The increasingly complicated landscape has not only created more competition for commission, but also made it harder for merchants and creators to track what’s actually going on when a sale is made.
Chlöe Gibbions, founder of Ours Agency, says brands and creators put a lot of trust into the platforms they use for affiliate links for different reasons. Creators, for instance, trust that a referral will be tracked and paid while brands trust platforms to correctly identify which affiliate actually deserves a commission for a sale.
Gibbions says there’s little information available about how conversions are actually assigned. Brands need a better understanding of their own conversion paths, as well as at which stage a creator’s link resulted in a sale, so that compensation can be dealt out fairly.
“Nine times out of 10, consumers don’t buy directly through a link; purchases are often considered over time,” she says. “With this in mind, there is a high chance organic search or paid ads might be attributed with the sale if it’s based on last click rather than assisted conversions.”
What brands can do
Edelman says merchants running two or more affiliate programs risk paying twice for one sale.
That’s because each network tracks the affiliates that sent the final click before purchase separately, and neither has visibility into clicks routed through a separate network. If a shopper clicks links originating from both programs before buying and the merchant reports the same purchase to each, both networks will claim they delivered the sale and the merchant may end up paying two commissions on a single transaction.
Edelman believes most of these merchants may not be aware there’s a problem at all, and pay both obliviously. His recommendation is for brands to partner with only one affiliate platform, to eliminate risk, though this could also limit reach.
Divecha recommends brands apply UTM parameters (short text codes applied to the ends of URLs that identify where a visitor came from) across all activity, invest in offline conversion tracking for in-store sales, and issue individual coupon codes to remove ambiguity for both sides.
Paul Archer, CEO and co-founder of brand advocacy platform Duel, says brands running multiple channels should stay on top of how creators are interacting with their own affiliate systems, as it could expose issues with their current setup. For instance, if a creator posted about a brand’s product that was seen by millions, but was only compensated a minimal amount, Archer argues there could be something inherently wrong with your tracking infrastructure.
Divecha also adds that while retreating to a single channel might solve the attribution problem, it could also constrain growth.
“It is simpler, but depends on whether you want to actually grow your business or shoot yourself in the foot,” he says. “If you did just one thing in today’s multi-channel world, you are definitely setting yourself up for failure.”
Edelman says there needs to be increased scrutiny on affiliate networks and that compliance teams need to be structured to identify bad behavior. Even when networks do act, he suggests they usually do because a practice costs them money directly, such as diverting commission away to a rival network, rather than out of any broader will to police the industry. “There aren’t that many disputes because usually nobody figures it out,” he says.
