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Splitting Commissions in AM: Your Views (1 of 3)

Splitting Commissions in AM: Your Views (1 of 3)

Whether there are debates at the IAB Affiliate Marketing Council Meetings, on Industry Forums, Wider Digital Marketing Blogs or even at Affiliate Networking Events, the subject of Commission Attribution will not subside, and with the launch of MoreNiche's Split Commissions Scheme, we've collated some thoughts from the Affiliate & Performance Marketing Community.

In this double news post, part one of two includes answers from figures within the following demographic companies;

Networks: TradeDoubler, Commission Junction, Affiliate Window, Paid on Results, Webgains, AffiliateFuture,

Publishers / Affiliates: Loquax, Top10.com, Artemis8

Merchants: Sky, Red Letter Days, PrezzyBox

Agencies: Total Search Solutions

Other: IAB's Affiliate Marketing Council Chairman

What is your view on the last click wins reward model?

Hero Hero Grigoraki (Webgains): The last referrer model has withstood the test of time as it’s a very reliable method of determining commission attribution. It has eliminated fraud issues such as cookie stuffing from first referrers and has enabled the industry to move towards mutually beneficial relationships that add value and maintain profitability. Although with certain limitations, the last referrer model is the best solution currently available in the industry and moving away from it will need a lot of data evaluation from all parties evolved.

Helen Southgate

Helen Southgate (Sky): I believe, and have done for a while, that it needs to be revised in order to protect those affiliates that contribute to a sale but earlier in the customer decision process. For a product such as Sky TV which is a highly considered purchase I firmly believe that affiliates add value at all stages, from awareness, to helping with decision making, to the last click. We know that search is often a last referrer in a decision making process, and we also know that cashback and voucher sites will also take last click so affiliates are and will continue to lose out to other channels and we need to find away to protect them. If these content affiliate sites were to cease to exist then would the customer ever get as far as the last click? It is essentially in everyone’s interests to try and protect this sales funnel.

Clarke Duncan

Clarke Duncan (PaidOnResults): It's the best solution we have at present, I see no issues with developing and improving reward methods, always wise to explore new ideas.

James Little

James Little (AffiliateFuture): I still feel that the last click model works – I strongly believe that the industry needs a standard metric for tracking. Imagine how difficult it would be for affiliates if each network did their own thing here, with no industry standard – datafeeds this way are bad enough, imagine what it would be like with tracking!

Kevin Edwards

Kevin Edwards (Affiliate Window / IAB Chair): Last click remains the ‘least worst’ payment mechanism for our industry. It’s lasted as long as it has for a reason and I strongly feel if there was a viable alternative that offered fairness to affiliates and the ability for advertisers to more intelligently target commissions the industry would be doing it.

Jason Dale

Jason Dale (Loquax): It's the simplest way to reward affiliates and it's the one that's easy to understand. We all know where we stand. Changing the model won't change many of the issues that effect last click wins such as "click to reveal codes" and those "enter code boxes" you see on merchant sites.

It might be more conducive to AM to look at those points before trying to conjure up a new payment system?

Julia Stent

Julia Stent (Top10.com): Let's give credit where credit is due - last click wins is what has made our industry what it is. Advertisers have the opportunity to minimise their risk and pay only when sales are actually made, rather than the more traditional methods that are charged either on clicks or views. In my opinion, the fundamental idea of last click wins is to assign credit where credit is due and that principle still holds. I think the difference we have now is that our industry has matured and technology has advanced significantly enough that we can see that just looking at the last referrer isn't the whole story, which is why last click has come under so much scrutiny.

Duncan Popham

Duncan Popham (Total Search Solutions): Last Click wins is a model created in different times, consumer paths to sale were far more linear, in stark contrast to the multi-touchpoint world we now occupy online. Its the best model that currently exists, but it is logically flawed at a fundamental level. Within affiliate marketing, the last click model has led to a "race to the finish" mentality with affiliates (quite rightly) focusing attention on getting as close to the point of sale as possible within the buying cycle. Of course, this means that merchants (quite rightly) are questioning the incrementality of sales delivered through the channel. In the long run, both of those positions damage the mutual affiliate/merchant benefits that underpin the model.

Zak Edwards

Zak Edwards (PrezzyBox): I can see both sides of the coin to be honest. On the one hand a content affiliate could provide LOADS of reviews/photos/technical specification inter alia on a specific product and then the sale can be “pinched” (in their eyes) by a cash back/voucher codes affiliate at the last minute. Surely therefore the content affiliate deserves something for all of their hard work, but this wouldn’t happen with the “last click wins” model. Conversely Voucher Code affiliates/Cashback Affiliates have a huge man power resource (and bill) managing their respective schemes. This is their content and likewise deserve some commission for their part in the purchase. Would the customer have purchased the item without a voucher code/cash back?

In an ideal World this commission would be shared between all of the contributors but:

a) This can’t work with the Cashback sites

b) How many levels of “multi-attribution” are classed as being contributors? Feasibly a user could search on Google, view a newsletter, click on a sponsored link, visit a content affiliate and visit a cash back site all to make a purchase over a number of visits. How deserving is each factor and how much commission should each get?

Maria

Maria O'Flynn (TradeDoubler): The model has underpinned the emergence of the affiliate channel into a coherent, mainstream discipline, and to date has benefited publishers, advertisers, and networks alike through a period of rapid growth. It is simple and transparent, and despite sporadic threats in the form of adware and cookie hijacking, the model has allowed us all to focus on mutual value-creation. Today, however, the concept of ‘value’ has been fractured from simple sales value and volume, into an individual metric depending on the advertiser (volume, value, retention, acquisition, margin, product specific etc etc). Therefore, reward for value created has to be re-examined.

Alison Guise

Alison Guise (Commission Junction): There is no right or wrong answer to this question, certainly as an industry we need to be able to offer our advertisers the opportunity to easily vary their payment models however the answer to how precisely it is done is a solution which should be unique to each merchant.

It is fundamental to understand the role of every channel and its value, then merchants can align them with their marketing objectives – changing the reward model needs to bring ROI. Certain brands will have a very cost-conscious target audience and so voucher codes and cash back affiliates will be a crucial part of the affiliate marketing mix, whereas some merchants may want to tactically offer discounting but may be more interested in customer lifetime value which a content affiliate may be able to bring.

Whatever happens, it should not be a blanket solution, but a well-considered marketing decision and it needs to be well-communicated to affiliates.

Tina Judic

Tina Judic (Artemis8): It’s a proven model that has worked for many years and it’s a model that has ensured that affiliates have continued to push innovation in the digital marketplace, as they are all vying to be the last click-driver.

Joshna Patel

Joshna Patel (Red Letter Days): With the rise and rise of incentivised traffic in the affiliate world, we believe there’s a need to develop a more intelligent solution that effectively rewards each affiliate involved in a sale for the value they have contributed throughout the customer’s purchasing process.

This was a key driver behind our launch in February of technology that shows or hides the discount code entry box in our checkout based on affiliate type, and enables us to create bespoke exclusive deals for all affiliates in order to create a more level playing field.

In order to be able to move forward from a last click model, we think it’s vital for affiliates, networks and merchants to collaborate in order to find a workable solution.

Do you see a multi-attribution payment model as a viable solution going forward?

Helen Southgate

Helen Southgate (Sky): Yes, but not solely in the affiliate channel. I think multi-attribution needs to start at an online marketing channel level (so affiliates, display, SEO, PPC and Email) but also include cashbacks and vouchers as a channel. This to me makes more sense than simply attributing between affiliates as my research over the past few years has shown that actually this doesn’t make much difference within the affiliate channel as affiliates win / lose just as much to each other so it generally evens out.

Clarke Duncan

Clarke Duncan (PaidOnResults): If done right I don't see an issue, however right now I don't think anyone has the correct secret sauce, in fact I think it will take trial and error on a Merchant by Merchant level to get something that works. Since the very start of Paid On Results history our tracking system has always been able to tell what Affiliates are involved in a sale and can pay out more than 1 Affiliate if needed, the industry however has not wanted this type of thing yet and with good reason due to additional issues it brings. It was developed to detect spyware Affiliates as they often flipped cookies from real Affiliates to themselves.

Hero Hero Grigoraki (Webgains): Potentially there will be merchants who decide to apply a value attribution model for their overall online marketing activity, affiliates included. It will however be on merchant level and after a lot of detailed data analysis.

James Little

James Little (AffiliateFuture): Not unless we get all networks buying into it and changing their technology, as mentioned above. Also the problem that we have is that the industry has now developed to the point where certain large affiliates (think incentive sites) have developed around the last click win technology, so a change would be difficult to put in place.

Kevin Edwards

Kevin Edwards (Affiliate Window / IAB Chair): My opinion of multi-attribution has changed in the last year. A couple of years ago when the idea started to gain some traction I was a firm believer that it offered a fairer remuneration system. I was less concerned about some of the practical limitations as I assumed we would be able to find workarounds. However I’m of the opinion that multi-attribution is a bit of a red herring as it doesn’t address what we’re fundamentally trying to achieve that is rewarding on value. A click is an arbitrary measurement, what should be measured is everything that sits either side of that click.

Jason Dale

Jason Dale (Loquax): Not really. I think it's just going to lead to a lot of confusion and affiliate frustration. However, I think it will come in for programs that are running on multi marketing channels. In that case I'd love to see transparency (in fact I'd love more transparency, who's deduping, who uses PI, who uses PV, who has cookies that take precedence etc).

Julia Stent

Julia Stent (Top10.com): In a word, yes. I was lucky enough while I worked at Vodafone to be given the resources to explore the concept fully in the context of their programme and I still stand by my findings that affiliates would be more fairly rewarded for complex mobile purchase journeys on a multi-attribution model. Now that I've had six months at Top10.com as an affiliate, I can also see how much residual value advertisers receive that can never be fully encompassed by last click. It's always a big step to start talking about changing payment models when the earnings of so many affiliate companies are built around last click, but I believe if done in the right way a move to multi-attribution in this sector would provide any company that can embrace innovation and change with a fantastic new set of opportunities - and revenue streams.

Duncan Popham

Duncan Popham (Total Search Solutions): The real reason for multi-attribution being a critical focus for the industry is multi-channel online marketing rather than Affiliate Marketing in isolation. Within the affiliate channel, the cookie overwrites tend to be fewer than expected but when seen from a multi channel perspective things become materially more complex. My opinion can be summed up as "multi-attribution is imperative, multi-attribution payments are unworkable". From our perspective, we want to use multi-attribution data from our clients to make effective business decisions. I think the channel is so focused on the current payment method that its almost impossible to alter it.

Zak Edwards

Zak Edwards (PrezzyBox): In a nutshell no. If a merchant wants to work with big cash back sites specifically then I don’t see how a multi attribution model can work. If a merchant is happy working solely with content affiliates then yes it would work perfectly, however Voucher Code/Cashback affiliates are big revenue drivers for a lot of merchant and I don’t see a huge amount of them turning their back on this traffic/revenue to introduce a multi attribution model.

Maria

Maria O'Flynn (TradeDoubler): Conceptually and technically yes of course. However commercially and operationally, not in the short to medium term. I think it is fair to say that publishers have matured far more so than advertisers in the affiliate space, and to be fair, so it should be when publishers have not had legacy attitudes and technologies to impede progress.

Multi-attribution is being looked at by our clients as a cross-channel, long term ideal, and it is the role of TradeDoubler to represent the value of affiliates in this wider context, so that when clients finally understand their purchase paths cross-media, we as the network and tracking/payments provider can provide an appropriate mechanism – probably bespoke to them. At the moment, this occurs in the form of program structure advice, where the client pays out on actions that they specifically value – eg first-time customers for Tesco, and in brokering specific relationships with valuable sites – normally content – who are demonstrably instrumental in moving consumers through the buying funnel.

If the need for a complete, automatic payment algorithm emerges, it will be our role to provide this also. My current suspicion is though, that these technologies will operate cross-channel, and potentially re-allocate affiliate commission budgets into display which has such broad, untargeted reach.

Alison Guise

Alison Guise (Commission Junction): Yes and it is already happening in some cases – some merchants choose to pay smaller commissions to voucher code sites for instance. The future of its uptake will only really be viable if it is well thought out. There will be some public success and public failures but failures will generally be because sufficient research had not been done beforehand. The fundamental rule is that it needs to be cost-beneficial to advertisers (whether in the short term or in the long term).

A benefit to the industry may well be that it brings some of the larger, traditionally CPM publishers into affiliate marketing which, in turn, may well bring the remainder of advertisers who do not currently have a programme into affiliate marketing – the final push to get this channel onto the plans of each and every marketer.

Tina Judic

Tina Judic (Artemis8): At some point in the future, but we’re not ready for it yet. We can only truly roll out multi-attribution when the advertiser can confidently map causality to an action. Until they are able to do that, then we are working on too broad assumptions. If, and no doubt when, multi-attribution does roll out, I can’t see it working solely within the confines of the affiliate marketing industry either. It needs to be part of a broad digital strategy. Multi-attribution can only truly work when all media channels are included, and all channels are treated with equal weighting.

Joshna Patel

Joshna Patel (Red Letter Days): I think that for the affiliate community as a whole to embrace multi-attribution payment model, we need to be able to demonstrate that there’s value in it for everybody involved, and this will differ by sector and customer behaviour. For example, for high involvement purchases we are more likely to see more contributing referrals on a sale, which emphasises the benefits of working on a multi-attribution payment model. However, for low involvement purchases the need to work on a multi-attribution model may not be necessary.

We are currently carrying out our own analysis of our affiliate traffic in order to determine what a good solution looks like for our programme, and we’re part of the IAB working group looking at this issue. I hope that more and more merchants carry out this type of analysis so that we can move towards a clearer industry-wide view of what needs to be taken into consideration when developing a best practice multi-attribution payment model.

More to follow...

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Chris Johnson

Chris Johnson

Content Director for PerformanceIN. Based in Bristol & London.

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