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MoreNiche Ltd., a UK affiliate network, just launched a split commissions feature that enables merchants to remunerate not only the last referring affiliate, but also the first, or any other affiliates involved in the presale process. The idea was called "revolutionary."

The feature was announced by Shawn Collins a few days before the launch in his AffiliateTip.com blog. He wrote:

The typical affiliate program pays out commission to the last referrer and nobody else. While this is great for the last site to touch the customer, it doesn't account for any previous affiliates that played a role in closing the sale. But what if there were a way to spread the commission across some or all affiliates that played some role in the ultimate transaction?

As far as I know, this hasn't been an option to date, but that is changing with the launch of a split commissions feature by UK affiliate network MoreNiche on June 14. MoreNiche will enable merchants to pay on first referrer, last referrer, everyone in the middle or a combination of all three.

Yesterday, the split commission feature went live. It was announced by MoreNiche in a video and in a press release.

The idea is simple: enable merchants to compensate not only the last affiliate whose link the end consumer clicked before performing a qualified action (a purchase, a subscription, filling out a lead form, etc), but also any other affiliates who, in the merchant's opinion, added value into the presale process by influencing the customer's final decision.

MoreNiche illustrates the process with the following graph:

Split commission illustration

The press release reads:

MoreNiche are trialling a revolutionary new split commission scheme which if successful, will blow all other affiliate networks out of the water. Leading with Proactol, who are piloting the scheme for the initial trials, affiliates who first refer the buyer to the product will earn a flat fee of £3.50/$5.00, and the last referrer that actually achieves the sale will still get full commission.

A feature like this is an excellent addition to any affiliate network's (or individual merchant's program) proposition, but I wouldn't exactly call it "revolutionary." PostAffiliatePro has been offering the feature of split commissions for quite some time already.  While we haven't seen other affiliate networks implement this yet, the idea really isn't new.

The question of conversion attribution is as old as the existence of referral traffic, and the global consensus on the subject is far from being reached. The current "last click wins" model has been widely adopted by affiliate networks and in-house affiliate programs, but apparently not all affiliates are happy with it. Looking at Econsultancy's 2009 Affiliate Census reports, we see the following distribution(s) of affiliate preferences:

U.K. Affiliates:

UK affiliates on last click wins model

U.S. Affiliates:

US affiliates on last click wins model

It seems the idea of remunerating both the last-referring affiliate, and the affiliate who introduced the end user to the brand is a very good one, but numerous questions linger. For instance, (a) how do we know who really introduced the customer to the brand whe the real introduction could've happened beyond the affiliate program's cookie life? or (b) on what grounds are we assuming that the first and the last affiliates played the most significant roles in the consumer's decision-making process? or (c) if we want to pay the affiliates who played their roles between the first and the last ones, how can we effectively measure the value of their participation in the pre-selling?

I'd love to hear what other affiliate marketers think. It's not an easy topic.

Geno Prussakov

Published 15 June, 2010 by Geno Prussakov

Geno Prussakov is the Founder & Chair of Affiliate Management Days conference, Founder & CEO at AM Navigator, author, internationally known speaker, and a contributor to Econsultancy. You can find Geno on Google+

27 more posts from this author

Comments (28)

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Shawn Collins

I think it would be interesting for a company with a PPC campaign to run it through their affiliate program, so they could see if/when their PPC ads are in the food chain of the affiliate transactions.

about 6 years ago

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Todd Crawford

I would be concerned that this compensation model would encourage forced clicks type behavior.

about 6 years ago

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Shawn Collins

Hey Todd - 

Do you think  the common model now is discouraging forced clicks? I don't.

about 6 years ago

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Kevin Edwards

I firmly believe multi-attribution at present, or potentially at any time in the future, is not viable solution.

Clicks, be they first, last or in between are not a reflection of value. Value attribution is what we need to be talking to merchants about; new vs. returning customers, average order value, conversion, persistency and so on should be the indicators for deciding commissions, facilitating information between merchants and affiliates.

It's fair to say many merchants have little insight into their current programmes and a move away from last click at this stage is to potentially muddy the waters with less transparent and possibly confusing reward mechanisms.

about 6 years ago

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Kevin Edwards

Another point to consider is every piece of analysis I've done or seen presented shows very few affiliates are involved in a typical sale.

My own research found the majority of sales have just one affiliate referrer. Therefore when first click, weighted or equal click models are applied the difference in commissions paid to the vast majority of affiliates is very small.

This would call into question whether there's actually any value in pursuing multi-attribution.

about 6 years ago

Geno Prussakov

Geno Prussakov, Founder at AM Navigator LLC

@Shawn: Interesting thought on a merchant with a PPC campaign. It would be also interesting to tag any other marketing campaigns they may be having (display, directory listings, sponsored giveaways, etc) - to see where (if anywhere) they come up in the presale process.

@Todd: I'm with Shawn there. Forced clicks are equally a problem with the "last cookie wins" model. A split commission model may multiply the impact of such behavior, but I'm not sure how exactly it encourages it. Would love to hear your elaborations though.

@Kevin: Interesting points. In the above-quoted press release MoreNiche argues "that over 39% of all sales generated actually involve more than one affiliate". Do you by any chance have links to the relevant research?

about 6 years ago

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Todd Crawford

Today forced clicks rely on catching the consumer just before they make a conversion.  If there were split payouts based on who generated the first click, there would be more efforts focused on forcing a click every time they hit certain websites - a la johnny appleseed - setting as many cookies as possible in hopes that some percentage are a first click cookie.

For the record, I am not a fan of splitting payouts.  I am however a fan of measuring attribution to better understand the effect/influence certain partners have on the eventual conversions and then using this data to better manage media spend and placement.

about 6 years ago

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Scott Medlock

Many merchants already issue attribution from their own internal departments as well. Many links given from a retailers call center contain tracking to give partial credit to the call center. Brand PPC campaigns garner attribution when a returning customer clicks thru a PPC link, etc. It can get very confusing. But the fact of the matter is that many large scale retailers are already doing this with their internal channels and it wouldn't be a stretch to think that they (the large retailers) would implement this in their affiliate programs as well.

about 6 years ago

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Kevin Edwards

Hi Geno,

A lot of work has been done by various agencies and marketers in the UK into what an 'average' affiliate sale looks like. I found from looking at three different sectors that an average of 1.2-1.3 affiliates are involved in an average sale.

What I was really interested to see (and this has been backed up by other companies who have looked into it) is that cashback and voucher code sites overwrite other cashback sites and voucher code sites more than 'content' sites.

Much of the clamour in the UK for a multi attribution solution came from a perception that incentivised traffic trampled on a lot of 'content' cookies. All research I've done network side shows this simply isn't the case.

I presented at the A4U Expo in London last year about my 'value attribution' model that I feel offers a future vision for affiliate marketing reward mechanisms. You can find it on SlideShare I believe. Am happy to send it to anyone who contacts me.

I think the premise that sticking to clicks as the basis for reward is flawed, therefore moving to multiple click reward doesn't address the fundamental challenge UK advertisers are posing to networks; that of helping them to target their commissions more intelligently. 

The UK Affiliate Marketing Council has formed a working group to investigate and collate all work on multi/value attribution and as current Chair I'm keen to distribute this as widely as possible.

about 6 years ago

Andrew Slack

Andrew Slack, Managing Director at Twist Digital LLP

Personally I think last referrer (the one that closed the sale) always deserves the lions share, but I do not think we can discount the first referrer (often investing in generic ppc or search marketing) and everyone in the chain.

This does not work for all markets but in the health industry were people often spend a large time researching the right product for them, is it unfair to incentive the person who introduced them to the brand? 

On the back of that is it right that content affiliates lose out to voucher sites, whipping the full commission away at the last moment?

No system is perfect especially not last referrer wins however I personally believe the 'educated' merchants should be allowed to decide what commission structure works for them.

about 6 years ago

Rishi Lakhani

Rishi Lakhani, Search Strategist at Independent Consultant

I have been working on and studying multi clicking processes for 2+ years now on various affiliate markets. to stick to one payment model is unfair, however to bring in an attribution payment model without decent groundwork is pointless. A business really needs to have an analytics and CRM system that talks to one onether to start weiging lifetime and cookie life value of affliat referrals in order to put together metrics of payment. Often I find instead of offering split commissions, a higher commission rate to first click referrers works out well as an incentive for such affiliates to drive more traffic. In other scenarios Voucher code and cashback sites over populate the market which means they will often be in multiple touch points for any referral - again the business needs to weigh in the longer term and incremental value of those referrals if they work with them...

about 6 years ago

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Hero Grigoraki, Client Services Director at Webgains.com

in my opinion, there is no "one size fits all" when it comes to commission attribution, so I don't see how a network-wide, single approach is beneficial to merchants. I advocate that this is something for each merchant to evaluate, taking in the equation all their online channels, and attributing VALUE to touchpoints. Once they have the value data, only then will they be able to decide whether to go down the multi-attribution route, or if they want to adjust their marketing spend and jiggle their marketing mix.

Moreover, branding something as "split" when you're not actually splitting, is confusing. What is being asked here is for merchants to pay the same commission to the last referrer and pay an additional fee to the first one. Unless it's advocated that merchants should start reducing commissions - which is in contrast to what we're all trying to achieve here, ie reward accurately to reflect the value.

If I were a merchant, I would be questioning the need to pay for first referrer if the first click to sale time is very big. Should this not be taken under consideration? Or the fact they might have used more affiliates, or channels, in between those two - why would we disregard their role in the customer path?

The industry moved away from first clicks for a very specific reason. Reintroducing them without adjusting attribution or evaluating value is bound to cause problems, in my opinion.

Hero Grigoraki, Webgains UK

about 6 years ago

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Kellie Stevens

Care should be taken when extrapolating out the data from and model of Moreniche into the affiliate marketing industry in general. Moreniche is somewhat unique. They are a network, but they are also the 'merchant' behind many of the offers on their network, including the site being trialed for split commissions. I did some work with them several years ago and at that time the affiliate channel was there primary marketing source. This of course isn't true for many merchants. As was also mentioned, buyers tend to do more shopping arouind with health related products, an area of focus for Moreniche. These things might make split commissions make a bit more sense in their model.

In general, one of my primary concerns with split commissions is whether or not merchants have both accurate data (or an understanding of the data) and a grasp of the affiliate channel in general to make good decisions attribute value in meaningful ways. No doubt there are merchants who are able to do this. But there are merchants who I have serious concerns about.

One particular merchant in the US comes to mind who is doing split commissions based on the merchant's perception of "value". Since the networks don't provide this kind of tracking capability, they are doing it by manual credits and reversals. Not only that, but they are doing it between the two networks they run their program on. The commission payout is complicated beyond belief! They actually put out an Excel document to explain their commission structure, which consisted of showing how much affiliates would be paid under something like 15 scenarios, admitting there could be more scenarios. All of this seemed to arise from their analysis of the value of coupon affiliates in their program. Amazingly (or maybe not so), they continue to allow affiliates in their program which appear to be the exact types of affiliates who they feel bring little or no value to their program.

My other concern is that this may ultimately result in lower overall commissions for affiliates. As mentioned "split commissions" infers splitting the overall commission being paid by the merchant and that's not the case. I don't think it would take to much time before merchants went down that road however. From an ROI perspective of the merchant, they would have to make adjustments to account for paying mutliple parties. Merchants would need to have solid historical data in order to be able to even work those numbers initially. While the data is certainly there, I'm not sure how many networks provide merchants the data of affiliate click history tied to each sale. Most likely they would need to derive that from their own intenral stats and many merchants may not be able to do that.

I totally agree with Todd that this type of model would encourage an increase in forced click behaivor as well. Merchants and networks would need to be prepared to deal with that (and it would include a total shift in monitoring techniques as well).

about 6 years ago

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Darren Beale

@ Hero. I think you are 100% correct when you say that this should be branded as 'split commisions' because the actual last refer commision is staying the same. There is just a new level of commision for first refer.

We have worked alongside MoreNiche to implement this new 'first refer' bonus because we could see that the first refer was adding value for us, Proactol.

How did we conclude this? Due to the large number of Slimming products in MoreNiche (pretty much everyone on the market). We could see people going to several affiliate sites for XYZ product and then being introduced to Proactol through a review or an advertisement on their site. In many cases we saw the user switch from their initial thought process of XYZ and buy Proactol.

The offering for Proactol is strong (medical device certification) so for Proactol, we have saw that when peopel find out about the brand it doesn't take long for a decision to be made. Proactol is an online only brand, so people could only find out about it online - so the first refer is important to us. Getting the word out there and increasing the brand landscape makes a big difference.

This is why we made the decision to work with MoreNiche on this. What will be interesting is if it leads to more websites carrying our brand or whether we are just giving away £ which we wouldn't otherwise needed to give away? :) This is the acid test and very intriguing.

We also hope that many affiliates who are 'promoting' the brand on a small level on their website - may start to see these smaller commisions fall in and start to look at pushing us more. Again we need to wait and see.

I certainly don't think that multi commisions could work with every site/product. Luckly the commisions are high on a product like Proactol, but for selling a set of cups - it would be hard to do this.

Thanks,

Darren

about 6 years ago

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Maria O'Flynn, Director of Strategy and Insight at TradeDoubler

Great to see this important subject being debated in such a balanced way. At TradeDoubler, we have examined multiple channel attribution for many advertisers to understand the media influences at play when a consumer is ready, willing and able to buy.

Purchases often, but not always come via single use of a reward or voucher site after product discovery through other channels. Display-driven purchases often show evidence of time-pressure, coming some time after the previous site visit, with high basket values.

As well as initiating product discovery phase of a transaction, generic PPC terms often reappear as a last-minute market-scoping exercise. Metasearch and price comparison sites, particularly those with supporting product review functionality, appear to be the most independent of site types, particularly for commodity or SKU-driven product categories. The behaviour of brand search terms is complex - there is a marked difference in the sequence of retailer and product brands in purchase paths. Content and vertical sites do seem to lose out to other channels, but make up commissions in the form of higher than average order values.

Publishers generate their sales through any and all of the above forms, and depending on the product, the brand and media heritage, season, and promotional activity of the brand and its competitors, one size does not fit all. Financial modellling that we have done for ndividual affiliate programs indicates that affiliates would earn the same commisssions overall but in smaller increments that are significantly more expensive to administer.

It is high time that advertisers invest in understanding what happens behind last click, that networks and media agencies proactively assist these efforts, and that CPA publishers strive to add incremental sales and customers. In this way, the affiliate channel is stronger, and we all profit.

Best,

Maria

about 6 years ago

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Peter Williams

Great discussion. I disagree completly with the comments that the majority of sales come without the surfer doing research and clicking through a few affiliate links before. More than likely your tracking just isn't setup to show this? If you ask anyone how they go about buying online, most people will tell you that they do not just go straight to what they want and buy. The rise of the price comparison sites, trip advisor etc prove this, people want information before buying., I will be watching to see how this develops :)

about 6 years ago

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Darren Beale

@ everyone. I just wanted to update you on the reception from received from the MoreNiche affiliates and the response from first referers. The reception was great on the MoreNiche forums but like yourselves they got confused with the terminology 'split commisions' - MN have agreed to change this moving forward. Over the last few days an extra 282 affiliates have started sending more than 5 hits to Proactol.com. The majority of these are existing affiliates that have just improved their positionings of the Proactol links. At the moment we have not seen an overall sales increase, but it as only been a few days. The buzz surrounding Proactol is certainly good and it is one of the most talked about merchants in the affiliate program but this needs to translate into sales. I also wanted to make it clear that Proactol LTD own the brand 'Proactol' and MoreNiche LTD have no ownership in the brand. Any questions on Proactol, let me know. Thanks, Darren Beale

about 6 years ago

Philip Buxton

Philip Buxton, Chief Marketing Officer at Exponential

I'm confused, since, if were a client advertiser, I'd want a system that doesn't just split credit/commissions by affiliate, but across all online (and eventually offline) channels.

Given there's a few systems out there delivering attribution/affiliate deduplication - one particularly successfully (!) - I'm also confused about how this is revolutionary :)

about 6 years ago

Andrew Slack

Andrew Slack, Managing Director at Twist Digital LLP

@ Philip, I would love to hear your thoughts on how you could split (by individual sale) an online sale that was generated via offline PR. Obviously different commission structures could apply in these cases but this is beyond the scope of this release.

Drop me an email if you would like to discuss further. 

about 6 years ago

Philip Buxton

Philip Buxton, Chief Marketing Officer at Exponential

Hi Andrew,

Hence the term 'eventually'. An affiliate network that seeks to reward affiliates more fairly and help drag us away from last click is brilliant. But systems to do this already exist, which is part of where I'm confused. (Full declaration - TagMan is one of my clients). Moreover those systems allow advertisers to track and reward elements of the entire online journey (as well as just the different affiliates if they so choose).

How to track offline? QR codes, Bluetooth, unique URLs, click-to-call, call centre systems etc. can help us there. Plus, isn't offline all going to be delivered via IP/online platforms anyway? IPTV, IPAD, digital outdoor etc.

Best,

about 6 years ago

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MrAffiliate

Sorry about that, I pasted from word!

about 6 years ago

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asda promotional code

I do believe many more networks will start to experiment with who gets credit and when as affiliate marketing becomes more competitive. Moreover I lump keyword bidding into "affiliate" marketing since it's based on response.

about 6 years ago

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Jimmy Read

I completely agree with you and believe that that this issue is something that should be debated upon for a very long time. Its a great post and thanks for sharing with us.

about 6 years ago

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Virtual Global

Thanks for the post! Affiliate marketing is such an interesting subject - it is theoretically a great way to make money for everyone, but in reality it is often very different.

almost 6 years ago

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My Voice Dialing

I think that affiliate marketing can be one of the greatest assets to a company! What kind of budget and expense do you think you could expect to pay to get a good return for a small business? Are there lots of good companies out there to work with?

almost 6 years ago

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Rugby Jerseys

When it comes to sharing commissions in Affiliate marketing I'd go for the traditional one which I believe has benefited more marketers. It's success even proves why Affiliate Marketing is still one of the most profitable online income opportunities. I guess they're just experimenting things here and will soon go back to the basics. 

almost 6 years ago

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Rugby Shirts

Usually when we promoting affiliate product, the last affiliate who referrer ( get click their affiliate link) get the commission. But how about the first man ( first affiliate ) who the first introduce the customer to buy the product? He get nothing. But with the latest split commission in Affiliate Marketing, everybody wins. Hopefully this could really last without glitches on the way. 

almost 6 years ago

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3for19

I kevin is right, the order of clicks is not an indication of value. The real losers will be casback sites who get the vast majority of the last clicks.

almost 6 years ago

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