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Crackdown on Cookie Tracking and What it Really Means for the Affiliate Industry

Crackdown on Cookie Tracking and What it Really Means for the Affiliate Industry

PerformanceIN

With all the recent tracking updates and Google’s latest privacy settings announcement, we take a deep dive into cookie tracking and what this truly means for the affiliate industry going forward.

Google Chrome’s recent announcement of its new privacy setting at the Google U/I conference has flipped the digital advertising industry on its head as advertisers face the prospect of being blocked from targeting ads to consumers that now have the option to turn off third-party tracking to personalise their online browsing experience. Add to this the recent Intelligent Tracking Prevention (ITP) tracking updates from Apple and Firefox as well, and there’s a feeling in the air that the online world is shifting to improving transparency for users when it comes to data privacy.

In hindsight, anything that aims to improve transparency, choice and control over privacy data must be a good thing, surely? Yes, if you’re a consumer, but if you’re an advertiser that relies on such data to construct your ad targeting while making revenue from the ads clicked, it could be a potential roadblock. While the finer details are still being confirmed – particularly Chrome’s tracking changes – advertisers and publishers alike are rallying the question of whether this will mean the end of third and first-party cookie tracking. Then there’s the compliance side; how should advertisers prepare for these changes so that your revenue streams don't come to a standstill and ensure everyone involved is rewarded fairly? 

With specific reference to the affiliate marketing industry, the question we want to answer is what exactly do these tracking updates mean for affiliates? 

The basics and initial impact

If we put this in affiliate terms, cookie tracking is a way advertisers can collect data on relevant consumers who browse online and purchase their products. They then use this information to adapt their ad targeting and audience. As part of an affiliate program, the advertiser would often work with a publisher to target a user on a website. When a user clicks on a targeted ad via the publisher website (which is supported by an affiliate link) and makes a direct purchase, the advertiser will receive the sale from where the purchase was made, with the publisher earning a commission from the advertiser. 

Cookie tracking is applied as data is often gathered at the end of the user purchasing journey. So, for example, with a purchase completed on Safari, based on the ITP changes, for instance, the first-party cookie data made after purchase will only be available to the affiliate for 24 hours, leaving them very little time to gather the information they need.

There have been discussions around the potential impacts on affiliates, most noticeably the loss of commission from the removal of third-party cookies on browsers such as Safari, Firefox and now Chrome, with first-party tracking restricted to only 24 hours (Safari) before being completely removed. Google claims that its latest development will have minimal disruption to first-party cookies, only impacting the tracking of third-party cookies, for now. However, if we actually breakdown the market share between these browsers, are the losses that severe? 

According to sources, Apple’s Safari browser accounted for 4% of desktop sessions and 26% of mobile sessions globally in April. Firefox accounted for 10% of desktop sessions and 1.5% of mobile sessions last month whereas Chrome accounted for 66% of global desktop sessions and 63% impressions on mobile. Looking at these stats, you could say that the effects of ITP, for example, could be written off for the likes of Safari and Firefox with their market share particular low in sessions. However, what’s more concerning is Chrome, which accounts for nearly two-thirds of market share, meaning the new changes for Chrome, which are unclear to some, could perhaps have the most effect on advertisers and publishers.

Networks step up

The networks that run the affiliate programs have had much to say about the tracking changes, even going as far as to urge advertisers to prepare themselves so that they’re fully compliant so that no affiliate involved in the program loses out. Some networks have even formed their own tracking code of which advertisers can input to mitigate the external browser changes. 

Since 2010, Awin has developed its first-party cookie solution, the Advertiser MasterTag. They have also been working to increase the adoption of server to server to offer a multi-layered approach to tracking. Awin’s product marketing manager Edward Chaput de Saintonge explained that the latest update is not as harsh as it may appear.

“We have been keeping our clients updated about the importance of upgrading tracking and what solutions will work. The Advertiser MasterTag, our first-party cookie solution, was developed in 2010 but this has not been as widely adopted as our Server to Server (API) tracking solution," said Edward.

"An important objective is to encourage the adoption of our full tracking suite, handhold where needed and ultimately have every advertiser tracking at the same level. Just as important is the push to ensure continuity in payments for publishers. We have recently made our first ITP compensation payments to publishers who are missing out on commission from the few advertisers who have not adopted the full tracking suite.” he said.

Owen Hancock, head of strategy, Europe at CJ Affiliate expressed that while these ongoing tracking changes have been made with positive intentions, they could ultimately reduce the transparency available to advertisers.

“It is essential that advertisers continue to find ways to offer a commission for sales that cannot be tracked under current mechanisms. Without this, publishers will suffer, ultimately resulting in them producing less content – a loss for both advertisers and consumers. I expect this is going to affect our long tail the most, as they are the types of small publisher that can’t afford to keep going when commissions are pulled away,” said Hancock.

Similarly to Awin, CJ Affiliate has been working on a number of ways to offer transparency for all parties during an evolving environment by employing a variety of solutions that work independently but combine to create stronger tracking. This includes local storage, cookies (server-side and client-side, first-party and third-party, request-level and page-context), and backend tracking APIs. 

“Our strategy is to align our tracking with trends in consumer privacy, positioning ourselves – and our partners – to take advantage of any and all best-in-class, privacy-compliant tracking techniques, all with minimal disruption and investment for our customers,” Hancock added.

Meanwhile, Webgains’ CEO Richard Dennys, stated that the network was working on privacy best practice long before the tracking changes came into effect, explaining that up until now, there has been relatively low impact for affiliates on their network.

“For our advertisers, we were already reworking our tracking code even before the first iteration of ITP came out in Safari and now have most of our advertisers rolled over to our first-party and/or server-to-server basis under a fresh contractual, data processor, basis and the rest in the process,” he said.

Has it worked?

At initial glance, the networks are certainly doing their part to ensure full compliance and transparency for their affiliates but this is just the start. 

“The best thing we can do is educate our customers about the upcoming changes and ensure we help advertisers through these tracking updates. These browser changes are not isolated but represent an ongoing situation that we have most certainly not seen the last of. Like the rest of the AdTech ecosystem, we will have to adapt our practices and change priorities just as we have seen since the onset of GDPR. The most important thing is to continue to educate the industry and be transparent with what is happening and the effects it will have, it won’t completely eradicate the advertiser’s pain of having to upgrade their tracking or the publishers concern over missed commissions but it is the best we can all do during these changing times,” explained Edward.

Referring to their practices, Dennys said Webgains is taking things very seriously, going as far as serving suspension and closure notices for affiliates who haven’t wanted to or been able to switch over to the appropriate tracking code.

“From a network point of view, they will most likely serve to reinforce the last-click attribution model, which probably isn’t great news for content publishers and influencers since it pushes ‘rewarded’ sale attribution even further ‘down the funnel’ into the voucher, offer and cashback aggregation space. This means that in vertical markets where customer discovery and purchase journeys are longer than 24 hours involving an Apple device, these may not be correctly rewarded, even if they directly drive or merely influence a sale,” commented Dennys.

All about the consumer?

If we look at the tracking developments from a broader perspective, it’s the eyes of the consumer that’s changing as they become more educated about their data and therefore demanding more control and transparency.

Rakuten Marketing VP of client success, Nick Fletcher welcomed Google’s decision to make information more accessible and digestible for consumers to make informed choices. But more importantly, he urged the affiliate industry to hold them accountable for making sure its ecosystem is an equitable environment for all its good-standing players and doesn’t give itself an advantage at the expense of the third parties who rely on it.

“At the end of the day, advertising is what makes the internet free, and it’s good to see Google’s commitment to that value exchange while also giving consumers more control over their online experience,” said Fletcher.

Whichever way we look at it, there’s no denying that we’re entering a new phase of digital advertising. No matter how prepared, it is the industry’s responsibility to help both advertisers and publishers overcome the challenges that await.

“Tracking blockers are the new reality for advertising, and create new, but not insurmountable, challenges for advertisers. Solutions such as server-to-server tracking, part of Rakuten Marketing’s suite of different tracking solutions, is one way to mitigate many of the current blockers,” Fletcher added; “Across the board, the onus is on us, as an industry, to create advertising experiences that are more appealing to consumers and add value to their online experience. Affiliate marketing is well positioned in this regard, as the content is native and contextualised to be relevant to consumers’ wants, needs and interests.”

Conclusion

So bringing everything back to the initial question – what exactly do these tracking updates mean for affiliates? The answer appears to be somewhat proactive. At a time when we have never been more consumer-focused, changes that allow them a more personalised online experience in addition to protecting their privacy and data are inevitable. It is imperative that the affiliate marketing industry takes the appropriate steps to ensure all parties are kept happy, even if there are some challenges along the way.

“As one of the world’s largest internet companies, Rakuten is fortunate to have an extensive ecosystem where we set ‘true’ first-party cookies. This isn’t the case for many companies in the space that rely on third-party tracking. While businesses will need to take steps to change the way they’re integrated with their ad partners, the call for the industry to do a better job of advertising is going to be a positive change, and we look forward to being a part of it,” said Fletcher.

“Ultimately, these are the changes that are being forced from above. Whilst the intentions are good, improving control and transparency for users, the fact that they are being carried out by the tech giants in such a blunt fashion does risk collateral damage to our industry. Affiliate marketing is a data-light, non-invasive form of advertising that fulfils a valuable function in sustaining online businesses of all shapes and sizes. It is paramount that affiliates and advertisers are insulated from these updates and networks like our own have a key role to play in ensuring this is the case,” Mark Walters CEO of Awin concluded.

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Mustafa Mirreh

Mustafa Mirreh

Mustafa is a senior journalist at PerformanceIN. Reporting on the latest day-to-day news and updates from the world of performance marketing, while also doing social media promotion, live reporting of events, article features and interviewing key industry players.

 

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