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Play-by-Play: Consequences & Opportunities of Affiliate’s Commercial Model, Discussed

Play-by-Play: Consequences & Opportunities of Affiliate’s Commercial Model, Discussed

The contentious subject of 'last click' discussed by an expert panel at Performance Marketing Insights: London, in summary.

Few topics stir up as much debate within the affiliate marketing industry as that of ‘last click’, the reward model whereby a publisher is paid for driving the final referral before a conversion. 

For some it’s the most logical way of rewarding a sale. Yet as the channel evolves and publishers learn how to play the system, the model arguably siphons credit from work carried out further up the funnel, across devices, that provided the early impetus for that same action. 

The subject of affiliate’s dominant commercial model was thrown to a panel of high-profile experts at Performance Marketing Insights last month. PerformanceIN took the chance to provide a play-by-play of the main discussion, which was hosted by commercial strategy consultant Julia Stent. The lineup was as follows: 

Anthony Clements - UK country manager at Affiliate Window 
James Little - group commercial director at TopCashback
Ernest Doku - senior commercial partnerships manager at uSwitch
Michael Long - senior partner marketing manager at Hotels.com

Do affiliate companies generally work on a last-click basis? 

The opening question of whether last click was dominant may have seemed moot to the affiliate experts in attendance. To those belonging to other backgrounds, it set the scene before the real discussion could get underway.  

“Yes, this is the main model in use,” commented Anthony Clements from the get-go, claiming this to have been the case for years, with James Little adding that “almost all” of TopCashback’s 4,500 retailers pay out on the same rule. 

Anticipating the direction of the debate, Clements was swift to attach that “efforts are being made” to develop the model, which could allude to the networks’ rolling out of technologies to track ‘assists’ on sales.

Ernest Doku seized an early opportunity to lay cards on the table, calling last click unequipped to recognise “increasing complexity” within customer journeys, thus highlighting investments of “time, money and people power” by higher-funnel publishers informing purchase decisions. 

Referring to uSwitch’s own campaign results, Doku said voucher codes or cashback sites were a growing subset “feeding off” the work of certain affiliates: “From that I would deduce that there are a number of sales we are commencing and which are being overridden later on in that journey.”

From the advertiser perspective, or what Julia Stent referred to as “the source of all budgets”, Michael Long confirmed that most of Hotels.com's attribution is on a last-click basis within the affiliate channel, the reason for this boiling down to which model ultimately proves the best ROI. It’s a significant aspect kept in mind when considering doing “something different”.

Where do intermediaries, such as tracking solutions and analytics companies, sit in regards to the conversation around reward models? 

In terms of attribution, that depends on whether they’re “facilitating or advising”, commented Clements, making his attitudes clear by adding a belief that most businesses will “know and understand” their customers more than most third parties, which can “miss the point”.

These companies can also be a “barrier” to developing reward and attribution models, said Clements, with tracking and technology sometimes reliant on companies that are “hard to influence”.

Little also took issue with third parties, citing examples of attribution errors and knowledge gaps - “they don’t really understand our channel, they’re not experts in it” - whilst stating his preference to work with networks on similar issues.

Stent pointed out that the issue extends beyond the technological, and to one of relationships and account management.

Providing a counterpoint to Clements’ assertion, Doku placed the onus on networks to push advertisers towards alternative models, away from last click: “The ideas outside of that have been pushed from our side. I think there’s an adage of ‘change is good, but you go first’.”

Clements objected that for affiliates of uSwitch’s stature, it falls on the publisher to push the proposition of higher funnel engagement with customers. On a lower level, with smaller publishers, the network plays more of a key role, he admitted.

Doku shot back that his company often feels “an army of one”, with many of these advertiser propositions “falling on deaf ears”, insisting that it’s the network’s role to “explain and enlighten” advertisers towards initiatives.

The subject of the conversation was steered towards the shortfalls, such as slow or “disappearing payments”, in ‘deduping’ - a preventative measure for more than one channel claiming credit for the same conversion. Clements called it “more undermining than transactional CPA”.

Little apologised for “network bashing” before saying it’s an issue caused by networks’ failure to combat it in the first place.

Agreeing, Clement’s responded there are things that could have been done but that “we have the situation we’re presented with”. He went on to argue that some of the conversations the networks had with advertisers were undermined by the way some affiliates generated traffic while apologising himself for “incentive bashing”. 

Is affiliate marketing missing out on a trick with influencer marketing? 

The conversation moved onto higher-funnel ‘publishers’ that have made things work for them, which saw Little opt in with the frank admission that the industry may have “dropped the ball”..

“Whether it’s that we don’t have expertise in the channel, whether it’s that we just haven’t gone down that route, it seems that it’s the kind of place where maybe affiliate marketing is missing out,” he added.

While calling influencer marketing “affiliate marketing rebranded”, Clements also admitted to missed opportunities to engage with certain propositions who are now on board with influencer networks, because of not having the means to reward them. 

Agreeing to the question “wholeheartedly”, Doku referred to influencer marketing as a “massive branding exercise”, and stating that if you are facing issues with last click, it’s a model that “allows you to thrive”.

Speaking on behalf of Hotels.com, Long said: “Where we’ve seen some success is where we’re bringing in other parts of our business, such as the PR team, to help with content; budgets that traditionally sit outside of what we call affiliate.” 

Asked whether this interferes with the channel-specific sales figures, Long replied that there are wider benefits for his company working with publishers on a “different level”. 

Little pointed out that progress into the influencer market is partly reliant on building awareness among advertisers that certain affiliates are indeed diversifying towards the model, citing TopCashback’s use of content to drive engagement around some products. 

How do affiliates, advertisers, intermediaries start to create new opportunities by thinking more creatively? 

Elaborating on a former point, Long said that Hotels.com is working on expanding its relationships with publishers. That entails making them more aware of upcoming sales, flexing cashback rates, and “what it is trying to achieve”. That extends to content creation, reviews, video for publishers to use, culminating in an opportunity that is more than “just a sales message”. 

For Doku and uSwitch, success pivots on market exclusivity and tailored approaches; presenting advertisers with rich publisher data, backing that with evidence of it working with unique deals in order to prove you can drive more solo sales and incremental revenue through the channel. That, meanwhile, opens the doors for more strategic conversations. 

“If you listen closely, whatever small element, you can solve, if you can do it frequently and well enough, you can charge for it. It’s a value-add that happens outside of last click,” he said. “That’s where we massively thrive among suppliers, and manufacturers in the case of mobile - to derive insights that are ‘novel’ and would only be able to come from a place like uSwitch.”

With the initial question handed over to Little, he responded that more needs to be done to build awareness and shun misconceptions around the affiliate channel, whether it’s PR or going directly to large retailers to explain the benefits. 

Responding on an industry level, he said its members should “just do the stuff we’ve been talking about for years”.

Little adds: “I know it’s hard to get merchant adaptation, I know it’s everyone’s fault, but we’ve been talking about these issues - such as generating more sales for individual affiliates - for a long time, and apart from maybe a few cases it hasn’t really been done."

Little remarked that every year seems to be predicted as a “tipping point”, shedding doubt on whether 2017 would be; a premise not agreed on by some. 

“I do think 2017 will be a tipping point”, commented Clements, “there are more advertisers paying publishers differently than ever before.” 

He concluded, however, that there would need to be a “mindset change” among advertisers, and that working with the affiliate channel is about “optimisation, not just measurement.” 

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Mark  Jones

Mark Jones

Editorial Executive at PerformanceIN. Mark reports performance marketing news and manages PI's network of guest contributors.

Originally from Plymouth, Mark studied in Reading and London, eventually earning his Master's in Digital Journalism- before making his return to the West Country to join the PI team in Bristol.

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