Q: Please advise regarding online affiliate marketing programs:
Affiliate marketing is a type of marketing in which a business (the merchant) rewards an “affiliate” (marketer/advertiser) for each customer he brings to the business by his own marketing efforts. For example, Company Z (the merchant) sells only kitchen appliances online. They run an affiliate-marketing program where Umar (the affiliate) can advertise the merchant’s website on his own website, or other places on the internet – all for a monetary remuneration. Umar puts up an advertisement for Company Z on his own website. The following options are available for Umar, please advise on their permissibility:
1. Pay-per-sale (also called cost-per-sale): In this arrangement, the merchant site pays an affiliate when the affiliate sends them a customer who purchases something from the merchant’s website (in this instance – kitchen appliances). Some merchant websites pay the affiliate a percentage of the sale and others pay a fixed amount per sale. Is this permissible?
2. Pay-per-click (cost-per-click): In these programs, the merchant site pays the affiliate based on the number of visitors who click on the link to come to the merchant’s site. Even if the visitors do not buy anything, the affiliate will still be paid for referring them to the merchant’s site. Is this permissible?
3. Two-tier programs: These affiliate programs have a structure similar to multilevel marketing organizations (also known as “network marketing”) such as Amway or Avon, which profit through commission sales and sales recruitment. In addition to receiving commissions based on sales, clicks or leads stemming from their own site, affiliates in these programs also receive a commission based on the activity of other affiliate sites which they refer to the merchant site. Is this permissible?
4. Questions 1 to 3 above are in the instance of a merchant selling only permissible items i.e. kitchen appliances. Other merchants, like Amazon.com for example, sell a wide range of products, like furniture, electronics, clothing, books, TV’s and movies etc. The difference with such merchants (those that sell both halaal and haraam products) is that irrespective of what the affiliate may have advertised (i.e. something halaal), if a customer is to purchase anything else on account of the affiliate’s link that got him/her onto the merchant’s site, the affiliate will still receive a commission on the sale of such non-affiliate advertised haraam products. For example, Umar advertises only plumbing equipment for Amazon.com with an affiliate link on his website. A person follows this link, purchases the plumbing equipment, but also continues browsing the website and also happens to purchase a haraam video game. Umar now earns a commission on this as well. Thus, his total payout is partly based on the commission from the haraam video game and the commission from the permissible plumbing equipment. Umar is supplied with a detailed breakdown (‘earnings report’) of this total commission from the merchant. He thus knows that, for example, of his $10 total commission earned, $7 is from the direct link to the plumbing equipment and $3 is from the unintended/indirect sale of the videogame commission. By advertising the plumbing equipment, and accordingly bringing the customer to the merchant’s website, Umar did not aid or support the purchase of haraam in anyway. It was solely the discretion of the customer in purchasing the haraam. Will the entire $10 be permissible for Umar?
5. If it is impermissible for Umar to accept the commission from the sale of the haraam item, should he give the commission earned from the haraam item in charity without the intention of reward? Can he continue to earn money through advertising while taking out the commission earned from haraam items and give it in charity?
6. Some merchants pay the affiliate a predetermined percentage based on the type of product sold. Is this, the predetermined percentage that varies per the fixed product categories permissible?
(In all instances, the actual advertisements of the affiliate will not have any animate objects, music, etc. or anything impermissible associated with it at all.)