Affiliate attribution has been discussed for a number of years within performance marketing. The path to purchase online can involve a number of touch-points along the way, and the location of the last click before the customer buys, which has historically been the criteria by which affiliates are judged and paid, may be changing.
This is because individuals interact with brands differently dependent on the sector. For example, customers buying a travel package might hit multiple affiliate touch points, including holiday review forums and deal aggregators, before finally using a voucher site to access and buy the holiday they want.
Research by Sky has been used to help understand the impact of performance marketing channels on sales. It indicated that there was minimal crossover between affiliates in the path to purchase, with the majority of sales only involving one affiliate. However, can we really apply this data to all brands? High value purchases may transact in a completely different way, with blogs, reviews and content sites becoming far more important to the final purchase decision when customers are potentially spending hundreds or thousands of pounds.
Many retailers have seen the growth of mobile search and ‘showrooming’ has led to a more complex customer journey with even more potential touch-points on the path to purchase, many of which might be part of an affiliate programme.
Instead I see advertisers implementing affiliate attribution, tracking for data purposes but not necessarily for reward purposes.
This is why attribution models are becoming increasingly important. However, they demand a bespoke analytic approach so retailers can understand how to reward their affiliates effectively. Many agencies have started utilising network data to understand the value of performance marketing activity, which means they can fully understand the attribution of affiliates in the purchasing process. After all, understanding the impact of each affiliate/performance channel will help to determine the best use of budget and resources.
For example, Resort Hoppa, part of the low-cost travel group, launched an attribution model in March. The system focuses on rewarding first clicks and last click. Commissions are weighted on a 50/20 ratio depending on where the click occurred:
- All publishers are rewarded 50 weighting on the first clicks
- Clicks between the first and last are awarded a 20 weighting
- The last click will be awarded either a 50 or 20 for content sites and voucher sites respectively.
So if a sale of £1,000 is generated by the affiliate channel, three different affiliate sites might be involved. The first click comes from a content site (50 weighting), the second click is from a content site (20 weighting) and the last click from a voucher site (20 weighting). The commission would be weighted accordingly:
- First click 50 – £555.55
- Second click 20 – £222.22
- Third click 20 – £222.22
If commission was paid @ 10%, then those affiliates would be awarded the following:
- First click – £55.55
- Second click – £22.22
- Third click – £22.22
If voucher code sites are indeed driving incremental sales then they should have nothing to fear from this model. The content site should also appreciate that part of something is better than nothing. There are, however, a few concerns.
Firstly, cash back sites cannot be included as customers want to receive the full commission on their purchases. This means that content sites will still miss out on sales. Fraud could also be a major issue with attribution as there is a plethora of buying journeys with lots of opportunity to drop fraudulent cookies.
We also need to bear in mind that affiliates are just as concerned with ROI as advertisers, so at what point does this model become unprofitable? If a competitor advertiser is not using a attribution reward model then voucher sites are more likely to work closer with them as they will receives bigger rewards for driving sales.
Understanding the level of purchase influence through bespoke attribution modelling can help retailers better understand their affiliate programmes. However, I don’t believe that rewarding affiliates within the buying journey will be implemented by the majority of brands. Instead I see advertisers implementing affiliate attribution, tracking for data purposes but not necessarily for reward purposes.
The likely future is therefore that the valuable purchase data will be used to evaluate offers and better understand the influence of different affiliate types. Affiliate revenue will still remain profitable as they will only be rewarded for last-click purchases.