Last Man In and Merchant Brandnames - Opinions Please!

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After having some discussions with various merchants today ive started this thread to try and gauge opinion on a particular issue some affiliates may encounter when driving traffic to a merchants site (either via a landing page or direct). Im sure this question will provoke responses from most affiliates but im also interested to hear from the merchants side. Anyway...here goes:

Heres the example:
A user goes to site A (affiliate), clicks on a product which takes them to site B (merchant). The user sees a product they like and decides to order later having noted down the merchants site.

Some time later the user searches (via google in most cases) for the merchants name. The merchant is bidding on their own brandname (as you would expect) and not allowing any affiliates to bid on brand related keywords. The PPC ad appears at the top of the page in the blue box and the user clicks through to the merchant site....heres the interesting bit:

The PPC ad now becomes the 'last man in' and overwrites the cookie that was set at the last affiliate site, thus reducing the average CPA for the merchant and leaving the affiliate with nothing for their part in the transaction.

The question id like to ask is....is that right, is it a fair way to treat affiliates and is it widespread? Why can the merchants not simply pay the last affiliate click commission and record a clickthrough from PPC on brandname...is it right that a campaign run by the merchant or on behalf of the merchant by an agency should take precedence over an affiliate click?

There is an argument to suggest that most people click on the organic result for a brandname so the affiliate cookie is retained but figures I have seen dont seem to reflect this - id like to know if anyone else has any figures they could share on clickthroughs at serps?

All opinions Welcome!

[drivetowin]

Personally I don't see anything wrong with it - this argument was discussed at some length for Comet late last year.

The basic premise we all work to is that last cookie wins, imho you can't pick and choose and say last cookie wins if it's an affiliate but doesn't win if it's the merchant's own ppc..

Otherwise (turning your scenario on it's head):

Visitor searches for 'xyz holidays' - gets merchant ad and clicks on it, visits merchant site but doesn't buy

Next day, visitor goes to your site, sees your content for xyz holidays (or a banner for xyz holidays), clicks through and buys

Are you saying then that you should get no commission because it was the merchant that first put the brandname in the visitor's mind?

[km8]

...is it right that a campaign run by the merchant or on behalf of the merchant by an agency should take precedence over an affiliate click?

Yes, if it's the last click - it cuts both ways.

If the merchant spends million on branding type adverts, the user remembers only the phrase "luminous widgets" from the branding advert and your ad gets the click, I bet you'd want to get paid?

It's either last click wins or it isn't - you can't say it's one rule for "last affiliate click" and another for "last merchant click".

[Keith]

If the last click is via the merchants own PPC there is no reason why they should have to pay an affiliate commission as well, however if the potential client returns via natural serps then the last affiliate should rightly be credited

[Travel Pixel]

interesting points people, keep em coming.

[km8]

If the last click is via the merchants own PPC there is no reason why they should have to pay an affiliate commission as well, however if the potential client returns via natural serps then the last affiliate should rightly be credited

Why? Last click wins means just that.
It's not, and shouldn't be, about dropping cookies - it's about the last click.

If the last click doesn't have a cookie, then no commission is payable to anybody - that too cuts both ways.

That's simple and fair.

[Qui Gon Jinn]

Good thread & valid points. But be careful what you wish for, otherwise there could a real avalanche on top of affiliates, with careful validation of clicks from multiple sources. Should this only apply to clicks, what about a banner view?

[Travel Pixel]

id like to know if anyone has any statistics on how many people (as a % of total) click the blue box (PPC) above the organic results in the serps. In the context of this thread it would be on the brandname with the organic results directly below.

Do more people trust organic results and clickthrough (therefore retaining any affiliate cookie)?

[angelabx]

Very good thread Travelpixel.

About three years ago we started working with a relatively unknown merchant that launched a new site specifically for affiliate traffic. They set up an in-house affiliate programme and we were their first affiliate.

We added lots of links across our sites and started getting good sales.

The merchant told us they were delighted with the results and had even noticed that searches on Google for their 'name' had increased 100 fold!

They knew this because they had a PPC advert bidding on their site name which also went through the in-house programme. Their site didn't feature near the top in the serps because the two word site name they were using were individually pretty common.

They freely admitted that the only way the 'brand-name' traffic could have increased so significantly was due to our promotion of them and the increasing awareness of their name.

For each sale made through their brand name PPC link we received nothing!

I think that is wrong.

I also feel that affiliates being permitted to bid on brand names is no better.

Purchasers often return to a site by typing the brand name into Google despite having seen it elsewhere first.

I did it myself today. I was looking for a Majorca hire car and went via well known Majorca site's affiliate link to a company called "Amigo Cars". I'd never heard of them until today. Later on this afternoon I went to Google and typed "Amigo Cars Majorca" to return to the site. In this case I'd still feel that the first referral should receive credit for the sale.

Interesting discussion. I'm sure there's no perfect solution though.

[Travel Pixel]

without trying to skew the thread too much, has anyone ever experienced a situation where the merchant, who was previously paying commission to affiliates who's cookie came in on the brandname (PPC ad), switched to deleting the aff's cookie and replaced with their own PPC/agency/inhouse cookie?

If so did you recieve notification of this change?

[D-Mac]

I've never liked 'last man in' for this very reason. My current favoured solution is to have a private deal with merchants on a PPC basis, with them tracking the sales (and clicks) to see if they do indeed get value for money, and me tracking exit clicks. I believe that the amount of leakage in the CPA industry is higher than may be expected, but the networks don't mind much as much of the leakage is from one affiliate (the deserving pre-seller), to another.

Of course it works the other way around too, with crap sites picking up the commission when no pre-sell or added value has occured. I've got a site or 2 like this

[Travel Pixel]

Excellent point D-Mac.

Has anyone else managed to switch from a CPA model to CPC with a merchant and succeed?

[morleymouse]

Knowing your on about alpha, thought id throw my opinion in…

Affiliates are values, so is ppc, you do need a metric to judge each campaign in its own right. If you start saying well this contributed that contributed and maybe this had a bit of something to do with it your quickly going from 7% to 5% to 3%. Id like to think in most merchant cases this is all factored in, in reality I now it isn’t, and its these merchants that a year, maybe 2 or 3 down the line will suddenly change their policies and everyone will kick up a fuss about them.

Whenever the sale commission is good I think last man in is very reasonable, and if as an affiliate your adding value then the user will return to your site anyway. Our top review, cash back, comparison sites etc all get commission from the same visitors over and over.

With regard to moving from CPA to CPC of course is possible. But would you want to? Merchants, despite what some affiliates like to think aren’t stupid. The only way a merchant would move to CPC is if your driving regular sales, so lets say every 6 months you turnover £10,000 worth of sales which is a £1,000 in commission. Say your, as an affiliate earning per click is 15p. Can you get a merchant to suddenly start paying you 20p per click rather than the sale commission? ... Id hope not. Offer the merchant a 10p per click deal and they might think about it. Also the affiliate, on a CPA model has the advantage of landing on a big sale, some of our affiliates know that a £2,000 booking with a commission of £140 can very quickly turn things around. Have faith in your own traffic!

anyway this is starting to feel like a bloody blog post, so good night

[Travel Pixel]

Knowing your on about alpha, thought id throw my opinion in…

mm thats not entirely true dan, my discussion with you and others did prompt me to start the topic on here and I think its a topic worthy of some discussion - got some good responses so far!

As for alpharooms, we know very well that a single big sale can boost figures enormously on a CPA model. Lets hope your stop start new site can do just that!

Launch today.....?

[matty]

i've always thought a first click model would be better. whoever attracts the consumer in the first place.

however nomatter what the model, there's always leakage.

i've noticed on one of my campaigns that i get a lot of clickthroughs in the daytime, but a much higher ratio of signups in the evening.

this implies more people are simply browsing during the day, and actually spending the time to sign up out of office hours - which probably means i'm sending traffic that's stored the cookie on a work computer, and then some people are going straight to the merchant when they get home. no commission for me! but it's just something you have to accept i guess.