Explaining multi-channel attribution in affiliate marketing
Posted: Wed Dec 18, 2024 10:31 am
Half the money I spend on advertising is wasted; the trouble is, I don't know which half." This quote is attributed to John Wanamaker, a 19th-century American merchant considered a pioneer in marketing.
Wanamaker made these comments more than a century ago, but his words still resonate with marketers today. Even in the information age, it's not easy to track which marketing channels actually influence the customer to buy .
image1 (1)
Today, buyers browse a company’s social media profile, look up reviews from other customers, and examine competitors’ websites before making their final decision. It’s a long, involved journey that could take several weeks.
It's difficult for marketers to determine where exactly the majority c level contact list of their marketing budget should be allocated to get the best possible result. And when affiliates are involved, things get even more complicated.
Multi-channel attribution is already complex
Although it does happen, most customers don’t buy a product in one sitting. If a customer searches for shoes on a search engine, clicks on the top-ranked website, “Footwear.com,” and places the order immediately – there’s no need for a marketing attribution model. The search engine is responsible for the conversion.
But let's imagine a different scenario. Here, a customer clicks on Footwear.com but doesn't buy the shoes. A few days later, the same person sees a review of the shoe on a social media page that includes a Footwear.com promo code. A week later, the customer visits the website again and uses the code to make the purchase.
Most buyer journeys are like the one described above. This is why online businesses invest in conversion optimization audits and multi-channel attribution. Some attribution models credit the sale to the last referral or click used.
But that doesn't reflect an accurate picture. Customers are influenced by a variety of factors and engage in multiple channels before finally ordering the product.
Focusing solely on the last touchpoint is reductionist and could mislead the website into investing in channels that do not provide the best ROI.
What happens when it comes to affiliate marketing?
Affiliates play a role at different stages of the sales funnel . At the top are content bloggers with their reviews and at the bottom are coupon websites. There are also different channels in the middle of the funnel. Finding their value and contribution to conversion is not that simple.
affiliate marketing-written-cogwheel
Similarly, due to the larger number of parties involved, it is highly likely that each of them will use different software and tools to analyze channel performance. This will lead to discrepancies in data as affiliate marketers will report different results using separate mechanisms. Determining which channels provide the best ROI becomes difficult in this scenario.
Without accurate data, you won’t be able to verify affiliate commissions and fully understand what value some of these external channels bring to your business. Multi-channel attribution is complicated on its own, and bringing affiliates into the mix makes it even more complex.
Implementing attribution models in affiliate marketing
Affiliate marketing outline concept vector illustration
Attribution is extremely important for affiliates as companies need to give them a cut of the sale. Many companies would rather not pay an affiliate a revenue-based commission of $80 when the attributed revenue is actually $50. It's all about creating a model that ensures your marketing budget is used effectively so you can get more out of your investment.
So how do you make this happen? The answer lies in the different attribution models offered by various affiliate platforms. Here are some of the common attribution models.
Linear Commissions
All touchpoints, whether paid advertising, social media, website, or multiple affiliates, receive equal credit for the conversion.
Preferred Affiliate
Companies select one or more preferred affiliates who receive 100% of the attribution regardless of how many touchpoints were involved in the funnel.
Custom Attribution
Combination of other models or a completely new attribution mechanism.
Exclusive discount code
Affiliates are provided with exclusive coupon codes . When these coupons are redeemed, 100% of the sale is attributed to the affiliate.
First Click Attribution
The first affiliate in the sales process receives 100% of the attribution.
Last Click Attribution
The last affiliate involved in the sales process gets 100% of the attribution.
E-commerce businesses choose these models based on the role affiliates need to play in their overall marketing strategy. If a business is looking for new leads, affiliates can be encouraged using an attribution model where a value is assigned to new customers.
Some companies continue to use the last-click model and give 100% attribution to affiliates despite having attribution data. This is because these companies consider affiliates to be an important part of their marketing puzzle.
To finish
Multi-channel attribution allows companies to gain insight into the buyer’s journey and their own marketing performance. They know which channels are proving to be an effective help in meeting sales goals and making the most of the company’s resources. The same information is used to justify the payment of commission to affiliates.
With the multitude of models available, it is not possible to select the best one. A better strategy is to examine attribution models on a case-by-case basis to see which one fits your business model.
Wanamaker made these comments more than a century ago, but his words still resonate with marketers today. Even in the information age, it's not easy to track which marketing channels actually influence the customer to buy .
image1 (1)
Today, buyers browse a company’s social media profile, look up reviews from other customers, and examine competitors’ websites before making their final decision. It’s a long, involved journey that could take several weeks.
It's difficult for marketers to determine where exactly the majority c level contact list of their marketing budget should be allocated to get the best possible result. And when affiliates are involved, things get even more complicated.
Multi-channel attribution is already complex
Although it does happen, most customers don’t buy a product in one sitting. If a customer searches for shoes on a search engine, clicks on the top-ranked website, “Footwear.com,” and places the order immediately – there’s no need for a marketing attribution model. The search engine is responsible for the conversion.
But let's imagine a different scenario. Here, a customer clicks on Footwear.com but doesn't buy the shoes. A few days later, the same person sees a review of the shoe on a social media page that includes a Footwear.com promo code. A week later, the customer visits the website again and uses the code to make the purchase.
Most buyer journeys are like the one described above. This is why online businesses invest in conversion optimization audits and multi-channel attribution. Some attribution models credit the sale to the last referral or click used.
But that doesn't reflect an accurate picture. Customers are influenced by a variety of factors and engage in multiple channels before finally ordering the product.
Focusing solely on the last touchpoint is reductionist and could mislead the website into investing in channels that do not provide the best ROI.
What happens when it comes to affiliate marketing?
Affiliates play a role at different stages of the sales funnel . At the top are content bloggers with their reviews and at the bottom are coupon websites. There are also different channels in the middle of the funnel. Finding their value and contribution to conversion is not that simple.
affiliate marketing-written-cogwheel
Similarly, due to the larger number of parties involved, it is highly likely that each of them will use different software and tools to analyze channel performance. This will lead to discrepancies in data as affiliate marketers will report different results using separate mechanisms. Determining which channels provide the best ROI becomes difficult in this scenario.
Without accurate data, you won’t be able to verify affiliate commissions and fully understand what value some of these external channels bring to your business. Multi-channel attribution is complicated on its own, and bringing affiliates into the mix makes it even more complex.
Implementing attribution models in affiliate marketing
Affiliate marketing outline concept vector illustration
Attribution is extremely important for affiliates as companies need to give them a cut of the sale. Many companies would rather not pay an affiliate a revenue-based commission of $80 when the attributed revenue is actually $50. It's all about creating a model that ensures your marketing budget is used effectively so you can get more out of your investment.
So how do you make this happen? The answer lies in the different attribution models offered by various affiliate platforms. Here are some of the common attribution models.
Linear Commissions
All touchpoints, whether paid advertising, social media, website, or multiple affiliates, receive equal credit for the conversion.
Preferred Affiliate
Companies select one or more preferred affiliates who receive 100% of the attribution regardless of how many touchpoints were involved in the funnel.
Custom Attribution
Combination of other models or a completely new attribution mechanism.
Exclusive discount code
Affiliates are provided with exclusive coupon codes . When these coupons are redeemed, 100% of the sale is attributed to the affiliate.
First Click Attribution
The first affiliate in the sales process receives 100% of the attribution.
Last Click Attribution
The last affiliate involved in the sales process gets 100% of the attribution.
E-commerce businesses choose these models based on the role affiliates need to play in their overall marketing strategy. If a business is looking for new leads, affiliates can be encouraged using an attribution model where a value is assigned to new customers.
Some companies continue to use the last-click model and give 100% attribution to affiliates despite having attribution data. This is because these companies consider affiliates to be an important part of their marketing puzzle.
To finish
Multi-channel attribution allows companies to gain insight into the buyer’s journey and their own marketing performance. They know which channels are proving to be an effective help in meeting sales goals and making the most of the company’s resources. The same information is used to justify the payment of commission to affiliates.
With the multitude of models available, it is not possible to select the best one. A better strategy is to examine attribution models on a case-by-case basis to see which one fits your business model.