- Written by Kimberleigh Gardener on
Online retailing continues to rise in the consumer industry.
Online retailing continues to rise in the consumer industry.
This has led to affiliate marketing becoming a key strategy for driving traffic and sales. Therefore, the ability to track this traffic has emerged as a core competency for any online retailer.
Having surpassed the in $1.7bn mark 2017, the affiliate marketing industry continues to adopt new tracking technologies and innovative strategies to meet the needs of brands utilizing performance marketing.
Affiliate tracking solutions used by retailers to manage their affiliate marketing performance are becoming increasingly sophisticated. There are several insights into a user journey that affiliate tracking can provide, but the most essential is the productivity of individual affiliates, helping to gauge the overall effectiveness of the affiliate channel.
Ever wondered what affiliate tracking is and why it is so important? Tracking allows brands and affiliates to gain invaluable insight into which elements of their online activity are generating the greatest volume of visitors, conversions and clicks. This provides a clear view as to whether an affiliate marketing campaign is working or not. Affiliate networks offer different tracking solutions, which enables the ability to track a range of different metrics. This allows brands to work with networks that incorporate specific tracking solutions and payment models, best suited to their brand’s key performance indicators (KPIs).
Affiliate marketing is, “a means for a company to sell its products, by signing up individuals or companies ("affiliates") who market the company's products, for a commission.” Traditionally, commissions are calculated based on a percentage of revenue that the brand makes for each sale or referral. However, there is a range of different commission models that can be used depending on the brand and what vertical they are in. The most common commission model for affiliate marketing is cost per acquisition (CPA), which means the brand only pays out to the affiliate once the sale is complete. There are also payment models such as cost per click (CPC), cost per lead (CPL) and cost per thousand impressions (CPM), which bring flexibility to the payment set up, allowing the brand as well as the affiliate to utilize the channel efficiently.
Traditionally affiliate marketing is powered by cookies, which is a piece of technology that interacts with a web browser to store information such as user preferences, login details or registration information and shopping cart contents.
If you have ever “accepted” cookies to read content on a website or opted-in to have a website "remember" your password and username, you’ve had a close encounter with a cookie.
Ever searched online for "phone deals" and suddenly you see display banners advertising phone special offers on other websites? This is the result of a cookie being dropped on your browser on the initial search, storing the data of this search as something you might be interested in and allowing you to be targeted at a later date. These cookies tend to last 30 days, but this can vary between brands.
In the context of affiliate marketing, these cookies store the link or ad that the website visitor clicked on. Cookies can also store a range of data attached to this click, including the time and date of the click and what type of websites you have visited.
There are several different forms of cookies (as well as uses for the cookies); however, the most common cookie type used in affiliate marketing is called a first-party cookie. When a visitor is reading content from a publisher's website and clicks through to make a purchase (either clicking through an advertiser's banner, display ad or text link), a cookie is dropped on the browser which enables this user’s click through journey to be tracked. This cookie allows us to identify the advertiser, the publisher and therefore the agreed commission amount. This data is stored in the cookie’s link information, which is known as the custom "parameter.”
The parameters can be as sophisticated as the brand needs, providing insights into specific products (including details such as the color or sub-brand) as well as details on the different payment or delivery type, whatever aspect of the attribution is useful to the brand. That said, affiliate marketing is typically data light and does not track consumer’s buying behavior, and since the legislation of GDPR came into play in May 2018, affiliate networks have taken extra precautions to ensure data protection is not breached.
By joining a network, such as Awin’s, advertisers can make use of our Bounceless Tracking solution. This allows all sales to be tracked without using cookies, but rather by using Awin’s Tracking Optimization Plugin and MasterTag, ensuring a faster user experience and greater visibility.
When an affiliate signs up to join a network, they are allocated a unique affiliate ID (Awin provides one publisher ID per affiliate, referred to as a PID, such as 999). This ID is then embedded into the referral URLs that affiliates use to promote the brand’s products and services. Within this link, publishers can use the click references to differentiate between websites or promotional slots. This referral link can look like this: http://yourfabulouswebsite.com/?ref=999. When a reader clicks on this link they are directed to the retailer’s website, and because the affiliate’s ID is embedded into the referral link, as well as the brand’s merchant ID, it enables specific attribution to the affiliate and merchant that were involved in the sale, allowing the commission to be paid out accurately too. It is this aspect of tracking that allows us to identify the different affiliate types that are driving growth to a specific affiliate program, such as a cashback affiliate or a discount affiliate. The brand may have agreed for each of these affiliate types to have different commission amounts per sale, and therefore the uniqueness of each affiliate link helps to enable this flexibility within the program set up. Through Awin’s Commission Manager tool, more visibility is given to both advertiser and publisher on their past, current and future commission rates, which improves the accuracy of attribution to affiliate transactions.
So if you have ever bought through a cashback site and had your cashback track into your online account, the retailer will have employed a specific affiliate model to track the sale and commission. That said, not all networks give a unique PID to each affiliate; instead they assign the PID to each link, so on alternative networks to Awin, the affiliates may have several PIDs due to the fact that they have several links or several websites.
Although the publisher ID will be stored in the cookie, it is also important for affiliate links to be embedded throughout the website so more granular insights can be pulled from the user journey. This could be the section of the site they clicked through to make the purchase, which would allow key learnings about the user behavior and a CPA model to be credited.
The cookie's expiration date is decided by the brand when the affiliate program is initially set up, so it can vary between vertical and retailer. However, the network standard for this is usually 30 days, as it gives the consumer enough time to make their purchase decision. It’s important to note that any web user is entitled to clear their browser cookies at any time they wish, which would result in the tracking of the affiliate and any potential sale to be cleared too. To combat this, Awin launched the Bounceless Tracking solution, which is an innovative approach to ensure all sales are tracked regardless of cookies.
The industry is built on the premise of “Last Click Wins,” which means in normal circumstances a cookie can be overwritten by any new click. This then credits the last referring affiliate with the commission. However, there are some multi-attribution models where the last click model does not suffice, due to multiple affiliates influencing one user journey. In these circumstances, as well as considering the cookie hierarchy, the affiliate that is attributed for the sale can vary.
Technically, you can set the cookie expiration to an extremely high number. However, you will still be exposed to the possibility that a customer will periodically clear their browser cookies, or even use a different browser all together. In both cases, the affiliate sale cannot be tracked, as the cookies will only be stored in the browser that the customer is using at the time.
There are some affiliate programs that offer lifetime commissions, which allows affiliates to earn commission off an individual customer, for a lifetime. With this program set up, the customer is always linked to the affiliate associated with the original referral link used by the customer, regardless of which browser they use or whether they periodically clear their browser cookies.
Affiliate tracking has the ability to track the use of a voucher code within the voucher parameter set up; however, the attribution of this code and the affiliate it was used with is dependent on each program’s terms and conditions.
Affiliate marketing has proven to be a highly effective strategy for driving revenue across a range of market niches for thousands of online retailers. However, while theoretically straightforward, the key to its success lies in ensuring you have the support of the right affiliate marketing program by the right technology.
Whether you are an affiliate or a retailer, the key to success is choosing a sustainable, long-term affiliate marketing strategy, partnered with the resources to deliver quality content, production and promotion. In order to deliver the above, it is essential to have a reliable tracking solution to track lead generation activity, quantify purchase conversions and reward affiliates for their successful efforts.
Ensuring the commission incentivizes affiliates to drive more conversions grows not only their presence in the publisher space, but also the merchants affiliate program and the network that enabled this partnership in the first place. By understanding your legal obligations as well as optimizing affiliate software solutions, you can position your affiliate marketing program on the road to success.
If you’d like to know more about either our lead generation or affiliate program propositions, please get in contact with the team here.
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