessary to quickly and easily edit some software templates.

4 Dictionary Impression: The viewing of an advertising banner, link, or product on the Inter-net. Advertisers use impressions to measure the number of views their ads re-ceive, and ad space is often sold according to impressions. Integration: What happens between tracking software and shopping cart or credit card processor software, to make the software work together, and enable sales tracking. Lead: When a visitor submits his personal information to a form, downloads something from a web site, or requests to be contacted about a product or ser-vice offering, the merchant considers the visitor a ‘lead’. Link: On the Internet, a link is a way to access one document or location, from another document or location, or one website from another website. A link is a form of advertising on a web site, or in an or online newsletter, which, when clicked on, refers the user to the advertiser's web site or a specific area within their web site. Massmail: The broadcasting of an , to many recipients. An affiliate program manager, for example, may create a special advertisement for his affiliates, and ‘massmail’ the advertisement information to all of his affiliates at one time. Merchant: Any Web site that sells a product or service, accepts payments, and fulfills orders. Most affiliate program managers are merchants, or represent merchants. Pay-For-Performance Advertising: When a merchant agrees to pay for advertising when products or services are sold, rather than paying ‘up front’ for advertising space on web sites. In other words, the merchant doesn’t pay until the advertising works. Pay-per-lead: When commissions are rewarded for each qualified lead (customer) that is referred to a merchant’s website. Pay-for-performance Marketing: (also called Affiliate Marketing) Any type of revenue sharing program where a web site markets a product or service, and receives a commission is a lead or sale is generated.

5 Dictionary Pay-per-click: When an affiliate is rewarded for getting others to click on a link and simply visit the website or view an ad. Pay-per-lead: When an affiliate is rewarded for getting others to click on a link, then submit information about themselves to a form, to be contacted as a sales lead, or to receive 'special offers' or advertising from other websites. Pay-per-sale: When an affiliate is rewarded for getting others to click on a link to a website, then purchase the products or services sold there. Real-time: No delay in the processing of requests for information, other than the time necessary for the data to travel over the Internet. Reciprocal Link: When one website links to another, and the other website links back, they have ‘reciprocal links’, creating a ‘you scratch my back, I’ll scratch yours’ type relationship. The intention is for each web site to receive more expo-sure. Referral program: A program that rewards on a 'pay per lead' basis, or 'pay per click' basis. ROI: (Return On Investment) A measurement of earnings against expenditures. Sale: When goods or services are purchased in exchange for currency. Shopping Cart: This is a piece of software that acts as the catalog and ordering process for an online store. Because a shopping cart is software, it can be made to communicate information to other software systems for a business. Shopping Carts are relevant to affiliate programs, because they often works with affiliate tracking software, to tell the merchant which affiliate (if any) is due a commission and for which items purchased. ***If you want a vivid mental image of how online marketing can really get specific to the consumer, imagine someone looking into your buggy at Wal-Mart, and being able to inventory the items that you are going to purchase EVERY TIME YOU GO TO WAL MART. Well, shopping cart soft-ware can communicate this information to the merchant about your purchases. Sub-affiliate: See ‘two tier’ Synergy: The interaction of two or more merchants (or agents) so that the sum of their combined effect is greater than their individual effects. (One of the Key Ingredients of a successful affiliate program!) Template: A blank or pre-filled customizable form that shows which fields exist, their locations, and their length. Templates are used to make creating documents easier. Templates are relevant to affiliate programs, because often, affiliate- tracking software utilizes templates that can be customized to look and say what the program manager wants the template to

6 Dictionary Tracking software: software used to track information, and report the information back to a central database. Primarily, tracking software is used to manage affiliate programs and track advertising results. Two tier: (as in two tier affiliate program) A two-tier program rewards you for get-ting others to join the same affiliate program. As well as earning commissions on your sales, you earn commissions on their sales. A 'one tier/two tier' relationship can be described like a 'parent/child' relationship, where the first tier is the 'Par-ent' or primary affiliate, and the second tier is the 'child' or any other member of affiliate program that the primary affiliate has joined to the program. (Second tier affiliates are also called 'sub-affiliates') URL: An acronym for Uniform Resource Locator, the address of documents and other resources on the World Wide Web. The URL for any page or document on the Web contains the domain name or IP address where the information is lo-cated. When viewing a web page, the browser will display the URL of the page or document currently accessed, in the address bar. Web-based: Requiring no software to access an online service or function, other than a Web browser and access to the Internet.

7 E-Commerce Programs StarMonitor ClickBank Plug 'n Pay

8 E-Commerce Programs E-Commerce have more than just affiliate tracking functions -- they provide a full sales platform on which to conduct business. Trend among store-building programs. Unlike most store-building programs which are designed primarily for the sale of hard goods, the programs offer platforms for the sales of specific types of soft products and information. You get a lot more from an E-commerce program if the software is hosted on your own Server Link Popularity

9 StarMonitor CGI based $1,500
Installed Software And electronic delivery (plus hard goods). Especially designed for software and e-book downloads. It is matches a full-featured 2-tier affiliate program with an e-commerce platform that can sell and deliver electronic goods. It provides customers with a unique URL for downloads that disappears after a merchant-specified time. This prevents the customer from giving the URL to friends to download software. It can also generate a unique username and password for a "member's only" site. Users praise the support team attention to customers‘ special needs. integrated into an e-commerce solution.

10 StarMonitor Software Type: E-Commerce. Integrated Shopping Cart, Affiliate Program, and Digital Product Delivery System Affiliate/Merchant Web Interface: Yes Pricing: $1,500 installed. Includes one sign-up form, one order form, and a maximum of 10 other files. Unix system with Perl 5 and cgi-bin required. Commission: N/A Affiliate Marketing & Recruitment: No Tracks: Sales. StarMonitor also has the ability to track hits and referrers to an affiliate's page(s). Ad codes are also trackable (so the affiliate knows which advertisement is responsible for any activity they receive). Two-Tier: Yes Customize individual payment rate: Yes Carts that support: Includes its own shopping cart

11 StarMonitor Payment Systems Currently supports integration with Authorize Net, SecureTrans, VeriSign (formerly Signio), PayPal, and PlugnPay. Integration with real-time system is included in the installation. Data Export: Yes. Affiliate ID generation: Yes Banner/graphic management: Yes to Merchant, affiliate and Customer after each order: Yes to Merchant after each affiliate sign up: Yes Send to affiliates: Program produces an affiliate list and a customer list which can be utilized by another program to send to affiliates. Affiliate sign-up: Automatic only -- there's no "approve/disapprove“ capability for the administrator. Redirects to particular pages: Yes

12 Positives of StarMonitor from users
I can easily run reports against any criteria. I can export my affiliate list to a file and import into Excel or other software. It puts my program on automatic. I don't have to THINK about it! This software is designed primarily for those who want to run an affiliate program AND distribute digital products (but can be used for hard goods too). There are many features that I really like about this software that you won't find in other

13 Positives of StarMonitor programs from users
It will automatically generate for each customer a unique download URL that expires after an amount of time that you specify. It can also automatically generate for each customer a unique username and password for a "members only" Web site. All customer info is automatically stored in a password protected online database. It has good ad tracking capabilities, and you can create ad codes "on the fly" without any programming. Once set up, I have found the software to be totally reliable. I like all the above features, and I particularly like the time-limited download feature. Other than 3rd party services (like Digibuy), there's nothing like it that I am aware of. I have not yet implemented my affiliate program (I plan to use this part of the software soon), but I like its features. You can run a 1 or 2 tier program, and establish an unlimited number of commission payout rates by dollar amount or percentage You can also offer "tiered“ payouts based on the size of the customer order. Another big bonus is that the software is hosted on my own server, so there are no monthly fees payable to run the program (normally $30-$100/month with other programs). You just pay a one time fee for the software and installation is included -- a big plus. What's my absolute favorite feature of this software program?...

14 ClickBank Remotely hosted $1 plus 7.5% per transaction
Products and services delivered via web pages, files, or . Provides no delivery mechanism. Merchants seeking to sell information products such as e-books can get started with very little investment using ClickBank, though it includes no download area -- just the affiliate tracking and payment system. No merchant credit card account is required.

15 ClickBank Commission: $1 plus 7.5% fee per sale for electronically delivered products Affiliate Marketing & Recruitment: Yes. Advertises to network of 100,000 affiliate sites. Tracks: Sales Two-Tier: No Customize individual payment rate: No Carts that support: N/A Payment Systems: Built-in

16 ClickBank Writes checks to Affiliates: Yes
Affiliate ID generation: Yes Banner/graphic management: Yes Affiliate sign-up: Automatic

17 Positives of ClickBank from users
I don't have to really do much with it. Affiliates just register as a free account with ClickBank. I use it for purchasers of my book, also for less hassle. I use a regular merchant account for my other store, but its fees are really bad. It was a complete "outsource" solution for my credit card collection and affiliate management.

18 Negatives of ClickBank from users
Not a lot of tracking with it, but I really don't need tracking right now. It is only a one-tier program. I wish there was a two-tier program for affiliates.

19 Plug 'n Pay Remotely hosted
Related products include shopping carts and e-delivery systems, payment gateways, etc. The Plug 'n Pay affiliate system is just one component of several e-commerce tools that include shopping carts, payment gateways, and merchant credit card accounts; price is not given on the website.

20 Plug 'n Pay Positives: Negatives:
It is already linked with my shopping cart software, so there is no extra work to manage the affiliates. Negatives: When affiliates sign up, the password is not encrypted and they do not receive a confirmation with their name and password. Also, if you do not bookmark the affiliate link to Plug N Pay when you sign up, you cannot find it again. Customer service tends to be slow.

21 Commission-Based ASPs

22 Commission-Based ASPs (Application Service Providers)
Be Free, LinkShare, Commission Junction, PlugInGo, ClickTrade, and others all charge the merchant a set-up fee plus a commission based on sales revenue. Software is hosted on their server CJ Set-up Fee of $2250 Commission of 30% Monthly Minimum $500 Annual Renewal Fee $250 Essentially, a merchant recruited a channel of affiliate partner sites to promote its products across the Web in exchange for a commission on sales

23 Be Free Customer and Scope
Set Up fee of $5,000 Paying affiliates (commission is wide range) Using Be Free; Pay for performance: Variable based on clients: Negotiable Commission (in percentage of commission paid to affiliates) But previously in the range of 2% to 3% of transaction. Monthly Minimum: $3,000 No annual Renewal Fee No Free checkwriting ($1 a check)

24 Be Free Be Free is a private-branded model, not a network pool of affiliates. Be Free has an affiliate recruiter program, and marketing relationships, but no official legal relationship with affiliates. Be Free requires that they are the exclusive affiliate program service provider during the duration of their contract with the merchant. Some situation this is not true. As a private branded model, allows merchant to put an investment into building their channel and make it successful. Tracks: Impressions, click-throughs, sales, and not the returns Two-Tier: Optional feature, if selected by merchant

25 Be Free Reports available through a custom application that allows merchants to run their affiliate programs from their desktop -- not a web application, but a desktop application. Web Based application by April 2003 Merchants are able to run more than 70 or more reports on traffic, sales, revenue, partner earnings, and more and then export that information easily into a variety of data formats. Affiliate ID generation: Yes Banner/graphic management: Yes to affiliate after each order: Yes Manage s based on Products Categories Affiliate compensation models Any other Categories Send to affiliates: Yes, or groups of affiliates Affiliate sign-up: Automatic or manual screening (optionally, Be Free will do screening for the merchant for a fee $4) Redirects to particular pages: Product-specific links

26 Positives of Be Free from users
Automatic link generation, reports are good and useful, user interface is pretty intuitive, you can pay Be Free to cut checks to your affiliates for you. It is flexible with types of links I can offer (especially the ability to provide HTML documents with affiliate links to affiliates. The system for targeted ing to affiliates is very useful. There are a lot of very useful reports, including an "Inactive Affiliates" report, which allows me to target sites that have signed up, but not yet promoted our site through their affiliate links. Private label: Tech support is prompt. BFast is very flexible and customizable. It allows the affiliate manager to get any information and to configure the system according to the needs.

27 Negatives of Be Free from users and Be Free’s respond
Slow performance, 8,000 affiliates but only about TRUE active affiliates many just sign up & never get impressions or sales Very slow from mid-day to evening on weekdays (NYC time). Some affiliates will not work with us because they do not like reporting.net. It's pretty complex and takes some time until you learn how to use. Not really for everybody.

28 Link Share Set-up Fee of $10,000
Negotiable Commission (in percentage of commission paid to affiliates) But previously in the range of 2% to 3% of transaction. Monthly Minimum $2,000 for technical support Annual Renewal Fee $2,000 Free checkwriting $1

29 Link Share Software Fees License and Installation Fee:
$10,000 initial fee, $2,000 annual renewal fee Revenue Share Percent of Sale 2% for $500,000+ monthly net sales 3% for $500,000 and below monthly net sales Per Form/Registration 25% of affiliate commission ($.75 minimum) Per Click ($.04 minimum) Service Packages Account Executive Services: $2,000/month Account Management Services: $4,000/month Client Services: $12,500/ month Image Serving $0.50 CPM Back Office Services Affiliate check cutting: $1.00 per check (plus postage) 1099/other tax forms: $4.00 per form

30 Link Share Affiliate Marketing & Recruitment: Yes. LinkShare is justly proud of their network of affiliates, and the ability to help merchants ramp-up rapidly. Tracks: Impressions, Clicks, Leads, and Sales Two-Tier: No, but $3 bounty for new affiliates. Customize individual Yes Carts that support: Essentially all. Payment Systems N/A Writes checks to Affiliates: Yes, optional $1.50/month Data Export: Reports downloadable in tab-delineated format. Drill down within reports. Affiliate ID generation: Yes Banner/graphic management: Yes to affiliate after each order : No Send to affiliates: Yes, both through internal as well as externally. Affiliate sign-up: Auto or manual screening. Affiliate application filter screen out affiliates from applying by certain criteria, such as country of origin, etc. A content spider allows you to search affiliate base for certain words -- both to screen out affiliates or find effective affiliates. Redirects to: Yes, multiple-landing page enabled.

31 Positives of Link Share from users
User friendly interface Simplicity, great reporting I like the reporting structures. I like the interface. I like the way that I can enter links into the system Number of affiliates. Good reputation for tracking.

32 Negatives of Link Share from users
It was very hard to launch. There was a ton of backend implementation. It was hard to get their Account Executive on the same page as our tech team. Eventually, we had to bypass the Account Executive and get tech to tech team talking. Technical difficulties, slow performance. Minor annoyances are: 1) Cannot break down all links by affiliate name (to see who is using which specific link) 2) Can't choose an affiliate and look at all the links on their site (in a report) 3) Can't see which affiliates are in a particular group (a groups I created, like all GMAT sites) User interface is a little buggy They send out informative s, have group meetings, etc. You have everything you need to succeed. At this location you can read my article: My Personal Experience with LinkShare.

33 Commission Junction Set-up Fee of $2250 Commission of 30%
Monthly Minimum $500 Annual Renewal Fee $250 Free checkwriting

34 Commission Junction Tracks: Impressions, Clicks, Leads, Sales
Two-Tier: Yes payment rate: Yes Carts that support: Most Payment Systems: N/A Writes checks to Affiliates: Yes Data Export: Many reports available. Report downloads comma-delimited files. Affiliate ID generation: Yes Banner/graphic management: Yes to affiliate after each order: No Send to affiliates: Only through the internal member-messaging system. Affiliate sign-up: Automatic or manual screening Redirects to particular pages: Yes

35 Positives of Commission Junction from users
Easy to use, seen as a trusted third party Ease of use, integrated stats, incontexual advertising emphasis They recruit for you and Affordable rates, good interface, good customer service Third party tracking; I think people see them as being trustworthy to correctly track and pay their commissions. Access to lots of potential members. Easy 90-day tracking. Efficient recruiting process, Easy Product links Software and the entire organization. For it is very hands off. I pay for it, but they take care of all the backend work and marketing. Ease of use, large client base to work with. Lots of related type programs. It's hands-off. I don't have to worry about it or think about it. It works by itself. The CJ network is an excellent source for new affiliates. The report generator is very flexible. It's easy to locate a specific affiliate. Can download transaction details and send bulk corrections via (features we could not live without).

36 Negatives of Commission Junction from users
Can't do custom links for particular affiliates Changed they can Not always the most flexible, tech support can be slow. Cannot edit affiliate sign ups poor validity check for leads New fee structure imposed without consultation/warning to existing clients. Relatively small base of affiliates. My publisher was using Commission Junction. Then CJ became greedy and increased their rates. It became uneconomical for the publisher. So, he will be cutting ties with CJ. That means the sales force I built up will go bye-bye. This could happen at any time with any program which I do not control myself. At sometime I could get a different publisher. So, I have made a decision that I will not use any affiliate program to sell my own products unless I have total control of the program. Too expensive -- my investment has not paid for itself yet. They don't provide very much support to merchants. 95% of our affiliates are not performing. Very few are targeted to our market. Slow site Very large and sometimes seem lost in all the maze of things to do. Dislike having someone else controlling the database and my back end office. It could be easier to review applications. Affiliates aren't screened. Any manner of folk can sign-up as an affiliate, most of whom will never send anyone to our site. (Editor: screening IS an option.) The website is slow to respond which makes all administrative tasks laborious. The integrated messaging system is a major annoyance since we would prefer to use our own client. The help system is even slower and not only is it difficult to find an answer, but some answers are confusing or just plain wrong (which we learned firsthand).

37 Who Owns the Affiliates?
What if you move from say Commission Junction to another vendor? Commission Junction answer is that they would each of them to let them know how to sign up for your new program -- and not just through the internal message system, but real -- though I doubt that you'll get the list of addresses for “Your" affiliates. Commission Junction feels they have an obligation to protect the privacy of "their" affiliates. Affiliate "ownership" is a very important issue when considering the model you'll choose. All the commission-based ASPs listed here have a wide variety of reports that merchants can run to analyze affiliate sales, and some vendors allow you to export them into a spreadsheet for offline analysis.

38 Pros and Cons Commission-based ASPs take a great deal of the administrative trivia out of managing an affiliate program. They help you acquire affiliates, they serve your banners, they provide continuously improved, feature-rich software, and, for larger merchants, provide staff assistance to help develop an excellent affiliate program. On the downside, they take a percentage cut of the "action" and may end up "owning" the affiliate relationship, making it difficult to change vendors if you desire to.

39 My Affiliate Program Pricing http://www. myaffiliateprogram
MYAP Pro MYAP Lite Feather Weight Enterprise Package $795 and $50/month $395 and $35/month $99 and $25/month $3,395 and $244.95/month

40 My Affiliate Program Software is remotely hosted
Affiliate Marketing & Recruitment: No pool of affiliates, but includes submission to (normally a $79 package). Book explaining how to attract affiliates. Tracks: Impressions, Click, Lead, or Sale. Two-Tier: Yes. Customize individual payment rate: Yes. Carts that support: Works with virtually every shopping cart, order processing center, order form and ordering system Payment Systems N/A Writes checks to Affiliates: No. But can use PayPal. Data Export: Exports to QuickBooks or other system for check-writing. (Customized for merchant's needs)

41 My Affiliate Program Affiliate ID generation: Yes. ed to affiliates. Banner/graphic management: Multiple banner support. Image is on merchant's site, but displayed to affiliates on Kowabunga's site. to affiliate after each order Yes (optional) Send to affiliates: Yes. Affiliate sign-up: Automatic and screened. Redirects to particular pages: Yes, in Pro version by category of affiliate. In both versions an entry page can be specified for an affiliate. Affiliates are able to link to any page on a merchant's site. You-Track feature shows display of the affiliate's code as a "telephone extension" or "department number" so that telephone inquiries and sales can give proper credit to affiliates.

42 Negatives of My Affiliate Program from users
Cannot edit set up once you set up. capabilities poor. Cannot manipulate data base not good for month-month statistics. No real problems -- install not easy, but not unreasonably difficult either It's only of minor importance but an affiliate can only access statistics on a monthly (including historical) basis. It would be great to enable affiliates to run reports against their specified date selection. Reporting features That is actually a hard question. I have looked at others (i.e. CJ, various in-house programs, etc...) and could rattle off what I don't like, most of which would be the lack of customizing to our needs. But I have not have had a single annoyance that could not be fixed on the fly or with a simple custom order to create a tool to meet our needs. So many new features being added that sometimes they don't always have the online help files up to date -- but this is very minor, most of the updates and improvements are very intuitive. Ideally we would have closed loop tracking where we knew exactly what ad, placed where, produced a sale. It used to take me a while to scroll to my last affiliate display page because we have so many of them; but I fixed the problem by editing the default type setting, now all my latest affiliations are type 5 , easy to access and in a separate folder until monitored, evaluated and moved to the appropriate level. Some things it can't do like track a second affiliates sale up from the first affiliate. Like a lot of other applications, the reporting features options/features could be more robust.


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