Online retailers frequently don’t know whether affiliates really generate new sales, or just get sales that would have occurred anyway. There is technology to solve this “incrementality” problem.

Jamie Birch, JEBCommerce

Jamie Birch, CEO, JEBCommerce

There is a big problem in the affiliate channel. Sometimes it’s right in front of our faces, plain as day. Other times, it’s lurking in the corner waiting for the worst moment—a board meeting, maybe—to wreak havoc on our digital marketing plans. This problem is so threatening that it can quickly close the channel completely, or make you second guess whether affiliates are worth any of the trouble you’ve been dealing with. At worst, it can lead to loss of jobs; at best, it’s an annoyance that doesn’t go away.

What is this issue? Incrementality: your ability to determine what revenue would not have occurred without a particular affiliate, and allocate your budget (and commissions) accordingly.

With the rise of cart sniping, stealing and poor channel attribution, it has become

increasingly difficult to ensure that the cost of acquisition for the affiliate channel is actually related to the sales that occur because of that particular affiliate. This leads to questionable profitability and an improper allocation of resources for affiliate programs.

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Here’s a typical cart sniping scenario: A consumer goes through the entire purchase process. He gets to the final cart page, but then, instead of completing the order, he suddenly jumps off and finds a coupon—triggering the affiliate to get the credit. You can clearly see the issue here.

What is this issue? Incrementality: your ability to determine what revenue would not have occurred without a particular affiliate.

Now, I’ve been working with affiliates for 20 years and have been charging at this windmill the entire time. Years ago, we didn’t have any technology other than pixels to combat cart sniping, and we awarded affiliates commissions based solely on last click. It’s archaic now when you think about it. The incrementality issue still exists, but there’s never been more tools to help us overcome it. That’s just one reason why I’ve never been more excited, and more positive, about the impact that this channel can have on your overall bottom line.

The Incrementality Issue

The difficulty of ensuring true incrementality has caused many to scrap their affiliate program altogether—an act I liken to throwing the baby out with the bath water. If you’ve heard your team members saying things like, “Are those sales even real?” or “I think we would have had those sales anyway,” or “I have no way to show that these sales wouldn’t have happened if we didn’t have this channel open,” then the incrementality issue has already begun to threaten the sustainability of your organization’s affiliate program.

All too often, the inability to ensure affiliates are only receiving commission for sales they drove causes advertisers to take one, or a combination, of these five actions

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  • Shut down the affiliate program: “It’s just too much of a hassle to figure this out, and it hasn’t produced that much for us.”
  • Move the suspected prolific offenders of incrementality to a superlow commission: This removes any incentive for them to promote the brand.
  • Remove an entire category of affiliates from the program: “Coupon sites add no value; nix ’em all.”
  • Remove all resources from the affiliate channel: This starves it of attention and enables nefarious affiliates to run amok, further confirming suspicions.
  • Nothing: Although nothing is done, the numbers reported from this channel aren’t trusted—ever

Cart sniping and stealing can lead to major incrementality issues for modern affiliate marketers. However, I’ve also seen firsthand how an affiliate program can be a significant and profitable part of your marketing mix. More now than ever, amazing technology enables advertisers large and small to spend their budgets in a much more targeted way and reward affiliates that drive truly incremental sales. I’ve seen the right set of tools enable advertisers to grow their program while reducing their costs and protecting their brand and other digital channels.

Simply put, there’s no need to be simply “OK with trusting your program,” or to close it down completely when incrementality issues arise. Instead, tap into these interesting and effective technologies to combat this big issue and steer your program toward true incrementality—and undeniable profitability.

Leading Affiliate Incrementality Solutions

In today’s affiliate industry, a vast amount of tech solutions help combat incrementality issues. What follows isn’t a complete list; however, if incrementality is a problem for you, one of the options here may be the perfect antidote.

ShareASale

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ShareASale has long been a leader in this type of technology, and with its recent purchased by AWIN in the U.K., has broadened its reach globally. ShareASale has two main features that you’ll want to know about:

  • Leapfrog: This technology allows marketers to minimize cart sniping by setting a timeframe between when items are added to the cart and when an affiliate gets credi Say, for instance, an item is added to the cart, then 30 seconds later the affiliate session begins. When this happens, there’s no commission, no credit for the affiliate and no cost for you. We’ve seen advertisers save us much as $90,000 in commissions and network fees by using this technology to implement a short window.
  • Conversion Lines:Most likely, you have a channel that you believe is generating more results at the beginning of the funnel and contributing more than is getting credit for. Maybe it’s a feeling you have in your gut, or maybe you also have data to prove it. ShareASale’s Conversion Lines allows you to indicate a channel, partner or group of partners to receive priority for a sale over other channels. Say your content producers need a little protection; use this tool to give them priority over all others. If your paid search channel gets priority, you can designate that here as well. This tech has many more uses that I encourage you to explore.

Impact Radius

  • Based in Santa Barbara Calif., Impact Radius offers unique tools to combat this and many other issues. A combination of these technologies, and others, is often used to ensure proper resource allocation across all digital channels.
  • Coupon Restrictions:Impact Radius allows you to designate—or blacklist—coupons that no affiliate will get credit for, such as email, social, direct mail, With the increasing promotional efforts and nature of online retail, this may cover a significant amount of overlap for you. If you have coupons that are channel specific, this will allow you to keep those offers and channels pure.
  • Affiliate-Specific Coupons: Impact Radius’ interface allows you to assign coupons to specific affiliates so no other affiliates can get credit for those sales. This is a vital strategy and technology for anyone working with influencers, bloggers and vloggers. Sometimes, affiliates are forbidden from include tracking links on certain platforms and instead use unique promo codesto promote you via direct links. With this technology, you can now protect those sales.
  • Last to Cart:This crediting logic only allows the affiliate who last added something to the cart to get credit. This can also be done if you track your other channels through Impact Radius and only credit that channel that last added an item to the cart.

Pepperjam 

I recently spoke with Maura Smith at Pepperjam (formerly Ebay Enterprise Marketing), to get the lowdown on how they solve these problems. Their technology further demonstrates the breadth of solutions available to advertisers.

  • Dynamic Commissioning: This is both a tracking-type and a commission attribution-like tool that allows clients to pass additional data points through a standard pixel or batch file. Some advertisers only value new customers, order sizes over a certain amount, orders through device types, or want to commission on a selection of SKUs or categories of products. Dynamic commissions allows you to use one or any combination of these order attributes to designate what is a preferable or incremental order—opening the door for commissioning By allowing different commission rates on different attributes, you can further refine your budget allocation to orders you deem profitable and/or incremental; for example, new customers who are making purchases without coupon codes.
  • In Cart Attribution: Similar to ShareASale’s Leapfrog technology, Pepperjam’s In Cart Attribution allows you to set the time-frame in which a sale must occur in order for an affiliate to get credit for the sale.
  • Preferred Publisher: As I’ve spoken about above, the ability to designate a publisher as always getting a sale they are involved in allows you to protect affiliates that tend to be vulnerable to cookie overwriting, and credit influencers or introducers who are not necessarily the closers of a sale.
  • Coupon Codes Attribution: You can track and designate coupons that affiliates do not get credit for. This is a great way to keep your promotions pure to a specific channel.

AvantLink

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Based in beautiful Park City, Utah, AvantLink has been at the forefront of many of the most exciting technological advances in affiliate marketing. Their Advanced Link Encoder allows content producers to convert words and phrases into trackable affiliate links to appropriate advertisers on the fly. This is a tremendous tool when you’re working with content publishers who have extensive evergreen content. AvantLink also has another great tool that helps with the issue at hand.

  • AvantMetrics: This dynamic commission-splitting and attribution tool allows advertisers to divide a commission based on the different touch points within an affiliate program.

I recently spoke with Chad Wait, Marketing Manager at AvantLink, about the importance of getting this attribution problem solved. “Online retailers are right to be concerned about the impact different affiliate types have on their goals,” he said. “However, any action taken to fix those concerns should be done based on real, raw data sourced from attribution and not from industry assumptions or hearsay.

  • Chad also emphasized the value of giving affiliates an opportunity to get equitably rewarded for making referrals that are more in line with the retailer’s goals. Said Chad, “Seeing the data and impact through attribution is one thing. Having that data power dynamic commission splitting to affiliates on a per-sale basis is where all online retailers who take the affiliate channel seriously should strive to be.”

LinkConnector

This network has several different ways to address the incrementality issue.

  • First Click Attribution: This simple solution allows merchants to credit based upon first click—in other words, rewarding the introducers in the funnel. If another affiliate cookie comes into play during the purchase funnel (i.e., a coupon affiliate), First Click attribution would prevent credit from being assigned to the last click coupon affiliate.
  • Shopping Cart Window: This is an effective solution for merchants that wish to eliminate credit entirely when a user is already present in the merchant’s cart.
  • Naked Coupons: This tech, which gives you the ability to provide a specific coupon to an affiliate for their use only, trumps any last-minute affiliate cookie addition. This is just another example of technology that minimizes, almost entirely, the type of behavior most damaging to an affiliate channel’s profitability.

Rakuten Marketing (LinkShare)

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Rakuten taps into a combination of data and technology to allow for more control and better budget allocation for advertisers. Said Jeff, “We take a data-driven approach to tackling these concerns. There is channel technology that allows advertisers more control on commissioning for coupons, which can be activated at a very granular level, but it is equally as important to understand consumer behaviors before making any assumptions about new and existing customers and retention.”

Rakuten Marketing looks at an advertiser’s program and then leverages data to understand the customer-brand relationship. Specifically, it identifies the value of different publisher types, such as initiators and converters, and makes recommendations based on these insights. Rakuten also encourages its clients to work with its team to test their hypothesis. The affiliate channel lends itself well to testing because of the diversity of publishers and the speed with which results can be achieved. It’s a low-risk environment where the CPS model serves to benefit.

“Ultimately, brands need a deeper understanding of their customer behavior before making decisions about affiliate marketing,” Jeff added. “By leveraging insights in combination with the network providing technology for acting on these concerns, we provide our advertisers with greater transparency into their affiliate campaigns.”

With a myriad of technological and programmatic options available to boost true incrementalism, there’s no longer an excuse to throw the baby out with the bathwater. Bathwater? Yes, let’s get rid of that. But let’s keep this revenue-producing baby clean, dry and well fed. Through proper use of these advanced technologies, you can do just that.

JEBCommerce is a digital marketing agency.

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