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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.

A customer journey

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

Matthew Finch

Published 12 February, 2008 by Matthew Finch

25 more posts from this author

Comments (7)

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Richard Hartigan

Richard Hartigan, Industry Manager at Google

Have you actually managed to deploy this? How have affiliates reacted? In my experience, affiliates are comfortable with the existing methodology and are reluctant to move to a method where there is the risk of earning less, knowing that the majority of actual sales come from SEM.

almost 9 years ago

Matthew Finch

Matthew Finch, Head of Sales & Commercial at Warner Leisure Hotels

Hi Richard. Certainly I have implement tracking of customers path to purchase across multiple channels. It gave some very interesting insight - see one of my previous posts: http://www.e-consultancy.com/news-blog/364841/rip-last-click-wins.html

As far as a split commission model with affiliates this is more of a concept than something I have implemented. I think this model would actually allow affiliates to earn more, by showing the value they contribute to sales that they don't currently get commission for.

almost 9 years ago

Richard Hartigan

Richard Hartigan, Industry Manager at Google

Hi Matthew, I commented on the last topic as well. I agree that there is potential for affiliates to earn more from the true value they have contributed to a sale but have met some resistance when I have tried to implement this.

I think the fear is that the model makes things more complicated for the affiliate and there is a risk that they may lose out, espceially if natural search is attributed value as part of the mix.

However, what I believe I will end up with will be a far better affiliate model as part of a wider online marketing mix.

almost 9 years ago

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Kaya PPC, Internet Marketing Manager at Optimised Media

I can see validity in the suggested model. However it adds a lot of complexity. It'll be difficult to get buy in from affiliates some of who feel networks have enough trouble tracking commissions as it is. Kaya @ Optimised Media

almost 9 years ago

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Andrej

We have just implemented this model called "SplitCommission" to Post Affiliate Pro software.

about 7 years ago

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Peter Koning

@Richard who said "affiliates are comfortable with the existing methodology and are reluctant to move" - I agree as it's human nature to get comfortable and resist change.

In any case it's up to the merchants to deploy this and if it helps affiliates focus more on adding value to their favourite part of the sales process then it could be a win/win/win/win for all the affiliates involved in the chain.

The merchant won't be paying much more commissions as a % of sales, but done properly and by working with the right affiliates who "get it", it could result in higher sales overall with credit to the affiliates.

It will be interesting to see some case studies from merchants who implement this form of tracking. As far as I know, there are NO networks with the capability for this, so it will come from leading edge merchants using commercial software (e.g. PAP) in their own private programs.

about 7 years ago

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Viktor Zeman

Quality Unit released Split Commission feature, which is described here in their Post Affiliate Pro affiliate software. Maybe it will help to somebody, who search for such feature.

about 7 years ago

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