This is a guest post from Matt Bailey, Client Director at dgm uk. Matt is stuck in his flat at the moment after major knee surgery, I wish him all the best on his road to recovery. I spoke to him yesterday and we are expecting him back for preseason, which is great news.
Despite the blank looks on the faces of friends outside the industry (yes, I have some) when I try to explain what I do for a living, I think that affiliate marketing is a reasonably simple concept. Affiliate spends their own time and money in driving traffic to their site, encourage the consumer to click through to a merchant site and then receive a commission payment when a predefined action occurs on the merchant site.
So the affiliate channel is a pure customer acquisition channel? Yes and no. There is an understanding from affiliates that the brand exposure that they provide to merchants as a by product of driving this traffic is an added extra for which the affiliate is compensated for in the CPA paid out. However should this be the case? Is it not time to revisit the power of the PI cookie?
A Post Impression cookie is dropped every time a banner impression is displayed on an affiliate site, regardless of whether that advert was clicked on or not. A click cookie will always overwrite a PI cookie, but the PI cookie sale will reward affiliates for introducing the consumer to the merchant through displaying the advert.
Traditionally, opinion has been mixed on the practice of paying out on PI cookies. It is seen as somewhat going against the ethos of affiliate marketing. The affiliate channel is one that is completely transparent and trackable, a last click is undeniably a last click, and when additional measures are added people start to feel uneasy. The banner could be hidden “below the fold” on the affiliate site or the consumer may not have seen it. People rightly ask why an affiliate should be rewarded if there is the possibility that they have not played any part, it does go somewhat against the purity of the affiliate model.
Also, regrettably, there have been occasions when PI tracking has been abused by parts of the affiliate community. Some affiliates have reduced banners in size so that the tracking pixel is still served, but no banner is displayed, allowing them to appear to have served the banner and therefore potentially pick up the PI sale, without having displayed the brand on their site.
So while some merchants, networks and affiliates may feel a slight unease about promoting a practice that is removed from the “ethos” of affiliate marketing, the other question to ask is why affiliates should provide free branding and prime online real estate without receiving any benefit. How much money do brands spend on online display advertising, let alone TV, radio, press and outdoor, without understanding the true return they get for their money? It is accepted that an online display advert will generate brand awareness and sales, so why would more targeted affiliate traffic not do the same? The benefit of carrying out this activity through the affiliate channel of course, is that instead of it being paid for on a CPM (cost per thousand views) basis, advertisers still only pay out when a predetermined action, usually a sale, is carried out.
The Holy Grail lies in understanding the value that each channel is playing in the sale and rewarding accordingly. Were a consumer to view a banner on an affiliate site, come back half an hour later and type the merchant URL in directly, I would defy anyone to argue that the affiliate has not played a vital part in delivering that sale to the merchant. This is where the merchant needs to understand all marketing channels separately, but look at them as one.
As tracking technology gets more advanced I see no reason why PI should not come back to play a more important part in affiliate marketing and in the online mix. Obviously PI should never supercede a click cookie, but if after deduplication against other channels has taken place, it can be demonstrated that the affiliate has added value to the sale through displaying a banner then the merchant should be willing to reward the affiliate accordingly. At DGM we work to the premise that affiliates should only expect to be paid for a sale that they can justifiably claim they have played a major part in and merchants should only pay out on a sale that can rightfully apportion to the affiliate channel. Whether this comes from a click or an impression is immaterial.
We aim to provide the merchant with the data and allow them to make their own minds up, so therefore I deliberately offer no conclusion. Let the debate begin…
Share This
If you enjoyed this post, make sure you subscribe to my RSS feed!
Fraser Edwards
Adii
Paul Wheatley