Whilst it looks like the EU has seen sense (or Google have lobbied hard) and decided against this well intentioned but ultimately impossible regulation against cookies (full details), it has raised the question about the future of cookie tracking in the affiliate channel.
A few networks have implemented cookieless tracking, and a few bold claims have been made. My problem is that I’ve never seen any empirical evidence that demonstrates this, which must be not only the most categoric way of proving these claims, but also the easiest.
Networks such as Webgains, Paid on Results and Affiliate Future have invested in “cookieless” tracking and Affiliate Window are currently rolling it out across their merchant base. Now all of these networks run campaigns that are dual network with traditional, cookie only tracking in place. Surely a comparison of the conversion rate across each campaign would answer the argument once and for all. Whilst I appreciate that this may vary slightly dependant on the type of affiliates on each campaign, it should give a reasonable indication.
Furthermore, affiliates are generally pretty savvy and I’m convinced that we’d have seen a switch from those networks without “cookieless” tracking to those with, to take advantage of the increased sales. In particular, the big cashback sites who work across multiple networks and also invest a lot of resource in dealing with missing transactions. They have more visibility than anyone and yet there doesn’t seem to have been much desire to consolidate their business to the networks with the more advanced tracking.
My second point is that if we do accept that more sales will be tracked through “cookieless” tracking, does that mean that merchants should reduce their commission rates? It has always been accepted that a certain percentage of sales will not be tracked and so therefore, CPA rates have always been artificially high to compensate for this. If tracking is improving, should we be looking to reduce commissions as merchants are effectively now paying for sales that they would previously have got for free.
I’m sure this argument will not be popular with affiliates or networks, but should provoke interesting debate…
Good post Matt, it will be interesting to see how the debate unfolds and what the outcome will be.
Sinead
Hot topic at the moment Matt. When I was in my previous role we launched cookieless tracking and it did have a significant affect on sales levels, however, like you I wouldn’t say we saw a mass surge of affiliates moving to take advantage of this.
There are some complications with this from a merchant perspective. As you point out above, if (as some of the networks claim) by using cookieless tracking we see a 10% increase in sales then commission rates would need to be reviewed as a lot of merchants do take into account that a certain percentage of sales are untracked / go to phone etc. The other complication is 3rd party tracking, many large campaigns use DART or Atlas to track across all channels and de-dupe, these platforms only use cookie tracking at the moment so there would be a discrepancy between the networks sales reporting vs. the third party and these sales would not be seen within the online channel view.
There is definitely an argument to ensure that cookie tracking can be supported by another method of tracking however it needs to be cross channel and industry wide otherwise it won’t work on its own.
I think the twist in the tale was that this wasn’t just about cookies – it was about any form of tracking that left data behind on the client machine. This would have ruled out flash object, etc, alternative tracking techniques… in fact, these very same techniques might now be in breach of the forthcoming laws rather than cookies!
Like the post Matt!
From what I have seen from cookieless tracking the %’s vary drastically from merchant to merchant. And without knowing the in’s and out’s, I believe it also varies based on whether or not 3rd party tracking providers are also involved.
In terms of decreased commissions to affiliates based on the fact they will begin to see an increase in the % of sales from cookieless tracking.
I don’t think this is fair
Is it not the case that we should look at it from the other angle. Those sales belonged to the affiliate in the first place? So it is the affiliate whom has always been losing out.
Affiliates are being squeezed more and more, as are networks for that matter. For example with the introduction of various 3rd party tracking and additional de-duplication processes. The point being that the attribution of sales as a % is decreasing regardless of cookieless tracking, so to reduce them further based on the cookieless tracking should be out of the question.
why affiliates don’t favour networks offering the advanced tracking? Because they get priviledges from the networks that don’t. It’s a shame but there’s plenty of affiliates out there who don’t give a damn if they get all their sales tracked or not.
In terms of cashback sites – transaction enquiries are far less with the networks that have advanced tracking. On our network, these transactions amount to 1% of the total valid sales these affiliates generate. I will happily give you stats on our network, if my word isn’t good enough and I’m sure other networks will do the same.
As for your suggestion that merchants should reduce rates if the tracking works as it should – well, I think you may want to rethink this, especially as you’re the voice of the AMC at the moment. When did a program pay higher commission rates because they dedupe against everything?
The barrier to networks launching cookieless tracking is rarely technical. It should be trivial for a network to implement flash cookies or similar. What these solutions ignore is an important party in any affiliate transaction – the end user. They rarely get invited to the table in industry discussions and it’s this void that the EU is trying to fill. By continuing to neglect and/or abuse end-users, we are inviting further intervention that may endanger our industry.
It’s clear under EU and UK law that we have no absolute right to store information on users, even if they are effectively anonymous – instead we need to negotiate their permission. With cookie tracking, we can do this automatically using p3p headers in the cookie request. Yes this does lead to a small amount of untracked sales, but this is the user’s right. There is no similar mechanism for flash cookies or etags, so essentially any network is stepping into a very grey legal area by using them. This may result in a short term gain for affiliates, but could be very damaging in the long term.
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