Affiliate marketing’s big pitch to brands is its use of the internet’s ability to track clicks to provide campaigns that are billed on performance, rather than just exposure to a message.
Through joining up to an affiliate network, a brand can rest assured that a wide range of sites are busy promoting its products and services and expecting to be paid on results alone, such as a confirmed sale or the registration of a new customer.
In contrast to the days when consumer panels were the main way of establishing a “share of voice”, affiliate marketing network managers can tell a brand where its money is going, how the affiliate channel is performing in relation to other channels (such as search and online display) and how return on investment (ROI) can be better maximised.
Before signing up with an affiliate network, however, there are several key parts to the process that a marketing department will need to consider to make sure they are asking a potential partner the right questions.
According to TradeDoubler chief operating officer Andreas Bernstrom, this series of queries should start with the very basic question of whether it has the necessary technology in place to run a professional network.
“Smaller players may sound attractive but a brand really needs to know the network runs smoothly with no downtime and that campaigns are scaleable,” he points out.
“The other huge issue is transparency. A brand has to know what terms it is offering to affiliates, and affiliates need to know the finer details of what and how they will be paid.”
This is a crucial point that can be overlooked, Bernstrom warns. Good affiliate sites are in high demand and can be fickle, so a brand offering terms that are not believed to be attractive will find it difficult to win take-up among the best traffic-producing sites in an affiliate network.
Ultimately, the best deals lie in the details of how well consumers are tracked by cookies and the price paid for a positive outcome, such as a purchase. There is not necessarily a right or wrong approach but, according to Bernstrom, a brand has to be up-front about it.
“Affiliate networks work through cookies, so both sides – the affiliate and the advertiser – know that a lead for a sale came from a particular site,” he continues. “If you only allow that cookie to remain active for a day, nobody will sign up with you because if someone is attracted to a brand’s site one day but then goes back direct © two days later to buy the product, the affiliate’s work in getting them there in the first place will not be recognised.”
Similarly, the best affiliate sites will expect an advertiser to offer IP tracking, so consumers who have barred cookies being placed on a computer can still be tracked via the IP address from which they log on for that browsing session.
Payment models can vary but Kevin Cornils, chief executive at Buy.At, believes the “last cookie dropped” model is best to avoid paying twice for the same customer and for establishing ROI. “Most networks work with the last cookie dropped,” he says. “So even if a person has already visited a site before via advertisements on an affiliate site, it’s the last journey to the site that is mapped and rewarded.
“This helps with the crucial issue of no brand wanting to pay twice for the same sale. We can also use analytic software to help brands establish where their spend should be going. We can work with an intermediary, such as DoubleClick, to work out what they are paying for traffic from, say, search and display and show them whether they would get a better ROI by shifting budget from one channel to another.
“It may sound self-serving but if we promise to get better results from shifting a proportion of budget towards affiliates, the onus is on us to back up the claim.”
With affiliate marketing offering such “measurability”, there is a move towards real-time metrics, through which a brand would not have to wait three days or so to get campaign results in.
“Affiliate marketing lets you work smart by deciding what to pay, to whom and for what,” says Alison Guise, managing director of affiliate network Commission Junction.
“So it makes sense for us to be moving towards real-time reporting, rather than always looking back a day or two so duplication of effort will be avoided.
“As affiliate marketing’s all about performance and ROI, we need to step up to the plate and show we can advise brands if they are paying for or measuring same sort of traffic twice. This can occur if, for example, they count people coming from search and an affiliate network as separate when they may be the same person at different times.”
This process of de-duplicating campaigns is a huge task, according to DGM chief executive Adrian Moss, because the Net offers so many sites through which consumers can arrive at a brand’s sales page and each of these sites has several channels, such as search, display, contextual link, banners and buttons.
Tags do the work
“The devil is in the detail,” says Moss. “Everybody’s advising brands about de-duplication and how they can work on their figures to prevent counting people twice, but we have taken it to the next step with automatic de-duping through a tag that can work with the channels through which a person has decided to buy at a site.”
It is these tags that sit on a brand’s website, ready to pick up on incoming cookies that recognise an affiliate has delivered a customer and so are crucial to the process.
“The problem with so many channels it that brands end up putting on a tag for each channel and each affiliate they work with, which can really slow down a site,” says Moss.
“So we spent £1.8m last year on technology that puts one tag on a site which recognises all the various channels and works with the necessary reporting software.
“This means you can split commissions between affiliates or search engines, rather than work on the last cookie dropped. It seems fair to us that you should have the technology to split a commission between the sites or channels that led to a sale.
“Crucially, our technology works automatically in real time, which we think could save thousands of pounds’ worth of ‘Excel hell’, where agencies have to trawl through figures. A lot of people are talking about de-duping but we don’t think anyone has the definitive answer because it’s not an exact science.”
If there is one issue set to dominate the technology used in affiliate marketing, it is the area of de-duping so that marketing managers can get an accurate picture of where their traffic is coming from and whether they are counting it twice. Armed with this knowledge, marketing departments can establish the ROI in the various online channels so that the most beneficial mix can be established.
Hence, the question “how do you de-duplicate and then present results?” is probably the most important query any marketing team could ask of a prospective affiliate network partner.