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Governance Mechanisms in Internet-Based Affiliate Marketing Programs in Spain

Author

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  • Paul B. Fox

    (ESADE - Ramon Llull University, Spain)

  • Jonathan D. Wareham

    (ESADE - Ramon Llull University, Spain)

Abstract

Internet-based affiliate marketing programs have emerged as one of the fastest-growing methods for online retailers to acquire customers and increase sales by tapping into the power of independent web sites to reach a large, diverse audience of potential customers. However, while these programs have proven effective in increasing website traffic and sales, illegal or inappropriate activities on the part of affiliates could negatively impact a retailer’s brand in the eyes of customers. This study is an exploratory analysis of governance mechanisms (formal contracts, partner selection, incentives and monitoring) in one-to-many affiliate programs in Spain. Agency theory and transaction cost analysis provide the theoretical background. The conclusion is that there is a significant lack of transparency in the guidance and restrictions communicated to affiliates, and a lack of systematic monitoring of affiliate behavior, which increases the risk of opportunism or misconduct. General recommendations for managers of affiliate programs are considered.

Suggested Citation

  • Paul B. Fox & Jonathan D. Wareham, 2010. "Governance Mechanisms in Internet-Based Affiliate Marketing Programs in Spain," International Journal of E-Business Research (IJEBR), IGI Global, vol. 6(1), pages 1-18, January.
    • Handle: RePEc:igg:jebr00:v:6:y:2010:i:1:p:1-18
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    Cited by:

    1. Syrdal, Holly A. & Myers, Susan & Sen, Sandipan & Woodroof, Parker J. & McDowell, William C., 2023. "Influencer marketing and the growth of affiliates: The effects of language features on engagement behavior," Journal of Business Research, Elsevier, vol. 163(C).

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