One of the things that brands question in the affiliate channel, and rightly so, is whether or not the sales that they are paying affiliates for are sales they would have gotten anyway, through other marketing channels. This is one of the major discussions happening in the affiliate space: the question of incrementality.
Given that it requires an average of seven touchpoints to convert a lead into a customer, most brands build a marketing strategy that involves multiple channels working concurrently. If you are a marketer trying to make a decision about investing more in an affiliate program, you want to know if the affiliate effort truly impacts the sale throughout the customer journey, or whether other marketing channels do the bulk of the work.
This can be challenging to figure out, particularly if you’re using standard third-party tracking methods, which are cookie-based and often employ last-click attribution models. Not only is there a lot of inconsistency when you have to rely on third-party tracking, but it also often incentivizes your affiliates to focus on last-click strategies so that they can claim the sale. (And who can blame them if this is what your program is set up to reward?)
The dream vs. the reality
If your company has been running an affiliate program for a while, you’ve probably experienced the frustration and confusion that comes with discrepancies between reports generated by third party tracking and that of your own internal analytics. The result of these discrepancies goes one of two ways: you either have to correct orders, withdrawing payments that affiliates were relying on — or you have to double pay for sales. Likewise, you may also have affiliates generating a lot of value at the top of the sales funnel, but not getting compensated for their efforts because you have no way to track that value.
This dissonance between brand and affiliate isn’t good for either party. Brands want confidence that the sales they are paying for in the affiliate channel are truly incremental — and affiliates want to be able to rely on payment for sales that are reported to the network.
If you’ve experienced these challenges and are questioning whether or not investing further in the affiliate channel is right for your business, take a step back and ask yourself this question: If you knew that the work your affiliates were doing was pulling in sales that you would not have gotten through other channels, how would that shift the way you approach your affiliate program and how you invest in it?
If you knew that every sale attributed to the affiliate channel was truly incremental to your business, could you:
- Pay your affiliates more?
- Pay affiliates more equally, rather than valuing some types of sales more than others?
- Have fewer order corrections?
- Grow your program by recruiting more affiliates?
- Invest in a dedicated affiliate manager or agency if you aren’t already using one?
- Build out the support resources that you offer your affiliates?
- Divest from other channels that you’ve been on the fence about?
- Spend more time testing the affiliate channel so you can optimize it?
- Spend more time seeking out top performing affiliates that are a better match for your brand?
- Reallocate resources and budget within your affiliate program?
After asking yourself these questions, you may begin to realize that the affiliate channel could be driving so much more value than you thought possible, and much more than it currently provides. This exercise can help you think bigger about the potential of your affiliate marketing program.
Better tracking for big dreams
Since the way that sales are tracked determines the results of both of these things, it seems obvious that we would look to the tracking method to offer a solution. Enter server-to-server tracking.
With server-side tracking, brands can eliminate the need for third-party tracking. Instead of information being stored in a cookie, which is becoming problematic for a number of reasons, attribution data is sent directly to the brand’s server. Pernix, which is a server-to-server tracking solution, takes it a step further and ensures that attribution is aligned with the brand’s analytics. When you can be certain that attribution is aligned with the method of attribution that’s best for your business, you can see exactly which sales are incremental. This is a game changer because it means that you can see which affiliates are truly performing and which are simply capturing credit for value that they haven’t created.
The Pernix solution is a server-side attribution tracking software that fuses with your brand’s own internal analytics and then records those attributed sales into the affiliate platform. Once you’re empowered with this information, you can begin to think and act so much bigger in your affiliate program. Hopefully, this leads to bigger results for both your affiliates and your brand, giving you more options for growth.