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Home Asian e-Marketing July - August 2009 Why Affiliate Marketing Needs a Comprehensive Tracking System

Why Affiliate Marketing Needs a Comprehensive Tracking System

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I am not sure if you were following the recent intense discussions on the topic “fraud in affiliate marketing”. It revolved around the idea that affiliate networks and agencies that take care of partner programs are not completely devoted to put an end to affiliate fraud. The reason for such an accusation was triggered by the fact that both parties are paid according to their participation in the affiliate value-added chain.

However, affiliate fraud is only a small aspect of this broad discussion, which encompasses trustworthy tracking that monitors all marketing channels.

A full-service agency always assesses its customers comprehensively and usually wants to take over the complete online campaign management through-out all channels, as each campaign element, comprising of SEM, SEO, newsletter marketing, display advertising and affiliate market are seen as an integral part of the final goal.

Analysis have proven that in more than 50 percent of the cases purchasers have more than one contact to advertisement material before they decide to buy a particular product. In practice this means that for example, a consumer sees a product in a vendor’s newsletter, then a banner for the same product on price comparison search engines, then searches the name of the brand in Google, and finally comes into contact with an affiliate’s marketing ad possibly on the page of a forum. In this case, only the affiliate receives the commission as he has been the last that placed a cookie as the most recent participant in the dialogue chain. This poses of course the question about the steps that the consumer took before the final purchase? The answer is simple: they are disregarded, because present tracking systems on the market only look at the last transaction in the chain of events, which compromises the evaluation of integrated online marketing enormously. However this problem and its complex impact are becoming increasingly pertinent.

Usually, marketing agencies provide their customers regularly with performance reports based on “last cookie” sales. To ensure that credit is given where credit is due, an enhanced and more comprehensive tracking system is required which counts each measure separately that leads up to a purchase. If every campaign element were handled by a single agency, the tracking could be run from a centralized system, which would allow the detailed notation of what actually led the customer to the purchase.

Only affiliate marketing is difficult to integrate, which brings us back to the starting point. The reason for this is the variety of network tracking systems. Every affiliate network works self-sufficient on its own system that runs parallel to the campaign tracking of the agency. Now there is the option to accept this and consult the performance data of both systems and compile them accordingly, if there wouldn’t be one obstacle: tracking systems are not connected to one another. They work that way that if their is a purchase on the dealer’s order confirmation page in co-operation with a cookie on the customer’s PC, an accounting pixel is called up that transfers detailed information like price, amount of items and order number to the tracking system. But experience proved that more than 50 percent of the affiliate buyers have a few adverting media contacts and therefore cookies of two different tracking systems on their PC. Consequently, two different counting pixels are declaring the purchase to their system and the sale is listed twice, leading to doublets. One part of the duplicates can be filtered, if specific product identifications have been given out that can be match later with each other.

In order to stick to the campaign logic “last cookie wins”, in the next stage, all affiliate sales would have to be cancelled, if the affiliate advertising media didn’t stand at the end of the dialogue section. But the sequence of the advertising media contacts isn’t displayed through the tracking system and therefore neither the filtering nor the later cancellation of the affiliate sales. Further, a high reversal quota is jeopardizing the relation between affiliate and merchant, which creates a dilemma for the agencies that offer integrated marketing for their customers. They want to provide error-free data, without leaving out the individual marketing steps that lead up to a purchase.

In order to live up to expectations, a simplified solution for the problem would look like this: All means of promotion that are stored in an affiliate network should be provided with a comprehensive second main tracking system identifier. The counting pixel of both congruent systems on the merchants order confirmation site are embedded in a so called “flood light tag”, which is able to recognize the additional tag included in the affiliate advertisements if there is an online purchase. Hence, only the counting pixel that is responsible for the last advertising material contact is marked and duplicates are avoided by using this method.

However, this entire process has one major disadvantage. The integration of this extended tracking recognition for the affiliate advertising accrues additional costs. These are known as so called traffic carriage costs, which are calculated according to the views and clicks on the ad. The result is that the more traffic has been attracted by the affiliates, the higher will be the additional ad serving costs.

These costs can rack up to thousands of dollars per monthly, which can put the performance of affiliate marketing significantly in question. In order to avoid this, agencies are very keen to pull those affiliates out of the business, which attract many but often frugal traffic to customers, but generate barely valuable sales and revenue. What remains then are only those affiliates that can guarantee a healthy “click to buy” relationship – that is to say that only those the affiliate manager knows personally will be the survivors one fine day.

By Daniela La Marca

 

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Contents (July - August 2009)