What's the key affiliate metric for 2023?
Understanding the metrics that add up to success of an affiliate program is a core skill set of any affiliate manager. Increasing sophistication in how these are measured and where possible attributed, coupled with the fact that it is all totally performance based, has provided valuable insights to at last make the affiliate program become a focus for the C-suite.
There are still nuances that can go un-noticed without careful examination. Moonpull audits regularly show many of the issues that represent the 'low hanging fruit' that can add significantly to the bottom line for affiliates, OPMs and networks. We recently published 9 tips to fix affiliate tracking issues on our blog to help.
Given that we're now in 2023 and unless Google kicks the can for another year, Q4 2024 is a deadline anyone involved in tracking advertising should be aware of; when Chrome will deprecate third-party tracking.
Affiliate is Generally Well Prepared
The panic among those in other areas of online advertising has led to the search for a holy grail of 'cookieless tracking'. Though in reality, almost all first-party and server tracking still use cookies as we cover in this article.
Most affiliate networks and SaaS platforms are working towards 100% first-party tracking in various guises. Many newer technologies are set up for purely first-party tracking; some like Webgains, made the change early.
Third-party Tracking is a Problem
However, we regularly see in Moonpull audits that even where first-party tracking is set up, often a third party cookie is also served as a backup. In other cases, we see advertisers for some reason, relying solely on a third-party cookie, even where the network supports first-party.
This is a problem for any advertiser. First it means that any sales from referrals via Safari or Firefox will not be tracked anyway. This can mean up to 25% of potential commission being missed - and for any publisher that represents significant missed bottom-line profit.
Secondly, where third-party cookie is set as a back up, it masks any other potential issues with the first-party tracking integration. It also masks issues that we see with poor integration of consent management platforms. This will look like unremarkable performance of the affiliate program. We see that around 5% of advertisers make changes to their websites each month, which can compromise the first-party integration; that may well go unnoticed.
In both of these scenarios, what the affiliates will see is a program that underperforms compared to a similar merchant with correct integration. That means that the affiliate manager's hard work may be undervalued due to under-reporting, whether in-house or via an OPM.
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Most important, it means that the publisher will not be being recompensed for sales that should be generating commission. For an OPM that operates on a performance metric and indeed a network that relies on commission override for part or all of its revenue, that may mean missing a large %age from the bottom line.
What is the Key Metric for 2023?
In his recent article, Moonpull founder Steve Brown argues that for anyone in the affiliate industry, this year is key for dealing with third-party issues ahead of the 2024 deadline. At this moment in early 2023, there are two industry developments that are of significant importance?that should therefore be incorporated in calculations.?These are:
These lead to two metrics:
Knowledge of what proportion of sales are by third-party tracking provides a valuable insight into the cliff-drop that will happen in the fall of 2024.?
And the sooner you set your benchmark, the sooner you know if you’re improving against it. So the time is now, and this is why it’s the metric for 2023.
How to Calculate it
Read the full article on the key affiliate metric for 2023 in the Moonpull blog to understand more and subscribe to make sure you get the fuller picture.