Scholars believe it was Confucius who first proposed this riddle over two thousand years ago:
“If an affiliate refers a visitor to your site, but the visitor waits to buy and returns a second time from a different referral... to whom do you pay the commission?”
Affiliate partnerships seem like an ideal ecommerce marketing strategy on paper. Affiliates send traffic your way, and in return you give them a small percentage of whatever sales those visitors make (or a fee based on how many signups you receive). Everybody wins, even the customer.
The reality is a little different though. Multiple visits from different sources, large gaps of time between the first visit and a sale, your-word-against-mine squabbles over how much affiliates are owed. It’s a shame such a hopeful ecommerce marketing strategy is marred by petty disputes and confusion.
But luckily there’s a solution to all your affiliate adversity. In this article, we’ll talk about the usual obstacles affiliate marketing presents, and how to avoid them to reap the benefits without all the headaches.
Affiliate Marketing: The Good, The Bad, and The Ugly
If you’ve had a bad experience with affiliate marketing, chances are the problem was with the data, not the practice of affiliate marketing itself. When you strip away all the affiliate disputes, this ecommerce marketing strategy still has proven results:
- 15% of the digital media industry’s revenue comes from affiliate marketing. [source]
- 38% of marketers cite affiliate marketing as one of their top methods for customer acquisition. [source]
- In the U.S., the affiliate marketing industry spends $5 billion a year — twice the economy of Belize! [source]
- In the U.K., affiliate marketing drives around 1% of the nation’s total GDP, more than the agricultural industry. [source]
- Also in the U.K., affiliate marketing has an ROI of £15 for every £1 spent. [source]
- Affiliate marketers generate 15-30% of all advertisers’ online sales. [source]
Affiliate marketing works. It’s not a replacement for SEO or social media marketing, but it’s the perfect complement. Ideally, you want to reach out to every market pertaining to your online store, and affiliate marketing grants you access to some of the more exclusive circles. Think of it as an autonomous sidekick to your own ecommerce marketing endeavors.
Its faults, though, can be chalked up to human error.
Ambiguous data and unorganized sales reports give way to disagreements and fuel opportunists. While some affiliates are more honest than others, you’ll still occasionally deal with some partners who claim you owe them more than you should.
This isn’t always greed, but sometimes just faulty data. As we know, affiliates tend to keep cookies for 30 days. If they send someone to your site without a sale, and then 29 days later that same visitor returns from a different entry point to make a sale, the affiliate can claim they assisted the sale and demand a commission.
These kinds of disputes can ruin your ecommerce marketing strategy and result in paying an affiliate too much or paying multiple affiliates for the same sale. This shouldn’t deter you from taking advantage of affiliate marketing and all its benefits; rather, you should just learn how to solve the problem so you pay only what you must and not a penny more.
The Goldilocks Solution: How to Pay Affiliates Just Right
Contrary to popular belief, sometimes the best defense is just a really good defense. If you’re fighting against someone with data claiming you owe them more money, you’re best protection is even better data disproving theirs.
This dilemma in affiliate marketing is precisely why we here at Divvit designed the Orders Explorer feature into our ecommerce analytics tool.
Most of our team have extensive backgrounds in ecommerce and by extension they know a thing or two about affiliate marketing. When our colleagues lamented about affiliates exploiting them and overcharging them, we listened.
We drew on our inside knowledge of ecommerce marketing when we built our Divvit analytics platform: after all, our job is ecommerce data, so it seemed relevant.
We figured out the solution for affiliate disputes was to present the right data and organize it in a way that was clear. With affiliate marketing in mind, we designed our Orders Explorer to show the exact metrics of each individual sale to quickly and authoritatively resolve any potential disputes.
Our Orders Explorer lays out each and every individual sale, along with any significant data tucked in.
First and foremost, you can see each visit with instantly recognizable icons representing the referral source. For example, let’s say a shopper’s first visit to your site comes from clicking one of your Facebook ads. They don’t buy anything this time, but you’ve peaked their interest. Now, let’s say they forgot about your store for a few weeks, until a Google Adwords ad reminded them. They click the ad and visit your store a second time, but they need to wait until payday to complete the purchase. A few days later they remember your store by name is visit a third time by directly entering the URL. This time, they buy.
Divvit's analytics records all this data and organizes it for easy comprehension. In the example above, you’d be able to find the purchase either by the ID number or the exact time of the sale. In the Visits Before Order column, you’ll see not only how many times they visited before the sale, but each corresponding referral source as well. With our example, you’d see icons for Facebook first, then Google, and then our Direct Traffic icon.
We put this feature front and center to appeal to our users who deal with affiliate marketing regularly. But our ecommerce analytics platform also provides other helpful data revealed by hovering. If you leave the cursor momentarily on each visit icon, you’ll soon see:
- the device used for that visit
- the landing page they arrived on
- how many pages they browsed before leaving
- the total amount of time per session
This data comes in addition to standard ecommerce analytics offerings like the total order value, which products were bought (also revealed on hover), and a customer ID.
All this data at your fingertips gives you firm ground to stand on if your affiliates challenge any of your payments. You’ll have everything you need to clear up any confusion or ambiguity to ensure you’re paying only what you owe.
The specifics of the arrangement are up to you and the affiliate, depending on your marketing strategy. You could use a last attribution method, where you pay only the affiliate that delivered the visit with a sale. You could set a specific time frame between a referral and a purchase, for example, only counting an affiliation assist if their visitor completes a purchase within a week.
Because Divvit presents such detailed data, you can even fluctuate the fees based on the amount of time per session, amount of pages visits, or any other of the dozens of metrics revealed by our ecommerce analytics.
Moreover, one of our main goals when designing Divvit was to create an analytics tool with an easy-to-use interface — a Herculean task considering how confusing and incomprehensible other analytics platforms are. We wanted Divvit to not only give the data necessary to grow your company, but to present it in a simple way so you won’t waste time searching for what you need.
That’s our thinking behind our Orders Explorer menu with the readily visible visit icons. One glance tells you how many visits the sale needed and where they all came from. One glance tells you exactly how much to pay your affiliates.
“Together we stand, divided we fall.” The affiliate teams that work together all benefit — when one does well, they all do well. But if you and your affiliates are torn apart by bickering, they’ll lose motivation for sending you referrals and both parties will lose money. One of the keys to keeping your affiliates on the same page is a clear and indisputable authority when it comes time to write the checks. That’s what Divvit provides: cold, hard data to set the record straight.