Affiliate Marketing: Principles and Tools

Affiliate marketing, also known as performance marketing, is based on collaboration among three main parties: the advertiser, the affiliate, and the customer. This model allows advertisers to promote their products or services through affiliates who operate websites, blogs, or social media channels. The customer is the individual who clicks on the affiliate link and performs the desired action, such as making a purchase or registering.

Technical Principle Affiliate Marketing

Affiliate marketing operates on the use of unique affiliate links containing special codes that identify specific affiliates. When a customer clicks on one of these links, they are redirected to the advertiser’s website, and the system records that the click came from a particular affiliate.

If the customer completes the desired action on the advertiser’s website, such as making a purchase, the system logs this conversion and attributes it to the specific affiliate. Based on recorded conversions, the advertiser pays the affiliate the agreed-upon commission.

Technical Tools Affiliate Marketing

There are various tools used for managing affiliate marketing:

1. Affiliate Networks: These networks facilitate collaboration between advertisers and affiliates, providing a platform for campaign management, generating affiliate links, tracking conversions, and processing commissions. Examples include CJ Affiliate, AffilBox, and eHub.
2. Affiliate Software: This software allows advertisers to manage their own affiliate programs without the need for an affiliate network.
3. Conversion Tracking: Conversion tracking utilizes cookies, pixels (codes embedded on the advertiser’s website), or postback URLs (sending conversion information to the affiliate’s server).

Types of Commissions

Different types of commissions can be awarded to affiliates:

1. Pay Per Click (PPC): Commission for each click on the affiliate link.
2. Pay Per Action (PPA): Commission for performing a specific action, such as making a purchase or registering.
3. Pay Per Sale (PPS): Commission calculated as a percentage of the sale price of the product.

Measurement and Alternatives to Cookies

Traditionally, affiliate marketing measurement relies on cookies that track user activity on the advertiser’s website. However, with growing privacy concerns and stricter data protection regulations like GDPR, the use of cookies is becoming increasingly problematic. Many users block or restrict cookies, making accurate tracking difficult.

Alternatives to Cookies:

1. Server-Side Tracking: Instead of storing information in the user’s browser, data is stored on the advertiser’s server.
2. Fingerprinting: This method uses a combination of device and browser information to create a unique “fingerprint” that allows tracking users across different websites.
3. URL Parameters: Special parameters added to the affiliate link identify the affiliate and are recorded upon visiting the advertiser’s site.
4. Direct Login: The user logs in to the advertiser’s site using their account after clicking on the affiliate link.

Cookies vs. Cookieless

Cookies are small text files stored in the user’s browser, allowing the tracking of their activity. They offer high accuracy but raise privacy concerns and can be blocked by users. Cookieless methods use various technologies such as server-side tracking, fingerprinting, URL parameters, or direct login. These methods better protect user privacy and are less prone to being blocked, though they can be more technically challenging to implement.

Measurement in CJ Affiliate

CJ Affiliate, formerly known as Commission Junction, uses a combination of various measurement methods:

1. Pixel-Based Tracking: Using pixel tags and postback URLs to record visits and conversions.
2. Server-to-Server (S2S) Tracking: Direct communication between the advertiser’s and CJ Affiliate’s servers, which is more accurate than pixel-based tracking.
3. Cookie-Based Tracking: Utilizing cookies to track users who have cookies enabled in their browsers.
4. Cross-Device Tracking: Monitoring users across different devices, which is crucial as users often start their shopping journey on one device and complete it on another.

CJ Affiliate continuously develops and refines its measurement methods to ensure the most accurate tracking of affiliate campaign performance and adapts to changing conditions in data protection legislation.

Affiliate marketing is a dynamic and ever-evolving field that offers various methods and tools for the effective promotion of products and services. With technological advancements and changes in legislation, new challenges and opportunities will arise, further improving this marketing model.