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September 13, 2006

Cookie Deleting - Should Merchants up their Payouts to Compensate Affiliates for Non-Tracked Sales?

Posted by Adam Viener

Vinny's company, Clicks2Customers, sponsored Ben Edleman to research the effects of anti-spam and anti-virus protection software on affiliate network cookies that are used to track customers who return and buy from the merchants after the initial click.

As you may know, many merchants offer 30, 60, 180, or more return days in their programs so that affiliates who generate the click to the merchant can still be compensated when that customer returns at a later date and completes a transaction.

Vinny wanted some independent research to determine just how many commissions his company was potentially losing out on by these programs who automatically delete cookies. The answer is a shocking 30%!

Ben Edleman has put up a web calculator program that can help companies determine the payouts the intend to pay their affiliates and show them exactly how much more they should pay to take into consideration these non-tracked sales.

Beyond merchants paying more to compensate for the evitable washing of these network cookies what else can be done? Vinny suggests allowing affiliates to use their own sub domains and CNAME them to the networks rather than the generic network domains that are being employed today. I have heard other potential solutions about having the merchants actually deliver 1st party cookies. I believe linkconnector does this today. The report actually points out this kind of private labeling could be a good solution:

"Private labeling offers another alternative tracking model. Suppose a merchant allocated a third-level host name to its ad system, e.g. linkshare.dell.com. Then the ad system could set cookies within the merchant's second-level domain name, and the merchant could retrieve such cookies later, as needed. This approach is used by DirectTrack (among others). "

Clearly this is a big issue that the networks and merchants should look at closely. The report clearly shows that the larger the network the bigger the issue, with Linkshare being in the worst position. (see chart below)

Where will all this lead? Personally, I might take a harder look at DirectTrack merchants and the Kolimbo network and maybe Linkconnector as well. Perhaps merchants who are not legally bound to stay with one network (linkshare often ads this to their contract) should consider setting up a directtrack solution as well to test the differences and offer affilaites who are conserned about the 3rd party cookie washing issue an alternative.

What do you think?

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