Understanding Attribution 101
The conversation about who to attribute which sale to in the online world is an ongoing one. It’s extremely complex and there are an incredible amount of variables to consider, not to mention how to understand of the data once it’s properly collected. Not only do we need to consider different affiliates (especially if you run your program on multiple networks) but also which marketing channel actually contributed to the final sale.
Do you reward an affiliate if it was your PPC ad that closed them? What if your email campaign or a facebook contest ultimately won the customer over, even if the affiliate was the reason they found out about you in the first place? How do you measure that? Do affiliates get the same amount of commission if two or three affiliates were involved in the sale? How do you split it up, since your margins are on the line?
There are so many questions and even the most experienced people in the industry are still trying to figure out how to properly manage attribution. That being said, it’s at least important to understand what it is and some of the elements that impact it.
Lisa Picarille of the Performance Marketers Association wrote a great 5 part series about it. Here are the links for quick reference.
An example of why attribution in affiliate marketing is important is from part 2. “Affiliates who often drive a sale to a merchant’s check-out page are faced with customers who see a discount or coupon box. That customer will typically leave the page and do a search for a coupon. If they find one at a coupon affiliate site and then return to make the purchase, the coupon affiliate will get credit for the sale. Some affiliates say that is not fair since they believe they did the upfront pre-selling job of getting the customer to the merchant’s shopping cart in the first place.”
This in itself should be a reason to look into this and better understand it. Are you crediting the right channels and the right affiliates to your sales? If not, how can you measure the success of each touch point? How can you successfully attribute budget to the highest profit or highest converting channels for new customer acquisitions?
By understanding attribution more clearly you will be able to make better decisions as to where you spend your advertising budget and learn which affiliates to focus your attention on. But being able to make decisions based on data rather than “gut feelings” your bottom line will be better protected and you will have opportunity to really grow profitable sales.