Positive Action Taken RE: Last-Click Referrer - 24 Studio Have Listened to You

[Ogilvy-Sean]

Hi guys,

We all know that the last-click referrer debate has been going on for quite a while (example post), and that the current "best practise" is to remove ANY commissions for sales (based on last-click referrer) which have been allocated to another online source other than Affiliates.

I have been working with 24Studio, Affiliate Window and Commission Junction over the last month to enable us to step outside of the box a little with regard to the above.

History :

The 24Studio affiliate program has been facing an increasing duplication rate on their sales as the program has been increasing its volume in the last couple of months. Some of the performers on the program raised their concerns about this, and I thought it prudent to address the problem before it became any more extreme and threatened your confidence in the program (as has happened so may times before with big-name brands!)

Having completed some tests using our third-party tracking software, we have identified that due to strong PPC brand activity, a large portion of the duplication (in recent months) is based on customers being cookied by affiliates, but having the sale completed at a later date when the customer searches for the brand (PPC) – resulting in the affiliate losing the sale.

Technically speaking, form a best-practise point of view - the scenario above is (arguably) completely acceptable, but having discussed this with the client to highlight the affiliates point of view - we have agreed to pay a % on these sales for the next 3 months as a test.

We believe that the affiliates are a valuable part of 24studio's marketing mix, and we have used the third-party tracking and the payment system below to help prove this.

How it works :

All standard last-click referrer sales tracked to the affiliates are paid on a 6% commission (standard payment system)

Additionally, when a customer clicks through an affiliate-ad, and goes to the 24Studio site, then leaves the site only to return within 30 days via the PPC brand activity - affiliates will be paid a 3% commission.


The upshot for affiliates :

The upshot of all this is that affiliates on the 24Studio program for the next 3 months will be paid commission on all sales where they have had an tangible involvement! If you have referred a customer from your site, you will be paid commission if the customer returns using brand search!

I know that this is not the usual run of events for this type of situation, but we wanted to acknowledge that the affiliates are an important part of the marketing factor for 24Studio, and that IF an affiliate refers a customer - and they come looking for the brand within the cookie period - the affiliates should reap some of the rewards.

We are testing this for the next 3 months so that we have some robust statistics for the duplication rates of both brand and non-brand, and we'll reassess the situation in February '08

Hope I've explained this well enough!

Please let me know if you have any questions or comments.

Thanks again for all the hard work.

Sean

[getvisible]

Hi Sean

You may have known I commented on the matter a few weeks ago:

Affiliate Marketing Blog & SEO Advice: Last Click Commissions - Still Relevant in 2007 / 2008?

It is absolutely outstanding that a merchant / agency / network(s) combination has finally taken the matter seriously.

I hope that others will contemplate applying a value to the education-role that affiliates do undertake in the purchasing process.

This action certainly makes any merchant, and 24Studio in this particular situation, a more attractive proposition when compared to merchants that do allow affiliate brand bidding and down recognise the input of content affiliates.

A great move - Jason there's hope for 2008! Care to update:

Affiliate Marketing - 2008 - The Year Ahead | One Little Duck - Affiliate Blog

with - some merchants choose to value content affiliates at last! ?

[hpops]

Hi Sean

Many thanks for posting, a really great technical solution to a complicated commercial problem - nice to see an agency of size put the time in to create as well as the client. We are changing de-duplication policies across our client-base in the new-year and will only be deduping non-brand (product or generic) search activity for the same reasons identified above (hope that didn't come across as thread-jacking - just wanted to add positive action to positive action)

I personally feel that in most instances there is very little difference between a brand search and a direct url type and that that needs to be recognised when dealing with cross-channel issues.

Once again, nice one

[Wardy]

This is a great step forward. I know Sean has been working very hard on this to put the affiliate point of view across and make sure us affiliates don't lose out and has created himself allot more work in the process.

This really is such a positive step forward and definately a nice added plus point to promoting 24studio over other merchants too.

Cheers
Wardy

[D-Mac]

Excellent A step in the right direction.

[Bud]

A great positive step forward Sean - well done, I'll bet it wasn't an easy ride to get this in place.

I'm sure the trial will throw up the need for a few refinements but this is a very welcome new approach.

Are we seeing the future of AM? Hope so!

Nice one Sean - A big pat on the back from me.

[loquax]

Jason there's hope for 2008! Care to update....

A glint of gold in an otherwise bleak landscape - unfortunately when looking at my crystal balls last night this didn't appear

I think this quite a monumental move and 24Studio and Sean should be congratulated for this. It will be interesting to see how it transpires. Good stuff - maybe there is hope after all!

Jason

[Barry]

Does this happen even if the person doing the 'brand' bidding is on the same network as the last affiliate before that?

Ta

edit
or maybe I have read things wrong?
/edit

[Ogilvy-Sean]

Does this happen even if the person doing the 'brand' bidding is on the same network as the last affiliate before that?

Ta

edit
or maybe I have read things wrong?
/edit

I hope not!! - I think I've opened enough can's of worms for one year - I'm leaving the brand bidding issue alone for now!!

Affiliates aren't allowed on the brand for 24Studio - so the issue shouldn't come up (hopefully)

hope this answers the question?

Cheers

Sean

[Barry]

I get you now, sorry just re-read your initial post

Excellent stuff.

[Alfie]

Excellent move Sean, well done! Will be interesting to see what impact this has - i'ms ure it will be noticeable which should encourage us ( affiliates ) to lobby other merchants and networks to take a similar stance.

Anyhow, many congrats to Sean!

[drivetowin]

Excellent move Sean - I'll be having a definite look tomorrow to see how we can promote 24 studio more.

[3wdl]

A step in the right direction but isn't this pretty much always the case? And moreover, shouldn't the affiliate still get the 6%?

As an agency we run duel PPC and affiliate campaigns and whilst it is useful to dedupe to understand there the customers are originating from, I would never, ever dream of cutting affiliates commissions due to this process, especially when most of the PPC sales would be coming from brand terms in the first place.

[Ogilvy-Sean]

A step in the right direction but isn't this pretty much always the case?

Hi 3wdl

Thanks for the post - in my experience, it isn't the case any more. A few years ago, before affiliate marketing was quite as popular, there were merchants who would pay all the commissions and PPC fee's without batting an eyelid - but in the last couple pf years, merchants have advanced their understanding of the market place and have pushed their knowledge of the customer journey as far as possible using the latest tracking solutions.

Best practise as it currently stands is for a merchant to pay based on the last click referrer, regardless of brand/non-brand.... I don't necessarily agree with this 100% as it negates the cookie period to a certain extent (and I don't personally like to cancel commissions for any reason if it can be helped) - but there definitely is an argument for this case.

From the merchants point of view, they pay an awful lot of money in order for their brand to be recognised....and not just online.

The reason we've stepped outside the best-practise box (cliché ) - is that we understand that to get a customer to actively search for the brand online (and to have been cookied by the affiliates previously) draws us a map of the customer journey, and highlights that the affiliate has had an involvement in the sale. The 3% commission payment reflects this - the fact that the affiliate has had a hand in the sale, but hasn't necessarily clinched the deal on their own - plus which, the client still has to bear the cost of their PPC advertising....so this is all about finding a balance which both sides are happy with.

Hope this gives you an idea of the thought process behind this action.

Look what you made me do?! - write another essay!

Cheers

Sean

[yesasia]

Hi Sean,

This is interesting, but I just wonder how you know if a sale came through brand bid activity if the affiliate is using a re-direct ? Or would you not consider these ?

thanks
Stefan