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The SourceForge Podcast is the world's largest B2B software podcast published to over 1.5 million subscribers across all major social media and podcast platforms, and to over 667,000 subscribers on YouTube. Interviews with tech and software CEOs, leaders, and changemakers. The SourceForge Podcast by Slashdot Media gives you insight into the cutting edge of software, B2B SaaS, and trailblazing technology.
SourceForge Podcast
All-in-One SaaS Affiliate Software: FirstPromoter
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FirstPromoter is an affiliate, referral, and influencer management platform built for subscription businesses, enabling companies to launch, track, and scale partner programs with billing-aware commission automation. By integrating directly with subscription billing systems, it automatically manages referrals, recurring commissions, payouts, and compliance, helping SaaS and AI companies grow partner-driven revenue with minimal manual effort.
In this episode, we speak with Tautvydas Vasiliauskas, Head of Marketing at FirstPromoter, about why affiliate and referral programs are especially powerful—and uniquely difficult—for SaaS and subscription businesses. The conversation covers how subscription affiliate tracking differs from e-commerce, why direct integrations with billing systems like Stripe and Paddle are essential, and how recurring revenue makes commissions, upgrades, downgrades, and cancellations much more complex.
Tautvydas explains that affiliate marketing works well for B2B SaaS because buyers usually research heavily before purchasing, making reviews, comparisons, and educational content highly effective. He also emphasizes that most programs follow a “small number of high performers” pattern: a tiny percentage of affiliates drives nearly all revenue, so companies should focus on quality partners rather than chasing volume through marketplaces.
The episode also explores how to launch a program from scratch, recommending that companies start with their own customers, power users, and niche creators rather than expensive large influencers. Tautvydas stresses that affiliate success depends on ongoing recruiting, not just initial setup.
Other key topics include fraud prevention, especially ad fraud and self-referrals, and the importance of convenience for keeping affiliates engaged—branded dashboards, clear incentives, easier payouts, and strong support materials all matter. The episode closes with a forward-looking discussion on AI, which is reshaping attribution, content creation, publisher quality, and affiliate management, while creating both new opportunities and new fraud challenges.
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Hello, everyone, and welcome to the Source Forge podcast. I'm your host, Bo Hamilton, and today we are getting into a corner of the SaaS world that I think is way more interesting than it gets credit for, and that is affiliate and referral programs. And here's the thing that surprised me digging into this. Affiliate is now the third biggest performance marketing channel out there behind paid search and paid social. It's nearly a $20 billion industry. But for a long time, it's kind of had this reputation as the internet's like used car lot, right? It was typically like associated with those spam links, coupon sites, a bunch of signups that really never do anything other than just harvest your information. But that has changed a lot over the years, especially for SaaS. When you've got reoccurring revenue, subscriptions, people upgrading and downgrading and churning, uh, affiliate tracking becomes this like really genuinely hard technical problem, but also a really powerful growth lever if you get it right. My guest today lives right at the center of all this. Um, that's Totvidas Vistelowskis, is head of marketing at First Promoter, which is one of the go-to affiliate and referral programs built specifically for subscription businesses. Um, and they've been at this since around 2016. They plug directly into billing systems like Stripe and Paddle, and they've tracked something like $2 billion in affiliate program revenue at this point. And Toads has spent more than a decade helping SAS companies actually turn these programs into real channels instead of these sort of, you know, pretty vanity dashboards. So he's got a pretty clear-eyed view of what works and what's just noise. So we're going to get into why subscriptions make all of this so much harder, what a healthy program actually looks like, how you fight fraud. And uh maybe the big one here is uh where AI fits into all of this, what it's about to do to this whole affiliate model, um, the whole industry. So we've got a lot to cover. Uh Totus, welcome to the show. Great to have you on. Thank you. It's very nice being here. Absolutely. So let's start at the top. For anyone who's hearing about First Promoter for the very first time, uh, how do you explain what you guys do?
SPEAKER_01So uh in a nutshell, uh we enable SaaS companies and subscription companies to run their partner programs. And uh in practice, uh, this means that uh we uh provide a tool to track, to manage our customers' uh affiliate programs and uh referral programs, uh influencer programs even. Um and the key point here is uh that we do it for subscription uh businesses uh specifically, right? And uh this is very different from e-commerce, and there are numerous uh e-commerce uh affiliate platforms, uh, for example. But uh as you mentioned, we've been doing this uh since uh 2016. We've been uh here for 10 years already. So basically, First Promoter is specifically designed to run on subscription and uh subscription uh model and recurring revenue model.
SPEAKER_00Gotcha. Okay, so you've been in the business for for a solid decade now. Um and you've been sort of your head of the curve in terms of what AI is doing on this front. Um, but be besides that, you're basically the way I can think of it is as you're basically the whole sort of engine behind a program. And you're not just focusing on uh the tracking links, but the the tracking itself, the commissions, the payouts, all of that in one spot, which um is honestly a lot more than most people picture when they when they hear affiliate software, I would say. Exactly.
SPEAKER_01Uh well, you know, tracking is only one part of it, and uh you have uh the campaigns that you have to run, you have uh different models of those uh campaigns, you have different models uh within those campaigns for for rewards, for commissions. You have uh numerous affiliates that need your attention, you need to communicate with them, you need to uh provide necessarily uh necessary material for them, and uh also you have payouts, you have a lot of administrative uh work. And uh uh First Promoter enables companies basically do that at scale and uh without the admin overhead that usually comes with all of this stuff.
SPEAKER_00Right, totally. I I I think you you you answered probably my next question I had for you, but basically I I I I want to focus on that all-in-one spot thing that gets that gets pretty tricky once um you know, once subscriptions enter the picture, right? Once you start working with SaaS companies, because it's a totally different beast than uh than a one-time sale. Um tracking gets more complicated the second you're dealing with subscriptions, you have the the reoccurring revenue problem, um, you have, or not problem, but just you know, uh dynamic upgrades, downgrades, people canceling at any given time. Maybe you can uh speak to that. What why does subscription affiliate software have to be its own separate thing from the whole e-commerce world?
SPEAKER_01So uh actually there are two main differences uh that uh well sets e-commerce and uh subscription affiliate software, right? So one thing is e-commerce affiliate platforms, they don't usually track signups. And signup is one of the key events in subscription businesses because you have users and and uh those users buy your service and they appear in your infrastructure and everything happens through that account, right? So uh if you don't have tracking for uh for that user signup, right, you lose a lot of information. So that's uh key point uh number one. Uh key point number two here is uh that tracking of the conversion itself. So when you have e-commerce affiliate platform, they usually integrate directly into order confirmation page. So once a customer uh pays, we get the order confirmation page, and uh that's how you know that uh you know uh the order was completed. So you have to integrate into that. Also, you have to integrate your tool into uh your order database because you need to know what's happening to that order later on. So basically, whether it's been canceled or it's completed or whatever you think of, right? And uh if you have a model where the same customer purchases more than once within the same account and doesn't get that uh order confirmation page, like we have with subscriptions, right? Because you pay once and it auto-renews basically all the time. So you don't have uh get those events. So uh if you use a traditional uh e-commerce software, it's a nightmare to set up that. And uh basically you would need at least two sprints of developer time just to set it up, not to mention the maintenance of all that. Because every time uh someone, for example, uh upgrades, right, you have to manually adjust that, provided that your software allows manual adjustments for the commissions. So you have upgrades, you have downgrades, you have cancellations, and there's a lot of movements, right? So uh this is the main difference uh between e-commerce and and uh subscription affiliate tracking. So you have billing events uh versus you have uh only one event with e-commerce. And uh generally, I wouldn't recommend anyone using uh e-commerce affiliate software for subscription businesses because it's going to be a nightmare to manage.
SPEAKER_00Yeah, yeah. It seems like there's a lot more um, you know, dynamics and things you have to keep aware of and a lot of heavy lifting if if companies were to go at this alone. Um and then uh yeah, just just you know, the whole e-commerce, you know, with e-commerce, the sale happens once, right? And you're done. But with a subscription, you know, it just it just keeps moving. Somebody upgrades in, you know, maybe three months, cancels in six months. Um the commission's gotta like follow all of that. It's just a totally different problem. So um I guess that sort of means that you can't really pull off any of that off unless you're like plugged straight into wherever the the money's actually moving. Um and that's that's why you kind of hook directly into Stripe and Paddle and these various billing systems, right? And when you do that, the I would say the stakes are pretty high because the whole SaaS sort of pitch runs on recurring commissions. Um, like an e-commerce's commission's usually around like 8% of an order, but on the SaaS side, you're taking like 22 plus percent of first-year revenue. So when the whole thing hinges on that number being right, how do those direct integrations actually keep everything accurate?
SPEAKER_01Yeah, so actually, this is the real issue, right? Um, if you somehow find a workaround to use a platform that it's is was not made for this purpose, you will have a lot of manual adjusting to do. And uh it will get messy. Uh, one way or another, it will get really messy. Uh so if you have a tool that can integrate directly into those billing events and get them live and adjust everything live, uh, it makes your life so much easier. Because uh I think we've all heard at least uh one or or two uh examples or or notices from our accounting teams, you know, about uh a payment that is slightly off. You know, that that's a nightmare for accounting. Uh and uh if, for example, you're a founder that's doing everything yourself, you know, you'll you'll spend so much time. So having the direct integration into those billing uh uh providers, billing solutions, uh really saves time and helps with a lot of headaches that are you know possible.
SPEAKER_00Absolutely. Yeah, no, I can imagine. I mean that's that's what it's all about. If you're saving, you're trying to avoid a headache with with the service that you're offering. I think that's like the biggest sales pitch. Uh so like okay, so you're basically reading the source of truth directly instead of guessing off of off of what what might be approached to you. If if something, if somebody downgrades, the commission just sort of uh adjusts on its own because you're like actually watching the billing event, you're tracking all these things. So to set the set the stage a little bit for this next question, um, affiliate's actually the third biggest performance channel right now behind paid search and paid social. It's almost a $20 billion thing. Um and SaaS affiliate is growing something like three times faster than e-commerce affiliate right now. So maybe you can just speak to the value of affiliate. Why can this become a real growth lever for SaaS specifically?
SPEAKER_01Yeah, so actually there's quite a bit of marketing theory behind this. Uh when you have uh SaaS business model, right size products, uh especially B2B SaaS products, um, people don't just buy straight away, right? Uh with uh B2C, with uh simple products, uh you have a very fast decision making from the customers. And most of the time it's quite emotional, right? You feel that need, you you want it, you buy. With SaaS products, and actually some of it also applies to high involvement uh products in B2C, like I don't know, buying a computer, right? Uh same principle, somewhat. When there is high involvement, you do a lot of research. And the research part is where affiliate marketing shines. So you have a lot of affiliates who do reviews, who do comparisons, uh, who talk about products, talk about uh updates, new as trends, and all of that, right? So you have a place where customer gets the information that they are looking for at that moment. And uh also uh one fun part if you're running a small brand, right? Uh having been being listed uh alongside your competition also at the same time works as a brand awareness shenanigans so you have affiliate marketing working for you as a brand awareness and uh uh basically appearing for uh in front of people in their consideration stage, right? They are looking for a solution. So uh these are kind of the most important reasons why affiliate marketing for uh B2B, for B2B SaaS, is really, really strong. And uh affiliate marketing, and because of all of this uh appearance in the consideration uh stage, right? It creates way more trust than, for example, ads. Also, on most of the time, not always, most of the time, it's cost uh more cost-effective than ads. Uh plus you always control uh p amount uh that you pay for conversion, let's say. Because with ads, you set spend and it happens what what happens basically. You you cannot control anything past that. You can optimize, but basically it is what it is. Uh with affiliate marketing, you strictly control the commission rate, you can control narrative, you can control spend, and uh basically it's the most cost-effective outcome that you can have within your uh within your channel distribution, right? So uh this works uh again, awareness stage, consideration stage, and you can control. So sounds like a perfect combo.
SPEAKER_00It does sound pretty good. Yeah, it's the most cost-effective sort of solution um in your channel. Um that's that's the rosy, you definitely painted the rosy version of it. And I I want to flip the flip the um script a little bit because affiliate programs sort of have this um reputation problem, right? There's tons of signups and then a whole lot of people who just like don't do anything with it, I guess. And the numbers sort of back that up. I would say that the top 10% of affiliates end up driving like two-thirds of the revenue, which I found pretty staggering when when researching this industry some more. So, what does a normal program actually look like? Like, what should people realistically expect walking into this?
SPEAKER_01Uh, you're actually really close to the number. So we did uh our own research research on our uh well uh customers and and affiliates. So it's for us, it's around 7%. That brings uh in about uh 95% of all performance. Uh but uh we have a main difference again uh here from e-commerce uh and B2C market, because in B2B, you don't need volume, you need quality, and uh focusing on a few affiliates that can create uh most doubt, right? That is the most important part. And uh we we see this a lot, right? Uh customers wanting for uh big marketplaces, for networks, uh for any uh easy way to gain uh publishers, right? To to attract affiliates. And uh this rarely brings any positive results because most of them are inactive. There are some reasons how uh why they are not active, right? But um, as as you said, uh usually there's a lot of affiliates who do nothing. So uh instead focusing on the quality ones, uh this is the way to go. And uh you have to kind of live with that fact that you know it's going to be a small number of your all affiliate base that uh uh will perform and uh just give them everything they need to promote you, right? Um but uh we are seeing some interesting trends. So, for example, uh we are seeing way more social media creators entering uh B2B SaaS uh affiliate uh marketing. Uh YouTube has been booming with uh B2B SaaS uh product placements. Uh we have this whole AI products uh trending uh that are heavily driven by affiliates, by referrals. So the market is evolving and this is changing. Uh not at the rate that, for example, e-commerce is, right? But still we are seeing some movements uh there. And uh yeah, uh that number might look interesting, especially for someone who has never done B2B uh affiliate marketing. So those five, seven percent, they they might look scary.
SPEAKER_00No, I I totally see that. I've I've been uh noticing that more as well, just with uh with YouTube, like you mentioned, and and some of the podcast advertisements on on Spotify and elsewhere. Um they're a lot more B2B focused um than I would uh normally see or hear about. I mean, part of that could be because it's the industry I I I focus on, but um I think that it really is starting to become more um you know influential um amongst influencers. So um yeah, there's definitely some some definitely truth to that. And then also what you're saying, I think it was interesting about, you know, you really do want to focus in on the the 7% of of um the you know the users that really do take advantage and and are make up the um most of the the revenue for affiliate programs. I was thinking maybe you want to bring up sort of the other the the other 90% that um aren't as active. And I'm sure that's that's part of it as well, but you really want to focus in on the the people that are really using it and utilizing it most.
SPEAKER_01Yeah, and uh by no means should you abandon the rest, right? You still have to work with them and uh and uh uh recognize the potential that we can bring, right? Uh so basically by by looking for opportunities, by looking for close matches and and relevance to your product, to their audience, and uh making those matches, right? You you still have to put in the work. And um there are a lot of uh companies and teams that we think, you know, uh if I onboard this affiliate, if I recruit this affiliate, this publisher, uh they will do everything for for us, right? There's no other work involved. And this usually is quite false, and uh kind of that's you know why we have these numbers. Because uh I don't want to say that uh those teams don't put in the work, but perhaps they are not doing it right or or they're not engaging with those inactive uh affiliates as much as they should be.
SPEAKER_00Right. And there could be a million different reasons why. I mean, um, yeah, I I think that makes sense though. And um, I'm curious though, so if a few partners are really gonna do most of the the heavy lifting, let's say, that that sort of does change how you would recruit future partners. Uh when you start, when you're starting from zero, how should a company think about tracking down the right people, like the right influencers, the right partners, maybe your own customers? How does that change the dynamic there?
SPEAKER_01Yeah, so the first instinct is always go to a marketplace, right? And uh miracles will happen. And that's a paradox. Uh marketplaces expose you to a lot of publishers. Also, a lot of publishers are exposed to brand. And this uh is problematic, especially if you are a small brand. There's so much noise that no one will pay attention to you. And if you do reach out through the marketplace uh to some affiliate or other, right? Uh there's a high chance that at least hundred or more brands also reached out through that marketplace. Again, noise, right? So uh standing out in the marketplace is really difficult thing to do. And if you're starting out, uh you most likely, not always, but most likely, you will not have much success. So uh second step that uh usual uh brands usually do is uh trying to contact like really, really popular creators, and uh then they are faced with the reality of enormous budgets, uh radio silence, because you know, again, there's a lot of people who want to work with them, and you know, there's a queue, so you just have to wait in line. Uh so you know, and actually, this is the uh part where uh teams start to give up. Right? They they tried affiliate marketing, it didn't work for them. Uh so usually what you should start doing is look at your own customers. Uh and I know, you know, uh this is a bit of a mixture between referral marketing and affiliate marketing, but they go hand in hand if you do them right. So uh first thing you should do always look at your customer base, look at your power users. Uh try to uh try talking to them, right? Introduce your your affiliate program, your referral program, uh, offer right incentives, uh, because most likely they they'll want to talk about you, right? And uh again, uh kind of a hack. Uh usually power users have peers that are also power users. So perhaps you know uh you can have this little network which will later on expand onto something better, right? Because once people start talking about you publicly, you will gain more attention and more people will want to talk about you, right? So this is an easy uh easy way to start with. Uh the second part that you should do is focusing on niche uh affiliates, niche creators, niche publishers. You don't need an influencer with, I don't know, two thousand two hundred thousand like followers, right? Starting the ones that have thousand, ten thousand. That's more than enough for the start. And that will be most likely quite expensive, right? But it's a good place to start. Test out a few of them. Uh focus more on uh niche publishers that are doing SEO content. Try to onboard those. Don't go all in like right away. Just small steps at the beginning. Uh find the right niches, find the right uh uh people who talk about uh Either your niche or something close by, and that would be a really good place to start. And uh I think the most important part that a lot of uh affiliate marketing managers, marketing managers, and founders do they think that they will do initial uh recruitment and that will be it, right? But the key of uh good affiliate marketing uh is always always was and always will be. You always have to be recruiting, right? That never stops. So I think these are the most important uh steps and and uh points of how to start with your affiliate program.
SPEAKER_00Yeah, that's some great information. I think that makes a lot of sense. I mean, you if you you try to stand in the marketplace, but there's a lot of competition, you contact the really you know popular uh influencers with like let's say millions of followers, they're not gonna they're not gonna respond. Let's say that they already have their own affiliate partners lined up. Um so yeah, it makes sense to kind of to follow and like reach out to your to your customers, the people that you know are happy with with your their experience. Um they already use the thing, they actually, you know, mean it when they recommend it. I think that's uh that authenticity is really um important nowadays. Um and something that people are really, really valuing because we're we're being overwhelmed with with advertisements and um promotions and uh referrals. So it's like if they really are uh mean it and they're genuine about it, I think that goes a long way. Um and then I think what you're speaking to about the the go for the kind of the niche, the smaller creators, I think makes a lot of sense too, because not only, you know, will they maybe like take you more seriously, like look into working with you, but you if they do work with you, uh they'll they'll you can grow with them as well. And like a lot of times some of my favorite creators, they they they use the same affiliate, they see they use the same partners, they use the same affiliate codes, and they've been doing so for for months and years. So um I think that has a lot of upside to. Um and it's a win-win. It's a win-win for the small creators. As a former you know, small creator myself, like it's um we we love like uh working with a with a really you know successful brand, having a really tight partnership is is a win-win. So um, yeah, yeah, great information. Um, so the next question is I have for you is like, let's say you have the right people signed up. Um, then you have to kind of worry about the the day-to-day operation. Um, that's the tracking, um, the commissions, the payouts, all the reporting. And I feel like that's the part where a lot of users start to get kind of overwhelmed, right? How does the right platform take all of that off of somebody's plate?
SPEAKER_01The truth is that you can run uh an affiliate program with pen and paper. Uh I launched my first referral program on Google Forms, basically. You know, you don't need the software to do this thing. What you need is when you want to scale. And uh if you have one or two affiliates, you know, you you can do everything by hand. But if you get 10 or more, this is where it becomes complicated. So uh basically uh you start needing software whenever there is more action involved. So uh if you get more clicks, right, you need to view those sources. You can do that via analytics, but you know, uh if you do it uh through uh platform, you can attribute embedded. Uh you get signups, so you need to connect those signups to those clicks, and uh if you convert, also you have to basically lay everything out. Uh then uh you have uh a moment where you need to pay the commissions. So if you need to pay only one commission, so that's kinda easy, right? But if you have to pay 80 different partners, so you have to calculate everything by hand, you have to look for the right emails. If you live in Europe, if you if you're a European company, you have to ask each and every promoter or publisher for an invoice to be able to pay them out, right? If you live in the states, if if you're a US company, you need to gather tax funds, right? So imagine trying to do that with 80 different people, right? Someone will not respond, someone will ignore you, so you will have some overdue payments, you will need to keep track of that. So this again becomes a nightmare really, really fast. And uh tools like Source Promoter and and and uh all the tools that follow, basically we we do everything for you, right? And this is the magic. So all of that admin overhead just you know becomes few button clicks. And uh you don't need to track any uh billing event changes, you don't need to uh do manual invoicing, you can pay out everyone with a single button click and uh again, uh getting back to e-commerce uh uh example, right? So or a simpler, just a simpler platform that wasn't meant for for recurrent revenue.
SPEAKER_00Yeah, yeah. No, that that becomes a lot of work. I mean, basically, like the system just handles handles everything. You don't have to have somebody looking over spreadsheets and and um cutting checks and tracking people down, trying to get the information they need. Um I could just see how that would be a total a total nightmare and just turn into a ton of uh a ton of like wasted time, time that you'd rather spend elsewhere.
SPEAKER_01Exactly. And and and yeah, remember my previous point, you always have to be recruiting, right? In order to grow your uh affiliate program. So how do you manage recruiting and massive admin overhead, right?
SPEAKER_00So Yeah, yeah. No, that's that it becomes just a lot. It becomes a second, you know, full-time job, it seems like. Um so okay, so that that's um I want to look at the the fraud side of things really quickly here. This is this is one I think that you know freaks people out and and for good reason too. Invalid traffic and affiliate fraud cost the industry something like $3.5 billion last year. Um, and that's around 17% of all affiliate spend. And then there's the the speed element too, catching it by hand, let's say takes something like 18 days on average versus a couple days if it's automated. Um, so it's it's a it's a it's a problem, and there's a reputation um for for like very real reasons. Um so my question is like, what does fraud actually look like in a subscription program? Um how does that change to something like the e-commerce market? And and where in the mix should you be be looking out for it?
SPEAKER_01Yeah, so affiliate fraud is I don't know, I want to say that it's even older than the affiliate marketing itself, right? It it evolved from something. Uh but uh with e-commerce, uh, because we we always have to, it came first, right? So we have to naturally come uh look at the e-commerce example, right? So uh the oldest examples uh were uh click fraud, uh credit card fraud and cookie stuffing, uh, and uh briefly explaining all of those. So uh with uh click fraud, so basically just sending fake traffic or hijack traffic uh if if you're doing uh ad fraud. Uh for uh credit card fraud, so basically just uh malicious actors using stolen credit cards, cashing out to be commissions, and and uh uh well leaving everyone to deal with this situation. And with cookie stuffing, so basically you uh you know those pop-ups when uh you visit a site and we said that we found a coupon, for example, right? If you click that button, that's when you get their cookie and they claim the commission because they did the work, right, of bringing the customer to the product. So uh there are numerous other examples with uh cookie stuffing, but this is the most popular one. And for example, if you're uh search for brand plus coupon keyboards, right, and and see a coupon listing, again, clicking that button instantly uh you get the cookie and they claim the commission instead of someone who actually put in the work, right? Or uh for B2B SaaS, this is a bit different. For example, credit card fraud is not that prominent. And this is because uh you have subscription, you have recurring payments, right? And uh that would not work because recurring uh payments usually get noticed really fast. So you know there's no money involved here, at least something. It does happen for sure, but not at that scale. Uh and uh cookie stuffing, yeah, it happens, and uh because you know uh coupon sites and and similar stuff like that always have their thing, and they they do offer coupons for B2P uh products as well, so that happens. But the most prominent uh one in B2B SaaS is uh ad fraud. So basically, uh it's when certain actor bids on your brand name, and instead of your uh brand link, we put in their affiliate link, and uh they get your branded traffic. So some someone was already searching for you, and basically we just hijack that uh search, right? And they get bid for that. So uh this and uh uh and uh uh self-referrals. Self-referrals, it's not a fraud per se. Uh it is categorized as fraud, but uh usually when uh someone uh wants to buy a tool, they sign up to your affiliate program and they buy the tool for themselves with their own link, right? So it's not, you know, there's no like huge thing that someone can do self-referrals a lot, but there's a lot of people doing that. So this creates scale, right? So you all also have to look out for this. So there are tools. You can do this actually manually. Uh in Turse Promoter, we have both of these built in. So we always monitor if the traffic comes from, for example, Google Paid or or uh any other paid account, right? Or if um if we see a potential match with who signed up and who is the affiliate, right? So we always flag these things because these are the most uh common ones, right? And uh the scale differs uh from e-commerce because again, I I don't want to say that it's more complicating to do. Uh it's not more complicated, it's it's perhaps not that prominent. Uh but uh there are some examples in B2B where uh some campaigns were set well without proper consideration and they got really um frauded, let's call it that. So uh this uh most likely happens uh on uh lead campaigns when you pay not for the current version but for the lead, for the broad lead. And uh uh if you have such a campaign, always make sure to monitor it. What traffic comes in, uh what affiliates are bringing in the leads. Are those leads legit? Are they fake? Uh, because you know, uh anyone can create like a hundred Gmail accounts and start signing up, right? And and cash out of a commission. So uh you always have to look for the uh for the quality of the leads, uh, look at the traffic, where is it coming from, and always be wary about uh potential credit card frauds and uh someone trying to hijack your affiliates hard work.
SPEAKER_00That that's uh that's those are all good points, make sense. And I uh I was just thinking of um so the self-referrals, um, like you said, it's kind of they classify as fraud. Some of the affiliate programs I've used um on the uh uh like as an influencer, um, one thing they kind of frown upon is is um referring, using an affiliate link for like friends and family. Is that also something that you kind of you know watch out for, or is that less of a problem?
SPEAKER_01It depends. Uh and um usually uh we see or at least we encourage companies to have a proper uh referral program, right? So it's a bit different from affiliate program, but uh, if you can uh get your customers or your potential customers or the influencers uh or or any other affiliates uh motivate them to use that instead of uh affiliate program, you can clearly separate them. And with uh with referral programs, you can do a bit more uh because you uh at least in in first promoter, you have double-sided rewards. So you can reward uh not only the uh customer who referred, but also the person that was referred, right? And for example, uh give a certain uh reward for the uh for the people who brought the lead and uh give them the the lead some I don't know, discount or or credit or or whatever your product does, right? So in in that case, it wouldn't be necessarily bad if they referred uh their friends or family, because you know, at the end of the day, they are still users. If they are using that, that makes sense, right? Uh but with uh affiliate program, you know, uh it might be, as you said, frowned upon. But uh these are usually the uh decisions that brands make for themselves, and there's no clear standard. So if you want to allow that, go ahead. Uh I would suggest having uh customer referral program and affiliate program running side by side.
SPEAKER_00Okay. Um and I really the the key though is just you know, the whole trick is just catching all this, all the self-referrals, the fake sign-ups, that sort of thing, um, you know, before the payout goes out, not sort of clawing it back, um, and then building that sort of um you know mechanism to catch potential fraud um uh at the first place, at the source, instead of you know sort of babysitting it manually and and working backwards. I want to look at the operator side of things. Um what what actually keeps the affiliates engaged and promoting you? Like is it the branded dashboards, is it the reporting, custom links, coupon codes? Uh maybe it's like just getting paid quickly. Um maybe it's all the above, you know. I'm sure all the above is uh is appealing, right? But which one do affiliates really enjoy?
SPEAKER_01So yeah, I I think uh all of all of the above, right? Uh but I would use one word instead, convenience, right? So you have to make everything comfortable and convenient. Uh and uh starting with branding, right? You have to have branded assets, right? You you have to have branded dashboards because uh the partner has to feel like they're promoting you, not someone else, not some random software, but you. So use that branding, use the ability to brand your dashboards, your your layouts, fonts, whatever, whatever works for you, right? So create that feeling that uh that they are representing you in some way. If you're using referral programs or have a need or you want to have the affiliate dashboard in your product, do that. For customer referral programs, it's kind of a necessity because it doesn't make sense to send the customer, your own customer, to some other tool to log in there, you know, and do the referral. So have that within your own uh product embedded, right? Affiliates usually like the separate uh login, so we don't have to log into the product. Again, convenience. Uh create coupons, uh personalized coupons. Make it easy for them to reach. Uh use deals. I mean uh provide deals to the to the affiliates, like clearly state the what's going on, what you are going to do, what you will get. Uh create incentives, uh some promotional material. I think this is uh where some brands lose the most, right? They create some promotional uh material. We upload the logo to the platform and we just expect that the publishers will stumble upon that, right? Uh so tell them about it, right? Make it convenient for them. And payouts for sure, that's the most uh the point where most friction happens, right? If it's inconvenient to get a payout, if you have to go through all of this process where you have to do numerous steps to get paid out, you know, they won't be that motivated to promote you, right? And uh, for example, again with invoicing, this happens so often. If you're a European company, uh your publishers have to send you an invoice. So that means we have to know how to generate an invoice. We have to have the necessary taxation identification codes or whatever we need in order to provide those invoices. So uh it's such a struggle to do that, right? So make it convenient for them. And uh that that is the most important part.
SPEAKER_00Got it. Okay, so yeah, there's a lot of things, but convenience is what affiliates really are looking for. That makes sense. Now, um that's okay, so that's like the the the state of where things um sit today, what a well-run program looks like. Um, I want to close by looking ahead a little bit and looking at what AI is doing because AI is about to scramble a lot of these uh sort of assumptions all at once. It already has. Um AI's hit uh the affiliate marketing side of things from like four different directions at the same time, it seems. You've got these AI overviews that are that are gutting traffic to the review sites and the bloggers, um, affiliate and how-to sites are seeing drops in like the you know 30 to 60 percentage range on the queries that triggered them. Meanwhile, affiliates are using AI to to crank out content uh by the boatload. You know, there was a there was a 28% jump in AI generated affiliate site signups this year alone. Um, and then on the other side of things, AI run affiliate management, the management side of things went from 18% of programs in 2024 to 67% by earlier this year. Um, and you know, keep in mind some of these numbers might you know differ here and there by some percentage points. I'm here, I'm curious to hear your take on the latest numbers. But um, the the fastest growing group launching new programs is the AI native SaaS companies. So I think that's pretty interesting. But um, out of all of all of that, which which force really matters the most? And where do you think this whole market lands in a few years? Where is it all headed?
SPEAKER_01Yeah, so I think the biggest issue right now, the for all of the AI transformation lies within uh attribution, right? Uh because of AI overviews and LLM overviews and and uh easy access to information, web publisher type of affiliates, we are losing a lot of traffic. Even though they are still the main source, well not the main main, but one of the main sources for those citations, right? Uh we're not get getting credited for those citations. And actually, uh one uh this is a fun part. If you want to get cited on those AI overviews, do affiliate marketing. And it it doesn't matter which part, all of it at once would be best, you know, but you can be picky. But if you do content affiliate, uh if you uh if you do SEO affiliates, if you do YouTube especially uh affiliates, you know, you will get cited more. So that's a fun part, you know. This uh uh affiliate marketing is a huge part of that. But uh getting back to the topic, so and we are actually seeing that a lot of SEO uh type affiliates they are kind of moving to YouTube more because people still watch videos, even though they have like uh AI written answer in front of them, they still want to watch the video because it's more engaging, it's more entertaining, and you know, it's just better for most of the people. And you can still use uh links in the description, you can announce coupon codes, and uh, this is where the tracking happens. So, you know, we are seeing that shift from uh web content publishers to uh YouTube creators, right? So that's one part. Uh another part is getting published on those, uh, for example, SEO comparison side, right? Usually uh in the past you were just paying the commission. But because of this shift, uh those uh those publishers are starting to ask for more placement. So something that you pay like a one-time fee or a monthly fee instead of uh performance uh part because we don't get the clicks. The clicks do not happen. So this is an issue that the whole industry is facing right now, and uh we are seeing some movements and and some ideas come up how to deal with it, but uh we're still not there yet. There is not a good solution currently in the market. Another thing with those AI overuse is again, uh same with uh your affiliates, people like convenience. So we don't actually want to do the research themselves, we want to uh put something into LLM and get the answer, right? Uh and I actually uh did uh research last year about this exact topic. So basically, how much do people trust uh and use AI to uh make the purchasing decision for them uh when buying uh again high-envolvement goods. So it can be anything from uh expensive electronics or or it could be also applied to B2B SAPs. So people don't trust AI as much as a real expert, but the convenience part outweighs the trust gap, right? So people are more inclined to actually use AI to do the research for them because it's more convenient. The uh it's called perceived effort is lower. So yeah, that that is um why everything. Is shifting, especially with content affiliates. Another thing is uh you also mentioned this AI generated uh content sites, right? You can like I don't know if if people are uh familiar with the term, uh it was called PBN. And uh PBN is a private blog network, right? And that means when you create a lot of sites and you interconnect them together and create this fake network of websites that look legit, but they're not, right? And this was uh SEO thing from back in the 2000s, right? It it's again all this as whatever. And it's coming back. Uh Google and other search engines, we were very, very cautious about this, right? They were trying to spot them, they were actually doing a really good job. But now the scale of it, uh, the search engines cannot actually keep up. And and if you do it uh right, you know, you can pass by all the filters. If you don't, you can just spend, I don't know, 10 more minutes with cloud code and have another VB and write. So this is also uh quite an issue in the market. So fake publisher uh issue is coming back and it's coming back with uh uh bam. We also have a lot of YouTube creators that are not YouTube creators, that's someone spending some time with uh AI agents to create the script, the video, uh, and everything. We can even fake the comments that would look engaging, right? Uh back in the day when it was just bot comments and and all of that, uh people, you know, well not people, someone using bots, they were just coming, uh commenting great video or or something like that. Something short that you can automate and and not think too much about. Now you can contextualize it, and that's another layer of uh you know having trouble spotting uh these fake publishers. So uh yeah, AI is changing uh affiliate marketing in many ways. And again, we have this uh we had this with SEO, right? And everyone was screaming, oh my god, uh AI is killing SEO. No. Uh now we have the same with uh affiliate marketing. AI is killing affiliate marketing. No, it's changing it, right? It's evolving. So uh because if you take it apart, all of the uh AI citations and all of that is just SEO plus affiliates. We don't create information, we just script that information that is already available, right? We we don't create anything themselves. So they just uh cite and reuse the information.
SPEAKER_00Yeah, no, absolutely. Um just so uh there's just so many uh interesting points you made there. And and um I it sounds like YouTube is really uh a huge vector for for this, um, and getting it kind of uh it's like the new frontier for for really maximizing affiliate um marketing, it sounds like um and kind of getting around that sort of attribution uh issue with with AI overviews, um, but also at the same time it presents its own issues with with people you know using AI to script videos, you know, fake comments, fake um, fake analytics, like just fluff up the the the views and whatnot to to seek out the goal of maximizing the profits. It's uh you're kind of playing whack-a-mole with with the fraud aspects, and and uh you kind of have to just adopt to this new this new standard instead of sort of just like revolting back to the the the way things were.
SPEAKER_01Yeah, and uh, you know, this was always present at uh some level, right? But the AI is just enabling to do it at such a scale that it's really hard to keep up. And actually, we do have the other side of it, right? All the AI businesses that are popping up. And again, we are mostly not always, and and not only, but we are driven by referral and affiliate marketing. So that's why the market is increasing. Uh, we have uh AI assistants, and we're actually about to launch our own experimental AI assistant that can do uh all of the uh administrative work for you, right? So that also frees up uh well time for vetting the partners, right? Like trying to spot that uh fake publisher problem, right? Uh and uh there are some innovation that is helping this uh market grow, right? And it's not all bad. So again, it's evolving, the market is growing, the market is uh changing. Uh so our job as affiliate marketers and and marketing managers is to adopt and find the right solutions to that. So uh I'm not looking at this AI uh evolution as a negative thing, right? It's changing things, but not necessarily for the bad.
SPEAKER_00Yeah, no, I I think uh you gotta you gotta find a way to adopt and and integrate some of these AI tools um and uh uh just grow with the changes. I mean, that's only that's kind of all you can really do. Um you can't be stagnant in this industry. Um you mentioned you're you're launching this AI tool um to spot fake promoters. Um maybe you can, I don't know, you could uh plug listeners and viewers um who are interested in learning more about First Promoter and following uh you know follow what you're building. What where's the best place to go to stay up to date with everything you guys are doing?
SPEAKER_01Uh so just a quick correction we are building uh AI assistant to manage your uh affiliate programs. You still have to do the wetting yourself, unfortunately. Uh it's getting more uh it's getting harder to spot fake publishers even for ourselves, right? Uh as humans. Uh so right now uh AI can flag certain things that might stand out, right? Uh for example, uh with YouTube, right? Uh you can always check the growth of views. Uh and uh there are some free tools, there are pay tools, you you can do that, right? So if you can spot the f some fluctuations, because normal video will never perform like steadily, right? There will be some fluctuations. So you so you'll see those patterns that it fluctuates. If you see a steady growth, you know, that's easy to spot, right? But with automation, it's uh it's getting to spot uh harder to spot those signals because uh usually you could send those signals to some, I don't know, your own AI agent that would flag this as you know potentially fake publisher, right? But now it's again getting harder to do that. And uh I would not really trust uh AI to do deep vetting uh for uh affiliates for early for first stage vetting, yeah, go ahead, right? Go go right ahead. It it can do that. For uh deeper analysis, unfortunately, we as affiliate managers will have to do that for ourselves. But AI assistants can do the management work for us while we are vetting the potential promoters.
SPEAKER_00Which is a very important uh thing. And it gets back to that convenience um thing that we keeps keeps coming up. Okay, so you're you're launching this AI assistant manager. Um for those interested in learning more about the manager tool you're coming out with um and all the other things you're building, where where should they go?
SPEAKER_01I would suggest going to firstpromal.com. We have a change log. You can always see what's coming up uh and what has already been released. For AI Assistant, it's already well it's uh experimental version is already in uh the dashboard. So you can go uh to settings and there you will find a toggle for AI assistant. But yeah, it's uh right now in experimental, uh, but hopefully we will release the beta version soon. And uh basically it will be able to tell you everything about the product uh for how to use first promoter if you are unfamiliar with some of the features. It will be able to create campaigns for you, uh create uh email outreaches and and basically everything that you can do yourself uh on first promoter. AI assistant will be able to do that via prompting, except for financial operations, because we don't want to mess with that. Please do it yourself.
SPEAKER_00Well, that's uh that's amazing. Okay, so firstpromoter.com. We'll put a link down below in the description and in the article over at SourceForge.net. Um and then yeah, hopefully we can you know maybe follow up with you one of these days um later this year or something and and or even do a hands-on demo to see a first hands-on view of of this AI assistant manager. I think that'd be pretty neat. But um until then, you've offered, you've given us a ton of information, um, really valuable information. I've learned a lot about this industry. Um, and I just appreciate everything you've you've shared with us, Totividas.
SPEAKER_01Yeah, thank you for having me.
SPEAKER_00Absolutely. Yeah, and and hope to see you back on the show again. Um, uh, listeners, if you want to get in contact with Totividas, um, head over to LinkedIn um and uh yeah, add him to your network. I'm sure he'd love to talk with you and get you connected. With that said, thank you all for listening to the SourceForge podcast. I'm your host, Bo Hamilton. Make sure to subscribe to stay up to date with all of our upcoming B2B software related podcasts. I will talk to you in the next one.