INside Performance Marketing
Is it Time to Shake Up the Affiliate Commercial Model?

Is it Time to Shake Up the Affiliate Commercial Model?

“Last click wins” is the mantra on which our affiliate industry was born and raised. Every account manager worth their salt should be able to explain cookie overwriting, and every affiliate is all too familiar with the fierce competition to be win that last click and convince the customer to convert to a sale.

Our model has shaped the companies, technology and budgets that we see around us. A plethora of affiliate sites have developed tactics of every size and shape to incentivise customers to ensure they’re the very last click - often by explicitly instructing their users that this has to be so. We have coached the advertisers working in the space to see affiliate spend as a cost of sale, and pay one commission per transaction to that magic last click.

There’s no denying the benefits of this model. In its purest form it’s logical, simple to explain and entirely risk-free for an advertiser. This has led to the exponential growth in affiliate budgets that we’ve seen across the last few years. According to the IAB, affiliate marketing generated £16.5bn in consumer spend last year. If we compare that to 2006 ten years ago when I first joined the industry that number was £2.16bn… 800% growth in ten years is not to be sniffed at.

Time for change

But what about the negative consequences of our model? Could we argue that chasing the last click has led to an industry that is obsessed with the bottom of the funnel - chasing consumers to the checkout, and neglecting the aspects of brand awareness and product choice that are so essential for a brand’s online strategy?

Over the last year many amongst us have watched the rapid rise of influencer marketing with growing interest. The new-kid-on-the-block, influencer marketing could be said to be everything that affiliate marketing is not - socially focused, top of the funnel, engagement driven. Are brands flocking to it as a reaction to years of affiliates chasing the last click, or is this an untrackable bubble that’s likely to burst?

We have a huge opportunity on our hands to decide how affiliate marketing’s commercial model should evolve. Expect the last click camp to argue that our model is evidently successfully as it is and should be left untouched - those astronomical growth numbers speak for themselves and customers want incentives. Their opponents could argue the opposite - affiliates and intermediaries need to evolve our thinking far beyond breaking up payments to affect a step change in the role affiliate marketing plays with the customer, reconnecting with the top of the funnel and welcoming back those influencer budgets from advertisers with open arms. 

Join the debate with Julia and Hotels.com's Michael Long at Performance Marketing Insights: London (October 25-26). Their panel session will be a base discussing a way forward for the affiliate commercial model

Continue the conversation

Got a question or comment – tweet Julia @JuliaStent or comment on Twitter, Facebook or LinkedIN.

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.

Read more from Julia

Related Articles

Join over 10,000 performance marketers for the ultimate weekly update on industry news