Last click has always been the standard by which we all receive our payments.
Whether one or ten affiliate clicks are involved in a sale winner takes all regardless of the value or influence of other non-last referring affiliates.
But over the past six months the idea that last click wins is out moded and could be ousted by a fairer payment on value or influence model has gained momentum.
Challenging last click wins is nothing new. Initial discussions about whether it has a long term future stretch back to 2007 but at that time the industry was far more fragmented and few merchants had easy access to data that could help define alternative payment mechanisms.
In that time advertisers have been looked at multiple metrics to determine the value they feel different affiliates and affiliate types offer their business; average order values, number of new customers delivered, conversion rates and so on. To an extent these have been shaping commissions and it’s now fairly uncommon for any affiliate programme to have a uniform commission rate for all its affiliates. At the same time networks and other industry players have discovered a spirit of collaboration.
But we’re still wedded to the notion that only one affiliate can benefit from every sale.
Fortunately both levels of knowledge and analytics have improved in tandem to make the prospect of different reward systems a distinct possibility.
So what format could that take? Well lets first consider there are two elements here for any advertiser; last referrer within the affiliate channel (lets remember that unlike other online channels affiliate marketing is comprised of its own ‘sub’ multi-channel network) and last referrer across all online channels. Some advertisers may choose to move to a multi-attribution model across display, search and affiliate whereas some may choose just to concentrate on the affiliate channel; some may choose to do both.
Let’s take just affiliates to illustrate how a multiple referrer model could work. Say a sale is recorded with three referring affiliates a commission could be divided three ways. What amount could be paid is up for discussion. It could feasible be argued that first and last referring clicks are most important; the initiator and the converter if you like. But that’s not to say mid stream clicks aren’t important, therefore a weighting system could be created to weight towards the start and end of the sales path.
Sounds pretty straightforward on paper but start to dig deeper and there’s no doubt the whole area is fraught with questions and issues. Any solution is also premised on sophisticated integration of technologies and additional reporting requirements that will need to be built to ensure the model achieves its full potential.
Some of the recent discussions I’ve had with merchants indicate there isn’t necessarily a consensus on approach, presenting an obvious challenge but fortunately we’re a more grown up industry now and the prospect of a working group constituting different interested parties is eminently realistic. Should this happen (possibly falling within the remit of the Affiliate Marketing Council) it will undoubtedly show to the wider online community what a forward thinking and sophisticated area of digital marketing we are.
We also need to consider that some merchants will have different motivations for moving away from last click wins. Obviously no advertiser will want to damage their programme or confuse affiliates. This last point is crucial. As unsatisfactory as some people may consider last click wins, there’s no doubt it’s a simple solution. Periods of education and consultation will need to be exhaustive to ensure we’re not creating a huge headache for all involved.
Ultimately we can’t lose sight of what the end goal is of any move from one payment model to another.
Any company embarking on a break with convention couldn’t do so lightly. If it happens it will be both to protect affiliate budgets and incentivise swathes of comparison and content sites. Research we’ve carried out shows these affiliates are most likely to lose out under last click modelling (although far less than might be assumed) so advertisers will need assurances that should they move away from last click, additional commissions will be ploughed back into supporting their campaign.
There are questions that still need to be answered. What do paid search affiliates do about their available spend if they don’t necessarily know what CPAs they’ll earn? What rates do cashback sites offer to their members?
Well no one said an alternative to last click wins was going to be easy; if it was we probably wouldn’t be having this discussion. But there will be workable solutions. Over the years we’ve demonstrated that affiliate marketing is a vibrant and innovative channel that many advertisers love. By pooling our experiences, opinions and ideas on alternative payment models we can surely find groundbreaking solutions that will continue to show why affiliate marketing is at the forefront of online innovation.