Is the last click CPA model broken?
For years some digital marketers have decried last click attribution, claiming it favours business models premised towards conversions while ignoring early funnel activity. Often this line of thought ignores one of the fundamental reward mechanisms of last click attribution, the fact that much of the activity it recognises is only commissionable if it results in a sale.
For affiliate marketers this means that the vast majority of clicks and impressions that never lead to a sale go unrewarded. These billions of interactions are the often overlooked halo effect of a channel that needs to do better at showcasing the branding and wider impact its traffic has, measuring affiliate marketing on both results and reach.
Is the last click CPA model broken?
As a consequence of the payment metric, many affiliate business models are inevitably focused on sale conversions: remarketing, retargeting, voucher codes, cash rewards and basket abandonment (collectively now accounting for almost 50% of affiliate sales), are clearly targeted at the last possible point before a customer makes a purchase.
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But we’re now at a crossroads where brands are increasingly interested in the non-sale elements of affiliate marketing. Fashion brands want to engage with influential bloggers who have armies of loyal followers. Telecoms companies, long time exponents of meaty tenancies, are always challenging affiliate networks to come up with new and innovative ways of connecting with their main publisher partners. There is, on the whole, a growing desire to prove affiliate marketing is more, much more, than voucher codes and cashback.
Building better relationships with a more diverse affiliate base is entirely achievable but at the same time we need to assess whether payment models and commission payouts are still fit for purpose; does a single, standardised commercial arrangement adequately reflect the value delivered?
At the heart of the conversation is an acknowledgment that last click cost per acquisition (CPA) which much of affiliate marketing is still rewarded on, is a commercial business model, quite separate from last click attribution that recognises one element of value delivered.
Therefore the discussion should be premised on whether last click CPA adequately recognises the value that business models sitting within the broad church of affiliate marketing offer. We know, for example, that certain affiliate models, typically price comparison and some content, can often lose out on last click CPA.
With this in mind we believe it’s time to acknowledge early funnel traffic within the channel, affiliates who are strong influencers but poor closers. How can this be done? Ideally we would like to see a set of metrics that recognise value: time spent on site, pages viewed, closeness to sale and post transaction ‘customer quality’ indicators, but we also need to be realistic about how much of this data is passed back from advertisers.
With that in mind, Affiliate Window has embarked upon a new payment ‘top up’ model that allows advertisers to provide additional click payments for affiliates who influence sales they ultimately get no credit for.
The assist payments are entirely flexible and can be defined on a per affiliate basis. They allow advertisers to budget for the additional cost and work all activity back to their programme’s target CPA. We’ve enjoyed some success already with longer tail, content based bloggers securing additional payments, or indeed higher general CPAs. This latter point is important because it shows advertisers will pay more for content they desire.
The affiliate channel is a complex microcosm of digital marketing and, just in the way no advertiser expects a single commercial model for email, paid search and display campaigns, so they need to think more creatively about alternative commercials for the hundreds (or indeed thousands) of affiliates who may be active on their programme.
Recently we ran an initial ‘assist’ test campaign for one of our largest clothing advertisers. Working with a small group of fashion bloggers, they simply asked for additional coverage of their clothes and accessories in the run up to Christmas.
Receiving thousands of additional impressions and clicks from these sites (with the effective cost per click working back to just a few pence), the goodwill and engagement generated proved the campaign was a resounding success.
We are just at the start of the conversation: we know the new payments are a single iteration and won’t signal the end of last click CPA. They’re not supposed to. We also know there will be discussions about the wider costs and how to measure them according to a campaign’s overall ROI. The editorial and regulatory challenges of effectively paying for placements may also need to be addressed, but now is as good a time as any to start the debate.
Let’s celebrate the diversity of affiliates and the breadth of content they generate, but let’s also recognise that our current business model may also need to change in order to acknowledge this.
Kevin Edwards, global client strategy director, Affiliate Window
Tel: +44 (0) 844 557 9240