20/06/2014

By Ami Spencer, vouchercloud.com

New data released by the UK’s top money saving brand has revealed that almost all brands who provide discount codes are concerned by the level of control they have on their codes getting leaked, with half of brands unaware of the protection available to prevent this from happening.

The money-saving brand undertook the research in order to uncover the issues faced with affiliate marketing from the perspective of the retailers and the affiliate. According to the study, the issue of leaked codes, otherwise referred to as ‘viral’ codes, has become so prevalent that 70% of brands were concerned over the unauthorised leak of discount and promotional codes.

The research, conducted by www.vouchercloud.com, questioned over 250 brands from marketing and e-commerce retail sectors. Of these respondents, 70% were concerned over the unauthorised leak of their discount codes; with 52% unaware of the support available to them which can help restrict their distribution.

Participants in the study were initially asked whether they implement exclusive offers, which are intended for a closed user group or specific marketing channel. Those who said that yes, generating discount codes was part of their regular marketing activity, were then asked whether they were concerned about that these specific codes being leaked via the web or social media, resulting in a far higher uptake than anticipated. A third of respondents (30%) said that they weren’t concerned about this risk, instead seeing the chance of leakage as increased exposure for the brand in question. The remaining respondents (70%) who had admitted that they were concerned about unauthorised distribution of discount codes were then asked to identify their main concerns. The team found the following top three widespread concerns brands have about the unauthorised leak of their codes:

1. Negative influence of brand perception — 73%
2. Lack of control due to increased level of redemption — 53%
3. Damage to prestige & exclusivity of code / Customer loyalty — 38%

In order to further explore the issue of control and how these concerns might impact the future of promotional codes, the survey asked all concerned respondents: “Do you actively take measures to protect your codes from leaking and viral uptake?” to which 80% of brands said that they didn’t. These respondents were asked why they didn’t put any measures in place, to which over half (53%) stated that they were unaware of the support available to prevent codes from unauthorised leaking. A further 37% of brands revealed that they had a lack of internal technology required in order to control the spread, with 14% stating that the spread was too quick for them to control.

The respondents were then asked whether they were able to implement single-use codes in an attempt to battle the leak of codes, to which over half of brands (52%) said that they did.

Finally, when asked if they had any further comments, 95% of respondents alluded to the need for more control in the industry as a whole on ‘viral’ codes.

We embarked upon this study as we wanted to gauge the perception of using social codes and the impact on the brands when they are leaked. As far as we are concerned, codes generated are intended for a particular audience and that they should stay that way. The way to combat this is through the promotion of single-use codes, which is something we are strong advocates of.

We believe that ‘viral’ codes have caused damage to many retailers and affiliates, who have had to pay commission for sales generated from codes that were distributed in an unauthorised way. This doesn’t seem fair for the retailer or their customers when the code could have been generated for a specific purpose or a specific redemption, for example in order to reward the loyalty of long standing customers. We are firm believers in the promotion of single-use codes and approved content, which works to combat unauthorised use and regain exclusivity. We have a track record of using these successfully owing to our work with the online fashion retailer, ASOS. The subject is something the industry should be far more aware of and we happily educate the retailers we work with.