Sales attribution isn’t a challenge that’s unique to affiliate marketing. It’s a challenge faced by marketers worldwide, both in the physical and digital world. Everyone has one question on their lips.
Which of my marketing activities is actually adding value?
It’s a tricky question with no clear answer. The only clear thing is that the average user journey has multiple touchpoints that lead up to a purchase; Google research suggests that it’s 2.8 touchpoints on average.
Our own Google analytics data shows pretty much the same story, with 21.1% of customers visiting the website 4 or more times before making a purchase.
If these visits are from different sources and channels, then it’s no surprise that everyone struggles to decide who deserves the credit for the sale.
The story is very much the same for affiliate marketing; if more than one affiliate was involved in a sale which affiliate deserves the commission. This is the question we tried to answer when starting FanFuel and explains how we finally decided how to attribute FanFuel sales.
The Two Types Of Affiliate Marketing
Most people tend to think of affiliate marketing as a single entity, but in reality, two different types of affiliate marketing serve completely different purposes.
1. Big Brand Affiliate Marketing
Most big brands have affiliate programs, whether you’re Reebok on ShareASale or Marks and Spencer on AWIN. There are hundreds of large well-known brands in affiliate marketing, from holidays to car insurance companies.
These brands turn to affiliate marketing to help them close a sale, with the biggest tactics being coupons, cashback and comparison shopping tools.
The brands don’t need affiliate marketing to survive; they’re well-known brands with large marketing budgets of their own. However, they’ve realized that price-sensitive customers explore the web for better deals and different ways to save money. This is why affiliate marketing matters to them, and this is actually the vast majority of affiliate programs.
2. Niche And New Brand Affiliate Marketing
On the other side of the spectrum, we have the smaller brands of the world, whether that’s niche sites like our own beloved CrazyBulk or a new venture that can’t compete with a big brands’ marketing budget.
These brands turn to affiliate marketing for a different reason. Exposure. They want the world to know that they exist. Affiliate marketing is a great way for these brands to promote their fledgling product or service.
Why is it so great? Well, simply put, it’s low risk. Affiliates get paid when they get results. Rather than blowing their budget on paid advertising with no guarantee of results, they can invest in affiliate marketing and only pay when the sales start coming in.
This is a complete contrast to what big brands care about and a completely different mindset for an affiliate network.
Affiliate Tracking Was Built For The Big Boys
This probably won’t surprise you, but affiliate tracking was primarily built with big brands in mind.
Affiliate networks make their money by connecting brands (advertisers) with the people who promote them (publishers). They primarily make money on a per-sale basis taking a small cut of every sale. Economically it makes sense for affiliate networks to work with huge brands to make as many sales as possible. Working with big brands that have a huge volume of sales just makes sense.
These big brands care about closing sales (because they’re already doing their own marketing), so they are keen to recruit coupon and cashback affiliates.
With these affiliates, it’s clear that the last coupon used or the last click before a purchase is the one that closed the sale. Last-click attribution is a no-brainer.
Voila, last-click attribution spreads and dominates the whole of affiliate marketing.
But What About Niche And New Brands?
As smaller brands became aware of affiliate marketing to grow their business, they started to look for tools and networks to launch their affiliate program.
The very tools that were never designed with them in mind became popular without these smaller brands realizing the consequences. They couldn’t afford to build their own, so what choice did they have?
Affiliates accepted the status quo too, last touch attribution is considered the standard and go-to tracking method for 99% of affiliate programs.
Our Lightbulb Moment
Having been lucky enough to grow brands such as CrazyBulk and PhenQ into multimillion-dollar businesses based on affiliate marketing alone, we’re lucky to have a ton of insights into how affiliate marketing works for smaller brands.
We’ve seen niche affiliate marketing evolve and been there with affiliates through the good and bad times. We’ve seen how affiliates promoting brands with primarily SEO have evolved with each Google update since the original Panda update.
What have we learned from all this? No matter the update affiliates always adapt. The only thing that seemed to change is the name of the top affiliate. We started to realize that the majority of affiliate commissions always go to the minority of affiliates.
We had thousands of affiliates promoting our brands, but over 80% of commissions went to the top 50.
It wasn’t that smaller affiliates were producing great content either. In fact, they were often involved in many sales. They just weren’t closing them.
Affiliate marketing attribution was broken. The value of these thousands of small affiliates was being overlooked and under-rewarded.
A ‘Typical’ Sales Journey
The majority of FanFuel products are about solving a problem. Typically a user journey goes a little something like this:
- Joe searches on Google for the “best fat burner” because he wants to be beach bod ready.
- He discovers a top fat burner article with 5 different products and clicks the affiliate link to checkout the one at the top of the list.
- He lands on the Clenbutrol page on CrazyBulk and thinks the product looks pretty cool, but he’s never heard of these CrazyBulk guys before.
- Joe goes back to Google and searches for “CrazyBulk” reviews. He wants to be sure that the brand is legit. After reading another affiliate article, he clicks another affiliate link returning to the site.
- Whilst making his purchase, Joe goes back to Google and searches for “CrazyBulk coupons” to see if he can save a little money. Fortunately, we banned coupon affiliates years ago, so he doesn’t find much, but he would click yet another affiliate link on most affiliate networks.
That’s potentially three affiliates in just one journey. That’s before we even think about branded search terms.
Many visitors aren’t ready to buy but come back days later after searching for the brand name in Google. If an affiliate ranks for a brand term, they can grab these sales at the last moment without adding much value to the journey.
What We Think Matters
As brand owners and as an affiliate network, we think affiliates add the most value to our brands by introducing new people to them.
Nothing is more important than creating exposure for our brands.
Brand terms, review terms, coupon codes, remarketing – these all play a role in a purchase adding value. However, nothing matters more than that first introduction to the brand.
That’s why our brand team focuses on these last touch interactions. Our goal is to ensure that once an affiliate introduces someone to the brand, they convert to a sale, and we both win.
It was clear we wanted to reward affiliates based on these introductions, so we chose first-touch attribution.
Fortunately, we partnered with EverFlow for the FanFuel networks affiliate tracking. One of the few pieces of tracking software that even has an option for first-click attribution.
First Touch Attribution Succes Stories
Since switching to first touch attribution, we’ve seen:
- More affiliates earning higher total commissions.
- New affiliates starting to make commissions faster.
- A wider distribution of commissions with less variance in conversion rate between affiliates.
- Affiliates in lower competition geos and foreign markets were getting better results too.
What also surprised us is just how much affiliates noticed the difference. Lower competition keywords could actually make sales. It was no longer just about ranking for the brand name and review search terms.
Here are just a few of the success stories, affiliates names have been removed to protect their privacy:
Affiliate A used to average $6.97 per day in commission. In his first 4 days with FanFuel they made $192.18 in commissions. During Jan and Feb 2021, they’ve made $1,063.59, almost 2.5x what they would have previously.
Affiliate B, back in October 2020, made roughly $600 in commissions. In February 2021, they made a staggering $9,788.32.
It’s not all about smaller affiliates too. In October 2020 affiliate C, made almost $11,000 in commissions. In February 2021, they made just shy of $67,000.
There are literally dozens of these stories. On average, small affiliates outside our top 100 have grown by more than 50% in sales since launching FanFuel with first-touch attribution.
Whilst last-touch attribution has its place for mainstream networks promoting big brands, we’re strong believers that first-touch attribution is the fairest attribution model for niche and smaller brands.