Why Affiliates Should Worry About Multi-Touch Attribution Models

Why Affiliates Should Worry About Multi-Touch Attribution Models

Each year brings new opportunities and threats to the affiliate space. In the last 12 months, we’ve seen a real push by retailers for multi-touch attribution models that will afford them more insight into the omni-channel journey of their customers and will allow them to more efficiently allocate resources (read budget) amongst all their channels. The affiliate marketing channel included.

Last month, our VP of Global Performance Marketing was attending the Linkshare event in the UK when this concept was brought up. To say the affiliates in attendance were upset may be an understatement. Their reactions were a catalyst for a detailed discussion internally about how the affiliates feel and what they should do about, and for this blog post.

Should affiliates be “up in arms” and scared about the coming mulit-touch attribution models? Concern is definitely warranted and in this blog post I’ll outline some reasons why affiliates should be on high alert. In the second post of this series, I’ll outline why affiliates shouldn’t riot in the streets and how/why they can be much more involved in these initiatives. So affiliates, I’m going to scare ya, then talk you off the ledge with some great ideas. So bare with me through both of these articles.

So, why is this a big deal to affiliate marketers?

IT’S GOING TO HAPPEN

There isn’t much you can do about this train bearing down on you. Advertisers are constantly looking for new ways to efficiently deploy their budgets and resources. My time, at the now defunct, Coldwater Creek was highlighted by our “lumberjack” analytics exercises where we identified the different channels a customer experienced or engaged with during their path to purchase and split the revenue and costs accordingly. That was over ten years ago. Other merchants are picking up the ball and running it with. So it’s happening and you’ll either be run over by it or help lead.

More networks are also providing tools to empower advertisers to commission, or at least evaluate on channel attribution.

IT WILL AFFECT YOUR EARNINGS

Anyway you slice it (pun intended), these models will effect your earnings. Many affiliates will see commissions taken away or drastically reduced as the revenue and cost of specific orders are spread across the multiple channels the customer utilized during their path to purchase. If these models are done correctly and across all channels without prejudice, many affiliates will finally see credit for sales that they participated in, but never before were given credit for (offline sales, phone sales etc). But ignoring the issue will ensure affiliates never see that.

AS MANY WAYS TO DO THIS AS THERE ARE ADVERTISERS

Determining a multi-touch attribution method or model is unique to each and every advertiser. Each advertiser will have different data available, different goals, needs, analytics capabilities and all have unique ways of looking at their customers. While many of the concepts are similar across the board, at the very least, each advertiser will have significant nuances. When an order comes through and that customer engaged with 5 different channels, 50 advertisers will have 50 different ways of determining who gets credit for what. This can make it awfully difficult for affiliates to navigate a constantly changing environment.

NO SEAT AT THE TABLE

Historically, affiliates have not had a strong seat at the omni-channel table. Internal discussions amongst the senior management does not often include affiliate marketing representation. This makes it increasingly difficult to ensure the channel’s value is represented accurately, especially when attribution is discussed and decided.

LITTLE TO NO INSIGHT

Affiliates have historically had on insight into how else customers were engaging with the advertisers they work with. “How do I know which customers I send to you are new?”. “How would I know that you sent them a catalog the week I sent them to your site?” There hasn’t been a whole lot of sharing from advertisers to affiliates and this is a real cause for concern. If advertiser A deploys Attribution Model A to reward for commissions, as an affiliate, I would have no idea how that would effect my sales because this advertiser, and most, has never shared their customers’ behavior or characteristics with me. I’m left to simply hope I still get paid. Not a fun place to be.

IF YOU DON’T HELP LEAD, YOU’LL BE LEFT BEHIND

Everyone is trying to determine that right attribution model and how that is going to effect their resource allocation, profitability and channel cooperation. There is no one right way right now. People are looking for smart ideas and insight and many affiliates are simply burying their heads in the sand. The ecommerce industry will be moving in this direction and either one assists in driving the boat or is left on shore wondering when their ship will come in, or where it went entirely.

Frightened? I remember when I was first exposed to this subject. I was frightened. I had visions of looking for work in a small resort town with two young boys to raise on my own. It was a real fear indeed. I dealt with all the items above with varying levels of success and pain. In the end, the fears above led me to act and be part of the solution, and the channel was stronger because of that. So, soak all that in, write down your objections, fears, arguments etc and let’s go over why you should not be afraid and should be actually leading this initiative in the next blog post in this series.