Is The “Last Click Wins” Model Best For Your Affiliates?
The “last click wins” method of awarding affiliate commissions means that whichever affiliate is responsible for placing the most recent cookie on a user’s machine is awarded 100% commission for the sale. In this model, affiliates responsible for earlier cookies or impressions do not prevail financially—they get nothing. The question is does the “last click wins” method box affiliates in to “clicks only” marketing channels? Could brand holders gain greater reach if, for example, affiliates could take advantage of behavioral retargeting (BR), content channels and post impression cookies (PI)? Lately, I have seen lively blog postings and discussions around behavioral retargeting and its relevance to CPA models.
Behavioral retargeting (redacted from Wikipedia), also known as behavioral remarketing or simply, retargeting, is a form of online targeted advertising by which online advertising is delivered to consumers based on previous internet actions that did not in the past result in a conversion (in other words, the action desired by a site owner, typically making a purchase).
Retargeting helps companies advertise to website visitors who leave without a conversion—about 98% of all web traffic. This is done by displaying ads to the prospect as they surf the internet via various ad networks. Retargeting is only serving banner ads to people who have shown at least some amount of engagement with your brand. This makes retargeting a smarter spend than most other display ad campaigns as it focuses on your brand’s engaged user-base. Studies suggest that a company needs to have seven different contacts with a customer (on average) before they make a purchase. Retargeting allows companies to continue the marketing conversation with a customer after they leave a website. This form of behavioral targeting is a growing trend in the online marketing arena.
For the affiliate channel to take advantage of BR on behalf of your brand, several components must be in place. First, there must be rules around post impression cookies that are clearly defined. Second, you need to allow participation by your affiliate network for tracking and payouts. Finally, you need to have the ability to de-duplicate cookies from all of your marketing channels.
The current wisdom is that behavioral retargeting and post-impression cookies, if introduced to your affiliate program, should be governed as follows:
Only trusted affiliates should be allowed to use PI cookies. The reason is that a PI cookie is delivered without any action from the consumer – merely serving a banner ad on a page the consumer visited will cause a PI cookie to be placed. This opens up the possibility that an affiliate will force a cookie on the user through “hidden” ads or below the fold ads.
Prohibit forced clicks / forced actions. Prohibit forced clicks in your affiliate agreement, and also ensure that your affiliate network enforces this restriction. Forced clicks occur when a cookie is dropped without user initiated action. PI cookies should only exist where the consumer has been exposed to a brand impression—e.g. a banner advertisement. PI cookies should never be allowed in the absence of an above the fold ad which contains an obvious and clear display of your brand in the form of an advertisement.
Establish cookie war winners. Click cookies should supercede PI cookies, and you can keep the “last cookie wins” model in place. PI cookies are nice when there is no click, but the affiliate has driven impressions. Otherwise, click cookies still are the most favored winner. Think of the impression cookie as a way to take advantage of all the gaps that normal click-based transaction correlations might miss, not to create duplication of payouts or to over-write click transactions.
Establish commission rules. Perhaps brand holders should pay less for sales generated through behavioral retargeting than for sales driven from clicks. Perhaps the PI cookie gets a shorter lifespan than a click cookie.
Define rules to govern media buying. Define what types of content sites are relevant. Restrict advertising to publishers with relevant content and that don’t conflict with your existing media buys. Just like in paid search, coordinate your efforts to avoid channel conflict.
Establish placement guidelines. Placement should be above the fold with controls on display time, and frequency caps.
Why would merchants want to do this? The main driver is to expand reach beyond “click” driven channels. The merchant still only pays if a sale happens. Publishers can become affiliates and gain the opportunity to monetize unsold impression based inventory.
Behavioral retargeting along with PI cookies is not a new idea for the affiliate channel. With today’s tracking tools and targeting vendors, it can be better policed and controlled than in the past. The debate will continue I imagine and we should all keep an eye on it to see what types of successes (and failures) may emerge.
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