“That sale is mine” or The Need To Abolish the Last-Cookie-Counts Principle

October 29th, 2009 by Peter Glaeser | RSS feed for comments on this post | TrackBack URI

As online marketers we often preach that online and mobile are so much better than traditional/offline marketing because we can track everything and measure all marketing activities correctly. The truth is that most companies base their decisions on invalid data about their online activities. Some of them are aware of it, most of them are not.

Back in the dark ages of online marketing it was alright to associate an online transaction with the last traffic source previous to that purchase. Having some data was better than having nothing. But customer behavior and online marketing techniques have evolved. Also, online marketing budgets are significantly higher these days, so we need to be a lot more acurate now. All this lets the principle of “last cookie wins” look antiquated.

Here are some facts I picked up at the latest a4uexpo affiliate marketing conference in London. During the “Affiliate Apocalypse Panel” Julia Stent of Vodafone UK shared some insightful data with us:

• In general there is a 20% overlap between affiliate and paid search traffic.
• In only 21% of all affiliate sales, the affiliate is the only person involved in generating that sale.
• For 72% of online sales in the travel industry where a user has visited an affiliate site at some point, affiliates were not rewarded due to the last-cookie-principle.

Currently we attribute a transaction (lead or sale) to one traffic source only. But given the previous facts, that actually ignores valuable data and leads us to miss the bigger picture completely. All marketing activities are inter-related. That goes for offline vs. online and also for within the online sphere.

However, today’s world, especially in online marketing, is still driven by the old principle of “that sale is mine.” In numerous companies I’ve seen internal fights about this, display vs. search vs. affiliate managers. Instead of cooperating they often work against each other, accusing each other of stealing sales. It’s usually the affiliate marketing people that have to defend their affiliates and themselves.

“That sale is mine” can no longer be our mindset. Instead we need to find ways to distribute commissions among all parties involved in the decision-making and buying process in a fair manner. We need to measure the true influence of an advertising channel and the parties involved instead of relying on the last-cookie-counts principle.

This would also remove the issue of chasing the last click, something that affiliates have become extremely good at through coupon sites or cookie spamming in the form of layer ads, pop-up windows, adware and other forms of forced clicks.

What we need is cross-channel tracking on the side of merchants and affiliate networks turning more into technical solution providers. We need to be able to split commissions for the same transaction among several traffic sources. Something we probably won’t see anytime soon, but this is where it needs to go.