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With the popularity of the last click model dwindling, do affiliate networks need to evolve their approach to tracking sales in order to remain a viable channel for advertisers?
The last click model, where all the benefit or reward is assigned to the marketing channel that recorded the last click before the sale, is dwindling in popularity with advertisers.
Many have come to appreciate it is rarely one channel acting alone that delivers the sale and customers are likely to have been exposed to multiple online marketing channels before making the sale.
Increasingly advertisers are looking at ways to understand customer journeys, measuring the impact of the varied online channels on delivering a sale.
This approach is very powerful in understanding the role of your display, search, email marketing and affiliates in the marketing mix.
It allows for multi-attribution models to be developed, sharing the CPA back with all the channels that helped deliver the sale.
The challenge for affiliate networks is that their traditional model of post-click conversion tracking (or post-impression in some cases) is no longer suitable in a multi-attribution model.
Criticism of tactics
Affiliates are often criticised for over-aggressive tactics such as competitive PPC bidding and heavy use of price and discount messaging.
This can often worry advertisers who feel affiliates are misrepresenting the brand or cheapening the product.
ASOS CEO Nick Robertson famously criticised the affiliate community in 2007 saying he wanted to see “no silly commissions being paid to grubby little people in grubby studios growing income at our expense” (although he did apologise for his use of language in a later interview).
However, if affiliates are only rewarded (with payment of commission) based on last-click, can they really be blamed for running marketing activity, at their own expense, that will most likely deliver a sale?
I have often thought that affiliates do a far better job of selling than the advertisers' own marketing team!
So can the model change?
Instead of being paid solely on last click, could affiliates move to a multi-attribution or split-commission model, where they are paid a proportion of the commission for their role in the customer journey?
For example, 10% commission for last click, 8% for second to last, 5% for third place and so on.
This would surely encourage affiliates to run more brand building activity, such as editorial, blogs, photo galleries, video content and email marketing.
It would also reduce their reliance on PPC search marketing and the need to use aggressive sales tactics - a welcome move from the brand police.
This model would benefit all
Affiliates would feel better rewarded for sales they helped deliver.
Advertisers would see affiliates better placed in the marketing mix and have further transparency on sales delivered.
Certainly with advances in tracking technology allowing customer journeys to be mapped out across multiple channels, this is achievable.
If the affiliate market is to continue to grow I think the commission model needs to evolve to ensure it remains relevant to advertisers.
Matthew Finch - view blog