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The most important affiliate metric for advertisers

the 2023 affiliate metric for advertisers

How advertisers should interpret the proportion of sales that are third party only

Steven Brown

The problems associated with tracking using third-party cookies should be well known by now by everyone in the affiliate industry. Based on evidence in Moonpull’s regular industry audits, it is an area that has not been addressed to best effect across the whole sector. We see programs with just third-party tracking and many others having it in place as a backup to first-party methods using a ‘memory cookie’; this article examines this in more technical depth – and sets out how its presence gives information about the health of an advertiser’s affiliate program. 

In our recent blog post, we described why Moonpull considers the proportion of sales arising from third party tracking as the most important metric in affiliate marketing for advertisers in 2023. That applies as much to networks as to advertisers and their program management agencies. 

There are two main, but related reasons for this, being:

  • When Google turns off the ability to track by third party methods in 2024, advertisers will lose the benefit to use this metric
  • At this point advertisers will have to have fully migrated all sales to first party methods to be recording all sales.

Impact of User Consent on Tracking

Cookie acceptance

There is another factor at play at the moment that is becoming more significant:  the impact on tracked conversions due to declined user consent.  And, as always, with these type of metrics that can change with time, it’s better to look at historic data too. 

Our blog covered this in more detail in the articles on cookies and affiliate tracking and the affiliate guide to cookie compliance.  The extension of privacy compliance across increasing numbers of US States and other countries adds to the complexities that require attention in tracking implementations because increasing numbers of advertisers use Consent Management Platforms (CMPs). 

This article is being written from the perspective of the  advertisers and their OPM agencies.  But the impact is applicable to all users of the model.

Modes of Tracking Set-up

For this article the following descriptions of tracking apply; 

  • Third-party tracking to be that where the memory of the user’s referral to the advertiser is recorded in a ‘memory cookie’ set on a network domain (or other domain) that is not the advertiser’s home page domain (e.g. set during a redirect by a network’s server)
  • First party tracking is that where the memory information is recorded by a first party method (within a cookie by a method specified by a network, an alternative GUID cookie, or local storage) whether this is by a javascript tag, on-page javascript or a server-to-server method

Most networks run tracking such that first party methods take priority over third party methods.  Many also run complementary tracking methods (such as using voucher codes for attribution and using mobile tracking businesses such as Branch and Button); such methods are outside the scope of this review, but an advertiser can incorporate them within their considerations.   This article is applicable where these are a small minority of sales.

The purpose of analysing the third party proportion is to identify if a tranche of sales are being missed by the first party implementation.  It is to help advertisers know if they are measuring, monitoring and recognizing the full volume of affiliate sales and to identify situations where advertisers are only analysing sales that they see in their business information datasets.

Third party tracking as a fallback method 

affiliate metric for advertisers is third party cookies

Third party tracking volumes are an indicator of the failure of first party tracking to be initiated.  Perhaps, more importantly, it is the fallback method that ensures commission is attributed and thus masks issues with first party tracking because metrics based on both first and third party combined are not showing the picture in enough detail.

No third party sales (with third party tracking enabled)

If the advertiser has a good level of sales that includes no 3rd party sales this is probably good news.   It is likely that the advertiser doesn’t have the first party tracking triggered after the user consents to tracking.

Therefore a plan for any introduction of consent-controlled tracking is appropriate, otherwise publishers may see a drop off in sales when users decline to give consent.  This happens already on Safari and Firefox, as will be the case  in 2024 on Chrome.

No third party sales (without third party tracking enabled)

The difference to the first scenario is the fallback capability is not present.  Therefore just because all sales are first party doesn’t mean there are not first party issues.  Therefore the advertiser should reassure itself that:

  • The first party tracking is set on all relevant pages on its site, especially those: 
    • reached by redirects when products are out of stock
    • Reached by redirects offering an alternative product
    • New and amended category pages
    • Out of date links in publisher datafeeds

In cases where user consent is required for tracking that the impact of this on the number of conversions from different advertisers is measured and discussed with the program’s publishers.

Only third party sales

This suggests that first party tracking is not present, or is ineffective.  A review of sales by browser type is also a guide to this as sales are likely arising almost exclusively from Chrome and not Safari (as Safari doesn’t permit third party tracking).

A first-party tracking implementation is imperative for:

  • Rewarding sales on Safari and Firefox (now) and
  • Preparing for the deprecation of third party tracking on Chrome

With development cycles for authorising and implementing third-party originated code on advertisers’ sites often running into months, the process can’t be started too soon.

Some third party sales 

This is a typical scenario and would place an advertiser alongside most peers.  It does mean tracking is falling back to third party in some circumstances meaning some first party tracking is not being initiated or completed.  Therefore such advertisers’ tracking needs appraising:

  • To understand when the third-party is being triggered
    • Is it after declined cookie consent?
    • Is first-party tracking is not present on certain pages?
  • To ensure it is effective on Safari (where third party methods are not applicable)
  • Is its tracking future-proofed for third party cookie deprecation?

In this case, looking at the change with time may be helpful and correlating with data from any consent management platform in use.  Points to consider are:

  • Are users more regularly granting/declining consent?
  • Is the first-party issue getting bigger?  For instance, is there a shift in the ratio of the success of product-specific landing pages to home page use?
  • In the US: is it the roll out of consent across more states?
  • Is it due to a consent process getting more scary – for instance, introducing the consent requirement with phrases such as ‘do not sell my data’

How This Impacts Publishers

affiliate commission

This all may seem dry and technical but it has real-world consequences for a program’s publishers. When tracking is compromised it actually means that affiliates are referring customers and maybe sales and are not earning commission that they may rightly expect. 

The impact on the program is that the earnings per click may be lower; and may be lower than a direct competitor which then becomes a more attractive advertiser for a publisher to promote. Commission issues reported by loyalty affiliates should not be the first prompt to check where tracking problems are occurring as it is a reactive approach and not a proactive approach. The Moonpull Value Calculator is invaluable in getting an estimate of how much is revenue is missed out on.

A regular audit of your tracking is essential. Moonpull sees that effective tracking has a ‘half life’; around 5% of advertiser tracking implementations change each month, with each change having the potential to compromise tracking resulting in missing transactions. So it may well be that tracking matters  create a slow reduction in epcs across a program.

Regular auditing of the tracking with Moonpull also ensures that the effects of any CMP are monitored on an ongoing basis.

With the ending of third-party tracking on Chrome next year, many programs may face a ‘cliff edge’ drop in conversions as the safety net of the ‘back-up’ tracking is pulled away. It is therefore crucially important that these issues are dealt with in full during 2023; this truly is the most important metric in affiliate marketing for this year.

If you would like to see more of how Moonpull can benefit your own business,
there’s more information on the Advertisers page – and we’d love to hear from you.
Please drop us a line on the Contact page

 

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