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  1. #1
    Affiliate Network Rep Ryan Gilbert's Avatar
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    The value chain: Rewarding affiliates
    An affiliate just asked me, "hey Ryan, I had 15 sales a day for the last few days and now 1-2 a day. whats going on with the tracking?" After checking out the stats, the program is making more sales than ever before so there's no apparent tracking problem. A closer look reveals that coupon code & SEM affiliates have taken the last sale.

    This prompted me here to ask, is it the SEM affiliate that deserves or should get the sale? or is it the content affiliate that did the product review on the first click? Is it bad luck for the content aff?

    We're interested in adding value to the merchants program and rewarding the affiliate that contributed the most the sale. I am interested in your opinion on the last sale wins policy and what can be done about rewarding SEO/content affiliates that put a significant amount more effort into adding value to the sale chain.

    To kick off the discussion, perhaps we can justify the results to our clients by showing a report or graph for the amount of 'presale' clicks the content affiliates have made. Perhaps the affiliates are categorized into different channels and the merchant has the ability to 'weight' certain affiliate channels over another?

    What's your thoughts on new technology that can add more value to the sale chain and move the industry forward? Is more transparency needed? Do you think it needs to be addressed?
    Ryan Gilbert
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  2. #2
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    Don't open a can of worm. It has been addressed many times. The industry standard is last cookie win. You can't have several standards or it will be a mess. I hate coupons but YOU and your merchants are pushing these coupons with your system and the merchant accept them in his cart. So YOU are part of the problem. Your affiliate is not making as much as before, and WHAT? Do you have to help him OR is it his responsability to understand something changed and to adjust.

  3. #3
    ABW Ambassador sjangro's Avatar
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    This isn't a can of worms, it's a great question.

    IMO, as a network, you should look into providing as much information as possible to the merchant to show them what affiliates are involved in each and every sale: the first click, second, ... to last click. (even though the last click gets paid).

    This will allow merchants to consider the value that each type of affiliate is bringing vs. how much they're getting compensated. That's something that's probably pretty specific to each merchant, and what to do with this information isn't a network decision. It is a merchant decision.

    This sort of transparency is what's needed to let merchants see really what's going on in their program.

  4. #4
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    And what will be the result, a different compensation depending of how long your visitor spent on different websites?
    Perhaps the affiliates are categorized into different channels and the merchant has the ability to 'weight' certain affiliate channels over another
    It has be done already by other networks. And what are doing the major etailers right now, helping whose who bring the less value and the most money, the parasites. Is it the kind of transparency that we need?

    To me, it seems like a too naive question. I don't live in fairy tales. How many merchants are taking the coupon box out of their carts? None.

  5. #5
    Beachy Bill's Avatar
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    I may be "old fashioned" but I like the concept of an hour-long "hard" cookie.
    Bill / Marketing Blog @ 12PM - Current project: Resurrecting my "baby" at South Baltimore..
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  6. #6
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    Old thread on it, all kinds of problems with that - http://forum.abestweb.com/showthread...ighlight=stick

    And here's the last time we had a poll on last click vs. first click, 86% said last click - http://forum.abestweb.com/showthread...ighlight=click

    That one affiliate that asked you that question, they should get competitive and just post the coupon and they wouldn't be having those issues.

    And I think with stuff like this, there might be good intentions but I also think there are some people involved in this discussion over the years that have a financial interest in it/product.

    Also don't think a lot of people actually play the scenario out. Maybe you're a fan of having literally 15 different scenarios like CSN does but I think it's ridiculous. Even people agreeing with it, don't even fully understand it themselves and would need a flow chart or video to understand it all.

    I like to know what I'm going to be paid for a sale. There's already a big leap of trust in this business, with tracking, reporting of sales, etc. I can't see what's happening on the merchant/network end. Then you want to introduce this kind of thing which is basically going in and manipulating the numbers, trying to figure out what channel did what, and splitting up the commisson. It just becomes one big mess when it's all played out.

    But I would first go reread the first thread I linked to in this post, very carefully. To me, it's one of those be careful what you wish for kind of deals.
    Last edited by Trust; January 25th, 2009 at 04:42 PM.

  7. #7
    Affiliate Network Rep Ryan Gilbert's Avatar
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    Quote Originally Posted by Zeus
    It has be done already by other networks.
    which ones Zeus?

    Quote Originally Posted by Trust
    Old thread on it, all kinds of problems with that
    Thanks for that thread trust... Particularly good comments from you and Jeff... I was looking for the ABW thread on that for ages.

    Having read it, it doesn't have to be all about dividing commissions. I'd only add an example where a merchant has not allowed PPC on their program and the content affiliate had their cookie overwritten by them... the merchant then declines the commissions and all affs lose out.
    Ryan Gilbert
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  8. #8
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    The example you just gave is one thing and if an affiliate violates an agreement, you can just boot them. But it's different from your example above.

    "We're interested in adding value to the merchants program and rewarding the affiliate that contributed the most the sale. I am interested in your opinion on the last sale wins policy and what can be done about rewarding SEO/content affiliates that put a significant amount more effort into adding value to the sale chain."

    With that you're talking about sales chains, and trying to reward the different players that played a part in that sale. The problem, even tho again there might be good intentions, is the idea just falls apart on many different levels.

    Here's just one. Usually it goes like this. A merchant has an affiliate program. In the agreement they pay 10% for a sale. An affiliate makes a $100 sale and at 10%, they'll make a $10 commission.

    But now, somebody wants to take that $10 commission and try to figure out what other channels might have played a part in the sale and split that commission up. Affiliates won't go for that. It would be death to your affiliate program. I want to know what I'm getting paid. So first you have that problem. One time you might say I was 50% responsible for that sale and pay me $5, another time i was 25% responsible for that sale any pay me $2.50. That's not going to fly. You wouldn't work like that, so people shouldn't expect affiliates either. And in past discussions these are just some examples of things that might have played a part in a sale:

    A link from my coupon site.
    Maybe they went to a content site first or other affiliate sites.
    Maybe they saw a billboard on the interstate.
    Maybe a friend told them about the merchant.
    Maybe they clicked a merchant's PPC ad weeks ago.
    Maybe they saw a commercial on TV.
    Maybe they purchased from you in the past.
    Maybe they happened to see a big banner from an ad buy you did on one of their favorite sites.
    Maybe they went to your site before when you were #1 in the SERPS for whatever they were searching for.

    You get the idea, I can come up with many more "links" in a possible sales chain. With any sale, there could be all kinds of links in that chain. So you have the problem of affiliates not knowing what they'll get paid. And you have major trust issues. We're supposed to trust that merchants will fairly split that commission up? There is just all kinds of abuse possible with it. Again as affiliates, we already can't see what goes on behind the scenes with merchants and networks and it is a leap of trust.

    Then there is the issue if a merchant has adware in their program which was brought up in the other thread and Kellie talked about a little. You can't even begin to get any type of accurate metrics with them in your program. You would have to start there before you even being thinking about doing this. And I don't see that happening with most merchants who have them in their program.

    So those are just a couple of problems and major ones.

    This idea has been around for many years. It's not a new one, it'll get brought up again years from now. It's just not ever going to fly based on the many problems brought up. All you have to do is play the idea out all the way to the end and then you'll see how it falls apart.

    The thing to do, is when a merchant starts an affiliate program, realize how all this works and that there might be different factors that play a part in a sale and factor that kind of thing in your initial agreement before you launch. It's not going to work with something like this as an example -

    We'll pay you anywhere from 2% - 20% based on outside factors that you just have to trust us on.

  9. #9
    Lite On The Do, Heavy On The Nuts Donuts's Avatar
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    Quote Originally Posted by Zeus
    How many merchants are taking the coupon box out of their carts? None.
    There are other ways to address the issue. Brent Elias of CSN Stores has implemented a method with his SAS program that meets their needs and rewards those sending non-coupon traffic. What they've done there is something that I believe is the one of the main reasons why they've won several industry awards, and Brent has posted here many times explaining it in detail. I think it's worth a look for any merchant who is trying to decide, with their own best interests in mind, what to do in multi-touch situations, especially when it involves coupon affiliates.

    Of course, some of the affiliates who are just (or mainly) couponers will post here some ridiculous assertions that you're making a newbie mistake, self preservation is a strong motivator. The one concept I suggest you keep in mind is to reward the activity that you (as a merchant) most want, that's how you get more of it. What you most want, and how you decide to try to reward and motivate it, and also how you balance it among others, is up to you.

    You might mostly want coupon affiliate activity for example, in which case you don't (and shouldn't) mind demotivating and defunding affiliates sending you non-coupon traffic.

    You might want email affiliates to get you massive exposure and decide to pay first in to reward those who can spread you name fastest and furthest.

    Point is, don't ask us to decide for you. We're biased towards the things we do. The merchant needs to assign his determined value and design a reward scheme (including approval criteria, food for thought, comms and timing aren't the whole picture) to optimize the outcomes to be aligned to those needs and values.

  10. #10
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    I know CJ and LS can track a visitor hoping from one website to an other and they have inside information on how was done the sale. I don't know how they share that information with their merchants (with all or a few). Anyway, regarding who deserves or should get the sale they made their choice a long time ago after the Nov 7, 2002 Performance Marketing Summit in NY, and the problem is there.

  11. #11
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    I love that this question is re-opened once in a while.. it shows the networks & merchants continue to have an interest in equitable distribution.

    As a content site, I have learned (the hard way!) that it's my responsibility to give the reader as much info as they need. It's all about that final conversion, yes indeed...

    Trust, I like your thorough analysis, it' a good reminder of the many scenarios out there.

  12. #12
    ABW Ambassador Joshua's Avatar
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    Quote Originally Posted by Ryan Gilbert
    An affiliate just asked me, "hey Ryan, I had 15 sales a day for the last few days and now 1-2 a day. whats going on with the tracking?" After checking out the stats, the program is making more sales than ever before so there's no apparent tracking problem. A closer look reveals that coupon code & SEM affiliates have taken the last sale.

    This prompted me here to ask, is it the SEM affiliate that deserves or should get the sale? or is it the content affiliate that did the product review on the first click? Is it bad luck for the content aff?
    It doesn't really make sense that an affiliate's conversion rate would suddenly drop, and be affected by both SEM and coupon affiliates. For some reason, I highly doubt that 85-95% of users would somehow get to the SEO affiliate's site, and then decide (all of the sudden - no gradual decline mentioned) to go to Google and search for a discount or something similar that would lead them to an SEM affiliate or coupon affiliate. Has the SEO affiliate's conversion rate actually dropped, or have they lost traffic sources, causing fewer clicks? That's one of the most important factors here.

    Are you able to track the progression of cookies/clicks (did the users first go to the SEO affiliate's site, and then go to a coupon site), or are you just basing the assumption on seeing that coupon and SEM affiliates have been driving the sales lately?

  13. #13
    2005 Linkshare Golden Link Award Winner  ecomcity's Avatar
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    Simple solution to reward the few affiliates, who are willing and able to make tasteful satellite sales content sites for your merchants products, is to add actual shopping cart links to their product showcases. Total cost per month for a hosted cart servicing ALL content affiliates, hooked to your network reporting, is 20.00/month and the cart shows NO COUPON code boxes and interfaces to Google Checkout and Google Analytics. Impossible NOT TO report all sales without turning off the shopping cart.

    Now your merchant, and your true value add affiliate, get a real incremental sales channel based upon Google's quality landing page score for natural SERPs and intermediate landing page PPC.
    Webmaster's... Mike and Charlie

    "What have you done today to put real value into a referral click...from a shoppers viewpoint!"

  14. #14
    ABW Ambassador Rehan's Avatar
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    Quote Originally Posted by Donuts
    There are other ways to address the issue. Brent Elias of CSN Stores has implemented a method with his SAS program that meets their needs and rewards those sending non-coupon traffic. What they've done there is something that I believe is the one of the main reasons why they've won several industry awards, and Brent has posted here many times explaining it in detail. I think it's worth a look for any merchant who is trying to decide, with their own best interests in mind, what to do in multi-touch situations, especially when it involves coupon affiliates.
    Yes, that's definitely worth taking a look. Here's one of the threads where it was discussed:
    http://forum.abestweb.com/showthread.php?t=114265

    One of the arguments against that method is that it takes a lot of manual work on the affiliate manager's part, but I would assume that there are ways to automate the clickstream tracking a little bit to make things easier.
    --

  15. #15
    Affiliate Network Rep Ryan Gilbert's Avatar
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    Quote Originally Posted by Joshua
    Has the SEO affiliate's conversion rate actually dropped, or have they lost traffic sources, causing fewer clicks?
    Same clicks, not sure about sources but their sales are back to normal again since then. I wasn't making any conclusions, just hypothesizing

    Quote Originally Posted by Joshua
    Are you able to track the progression of cookies/clicks (did the users first go to the SEO affiliate's site, and then go to a coupon site), or are you just basing the assumption on seeing that coupon and SEM affiliates have been driving the sales lately?
    My question was based on an assumption but that made me go back and check the trail of multiple sales by IP instead of the one sale. Result: Some recurring customers were once with the content aff and is now with the SEM or coupon site. I had a random look over 4 IP's and the content aff had sales leading up to the 21st and then it swapped to the SEM/Coupon aff. Interestingly, on one of 4 the IP trails the sales went back again to the content aff on the 24th.

    There's a whole host of circumstance that could have lead to this event but its interesting to analyze the trail and promote discussion on the topic. There's some interesting proposals
    Ryan Gilbert
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