Is channel attribution good for affiliates?

Andrew Copeland

Webgains

Wed, 11-05-2011 07:58

It’s interesting – though not unexpected – to see large brands like Virgin Atlantic, exploring multichannel attribution as a viable means of evaluating and rewarding the different marketing streams.

While the current model ‘last-click-wins’ is a somewhat crude model, it’s the best we have so far. It also has the advantage of simplicity – it’s easy to execute and everyone knows where they stand.

The major stumbling block to the successful adoption of multichannel attribution for affiliates will be the fixed costs associated with many forms of marketing. Whether utilised directly or indirectly, many forms of marketing employed by affiliates such as paid search, display or email, incur upfront costs regardless of results. The current remuneration model at least allows affiliates to calculate approximate revenue as a result of these activities and set their maximum spend thresholds to ensure a profit.

An attribution model would increase the difficulty of calculating these thresholds (and the resulting breakeven points) as affiliates will not know at what stage in the attribution process their efforts have been deemed to have added value, nor how much of the ‘pot’ they will be awarded. Naturally, this leads to uncertainty over projected earnings and a need to safeguard against over-expenditure.

This could lead to affiliates calculating breakeven points at minimum attribution levels. And ironically, this would mean merchants receiving less promotion from their affiliate partners as a result of implementing multichannel attribution – which, by its very nature, is designed to increase promotion.

Andrew Copeland is Client Services Manager at international affiliate network Webgains. He has 5 years of affiliate marketing experience and has worked with Mazuma, Envirofone, Toshiba and Barclays.