January 3, 2024 / Jamie Birch / No Comments

Unleashing the Power of Affiliate Marketing: Mastering Incrementality and Boosting Profits

Over the last decade, the technological improvements made to the affiliate channel have been dramatic. Each and every network and platform has had a heavy focus on innovation and spent those energies on providing agencies, advertisers, and publishers with amazing tools to reach new customers, increase profits, analyze data, and make difficult decisions much easier, or, in some cases, possible where before it was not.

Incrementality’s Challenge

6 years ago we released an article on Internet Retailer, now DigitalCommerce360, titled “Affiliate Marketing’s Biggest Bugaboo and How to Tame It”. Don’t get too caught up on the title, that wasn’t my call (editors, am I right? LOL). The article was our attempt to shed light on the amazing tools that our network and platform partners released to help advertisers answer one of the biggest questions they still have to this day. Here is what I wrote back then:

“What is this issue? Incrementality: your ability to determine what revenue would not have occurred without a particular affiliate, and allocate your budget (and commissions) accordingly.

With the rise of cart sniping, stealing, and poor channel attribution, it has become increasingly difficult to ensure that the cost of acquisition for the affiliate channel is actually related to the sales that occur because of that particular affiliate. This leads to questionable profitability and an improper allocation of resources for affiliate programs.”

Incrementality raises a critical question for advertisers: Would these orders have occurred without the channel? Navigating the landscape gets trickier with cart sniping and flawed attribution, making it challenging to pinpoint the real cost of acquisition and leading to some head-scratching moments on profitability in affiliate programs.

Having managed affiliate programs for nearly two decades, we know the beat of incrementality still resonates. Despite tools designed to address it, they are often underutilized as are the vetted strategies that require them. Since 2017 (and likely further back still), the conversation persists. In fact here’s a relevant point that was made in the original article:

“The Incrementality Issue:

The difficulty of ensuring true incrementality has caused many to scrap their affiliate program altogether—an act I liken to throwing the baby out with the bath water. If you’ve heard your team members saying things like, “Are those sales even real?”or “I think we would have had those sales anyway,” or “I have no way to show that these sales wouldn’t have happened if we didn’t have this channel open,” then the incrementality issue has already begun to threaten the sustainability of your organization’s affiliate program.

All too often, the inability to ensure affiliates are only receiving commission for sales they drove causes advertisers to take one, or a combination, of these five actions:

Shut down the affiliate program: “It’s just too much of a hassle to figure this out, and it hasn’t produced that much for us.”

Move the suspected prolific offenders of incrementality to a super–low commission: This removes any incentive for them to promote the brand.

Remove an entire category of affiliates from the program: “Coupon sites add no value; nix ’em all.”

Remove all resources from the affiliate channel: This starves it of attention and enables nefarious affiliates to run amok, further confirming suspicions.

Nothing: Although nothing is done, the numbers reported from this channel aren’t trusted—ever

Cart sniping and stealing can lead to major incrementality issues for modern affiliate marketers. However, I’ve also seen firsthand how an affiliate program can be a significant and profitable part of your marketing mix. More now than ever, amazing technology enables advertisers large and small to spend their budgets in a much more targeted way and reward affiliates that drive truly incremental sales. I’ve seen the right set of tools enable advertisers to grow their program while reducing their costs and protecting their brand and other digital channels.”

This is pretty much the same conversation as it was in 2017, and frankly, as far back as 2004. In fact, I did a little digging today and the same advertisers that shuttered their program without utilizing available resources to directly address their particular issues still haven’t opened back up, haven’t explored the possibility of running a SMART affiliate program, and continue to miss out on incremental and new customer acquisition.

Affiliate Leverage in the Modern Era

One thing that has really changed since 2017 is the simple fact that affiliates have more leverage than ever. Many of them have been spending the last decade or more building an audience, a brand, and a powerful customer affinity, sometimes greater than that of the advertiser. So not working with them is shortsighted and contributes to advertisers missing their goals. I outlined this in season 2 of our podcast on an episode titled Affiliates Got the Power. Give it a listen. From the transcript:

“Well, now, if you want to get that customer, you have to play on that affiliate. I used to always talk about, I call it the pants analogy. If I’m going to my local mall, those haven’t died yet. They’re still around. I go to my local mall, and I’m going to buy a pair of jeans. My solution set is everyone who is there selling men’s jeans. If you’re not there, you’re not going to get my sale. You have absolutely no way to get that purchase from me. I’m only going to shop because I like going to that mall. Now, if you take that to the affiliate, now my affinity as a consumer is to the affiliate. If you’re not on the affiliate site, I don’t even know you exist. I’m not introduced to you. You’re not part of my solution set to make that purchase.”

Playing in the Affiliate Channel

Times they are a-changin’. You simply have to play in this channel to get access to the customers who are using this channel more than ever. You can’t simply “feel” that the sales are not incremental or you would get them anyway. The tools we are going to highlight allow brands to participate, protect other channels and spend, and reach new customers every single day.

So, here we go. As we did in 2017, we contacted all the major networks, many of them very good friends of ours. We asked them to go through the article and update us on the tools and technology they have made available to target this issue.

That said, let’s dive right in and go in the same order we did back then. No rankings here.

ShareASale

Founded by Brian Littleton in Chicago and now owned by AWIN, ShareASale (follow on LinkedIn) has always been at the forefront of this issue and has had some of the most useful tools for advanced affiliate marketing.

Conversion Lines: Most likely, you have a channel that you believe is generating more results at the beginning of the funnel and contributing more than is getting credit for. Maybe it’s a feeling you have in your gut, or maybe you also have data to prove it. ShareASale’s Conversion Lines allows you to indicate a channel, partner or group of partners to receive priority for a sale over other channels. Say your content producers need a little protection; use this tool to give them priority over all others. If your paid search channel gets priority, you can designate that here as well. This tech has many more uses that I encourage you to explore.

Shopify & WooCommerce plugins: ShareASale is known for its easy integration but with the ShareASale Shopify and WooCommerce plugins, getting started on ShareASale is easier than ever. To install the plugin, simply select the e-commerce platform from our drop down menu in the setup wizard, and you’ll be taken to the app. It’s as simple as installing the app, and entering your merchant ID number. ShareASale also has simple to use instructions for many other major platforms such as Wix, BigCommerce, Squarespace, etc.

Recurring commissions: In recent years, subscription boxes have been a popular category amongst affiliate networks, and ShareASale is no different. Great news with ShareASale, we offer the ability to pay not only commissions on the initial sale, but also recurring commissions if desired as well.

Impact Radius

Headquartered in Santa Barbara, California, with 20 offices across the globe, impact.com (follow on LinkedIn) provides full-funnel tracking & insights needed to reliably measure partner outcomes and the flexible contracting to align compensation with value.

Incrementality Reporting:

impact.com’s Optimize feature contains a suite of reporting tools that help brands understand incrementality, so they can easily identify partner value, improve ROI, and maximize program growth. Some examples of Optimize reports include:
- The Contribution report, which shows brands how often a partner or channel is an introducer (first touch), closer (last touch), influencer (touch in the middle), or solo (the only partner in the path).
- The Leapfrogging report, which shows brands how often a partner is “leapfrogging” another partner at the last minute to win credit for a conversion.
- The Incrementality Dashboard, which helps brands see how much incremental value each partner contributes to their program, how removing certain partners could affect their total conversions, where opportunities may exist to improve high-value partnerships, and where payout adjustments may be beneficial to program performance.

Flexible Attribution & Commissioning:

The impact.com platform makes attributing credit to the right partner easy. You can choose from Last Click, First Click, and/or Last to Cart Crediting. Additionally, you can add partners and channels to “Credit Groups” to help with prioritizing credit to the right place.
On the impact.com platform, you can align compensation with value by adjusting partner payouts by over 100 factors at 3 different data levels:
- The customer level includes customer statuses, geolocation, lifetime value, and other parameters.
- The order level includes cart size, applied discounts, promo codes used, etc.
- The item level includes profit margins, item SKUs, item categories, etc.

Promo Code Management:

Impact.com makes it simple to manage promo code usage and ensure compliance with program terms. Promo Code tracking can be used to assign credit to a specific partner without the need for a click. Promo code lists within contracts can help reduce or restrict payouts when certain promo codes are used. Finally, Impact.com’s Promo Code Monitoring feature helps you see when partners are promoting codes they shouldn’t be.

Ascend, by Partnerize (Formerly Pepperjam)

We reached out to the Ascend (follow on LinkedIn) team and they confirmed, these tools are still readily available and will help all advertisers tackle this issue.

Their technology further demonstrates the breadth of solutions available to advertisers.

Dynamic Commissioning: This is both a tracking-type and a commission attribution-like tool that allows clients to pass additional data points through a standard pixel or batch file. Some advertisers only value new customers, order sizes over a certain amount, orders through device types, or want to commission on a selection of SKUs or categories of products. Dynamic commissions allows you to use one or any combination of these order attributes to designate what is a preferable or incremental order—opening the door for commissioning by allowing different commission rates on different attributes, you can further refine your budget allocation to orders you deem profitable and/or incremental; for example, new customers who are making purchases without coupon codes.
In Cart Attribution: Similar to ShareASale’s Leapfrog technology, Pepperjam’s In Cart Attribution allows you to set the time-frame in which a sale must occur in order for an affiliate to get credit for the sale.
Preferred Publisher: As I’ve spoken about above, the ability to designate a publisher as always getting a sale they are involved in allows you to protect affiliates that tend to be vulnerable to cookie overwriting, and credit influencers or introducers who are not necessarily the closers of a sale.
Coupon Codes Attribution: You can track and designate coupons that affiliates do not get credit for. This is a great way to keep your promotions pure to a specific channel.

AvantLink

AvantLink’s (follow on LinkedIn) approach to performance marketing is simple: grow your business through quality partnerships. They operate across three distinct networks – the global/U.S. network, the Canadian network, and the Australian network – all of which boast category-leading merchant advertisers supported by a thriving community of accomplished affiliate partners.

The following bullets are some specific features and tactics that warrant being highlighted.

Quality over Quantity: At AvantLink, we prioritize quality over quantity. While it may require more time and effort on our part initially, the outcome is worth it, primarily when brands seek productive affiliate partnerships in an always arduous search. This process results in the denial of over 70% of affiliate applications and a meticulous review of all merchant prospects.
Clickstream Commission: Network and marketing channel deduplication can help a brand ensure that payouts to multiple affiliate networks and marketing channels do not occur. Brands can trust they are effectively managing their marketing budget across various platforms and channels.
Coupon Codes Commission: Coupon code leakage can be a problem for brands. AvantLink has created several coupon code rules to ensure that it is appropriately awarded when a code is used.
Product-based Commission: AvantLink allows brands to adjust commissions based on product instead of one general commission rate for all. This may offer extra incentives for specific items or reduce standard commission rates due to low-margin products.
Incentive Commission: Enticing affiliate growth can be tricky. AvantLink can help programs grow by placing automatic features to award higher affiliate commissions when a partner reaches specified sales goals.
Commission Attribution: AvantLink allows brands to track different affiliate partners who are part of the path to purchase. Adding to this is the ability to share or modify commissions when more than one affiliate participates in a sale. This often serves as a tremendous value to smaller affiliates and ensures that a brand can effectively commission its desired affiliate group.
New Customer Tracking: This critical KPI for many brands can be tracked and awarded differently for affiliates who bring in new customer sales. With new customer definitions being broad, brands can decide their new customer parameters and incentives.

LinkConnector

Since its inception 20 years ago, LinkConnector (follow on LinkedIn) has been at the forefront of developing technologies to give merchants and affiliates more control to achieve program goals. Specifically, LinkConnector has pioneered several different ways to address the incrementality issue:

First Click Attribution: LinkConnector was the first network to offer merchants a choice between Last Click attribution and First Click attribution. This simple solution of First Click Attribution allows merchants to credit based upon first click, rewarding the introducers in the funnel. If another affiliate cookie comes into play during the purchase funnel (i.e., a coupon affiliate), First Click attribution would prevent credit from being assigned to the last click coupon affiliate.
Shopping Cart Window: Unlike other solutions that are time-based, LinkConnector recognizes when a user enters a shopping cart to exclude any affiliate crediting. This is an effective solution for merchants that wish to eliminate credit entirely when a user is already present in the merchant’s cart.
Coupon Compliance: LinkConnector recognizes that merchants provide coupon codes via various departmental segments. Many are not intended for the affiliate channel. LinkConnector’s Blacklist/Whitelist Coupon Functionality allows merchants to enforce the use of approved and prohibited coupon codes programmatically.
Adaptive Attribution: In LinkConnector, merchants may customize how they attribute affiliate credit based upon their own unique needs. Merchants may optimize program performance by rewarding promotional methods they want encouraged. Merchants may incentivize specific affiliate segments or limit segments that should be reduced.
Naked Coupons: Naked Coupon Attribution, where a click (or cookie) isn’t required for Coupon Code Attribution, opens affiliates up to a much broader range of promotional methods. This includes reaching an affiliate’s followers in social networks and the possibility of using offline promotional methods like print or broadcast advertising. This tech, which gives merchants the ability to provide a unique coupon code to an affiliate for their use only, trumps any last-minute affiliate cookie addition. This is just another example of technology that minimizes, almost entirely, the type of behavior most damaging to an affiliate channel’s profitability.

Rakuten

Rakuten probably has the largest increase in tools made available since our original article. The team at Rakuten (follow on LinkedIn) outlined what those are and how advertisers can use these.

Tiered Offers: A tiered offer compensates publishers based on the amount of sales they generate for you, offering them higher commissions for greater sales. Tiered offers provide incentive for publishers to partner with you for the long term and to drive more sales to you from their sites.
Multi-Touch Commissioning: Multi-touch commissioning allows you to pay a commission on each touchpoint of a customer journey when multiple publishers are involved. With this feature, you can extend offers that include a first click commission (% of sale) in addition to the traditional last click commission.
Coupon and Voucher Code Commissioning: Coupon and voucher code commissioning allows you to create commissioning rules that automatically trigger upon detection of a coupon or voucher code in an affiliate transaction and can be assigned to a single publisher or group of publishers.
Linkless Code Tracking: Linkless Code Tracking allows you to award your publisher partners a commission for generating conversions even when there is no click associated with the conversion. With Linkless Code Tracking, you create a coupon that is exclusive to a specific publisher. The publisher can then promote the coupon to their audience and be compensated for any conversions associated with the exclusive code where a click has not occurred.
Dynamic Commissioning: Dynamic commissioning is a data-driven strategy that allows you to offer variable commissioning payouts to publishers on the data elements within each order processed in the program. There are 60 available commissionable fields and you can create up to 40 different rules per offer on how to dynamically apply the commissions.
Personalized Rewards: Personalized Rewards are a type of campaign that allow advertisers and publishers the ability to partner together to target and commission specific customers on the publisher site. An example would be where a new customer visiting the publisher site would see a promotion uniquely different from an existing/returning customer and the associated promotion or commissions would be automatically tracked as such in the Rakuten Advertising system.
Benchmarking Overview: The Benchmarking section of the Insights and Analytics Portal allows you to compare your performance, at the Network level, against similar advertisers (known as a cohort) across metrics such as Sales, ROAS, Spend, Commission Rates, EPC, AOV, Orders and Clicks. Advertisers can toggle the Network and Currency selection to suit their needs.
Affiliate Conversion Journey: Affiliate Conversion Journey provides insights on publisher contributions to conversions during all purchase phases. It allows you to see which publishers are part of the purchase process even if they are not last click. It also shows you the most common paths to conversion.

AWIN

AI: AWIN‘s new publisher recommendation tools helps solve the time consuming process of partner discovery and recruitment.

Built using machine learning logic our new tool personalizes publisher recommendations based on your performance metrics and similar brand partnerships on our network. The recommendations also continuously improve as you use the report helping to create a powerful and diverse pool of partners that reaches new audiences and helps grow your revenue.

Influencer Express sign-up: We’re thrilled to share our express influencer sign up is now live, making it easier than ever for brands to onboard their creators. We now allow influencers to sign up with a few simple steps using their Instagram data – removing some of the barriers advertisers face when recruiting new partners to their affiliate program. Additionally, this simplifies the process for many influencers who often don’t have traditional promotional spaces like a website. Creators can choose between the traditional publisher sign up or new shortened influencer version, which collects information directly from their Instagram.

Engagement Triggers: Engagement Triggers are a means of sending a predefined piece of communication and are based on three variables – clicks, sales and commission earned. The message will only be sent once it has met the conditions of the trigger, for example creating a message to be sent when a publisher reaches 100 sales. Recipients of the message can also be defined by Publisher Tag and Publisher Type allowing for targeted, or even personalized, communication. Engagement Triggers are designed to help start a conversation with publishers who are over-performing, underperforming or stagnant.

Commission Junction

Addressing the perennial question of affiliate’s incremental value has driven CJ (follow on LinkedIn) to create a comprehensive suite of measurement reports to empower clients with valuable insights. Approaching the assessment from a number of different angles, CJ has six reports that clients can leverage to explore the incrementality of their affiliate program performance.

Channel Incrementality: Measures how, when an affiliate partner is included in a customer’s journey, how it changes their likelihood to purchase, AOV, and revenue per customer.

Media/Campaign Incrementality: Using CJ’s in-platform campaign management solution, this report measures past campaign performance utilizing programmatically created baselines and determine true incremental ROAS.

Cashback Elasticity Analysis: Examines how changing cashback rates, in turn, changes customer demand in order to identify opportunities for growth and efficiency within a competitive context.

Commission Rate Analysis: Identifies correlations between different effective commission rates and partner performance to drive optimal performance at an efficient commission rate.

Benchmarks and Share of Voice: Measure how campaigns or program term changes affects the share of voice you capture from a publisher site.

Customer Analysis: Measure the value of the customers acquired by and nurtured by affiliate. Compare customer value across affiliate partners and non-affiliate to create partner specific strategies and measure long term partner value.

Navigating Incrementality: Tools, Strategies, and Next Steps

There you have it, a multitude of ways to approach this opportunity. From time-in-cart tools, to advanced coupon use, to utilization of more in-depth reporting, to dynamic commissioning, something used by many networks and should be utilized in your program(s) as well. We’ve written other pieces on the topic and the importance of using this strategy correctly to achieve your goal:

No longer can advertisers say that the channel is just not worth the trouble, it is. But if you aren’t using great tools readily available, then you are running an inefficient, non-incremental, unprofitable program that could be achieving so much more.

And yes, it can be a lot to work through. Everything worth doing usually is. But don’t worry, we have two things that you can do to help:

Use our Incremental Benchmarking Tool to see where your program stands. After going through several categories of questions, you’ll be delivered an email with a description of where you stand. It’s free, so go check it out.
Contact JEBCommerce. You may need a successful and experienced agency to walk you through the process. We’d love to help.

Special thanks to Tara at LinkConnector, Parrish at ShareASale, Vanessa at AvantLink, Sandrine at CJ, Cary at Rakuten, Scott and Julia at Impact, and Erin at Ascend for all your help putting this together!