It is rare that an upgrade to technology used to track online sales could have such a fundamental effect on how a company thinks about its entire business model. But with cross-device tracking (the ability to stitch consumer journeys together as they switch between handsets, tablets, laptops and other connected devices), it is as if an alternative vision of the affiliate channel has been offered.
Affiliate marketing is premised on a last-click conversion model. Advertisers will seek out a diverse range of publishing partners, who receive a bounty for converting a consumer from casual browser to paying customer. It is clear why the conversion is important: lose that potential shopper and you can kiss any commission bounty goodbye.
Affiliate marketing is the ultimate performance channel. While other digital disciplines have encroached on our turf, the lack of risk it presents in its purest form makes it a compelling proposition for marketers looking to maximise their return on investment (ROI).
But the last-click, pay-on-conversion model that makes the channel so ROI-positive has also made it a target from certain corners of the digital world, who grumble that its contribution to sales is overstated. Epithets such as cannibalistic and low-hanging fruit are often used to describe the tactics publishers employ to drive purchase intent. There are certainly obvious triggers that can be exercised: think of a voucher redemption or a cash or points reward that you might receive when shopping online. There is a possibility that you were close to the point of purchase when you made use of these services, but can any of us say with certainty that this is a universal truth?
What if some of these popular affiliate tactics are actually more complex and, far from hanging around the conversion goal, could quite feasibly influence sales weeks in advance?
It is this insight that cross-device tracking delivers. We all know consumer journeys are complex, with estimates from across the industry stating that as many as two in three online sales start on one platform and complete on another. Consider your own browsing behaviour to see the iterative process you go through that ultimately leads to the checkout button.
That advertisers and publishers should expect – or indeed demand – the ability to survey those winding paths to purchase is a given. But aside from the practicalities of deciding which solution is best (deterministic, because advertisers will only pay affiliate publishers for sales they can guarantee are theirs), the implementation (actually quite straightforward); and the privacy concerns (data can be encrypted prior to leaving the advertiser site), the real beauty lies in the data.
For years we have told our clients that affiliate sales are surprisingly linear. In contrast to the widely publicised complexity of consumer purchases, the affiliate industry has consistently stated that not only do the majority of publisher sales involve just one affiliate but they occur very close to the purchase.
“Consumer journeys are complex; two in three online sales start on one platform
and complete on another”
Kevin Edwards, Affiliate Window
Presented with data from cross-device journeys, our perceptions changed. From seeing 74% of sales complete within a 24-hour period after the consumer clicked a publisher link, the majority of sales driven by multiple devices were now occurring more than a week after the same interaction. In other words, the ability of publishers to influence earlier in the transaction cycle was now demonstrable.
This, however, was not universal. It is often said that one of the aspects of affiliate marketing that makes it so attractive is the diversity of its publisher base: digital marketing in microcosm united by a common commercial metric (last-click cost-per-acquisition).
Tracking across devices, however, shows huge variances. For one major retailer, 20% of sales were being recorded across multiple platforms by the end of 2015. Delving deeper revealed stark contrasts. Some bloggers, niche content and ‘influencers’ were easily pulling in double that amount of sales, previously unrewarded. Mobile-first companies, sorely lacking in volume within the channel, were spiking significantly.
This is important for a couple of reasons. First, there has always been a conversion problem within the mobile channel, with publishers failing to convert the 30% of clicks generated by smartphones into more than 20% of their total sales. Tracking between devices demonstrates that many complex online journeys originate from a handset. In fact, the data shows us that casual browsing in the morning ultimately led to conversions on a tablet or desktop in the evening. And when those interactions are connected, smartphones close that conversion gap substantially.
The second reason this should resonate is because those affiliates with the highest proportion of smartphone traffic are typically those most in demand. Any marketer managing an affiliate programme will tell you the number one requirement from their clients is the recruitment of the much in-demand (but often viewed as unobtainable) ‘long tail’. This army of true content sites, with the power to advocate and endorse retailers to their engaged users, will typically gain most from attributing sales across devices. Much of the interest in their content is early in the sales funnel, exploratory and casual in nature; the antithesis of the last-click, cost-per-acquisition model they often rely on to reward their efforts.
The point can be reinforced when considering even deeper data. Reflect on sectors such as fast fashion and their natural demographic. According to Deloitte, 80% of 18- to 24-year-olds use their smartphones on public transport (let us not dwell on the 20% who apparently check them while crossing the road), so the imperative is clear.
The ability to track robustly is not just about understanding journeys better; it also demands
a discussion about whether the payment metric that underpins our business model is still fit for purpose. Clearly, it works for some segments. Those that have control over the purchase mechanism will continue to see strong conversions and handsome rewards. But for those earlier in the purchase cycle, tracking between devices demands an industry debate about alternative commercial arrangements.
Affiliate advocates must now grasp the tracking nettle to ensure our dynamic and innovative industry can continue to reinvent itself and remain a viable proposition for advertisers and publishers alike.