The DGM Administration Ripple Effect

There’s an interesting and important post about DGM and their administration over on Affiliates4U. The post reveals something about the administration and also comments about leaving links up especially as “you are unlikely to realise the value of the sales commissions you are generating”. It also appears that any rescue of the network will not be forthcoming.

Administration has a horrible ripple effect.

There are obviously those caught at the eye of the storm such as ex-employees and there are merchants who need to move to other networks asap. Plus of course, possibly a little too glossed over in many respects, there are the affiliates who could be losing out on significant and much needed income. Some may have PPC bills to cover, whilst others may be having a few sleepless nights until their merchants move or they figure out what to do next.

Cashback sites and their users are also caught up in this ripple effect. The reaction from affiliates to DGM’s administration has been one of a quiet acceptance, in my opinion, but hell most certainly has no fury than a cashbacker scorned.

In the firing line over on Money Saving Expert are Quidco who whilst quick to explain the administration then got both barrels and a lot more besides from unhappy punters. Their problems were compounded further when a rival site announced they would be paying up any monies owed from DGM affiliates.

What’s quite fascinating from the discussion though is the varying degrees of knowledge regarding cashback, affiliates and tracking. In some cases cashback customers didn’t know a tracking company, such as DGM or Awin, were the middle man.

The issues Quidco are having on the money saving forums also highlights one of the problems of doing “customer services” away from home and the relative safety of your own forums. Having tried to do it, albeit thankfully no where near on the cashback site’s scale, it’s not something I’d rank as a highlight of the working week.

Because of that, and many might be shocked by this, I feel a tad bit sorry for Quidco. They reacted to the situation as they saw right but then got battered and bruised by all and sundry for being perhaps too quick off the mark. Maybe they misjudged “what to do” but perhaps the blame really has to fall on the poor way the administration has been announced and the uncertainty of what’s happening (or not).

In contrast to DGM, Clash Media also went into the admin corner last week and immediately switched off their UK network links. That’s a pretty good indicator of “we’re not in right now”. Just as an aside to this it’s interesting to note that there’s been less comment and little cashback or affiliate furore over this particular network’s end, despite their ukprizedraw program being run via a number of other networks.

Anyway, at least today’s “unofficial DGM announcement” should bury any hopes of a reprieve or uncertainty about keeping links in place “just in case”! The start of August for some affiliates is going to mainly revolve around switching links. But here’s the thing – if you’re unhappy about that, stop and think “at least I’m not running a cashback site” (unless you are, then go and get the beers in).

6 Comments The DGM Administration Ripple Effect

  1. Antony July 31, 2010 at 10:00 am

    Not sure I have much sympathy for the cashback sites or at least the larger ones. Customers going bust is part of business and in the current economy its quite probable to occur.

    They had plenty of choices
    – take specific bad debt insurance
    – self insure (pay out themselves)
    – not deal with DGM if they had concerns (late payments for example)
    – do nothing and take the flak and potential brand damage

    Id agree this would be a bit much for smaller affiliates to get into but for larger ones they’ve taken all the money and seemingly ignored the risks during several easy years so now its time to see the real cost of their business model

    Reply
  2. hero July 31, 2010 at 1:22 pm

    there’s a lot of advertising/affiliate companies who are owed incredible amounts of money from DGM and they are severely strugling to keep the companies going – it’s not just the cashback sites, unfortunately.

    The damage to the industry will take some time to patch up

    Reply
  3. Simon July 31, 2010 at 8:40 pm

    Putting affiliate commission into client accounts should protect our cash. Contact your merchants and get them to ask their network to get this facility up and running asap.

    Reply
  4. Mark August 2, 2010 at 2:13 pm

    Totally agree Simon – In fact, I suggested the exact same thing to Equifax for when they get up and running with another network.

    Reply
  5. Andy Guest August 5, 2010 at 6:18 pm

    TradeTracker are currently in talks with a number of the previous DGM advertisers & are offering to pay back any money affiliates have lost in dgm sales if (and this is a big IF) those clients move to TradeTracker & the affiliates continue to run them.

    TradeTracker understand the impact dgm’s downfall has had on many affiliate publishers & would like to try to address this balance whilst increasing marketshare, the client feedback has so far been mainly positive & are hoping to launch a number of new accounts over the coming weeks.

    Any support affiliates can offer to make this happen would be greatly appreciated.

    Andy

    Reply
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