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Why Single Click Attribution Never Worked

25-07-2018

By Zeynoun Albeik

We see that nowadays there is more and more consensus among marketeers on the importance of measuring true incremental value of a company's different marketing channels. However, the most dominant models in affiliate marketing are still based on single click, which contradicts the idea of incremental value. So, what is the truth about single-click models and what will the future bring us?

The affiliate market today

Traditionally, affiliate models are based on a single click model, mainly last-click. A well-known example of last-click based commissions are coupon and cashback sites. As affiliate marketing is founded on the last-click model, it's no surprise that these sites are 'experts' in converting. These coupon sites make the purchase path longer and more complicated. As a result, potential clients drop out of the journey. The ones that finish their journey with a purchase do so despite coupon sites, not because of them.

On the other hand, some models are based on first-click. In this case, the click that initiated the sale is rewarded with 100% of the commission. A good example of a first click in a customer journey is a blog in which a product is promoted by the blogger. Both methods ignore all other touchpoints in the journey. They promote the existence of coupon and cashback sites that detract customers away from their buying process, leaving less room for valuable sites that occur elsewhere in the customer journey. Over the last few years and into the coming years, attribution models remain a focal point of discussion. One of the hot topics in the affiliate world is multi touch attribution, which aims to attribute sales to multiple touch points in the customer journey. With customers journeys becoming longer and longer, the longing for multi-touch attribution naturally increases. Just like it takes 4 to win a relay sprint, it takes 4 (or 5, or dozens) of clicks to win a customer. Without the whole team, there will be no gold medal. As multiple touch-points became visible in the funnel, advertisers may choose to deviate from the single click model. For example, advertisers could choose to distribute commission evenly among the publishers, or to attribute commission based on the position of the touchpoint. Assuming advertisers have moved beyond single click models, the goal of a multi-touch attribution model is to assign publishers value that reflects their role in the customer journey.

Time for change

Although multi-touch models are a step in the right direction, the challenge remains for advertisers to assign incremental value to each publisher in the customer journey. How do you decide which model best represents the value of all the touch points? How can you assure this truly reflects a publisher's incremental value? Choosing an even split model for example, would leave some of the publishers disadvantaged, as it's unlikely that each touchpoint in the customer journey contributed equally. Along these lines, incremental value is strongly related to a publisher's motivation to create and publish new content. If you repeatedly get paid a fraction of the commission you deserve, why would you be motivated to create and publish new content? Unfortunately, many affiliate programs still use a last-click model, leaving many affiliates positioned early in the customer journey, in the dust.

It will require an industry wide shift to go from a last-click model to a multi touch attribution model. Fortunately, the attribution ball has started rolling as affiliates are starting to realize traditional affiliate models generate unjustified commissions. Although an increasing number of companies offer services that can apply affiliate attribution models, it remains crucial to analyze your own unique data. No one model is right for an affiliate program or merchant.

As affiliates are starting to realize that there are ways to be credited fair commissions as opposed to single click models, an irrepressible change is taking place in the world of affiliate marketing. On the other side, advertisers are realizing that journeys with dozens of clicks aren't being served right by single click attribution models. We believe the future of affiliate marketing lies in the evolution of multi-touch attribution and its increased visibility facilitated by modern data analytics. Over the next few years, we will witness how multi touch attribution will take over affiliate marketing.

Learn more about how Odyssey helps to assign the true value to affiliates.

Using Common Sense in Online Marketing

Jelle Oskam @ Affiliate Huddle London 2018

22-05-2018

By Zeynoun Albeik

On the 10th of May, the Odyssey team attended the Affiliate Huddle conference in London. Jelle Oskam, Odyssey co-founder and Global Affiliate Manager at adidas, shared his thoughts on the rapidly changing field of affiliate marketing. During Affiliate Blogger Sessions 2018, he kicked off the event with the following statement: "Five years from now, affiliate marketing will have become the #1 traffic driver". At Affiliate Huddle we explored the reasoning behind this daring statement that is all about handling the situation by using good old common sense.

Common sense is essential in any field of online marketing. If we take a closer look at the way traffic generation is organized, Google and Facebook are the two incontestable big actors. Both parties possess an incredible amount of data. While this raises concerns on its own, it also means organisations are predominantly -if not entirely- dependent on these big players for their traffic generation. For instance, if a company aims to grow its business consistently over the next two years, this means growth is reliant on rules set by an external organisation. It's not hard to see that this is an undesirable situation for all associated players.

To illustrate the extent to which organisations are dependent on Google, the Merkle Digital Marketing Report 2017 showed that brand cost-per-click went up with 23% in Q4. It might be ignorant to think that these numbers are only the result of supply and demand. Rather, it seems to be a result of Google's algorithm taking advantage of its strong position. Along these lines, Google doesn't seem to be in a rush with regard to the roll-out of Google Attribution. The reason behind this is simple: If many conversions occur with the search channel being the last click, then why would the most powerful player start attributing commissions differently? If this would happen, channels positioned earlier on in the customer journey become more important, resulting in loss of revenue for Google.

While it's a challenge to escape the powerful giants, it remains crucial to observe their role in the customer journey. Looking at the entire customer journey, we see that Facebook and Google take on a leading position. However, the role they fulfil is not as dominant as one would expect from the size of the allocated budget. From this point of view, advertisers should be looking for alternative traffic drivers. Consequently, this will point in a direction of a more transparent, straightforward relationship between publisher and advertiser. As an industry-wide shift is taking place, it becomes increasingly important to measure the incremental value of all touch points within the customer journey. We will cover more of these developments in the next blog posts!

Learn more about how Odyssey aims to serve as a solution in incrementality measurement.