R.O.EYE Blog

By Gavin Hudson, Technical Solutions Manager

Inspired by a post on Lee’s blog - Last Click Commissions - Still Relevant in 2007 / 2008? there has been a bit of chatter recently about the validity of last click as a tracking and de-duplication method. For those unfamiliar with the term “last click” we use it to mean the system of attributing the sale to the online channel that the user last clicked on.

In the eyes of many, this system has a number of flaws, and can reduce the affiliate incentive to be creative in order to drive that initial “first click” and incremental sale. The usual example given is where a customer finds an affiliate blog or review, decides that they are 99% sure want to purchase the product (perhaps convinced by a review or content on the affiliate site) but decide to think about it. With the proliferation of toolbars and integrated search boxes, it’s now more than likely that a customer will revisit the merchant site not by typing in even the simplest of URL’s or by looking at their history, but simply by searching for the brand term.

If the user then clicks a paid ad, then there is a strong chance that the affiliate cookie will be overwritten by the one assigned to a paid ad - whether that be a client PPC ad, or an affiliate one.

Is this fair? Well, I’m going to stick my neck out and say “Yes”. It’s frustrating, I agree, but I really feel it’s the only sensible and just way at the moment. In an ideal world, everyone who had contributed to that sale would be rewarded, but ultimately affiliates are paid for ‘finishing’ the transaction. The key reason as to why I believe this is the best way, is that it works both ways - for every affiliate that loses out on a sale to brand PPC, you would hope that there are some that win too.

I like the example of the customer walking into a high street electrical shop. Let’s call them “Kormas”. A customer is assisted to make a judgement by talking to sales assistant X for twenty minutes, but doesn’t purchase there and then. The customer goes off, phones their partner, and comes back into the shop to make their purchase, but sales assistant Y processes the transaction. It’s perhaps a bit unfair that Y gets the credit on his sales figures, where X did all the hard work but at least it’s the same for both parties and you’d hope that over the quarter, things even themselves out. The same holds true online as well as offline.

A perceived issue with last click referrers is that PPC affiliates are more likely to gain that precious last click, at the pureplay ‘content’ affiliate’s last click. This may be true, but I guess it again works both ways, and it goes back to the affiliate to ensure that their sales pitch is convincing enough to ensure that they gain the last click!

Overall, last click tracking is far from perfect, but it’s the best we can reasonably hope to use at the moment in online media, it works the same for everyone, and at least avoids the nightmare of duplicated orders and large scale over-reporting, which can lead to (whisper it) reversals of affiliate commissions by unscrupulous merchants.

Now, what was the domain for Amazon again? Ah, I’ll just search for it…

By Mark Kuhillow, Managing Director, R.O.EYE 

The affiliate marketing industry has been talking about the potential opportunities mobile presents for a long time now. During the final quarter of each year, mobile is usually in every industry expert’s top 5 predictions of ‘next year’s things to watch out for’.

I have already listened to numerous presentations and speeches so far this year on the subject of mobile marketing, given by various thought leaders from the digital media industry. But in 2007, the mobile debate has had a slightly different feel. It finally seems as though the tipping point has been reached and mobile is proving to be a communication tool which the digital media industry can monetise.

Why is this happening now? My own view is that the key inhibitors to date have been driven by the fact that the technology hasn’t quite delivered the user experience which consumers require. However, with handset manufacturers now developing more capable products geared towards the mobile internet and 3G networks delivering faster connection speeds than ever before, it seems as though this obstacle has finally been removed. This opens up a range of possibilities.

The global key players have been flexing their muscles over the last few months, having seen the imminent opportunities in this space, and are developing their platforms accordingly. Google is about to Beta Adsense for mobile, whilst UK operators are moving away from the traditional ‘walled garden’ approach to offer users a more navigable experience.

However, this still leaves a key issue to be addressed - how do consumers carry out transactions when using the mobile internet? The most obvious option is reverse billing, but there is a potential problem here, initially at least, with credit balances being capped - prohibiting anyone booking their holiday over the phone for example. My prediction is that the starting point for alternative solutions will be Paypal or Google Checkout, enabling consumers to go mobile using tried and tested online payment methods.

Let us assume that all of the corner-stones are in place for mobile to be viewed as a medium which can be monetised and scaled. So, the technology offers the necessary degree of functionality, media owners have created content users are actually searching for and consumers have the ability to transact with advertisers and merchants. But what does that actually mean for the affiliate community?

The accepted view is that traditional methods can’t be employed, when it comes to mobile tracking solutions, as a cookie cannot be dropped on a mobile phone. Yet supplier specific referral codes would seem an ideal solution. By using channel and affiliate specific source codes, the referral code of a transaction’s originator can be captured. This will allow the relevant affiliate commission, based on the transactional value, to be recorded.

Finally, it is worth remembering that user behaviour is not about to change overnight. People aren’t going to immediately start using their mobiles to book holidays or take out a loan for instance. But wouldn’t it be great if while searching on your mobile to find a local restaurant, you were also presented with details of a local car park and the opportunity to click through and pre-pay for your evening’s car parking? Affiliate marketing on mobile…. Long predicted, but finally here in time for 2008?

With the web being the dynamic entity that it is, it is not surprising to hear about the many mergers and acquisitions that take place each month in the online marketing space. However, certain recent deals have taken aback even the most experienced marketers. These market moves cannot be put down to the usual flurry of activity which has led to online businesses being traded at very healthy profit multiples. They are potentially Herculean transactions which could change the shape of the space in which we operate.

The Google Doubleclick acquisition continues to make waves in the online marketing industry. Although it has now been referred to the US regulators, industry rumours suggest that the deal is expected to go through. It is likely that Performics, the PPC and Affiliate arm of Doubleclick, is to be jettisoned from the new marriage due to competition fears. But even the substantial Google deal has become old news in light of activity which has taken place in its wake.

Smarting from losing Doubleclick to Google, Microsoft stunned many industry observers with the $6bn purchase of Aquantive. This figure is three times the amount Microsoft has paid for any other company and is the industry’s biggest deal, doubling the price paid for Doubleclick. Borne out of the market-leading direct agency AvenueA at the turn of the century, Aquantive went on to build a robust adserving platform in Atlas. It added GoToast (at the time the market-leading bid management software) to its product portfolio, alongside agency businesses including the remnants of Razorfish and, in the UK, DNA.

Interestingly (and predictably), it looks like the ‘big guns’ are focussing on two primary assets – search and technology. Rumours abound that these deals could see the birth of ‘super-agencies’, in which search engines effectively have the technical abilities and skill sets to interface directly with merchants and run their search campaigns on a bilateral basis. Should this be true, the death knell to the major SEM’s will be the final removal of their agency commissions. Whilst smaller SEM’s and full service off-shoots may be able to survive due to their agility and fee structures, anyone running a major SEM relying on agency commissions should be very concerned indeed.

As is often the case however, while these plans are outstanding on paper, the benefits will only be fully realised upon their execution. It will be a huge hurdle for these technology companies to integrate their relevant functions and combine them with the human element. It is the human side which has enabled agencies to carve out such an important niche in the market – adding value. We all know that the strongest marketing initiatives are the products of well laid plans and individual talent. It will be interesting to see how the latter is added into the mix to give the SEM sector a run for its money.

Not all the deals, however, are about technology businesses moving into the agency sector: the reverse is also happening. Sir Martin Sorrell has joined the party in his WPP juggernaut by buying 24/7 Realmedia. As well as opening up a significant remnant inventory arm to the WPP network, 24/7 also owns the Openadstream adserving platform. This acquisition could be a very shrewd move indeed, as it offers the benefits of an in-house tracking tool and the economies that come with it.

With rumours of a possible liaison between Microsoft and Yahoo! still rife and the current hotbed of activity within the internet TV sector, it looks like the rate of consolidation is set to continue. If it is accepted that three months in the online world equates to a year (or more!) within traditional industries, is there anyone willing to gamble where the balance of power will lie by Christmas?