Having worked with many different types of companies on their paid search compliance strategy, I’ve seen my fair share of program abuse. Paid search abuse takes many forms and involves a variety of bad actors, including trademark abusers or affiliate program violators.
With the rise of referral programs that reward users for referring new members, a new type of abuse has emerged. Referral programs are a useful means of acquiring new customers and users. By encouraging word-of-mouth with incentives, companies can accelerate growth at a reasonable and consistent cost. Referral programs are also a great way to transform loyalists into full-fledged brand ambassadors. With the opportunity to gain some extra perks, these star customers can bring on a lot of incremental traffic and revenue.But is the traffic always incremental? I frequently see referral members running ads on a brand’s trademarked keywords using the brand’s display URL. In the example below a search for “tesla referral code” serves up an ad that looks like a Tesla ad – not a referral user’s ad.
But when the consumer clicks on the ad they land here:
You’ll notice at the top of the page that the url is a referral link for Jacob, rather than Tesla’s homepage. This is the link Jacob uses to earn credit for referring new customers. Most referral programs, however, restrict referrers from running paid search ads on branded keywords. Why should Tesla pay Jacob for a prospect that was already aware of Tesla (ie. they did