Practical Ecommerce

Affiliate Marketing: Time to Adopt Attribution Rules?

ShareASale, the affiliate-marketing platform, offers sophisticated attribution rules, allowing merchants to pay commissions to all participants in a customer's purchase path.

ShareASale, the affiliate-marketing platform, offers sophisticated attribution rules, allowing merchants to pay commissions to all participants in a customer’s purchase path.

Deciding who should receive affiliate-marketing commissions is increasingly important. Ecommerce merchants have watched as the affiliate channel evolved and coupon and loyalty sites quickly became the dominant publishers with little to no extra effort. Content-based affiliates that typically introduce new customers to brands started seeing a steady decline in conversions.

Progressive affiliate networks went to great lengths to create customizable rules to level the playing field and end the archaic model of “last click wins.” This attribution technology allows affiliate managers to place a value on specific touch points in the clickstream. Rules vary from ignoring the closing affiliate to splitting commissions for all affiliates involved in the transaction process.

In “Affiliate Marketing: Many Ways to Attribute Sales,” an article from 2015, we highlighted the attribution methods. Since then, only a fraction of the merchants in these networks have adopted some form of the advanced attribution rules. Merchants are either unaware of the technology or they have not considered the ramifications of not implementing it.

Bloggers, influencers, and social media marketers are being heavily recruited to affiliate marketing. Proactive affiliate managers are creating these new content affiliates but many are not giving them the proper tools to be successful.

Extensive Purchase Path

Consumers do not necessarily shop only on their favorite ecommerce stores. Instead, they often have an extensive purchase path. They use search engines, read reviews, click search ads, visit coupon and deal sites, and respond to shopping cart abandonment follow-ups. Clickstreams often include a mix of all these before the final transaction. When the merchants enable advanced rules, a content affiliate that introduces or influences the process is virtually guaranteed to receive at least a partial commission on the sale.

At the January 2017 Affiliate Summit West conference in Las Vegas, Sarah Beeskow Blay, director of client services at ShareASale, an affiliate platform and network, presented her research on the topic. Only 20 of ShareASale’s top 100 ranked programs were utilizing the platform’s attribution technology. ShareASale has more than 4,500 merchants and more than 100,000 publishers.

Consumers do not necessarily shop only on their favorite ecommerce stores.

A common complaint from content publishers is low conversion though the affiliate channel. They spend hours or days creating unique promotions only to find low clicks and no sales. They get frustrated and sometimes don’t understand the reason why they didn’t earn the expected commissions.

According to Kelby Carr, C.E.O. and founder of Type-A Parent, a conference and community platform for moms and dads, most bloggers are unaware of the disparity in the clickstream process. If they knew they had a higher chance of conversion with a different merchant, they might rethink their promotions, she said.

Rewarding All Participants

The most effective rule, according to ShareASale’s Blay, is the split method, wherein the commission is shared among all participants.

She cited a merchant case in which content affiliates’ commissions increased 163 percent after the split rules were in place. In 2015, the commission balance for this merchant between content and other affiliate models was 26/74, in favor of the others. After the split rules were enabled, the percentage was 52/48, in favor of the content affiliates. The increase in trackable conversions gave content affiliates confidence and motivation to continue working with the merchant. The split did not cost the merchant any extra in payout and the key players in the clickstream were rewarded with their fair share of the commission.

Chad Waite, marketing manager for AvantLink, another affiliate platform and network, says that about 50 percent of AvantLink’s top merchants are using attribution data and 20 percent are using commission splitting rules. Program managers collect all the data from the clickstream and they often find multiple affiliates involved in the sale. That data then powers real-time commission splitting.

“If [merchant] programs don’t embrace this, they’ll lose the valuable affiliates they want to work with because they’re not being kept in the payout cycle,” said Waite. “Affiliate demand for equitable payouts will drive the adoption of attribution and commission splitting, and merchants’ insatiable desire for data will be a secondary force.”

Devaluing Affiliates?

Depending on the platform, some merchants use attribution technology to extend the rules to include all ecommerce channels and monitor the entire life cycle of the customer. This action devalues the true nature of the affiliate channel.

Affiliates are discouraged when they learn of reversed commissions because the customer clicked on, say, a merchant’s newsletter in the previous 90 days. This method benefits the brand, by reducing commissions, but it does not encourage long-term affiliate partnerships. Affiliates need to know they are valued.

The affiliate channel generates high profits for many brands. Affiliate program management requires constant attention, enforcement, and adjustments as merchants and publishers evolve. It is not an auto-approve and set-it-and-forget-it channel.  Attributing all of the players in the purchase process is key.

Greg Hoffman

Greg Hoffman

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  1. Andreas Reifffen February 1, 2017 Reply

    Makes a lot of sense, but …
    I remember that this discussion started in 2006 (!!!) and so far nothing has happened. Probably the networks are not interested as many affilates sit at the end of the conversion funnel and would not benefit from attribution. Quite short-sighted, however.

    • Greg Hoffman February 2, 2017 Reply

      But the point is, some networks have done something. Now it’s up to the merchants to take advantage of the technology.

  2. Jessyca Frederick February 2, 2017 Reply

    As a happy content affiliate in one of Greg’s Top 100 Power Rank merchant programs, I can attest to the importance of multiple attribution in the payout — it keeps my revenue high and the program high on my list for any and all promotional opportunities.

    As time goes on, I find myself asking more and more merchants about whether they’re using these tools and at some point this year, not using these tools is very likely going to become a negative factor in how much visibility my partners’ products see on my website.

  3. Petar Elez June 6, 2017 Reply

    Hi Greg,

    My understanding is that the attribution is based mostly on link activity. If that is correct then affiliates are potentially losing money a lot of money in cases where visitors don’t follow links but visit advertiser website directly.

    If another way existed would there be demand for it?

    I’ve recently launched a startup (CinnamonCookie.com) and our tech can potentially enable a “linkless” attribution model for affiliate industry – no links, 3rd party cookies or iFrames – and has 100% visitor traffic coverage.

    Wondering if we should focus on the affiliate industry.

    • Greg Hoffman June 6, 2017 Reply

      Your idea sounds great for affiliates but not so great for merchants. They are looking for ways to be smarter about the money they spend. Linkless attribution would only work if all ecommerce channels were represented and a fair piece of the pie was distributed to each touch point. There are third party technologies that exist for this such as Convertro and Adtriba.