The Case for Splitting Commissions
Editor’s Note: The argument around providing full attribution to all publishers who contributed to a sale has been ongoing for several years. While no one seems to think it is a bad business practice those against the notion either:
a) don’t feel there is enough cannibalization of commissions going on to warrant crediting anyone but the last referrer (aka the last cookie in);
b) feel that mulit-attribution tracking is too cumbersome from a technology or management point of view or ;
c) simply feel that there will never be enough buy-off among advertisers for such a practice to become common place.
Even those who are strong advocates of affiliate rights like Haiko de Poel Jr, Founder of ABestWeb, have publicly stated that splitting commissions is not a practical option.
Recently, Econsultancy weighed in with some data behind the argument (and seems to side with notion a) above). The following article by Viktor Zeman, provides a counter-point to Econsultancy’s findings.
Econsultancy’s Findings
In an attempt to get to the crux of a long-debated issue about cookie overwriting, London-based market research firm, Econsultancy, last month published a report called The Truth About Affiliate and Cookie Overwriting.
The idea according Owen Hewitson, author of the report, was to:
“Examine and scrutinize the value incentivized traffic, question where or not voucher code sites are stealing sales that otherwise would have been credited to content sites and wonder how different models of multi-attribution might work, the ability to inform these debates with insights in to what extent cookie writing is occurring, and amongst which affiliates.”
The three key findings of the study show that in the vast majority of cases the majority of transactions have only one referrer; all transactions take place within 24 hours of the click; and where an affiliate does overwrite another affiliate’s cookie to claim the sale, they are more likely to overwrite affiliates that use the same primary method of promotion.
The methodology of Econsultancy study was based on five retailers across varying sectors – fashion, mobile, and health & beauty sectors, and two from the electronics sector. Each advertiser was a household name, had a high street presence and ran large affiliate programs, according to Econsultancy.
The Case for Splitting Commissions
However, the data from Econsultancy doesn’t seem in step with the internal data I see at my company Quality Unit each week. Recent data shows that just under a third of all the commission paid out to affiliates by our merchants has more than one affiliate. Thirty-percent of sales being referred by more than one affiliate is significant and should not be ignored. And in a small number of cases (nearly 9 percent) were referred by 4 or more affiliates.
We began offering split commissions through our Post Affiliate Pro affiliate tracking software in October 2009 because we had such a high demand by affiliates for merchants running programs to be able to use multiple options to define and reward multiple affiliates for referring a sale. Affiliates were complaining that they were no getting commissions due to them.
If we were not offering this split commissions feature, then in the case of more than 30 percent of sales, the other referring affiliate would get no commission.
Merchants need to understand that there is no reason not to pay all the affiliates involved in the sale. It is a huge motivation for affiliates to continue to promote the merchant’s program – even if the percentage of a specific sale is smaller to each affiliate by splitting the commissions. Affiliates are willing to accept a smaller commission on sales referred by multiple affiliates because they are getting paid on every sale where they are part of the decision chain – as opposed to feeling cheated or overlooked, which causes bad feelings toward that merchant.
By using split commissions, affiliate program managers continue to motivate all their affiliates and further emphasize the importance of the affiliate channel to their business – not just “last click” affiliates.
According to Hewitson:
“This research shows affiliate activity in a positive light. Affiliates are revealed as click winners, not ‘click stealers’…and there is no evidence to demonstrate that incentive sites are overwriting the cookies of true content affiliates in any significant numbers, even if this assumption has been adopted by many in the industry.”
We feel that but implementing controls for merchants to make decisions about splitting commissions, if they choose to do so, all affiliates involved in the sale process are click winners.
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Pat Grady
