In this guest post for the APMA, former UK head of Adtraction, Anthony Clements, takes on affiliate tracking.
He argues that Google’s year of reckoning with the affiliate channel has laid bare how outmoded our current tracking solutions are, before offering a future blueprint for success.
Make yourself comfortable and prepare to have your views on affiliate tracking challenged.
“Public proclamations about affiliate tracking over the last few years have focused on how much money the industry is supposedly losing due to poorly implemented, outdated, privacy incompliant or just downright ‘bad’ tracking.
Some figures I’ve seen quoted are touching the £100 million mark.
In the APMA’s State of the Nation report almost half of affiliates surveyed said that unreliable tracking is their biggest challenge to growth. There’s clearly a major issue here that needs exploring, but the fix is not just saying to networks and advertisers…‘do better’.
Although technically straightforward, affiliate tracking is a complex mechanism, intertwined with external factors that fundamentally affect how it currently operates.
Let’s take a look in more detail…
Are we listening?
Affiliate marketing is not reading the room about how our industry tracks.
Last year Google Analytics 4 wrought havoc by rolling out a default view that significantly reduced the revenue credited to affiliate marketing.
While we won’t go into the myriad of reasons behind this, one inescapable truth lingers large; Google is telling advertisers that when it comes to what acquisition channels are valuable to them, affiliate marketing is up to 80% less valuable than its own tracking platforms claim it is.
The APMA’s guide to GA4 for affiliate marketing published in early 2024 has several examples.
Let me be clear, the default view in Google Analytics 4 massively undervalues affiliate marketing and isn’t an appropriate way to measure the channel. But, in the changes to session counting and default modelling deployed in GA4, Google is trying to send a clear cue to affiliate marketing:
Google thinks affiliate marketing tracks too much, not too little.
This is a challenge we need to meet head-on by taking every opportunity to prove the value affiliate marketing delivers to retailers. Affiliate marketing’s wide variety of traffic sources, free brand exposure and ability to get customers over the line, just aren’t being valued in GA4.
Affiliate marketing needs to spend more time case-studying its value as a customer acquisition channel and finding new routes to customers than trying to inflate the size of its pie.
Cross-channel de-duplication remains the nemesis of affiliate tracking
A conservative estimate says that total UK affiliate spend would be 18% higher in the UK if all affiliate tracking was called unconditionally.
Currently calling affiliate tracking based on ‘conditions’, such as what other marketing channels are involved in a customer journey, happens on around 30% of all UK affiliate programmes, but disproportionately affects some of its largest brands.
Cross-channel de-duping has been prevalent in the industry since the early 2010s, and is the most impactful issue when it comes to affiliate marketing not being credited for the advertiser revenue it generates.
If affiliate marketing was allowed to track an affiliate referred sale every time the channel was involved in a conversion journey, the overall value of the channel would undoubtedly be higher. But this belies the reason that cross-channel attribution exists in the first place; to help brands (especially large brands with significant spend across a variety of acquisition channels) understand the value of their marketing spend.
The fact that a significant chunk of the channel’s sales are generated by incentive and discount partners, and three of the top five largest affiliate sites in the UK are either solely or partly reliant on a browser extension, underscores why brands feel cross-channel attribution is important when trying to ensure their affiliate budget is well-spent.
Arguably most cross-channel attribution strategies still don’t help the affiliate channel to identify its most valuable acquisition sources, but they are an attempt to regulate spend in a channel that has traditionally struggled to showcase its strengths in acquiring customers.
The other interesting point about calling affiliate tracking unconditionally is that it allows total access to a retailer’s order flow.
Best guess tracking
This permits networks and tracking platforms to unleash a veritable fury of probabilistic matching methods, including discount code, IP, geo-location, and hashed email address matching. These techniques have been used for over a decade to back-fill affiliate marketing in the face of common tracking break-points like device-switching, browser-based cookie partitioning and ad-blocking.
Affiliate tracking has become ever more reliant on probabilistic matching to the degree that when retailers give affiliate networks total access to their order flow (or in other words call tracking with no conditions), the net result is likely to be over-tracking as much as under-tracking of affiliate sales. This is especially the case if discount code matching is used on multi-use, vanity codes issued to individual partners – the affiliate tracking equivalent of apple-bobbing with a blindfold on.
Whether the issue be Google Analytics 4 or cross-channel de-duping, affiliate tracking’s issue remains the same. Affiliate marketing’s goal to get as close to the sale as possible, and hoover up as much credit as it can along the way, undermines affiliate tracking’s genuine challenges, as well as its value.
The poor cookie
The much-maligned internet cookie gets a lot of heat, especially from within our own industry. There are two reasons for this:
- Browsers ending support for third-party cookies
- Legislation that forces websites to gain user consent for setting cookies
The vast majority of affiliate networks and tracking platforms use first-party cookies as their primary method for recoding affiliate referred traffic.
The widespread use of third-party cookies ended many years ago. So the first issue really isn’t an issue. At least not for the affiliate platforms themselves.
The second point, by contrast, is an issue.
At the start of this year the ICO made it clear that all UK websites are expected to offer a clear opt-out option for setting cookies on a user’s browser. When affiliate marketing is not able to use a ‘strictly necessary’ cookie it can be easily opted-out of by a user. This fails affiliate tracking, and may also prevent many on-site partner technologies from working.
The cost of lost affiliate sales is very real. An in-your-face cookie opt-out coupled with classifying affiliate tracking cookies in one of the most privacy-invasive categories, such as ‘tracking/targeting’, can remove up to 25% of an advertiser’s genuine affiliate referred sales. However, the impact of this issue industry-wide is tempered because many advertisers have no cookie opt-out options for affiliate tracking, especially those implementing affiliate tracking using off-the-shelf e-commerce platforms.
Across the industry, I’d estimate no more than 2% of total sales are lost to cookie opt-out currently.
When affiliate marketing is conservatively driving more than £20bn in sales, 2% is still a big number of course, and it’s getting bigger as more advertisers implement one-click cookie-opt-out options in line with the ICO’s guidelines.
Despite the ICO providing a potential exemption for loyalty sites, the wording of this exemption is specific and is unlikely to lead to a blanket acceptance of affiliate cookies being strictly necessary for users.
So what can affiliate marketing do about cookie consent?
Cookies are identified as an instrument of mass invasiveness by European legislators largely due to their role in serving retargeted display ads.
The cookie’s role in affiliate tracking should not adversely affect the privacy of an individual internet user, and there should be no reason for an affiliate tracking cookie to be read across different domain names.
Unfortunately, legislators have unilaterally linked cookies with online privacy, while ‘big tech’ continues to invade people’s privacy in a myriad of underhand ways including scraping messaging apps and listening through a phone’s mic.
Hopefully, regulators come to their senses soon and realise that while they are tying the online ad industry in knots with cookie legislation, the world’s largest software and device manufacturers have long since moved on to more effective ways of gathering powerfully invasive data on users.
Educating legislators on the idea that their house is being robbed while they are busy guarding the garden shed is likely to be a forlorn and ineffective strategy in the short-term. Ten years from now I doubt the internet will be using pop-up cookie consent. Privacy regulation will evolve. But that will be too late for affiliate marketing.
When I look at all of the issues I’ve raised here that feed into affiliate marketing’s tracking challenges, the one thing that really hits me is why we are still so beholden to these technological and legislative issues.
Cookies are a great example. It’s been clear for a long time that lawmakers, especially in Europe, want to legislate internet cookies out of existence. And that process continues apace. Why are we still hoping legislators change their minds, while calling out how much we think everyone else’s shortsightedness is costing us. That isn’t a strategy.
Where is the innovation to move affiliate marketing beyond using a cookie (first or third party) to record a click? Outside of a handful of lightly used rule-based probabilistic matching techniques and server-side post-backs, which normally still require opt-in cookies, the industry has done nothing to lessen its reliance on cookies for tracking.
This is despite other online ad industries leading the way in moving their platforms away from any kind of cookie reliance.
A blueprint for change
So, to make the next few years of tracking innovation less barren than the previous ten, here are some ideas that the industry could be working on to make affiliate tracking more accurate and privacy-compliant.
All focus on removing the need for cookies to record clicks and/or be a reference point for code embedded on a confirmation page to send a conversion signal across the web.
- In any given month 65% of affiliate sales use a discount code of some kind. Yet, despite efforts by some companies, single-use codes are still not a fundamental part of affiliate tracking, and discount code matching remains a hindrance as much as a help. There is still significant potential for the use of disposable, single-use discount codes to improve tracking accuracy. Maybe it’s something every user should be required to use when opting into a discount, loyalty scheme or incentive.
- One of the best examples of an online ad brand building its technology away from cookies is Trade Desk’s Universal ID. This is an open-source matching system built for online display advertising that retains the deterministic accuracy of cookies. Any kind of identity solution comes with its privacy challenges, but affiliate technology providers need to start investing in identity technology that does not rely on browser-based cookies. Trade Desk’s work in this space is not only a great example of what a company can do by taking the lead, rather than waiting on industry-wide consensus, but it’s also a very useful template.
- Google’s Privacy Sandbox may not have convinced the advertising giant to shelve third-party cookies in Chrome, but the vision of the Privacy Sandbox is a sound one for online advertising. The affiliate industry should pay particular attention to its Attribution Reporting API, which has the benefits of sending a server-side conversion signal that is free of the disruption possible on the open-web, and also has a generic schema that means the technology isn’t reliant on bespoke implementation by each advertiser.
- Embedded browsing experiences are commonly used across major websites or Apps. In the spirit of not all tracking innovation resting with networks, major affiliate partners should invest in keeping a user inside their eco-systems when purchasing online, removing the need for cookies and other failure points that exist with click-out marketing.
I’m sure there are lots of other ideas out there. The point is that viable ideas to quick-step affiliate industry tracking into the future exist. We need to stop ignoring them in favour of spurious sabre-rattling, which ultimately tinkers at the edges as big-tech and online ad companies make legitimate progress to effective cookieless tracking.
