On more than one occasion I have heard marketers and web analysts bring up the subject of “conflict” between affiliate marketing and other online marketing channels. The primary area of concern has always been the attribution of an online sale. What really helps close that sale, or land this or that prospect? Is it a paid search campaign, an organic listing, advertising through a comparison shopping website, or a banner with a compelling message, or maybe an affiliate pre-sells the customer skillfully and enticingly enough for them to place the order through?
First of all, it is important to understand that affiliate marketing is not a marketing “channel”, but rather, a way of remunerating a marketer (based on performance). Hence, affiliate marketing really exists on the crossroads of a number of online marketing channels, and works with nearly all of them.
Secondly, why does it have to be an “either.., or…” question, and not a “both.., and…” one?
Thirdly, I believe such debates to be akin to a debate between an existentialist and a utopian. The latter believes in building a perfect human society, while the former focuses on the existence of each individual, believing each person to be fully responsible for giving his own life meaning, and making the most out of it. Not widening this allegory any more than we have to, I believe that in the question of online marketing attribution it seems that either side can be argued at any time. While we should definitely strive for appropriate remuneration of every individual and channel involved in the pre-sale process, the perfectibility of online attribution is yet to be achieved. There are various solutions in the works, but not one is universally accepted yet.
So, instead of arguing, before we do have a better system that online marketers currently have, it seems sensible to follow the example of the larger brands, and strive for the widest online presence possible, reaping the fruit ripened under a bouquet of factors (and through an array of marketing channels). You can think of your search engine optimization efforts as fertilizing the soil, social media marketing and branding as the rain, while reviews, comparison shopping, paid search, coupons, loyalty marketing and other channels — be they handled with or without an affiliate marketing payment model in place — as the sun that brings about the desired outcome: that sale or lead you are ultimately seeking to land. Utilize all, measuring and improving all, and at all times.
Geno,
The problem is that attribution stops with “online” when we know that for every $1 spent online the consumer spends another $6 offline. You don’t hear anyone talking about giving credit to online channels for those offline sales.
When you have a partner earning commissions on a “last-click” basis and you start talking about taking some of those sales away to give them to other internal departments, you are going to create some problems.
It’s like telling your sales team, that we used to pay you 100% of the sales that you closed, but since we sent out a catalog or an email last month, we are going to “attribute” 25% of your commissions to them instead.
Guess what? No more sales people.
I think it’s great to be able to study the numbers and use those numbers to decide to spend more in other channels, but once you start taking away commissions from your closers, you risk losing you closers to your competitors.
Let’s utilize all the data to better understand the ecosystem, set realistic commission rates that enable you to maximize the efforts of all channels, and not shoot the goose laying the golden eggs.
Adam Viener
Founder & Chairman
imwave, inc.
http://www.imwave.com
Adam
Amen all around!
1) Excellent point on the need to measure offline conversions if you really want to get a full picture.
2) And I cannot agree more on the deadliness of lowering affiliate commissions (regardless what the explanation/”justification” is).