- Category: October 2010
There is no end to the discussion on fraud in affiliate marketing, as affiliate networks and agencies are allegedly not fully devoted to resolving affiliate-fraud related issues, due to the fact that both parties are in line for remuneration for their participation in a shared venture.
Frankly speaking, affiliate-fraud is just a small aspect of this broad area of discussion, which encompasses trustworthy tracking techniques that monitor all marketing channels. A full-service agency offers comprehensive management that ideally includes as many aspects as possible, ensuring that each element, be it newsletter marketing, advertising, affiliate marketing, SEM or SEO is treated as an integral part of a company’s marketing campaign.
As studies have shown, 50 percent of consumers see more than one form of advertisement leading up to the purchase of a particular product. For example, a consumer sees a product in a marketing newsletter, later he sees a banner for the same product on a website, and then he “googles” the name of that product and finally comes into contact with the producer through a forum established by an affiliate-marketer. In this case only the last action that led to a dialogue between consumer and producer would receive a commission, which raises the question: What about the steps in between, before the final purchase occurs? Well, it may not be fair but the truth is that these steps are disregarded, because present tracking systems only look at the last transaction in the chain of events. Sadly, we cannot yet carry out a full evaluation of integrated online marketing and this problem and its complex impact is becoming increasingly pertinent.
Performance reports are usually given out on a regular basis to customers, based on “last cookie sales” to ensure that credit is given where credit is due. Advertisements that help lead to, but are not the final purchase page, require an enhanced and more comprehensive tracking system.
If every marketing element were handled by a single agency, tracking could be run from a centralized system and would identify exactly what led the customer to a purchase. Affiliate marketing, however, is difficult to integrate due to the network tracking system that works on its own and usually operates parallel to and/or is paired with the agency’s marketing tracking system. It is possible to integrate both systems by compiling the performance data of the two, but it still doesn’t solve the problem, as the tracking systems are in general not connected to each other. With over 50 percent of affiliate advertising buyers having advertising contacts and therefore cookies from different tracking systems on their computers a sale can be conducted twice, which results in duplicates.
To stay in line with the campaign logic "last cookie wins", all affiliate sales which have not been in last place of the dialogue, would have to be cancelled. The order of advertising media contacts is not shown on the tracking systems, and in consequence, neither the filtering nor the subsequent cancellation of affiliate sales. High purchase intention cancellation rates hinder the merchant-affiliate relationship enormously and create a dilemma for agencies that offer integrated marketing for their customers. Their only interest is providing error-free data, leaving out the individual marketing steps that lead up to a purchase.
A simplified solution already exists: all internet advertising facets that are related to an affiliate-network should be monitored by a second main tracking system. The traffic loggers of both congruent systems on the selling website are programmed into a so called “floodlight tag”, which recognizes the affiliate advertisements as well as the online merchant, marking only the traffic logger that is responsible for the last advertisement hit, thereby avoiding duplicates.
This solution sounds too good to be true and indeed, the process has one major disadvantage: the integration of the added tracking system for affiliate advertiser accrues additional costs, that are calculated through how many clicks occur on the associated advertising material. In short, this means that, the more traffic affiliates attract, the higher the additional advertising costs, which can rack up to monthly costs in the thousands of dollars. Such incidents challenge the performance of affiliate marketers and agencies, who therefore try to minimize the damage by partnering with affiliates that attract many but often frugal customers. Still, those that guarantee a healthy “click to buy” relationship will always be the crowned champions in the business.
By Daniela La Marca