Should marketers use multiple affiliate networks? If so what are the pros, cons and pitfalls to avoid?
I sat down with the very experienced, Carolyn Tang to find out how marketers should go about making that critical decision. She didn’t hesitate to give it to me straight!
Should your company be involved with multiple affiliate networks? Why or why not?
If so, how does it work technically — from a tracking, reporting and optimization perspective?
When it comes to affiliate programs, everyone is looking for more sales and leads with less friction. I’ve complained for years that affiliate programs need a better means to achieve scale (providing marketers with an easier means to drive actions). Scale is Google’s ‘secret sauce’ and responsible for cost-per-click’s (CPC) trouncing cost-per-acquisition (CPA). The CPC model has won that battle… for now.
In seeking out CPA scale (and the increased actions it may bring), marketers always find their way to the “multiple affiliate network” question — should they or shouldn’t they and what’s involved? Carolyn Tang has been around this block a few times and worked both sides of the fence at affiliates like MyPoints.com and marketers like Orbitz and CollectiblesToday.com (The Bradford Exchange). Today she works as the client services lead at Chicago-based affiliate network Shareasale.
Simply stated, there are two primary concerns for retailers when swimming in multiple affiliate network ponds. These are:
- Proper attribution of the sale:
Avoiding duplication of ‘counts’ or ’scores’ among web marketing channels (affiliate, search, email, etc.)
- Proper payment:
Avoiding duplicate payments to affiliate networks (in scenarios where customers ‘touch’ multiple affiliate sites or cookies)
Here’s an excerpt from my conversation with Carolyn that gets to the nitty-gritty of what to be concerned with and how to make the decision….
Carolyn: I think in the past the emphasis has definitely been on duplicate reporting, on having to pay multiple times on a single transaction. Obviously, this is not very cost-effective.
Funny thing… as the technology has evolved into where we’ve got a lot more reporting tools in place, such as Omniture or any third party dashboard reporting tool. Many times those tools don’t necessarily track correctly. They will attribute a transaction to a single marketing channel, but because of the way the technology is set up it may or may not attribute it to the correct channel. So I think, whereas before the driving concern was on overpaying on a single transaction, now it is on actually attributing the transaction to the proper channel.
Jeff: So you’re saying that the technology now has improved that?
Carolyn: I think technology has reduced the issue of the duplicate transactions, or paying twice for a single transaction. For example, in the past… let’s assume a program manager is running on multiple networks. Here’s the scenario: a consumer went to Google and searched for “chocolate”… and then went to Affiliate A’s ad for chocolate, landed on a chocolate site… and decided they weren’t ready to purchase. They then went back into Google, re-queried the engine, received search results, clicked Affiliate B’s ad for chocolate, went to the same site, and then proceeded to make the purchase.
If Affiliate A and Affiliate B were on two completely different networks, it is likely that the merchant would have paid commission to both Affiliate A and Affiliate B for the same commission… or for the same transaction.
I think in the past… when I was actually actively managing programs that were on multiple networks… that was an issue that I had to deal with, definitely. The emphasis then was on whether or not you attribute the sale to the first cookie in, first cookie out, there was a lot of manual bumping reports up against the mainframe, all that kind of stuff.
Now I think merchants became more aware of that as an issue and have started implementing third party dashboard reporting tools that cover all the marketing channels. However, what’s happening is that those marketing tools actually have the potential to misdirect or misattribute where the transaction actually came from. They could be attributing the transaction to a completely different channel. So even though it came in from an affiliate, it might be attributing that to a search… to the search channel.
Which isn’t so bad in terms of cost, but it’s kind of detrimental when it comes to actual oversight and having a broad view of what is actually going on with the site. There are definitely fixes for it. We have a lot of our merchants, for example, are using Omniture, and we are able to work with tools like that. Yet what’s happening is that a lot of merchants don’t realize that when they put these tools in place. They do need to actually make tweaks to those tools. You can’t just use it out of the box and assume it will automatically detect everything. You do have to add some tweaks.
Jeff:What do the tweaks do, essentially?
Carolyn: For example, if the sales did come in through an affiliate who is using CPC, there’s a way you can set it up such that you can attribute the sales to your affiliate channel, rather than just saying, “Oh, it’s coming in through search.”
Carolyn: So I think a lot of what’s happening is… as we have more and more marketing channels that are out there, it becomes absolutely necessary to be able to see how your entire marketing effort is going under each individual channel — especially since your reporting differences vary from one place to the next. It makes sense, but I think a lot of it is that it’s still so young that a lot of merchants aren’t realizing that they do actually have to go back to their other vendors, their original vendors, and say, “Hey, how do we get this reporting to work with your data?”
Jeff: That’s interesting. So if you are… essentially, if you do have two programs running on two or three different networks and you don’t have another third party solution in place, you will essentially be double-paying, will you not? Potentially.
Carolyn: It is possible, yes. It’s definitely is possible.
Jeff: Any idea how many people are out there in that scenario? Actually doing that, where 20 or 30 percent… you know…
Carolyn: Any merchant that’s out there that’s running an affiliate program on multiple networks does run into that as an issue, yeah.
My solution, when I was doing it, was always to double-check everything manually at the end of the month. But what happens there is that… there’s always a question, do you set up to count the first cookie or last cookie? I mean that’s a good debate right there…. there are pros and cons to both choices.
And then, you know, there’s also the argument of, “Well why don’t you just split the commission with the two?” Well, that’s not really fair either. I mean, in some cases, when I was working on programs, you could see both affiliates actually contributed to the sale. Maybe one affiliate has a coupon code and one affiliate actually had the content.
Is it right to say that the coupon-code affiliate should get the commission, even though the content site did the selling? But then again, the coupon publisher is the one who actually may have been that last little ‘tip in’ to get the consumer over the final hurdle. I mean, you can’t really know what the consumer is thinking when they made that purpose. So is it right for the merchant to assume which affiliate to give credit for?
Jeff: Is there some recommendation nugget that you can give people to say, “You know, in my experience, I’ve been doing this for awhile. I’ve been through the process of trying to figure out what the right reward structure is. Here’s my take on it, it’s more of a holistic take.” Would that be fair to say, that your take right now is holistic?
Carolyn: My take right now would be to say, yeah, it is holistic. I mean, you have to ask yourself, ‘how is each affiliate working with you?’ You have to take a look at… is one affiliate constantly getting credited for transactions that they may not be initially driving?
One of ShareASale’s primary stances is that we don’t allow adware into the network. And one of the reasons we don’t do this is because we find that adware often ‘mis-channelizes’ — clouds the attribution of — where the sale or lead came from.
So for example, if a consumer types in a direct load to go straight to the merchant’s URL, www.chocolatemerchant.com, it is possible that an adware affiliate can be attributed for that sale even though the adware played no role in driving the customer to the site.
So I think it’s a very difficult thing for the merchant to be able to understand, where that transaction is coming from. And in terms of paying commission out… or in terms of deciding how much to pay for that transaction, you know, it almost is a case-by-case basis, unfortunately. Which is why I often think that it’s a lot easier, at least looking within just the affiliate channel. It’s a lot easier just to manage a single affiliate program.
Jeff: So ultimately, do you think that it’s not beneficial to run on multiple affiliate programs?
Carolyn: To run multiple programs? I wouldn’t advise it. At Shareasale, actually, we have no exclusivities… but in my personal experience and from what I’ve seen with merchants that I have worked with here it’s not worth the extra effort. It’s not worth the dilution of your reports.
Jeff: In consideration of particular verticals, would you say that that might not hold true, or do you still stand firm?
Carolyn: I still stand firm. I mean, the way that I’ve seen it is that the larger affiliates, that are not adware focused…. they don’t care which network a merchant is on. They want to work with a merchant. The technology, the tracking, doesn’t really matter to them. So, no.
Jeff Molander is the CEO of Molander & Associates and is a regular guest blogger at E-consultancy. The views of the author do not necessarily reflect those held by the publisher.