See the Future of Affiliate Marketing with Smart Attribution Logic

See the Future of Affiliate Marketing with Smart Attribution Logic

2020 was definitely the year of affiliate marketing. The performance marketing channel has managed to prove itself as a reliable source of income and a new sales channel for many small and medium-sized online stores, especially during the pandemic period. Due to the changing purchasing behavior from retail to online shopping, many retailers have faced the challenge of shifting their business more and more to the Internet, thereby benefiting new groups of buyers.

For many website operators, affiliate marketing has become a powerful lever to counter the competition and thus make themselves less dependent on Google, Facebook, Amazon or Apple. To continue to pursue a profitable online strategy in the future, the goal should be to rely on logical attribution logic.

The different players in affiliate marketing: who is who?

Affiliate marketing is about several players collaborating in a spirit of partnership and building a long-term relationship that benefits all parties. When talking about partnerships, it’s worth taking a look at the partners involved. These are advertisers, publishers on the one hand, and networks as a third actor. Advertisers are individuals, such as stores or companies that want to sell a product or service.

Through affiliate marketing, advertisers find new ways and opportunities to advertise their products, reach new target groups and increase traffic significantly. They also benefit from the recommendation of the publisher promoting their article or service – which can have a positive impact on branding.

Collaboration between advertisers, publishers and networks

Publishers provide free ad slots to promote the advertiser’s product or service. This could be, among other things, a blog article, a banner on the website, a post on a coupon or refund page, a listing on a price comparison company’s results page, or a link in the description box of a YouTube video. . If the ad leads, for example, to a purchase or referral, the publisher is entitled to a commission from the advertiser. By integrating the advertising material, the publisher can create new opportunities for monetization and increase its reach and visitor numbers through the advertised products.

The affiliate network is the technical interface between the advertiser and the publisher. It provides a stable and secure framework for collaboration, supports technical implementation and engages relevant partners. It also guarantees error-free and safe processing of the data used with its tracking, and reports the commission amounts as well as clicks and sales. The affiliate network also opens up new opportunities for monetization.

Once the terms and conditions have been agreed and the contract signed between the advertiser, publisher and network, the process can begin. The advertiser provides the publisher with advertising material in the form of banners or links that it can place on its pages or channels. Network tracking provides information, for example, how many clicks or sales were generated through the relevant advertising material. These are related to the payment of the later payment or commission. Depending on the billing model, the publisher makes their money with it. The affiliate network is the point of contact for both parties – the advertiser and the publisher – and provides support for individual campaigns and sets rules for the payment of commissions.

Tracking in affiliate marketing: numbers, numbers, numbers

However, GDPR and e-privacy regulations largely regulate tracking possibilities. It’s also complicated in another way: Google has announced that for 2022 it will do without third-party cookies in Chrome. This measure is just one of many that will significantly limit tracking opportunities, especially in affiliate marketing. These challenges are offset by the shift from offline to online in the purchasing process fueled by the COVID-19 pandemic. This trend will continue in the years to come, and with it the desire to increase online marketing budgets will continue. This increases the importance of making budget decisions more efficiently. The basis for this is provided by customer-specific attribution models.

The old attribution (last cookie/last click wins), i.e. a special fee for the last customer touchpoint with an ad, for example, is being replaced by long outdated and data-driven attribution models. More and more advertisers are using such data-driven attribution models to control their marketing channels. A data-driven attribution conditioned by comprehensive omnichannel monitoring is the basis for a purposeful payment of partners. This allows more partners to benefit from a commission, thereby providing diversity in the publisher portfolio.

Data-driven attribution models as a strategy for success

Experts agree that the future of monitoring will shift from a single model to hybrid monitoring. By combining several tracking methods, it will be possible to work cleanly and securely with reliable data in the future, despite all the regulations and tightening of the law.

Meaningful attribution requires accurate tracking of as many as possible, ideally all touchpoints. The prerequisite for this is the use of first-party tracking on the browser side. Due to the ever-increasing restrictions on the browser side, it is recommended to set up parallel monitoring from server to server. This ensures data stock is maintained.

By analyzing and evaluating many past customer journeys, a precise picture of the role and impact of individual channels can be determined. The development of a data-driven association is related to the purpose of the respective company. For example, if a company is focused on acquiring new customers, special weight should be given to these initial measures. The stated goal is to evaluate channels for their cause and strike a balance between new customer and existing customer metrics.

Post-view evaluation is about attribution, not just clicks, but also views of advertising materials, for example. To do this, it is necessary to establish a causality between the appearance and the triggered transformation. For this purpose, a temporal window is used to understand this causal relationship. The time window can vary from a few minutes to several days. It depends on the complexity of the customer journey, the value of the cart, and the industry.

An alternative is to establish a causal relationship between a view and triggering Direct Type. If a view triggers a Direct Type in a timely manner, this should definitely be considered in attribution, regardless of the time to conversion. What needs to be modeled though is the weighting of a view compared to a customer-specific click.

Interdisciplinary into the new era of affiliate marketing

Finally, a new era in affiliate marketing needs to initiate the interdisciplinary agreement on new attribution in the company. All departments should learn to work with the new association. Interdepartmental but still department-specific reporting is a necessary prerequisite.

The introduction of a new citation means the end of the silos and the shotgun approach. This requires a set of monitoring, data and organizational measures. Those who have the courage to change will create decisive competitive advantages and experience increased productivity.

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