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Payment on Influence: A New Model for the Affiliate Channel

Payment on Influence: A New Model for the Affiliate Channel

Now Head of Partnerships at Top10.com, having previously spent a year at Vodafone, I was able to compile the 'Payment on Influence' report, available for download below.

For over three years the affiliate industry has debated the fairness and sustainability of the 'last click' sales attribution model. Many have speculated as to whether it was possible to identify more than one referrer in the path of a sale, and how a 'multi-attribution' model might work in practice. In light of this I interrogated third party tracking data from thousands of transactions over a six month period. The data was modeled to show how affiliate interactions occur within a 'typical' sale, where different affiliates impact a sale and how different payment models would affect commissions.

This extensive research and data analysis showed that for Vodafone:

  • An average of 2.2 affiliate referrals drive a sale but on last click modeling only one of these referrals will take all commission.
  • 54% of all affiliate interactions that ultimately lead to a sale are not the last click, meaning they are not currently credited.
  • The percentage of interactions that will earn commission on a last click model is unevenly split between different types of affiliate, e.g only a third of clicks from a True Content site to a merchant that ultimately lead to a purchase is rewarded.
  • There is little visibility on which interactions start off a sales journey, which could be argued to be of critical importance to widening the sales funnel and providing incremental sales to an advertiser.

I felt that the findings pointed to the benefits of launching a pioneering new model, dubbed 'Payment on Influence'.

The detailed findings in this white paper are to be released to the affiliate base a whole, allowing complete transparency on an affiliate's role in customer journeys as never seen before - how frequently they are the First or Last Referrer, length of customer journeys and so on.

Constructing this model and applying it to the data obtained form the third party tracking solution allowed Vodafone to contrast earnings from Payment on Influence with a move to deduplicating affiliates against all marketing channels. They discovered:

  • The 'Last Click' model deduplicates the affiliate channel only while Payment on Influence attributes across all online marketing channels.
  • Deduplication cross-channel would reduce earnings by an average 13% for affiliates.
  • A comparison with Payment on Influence show significantly lower reductions than this.
  • The total affiliate channel earnings are reduced by just 0.9% on Payment on Influence.

A technical project of this nature is never going to be deliverable in a short timescale and Vodafone are prioritising individual affiliate-focused developments to their programme over the next few months. However there is no doubt that the next twelve months will see some significant changes from a variety of advertisers across the industry which could result in a seismic shift in how CPA deals are considered; rather than arbitrary commission, scientific rationale behind the rates offered will add value to both advertisers and their good quality affiliates. This proposal for the Payment on Influence model is intended to kick-start discussion about how a new payment model might look for the wider industry. While by no means exhaustive of all the factors driving value up to a merchant, I intend it to take a first step towards looking beyond the Last Click and to open up the conversation to the industry as a whole.

View the entire 'Payment on Influence' White Paper here.

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Julia Stent

Julia Stent

Julia is an experienced Online Commercial Strategy Consultant, supporting a range of brands with their ecommerce and online strategies. Her projects range from start ups looking to drive growth to brands growing their ecommerce offering to agencies enhancing their affiliate proposition. Julia can draw on experience from all facets of the performance marketing industry, as her career spans ten years in the affiliate space across publisher, advertiser and affiliate network side. Julia was previously Commercial Director at Top10 Hotels, Commercial Director at uSwitch, Affiliate Manager at Vodafone and Client Strategist at Digital Window.

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