Should Retailers Use Multiple Affiliate Networks?

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Should your company be involved with multiple affiliate networks? Why or why not?

If so, how does it work technically — from a tracking, reporting and optimization perspective?

I recently asked these questions to a group of veteran online affiliate marketing experts and got some surprising answers. Some were strongly ‘pro’ and others were firmly ‘con.’

One participant ended up confessing, “I wouldn’t advise it… in my personal experience and from what I’ve seen with merchants that I have worked with… it’s not worth the extra effort. It’s not worth the dilution of your reports.”

In on the discussion were:

Donald Schamber, Online Marketing Manager,
Carolyn Tang, Client Services Dir, Shareasale
Jonathan Miller, Founder, Forge Corporation
Jamie Birch, Dir, Affiliate Marketing, Converseon (formerly of Coldwater Creek)
Chris Sanderson, Managing Partner of AMWSO

I’m pleased that some of the most experienced affiliate-focused retailers and industry veterans around participated. Some described their successes while others their failures. The conversation was part of a live Webinar this month and had some valuable take-aways.

Notably, the group did not include the affiliate/publisher-side perspective which is an important one and leaves room for discussion. That stated, we did briefly discuss the recent entrance of — a tool-set aimed squarely at affiliates but one that sheds serious light on the wasteful spending of some advertisers leveraging multiple networks.

The Issues
Simply stated, there are two primary concerns for retailers when swimming in multiple affiliate network ponds. These are:

  1. Proper attribution of the sale:
    Avoiding duplication of ‘counts’ or ‘scores’ among Web marketing channels (affiliate, search, email, etc.)
  2. Proper payment:
    Avoiding duplicate payments to affiliate networks (in scenarios where customers ‘touch’ multiple affiliate sites or cookies)

ShareaSale’s Carolyn Tang, who ran the affiliate program for a few years, suggests that Web marketers are maturing as they adopt Web analytics packages.

“In the past the emphasis has definitely been on duplicate reporting… on (avoiding) having to pay multiple times on a single transaction. Obviously, this is not very cost-effective,” says Ms. Tang.

Yet as retailers put more analytics and reporting tools in place, she says they’re focusing more-and-more on correct attribution of the sale. In their quest to understand (tactically) which marketing strategies are working better than others it’s becoming very important to ‘score’ each performance-based marketing channel (indeed, campaign) properly.

Proper Channel Attribution
Ms. Tang warns that retailers could be attributing the transaction to a completely different channel. As an example, although a sale or lead came in from an affiliate the Web analytics package may attribute it to a search campaign.

“Many times those tools don’t necessarily track correctly,” Ms. Tang says.

“They will attribute a transaction to a single marketing channel but because of the way the technology is set up it may or may not attribute it to the correct channel. So I think whereas before the concern was overpaying on a single transaction, now it is on actually attributing the transaction to the proper channel.”

Indeed, this squares with my recent discussion with Alan Rimm-Kaufman regarding how retailers should be tweaking affiliate marketing programs to zero-in on incremental sales.

On the positive side, Ms. Tang says, “There are definitely fixes for it. Many of our merchants are using Omniture and we’re able to work with tools like that… but what’s happening is that a lot of merchants don’t realize that when they do put these tools in place they do need to make tweaks to those tools. You can’t just use it ‘out-of-the-box’ to automatically (correctly) detect everything.”

C’mon In… The Water is Fine!
Those suggesting that marketers SHOULD jump in multiple ponds are heavily invested in the strategy. Vistaprint’s Don Schamber suggested that he could hardly keep track on the number of cost-per-action (CPA) affiliate networks he participates in. That stated, his approach is a sophisticated one taking into account typical challenges including proper channel/strategy attribution (and potential double-payment) in scenarios when one customer “touches” multiple affiliate sites when making a single transaction.

Vistaprint uses a proprietary, home-built technology solution to keep tabs on everything. Of course, that’s a rather luxurious position but one that’s worth considering.

What You Need
Forge’s Jonathan Miller is gung-ho about swimming in multiple CPA network ponds and has built a niche business around serving the needs of retailers looking for a similar technical solution (to the attribution and payment issues).

Mr. Miller suggests that before launching a multi-network affiliate program, retailers must be sure that:

  1. Their shopping cart can handle multi-network referral sources without duplicating affiliate pixels / tracking
  2. The networks’ tech platform (tracking and reporting technology) meets your business requirements
  3. The platform allows you to download reporting for use in your own business intelligence (i.e. analytics) system
  4. You have access to advanced business intelligence tools to collate and analyze data

As well, Mr. Miller suggests that retailers must have a focus on synchronizing internal and external reporting engines. Not a trivial task, indeed, but mandatory for success and critical on measuring the ROI of affiliate networks themselves on a network-by-network basis.

AMWSO’s Chris Sanderson shared remarkable insights. He believes “in-house” (proprietary tech platforms) can be attractive to affiliates once you’ve built a track record on a network yet, “The ‘see if it succeeds and move’ concept is flawed,” says Sanderson.

“If you succeed you don’t move. You expand.”

“Affiliates do have network preferences and networks they refuse to work with,” says Sanderson. “Variety can help.”

He also believes that participating only on smaller networks can mean missing the bigger affiliates. Sanderson also recommends auditing of sales for proper attribution and payment duplication is a must.

“Split commission rather than ‘selective’ cancellation (of commission) is a good option.”

Yet Ms. Tang seems to disagree on what drives the affiliate loyalty-to-networks issue suggesting, “… the larger affiliates, that are not adware-oriented, don’t care which network a merchant is on. They want to work with a merchant. The technology, the tracking, doesn’t really matter to them.”

In fact, this has been my experience as well but I sense that it’s a very retail-focused (multi-product selling, brand-centric) perspective that doesn’t apply widely across other kinds of marketers.

Proper Affiliate Payment
Yet the ‘proper’ or ‘best’ affiliate payment scheme is a contentious and confusing issue — the proper payment model in such a scenario. What’s best for whom, when and how? My posing the question resulted in more questions than answers.

“Is it right to say that the coupon-code affiliate should get the commission even though the content affiliate did the selling?” asks Ms. Tang.

“But then again, the coupon affiliate is the one who actually may have been that last little push to get the consumer over the final hurdle. You can’t really know what the consumer is thinking when they made that purchase. So is it right for the merchant to assume which affiliate to give credit for?”

What do you think? What’s the best affiliate payment model in a multiple-network scenario? For that matter, what’s the best affiliate payment model when considering the ‘incremental sales and affiliates’ issue?

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  1. Posted January 18, 2011 at 11:53 pm | Permalink

    well i think retailers should only use one affiliate network, especially the small ones for the easy payment and tracking purposes.

  2. Posted March 15, 2011 at 7:13 pm | Permalink

    I want to be on as many networks as possible but I am running into problems with the tracking pixels. Some companies provide an API that lets me query when the affiliate cookie was added so I can award the sale properly.

    I am wary though of this and not all networks have this. I would really like to see a system for effectively managing multiple networks. Unitil I ran into this problem myself I havent seen anything mentioned about it.

One Trackback

  1. By 5 Star Affiliate Marketing Blogs on April 30, 2008 at 12:16 pm

    Should Merchants Use Multiple Affiliate Networks?…

    Should Merchants Use Multiple Affiliate Networks? It’s a multi-dimensional issue and there is not a single answer that’s right for every affiliate program. Industry veterans answered. Affiliates – what do you think?

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