Rewarding Affiliates With Cookies
Longer cookie days rule
The pros and cons of apportioning a long cookie date to affiliates has been the subject of many discussions over the years and I remember a very good post written by Matt Woods owner of A4uforum.co.uk A few years ago (Matt if you are looking in, I would love to read that post again) Matt studied the number of times he referred a visitor who came back to shop with one of the merchants he was promoting from the affiliates perspective. Alas I can no longer find that article but it really did support the question that a few merchants have when setting up an affiliate program, “how long should I set affiliate cookies for?” Owen Hewitson from AffiliateWindow.com/Buy.at sums up the basics of cookie setting and would urge you to read this first. As everything in life, there may be other variables to think about when making a cookie setting decision.
I believe it is important to start with statistics, how many times will a new customer that has come via an affiliate link return? I have used a cross selection of clients here at APA and TheNoiseFarmInc.com and averaged out the numbers. Please note that most of our clients are in the fashion sector, their individual website conversions have been averaged and the number of returning affiliate referred customers has also been averaged. We have used our fashion clients who have a cookie date of 60 days.
We have also used just one affiliate network.
Same Day
There is no doubt that the majority of affiliate referred customers do buy on the same day, 67% was the average. So does this metric alone support Amazon’s 24 hour affiliate cookie policy? Simple question you need to ask yourself is, are you a huge household name like Amazon? I think Amazon could have terminated their affiliate program at any time, who has not heard of Amazon? Their goal was to keep their affiliate program open in order to acquire the new customers that had not purchased anything from them before. In affiliate marketing there is little contradiction from anyone that the affiliate channel is one of the best routes to acquire a new customer. Therefore, Amazon does not need a long cookie date, the point here is that arguably the biggest online store still uses affiliate marketing.
Same day cookies, will never work for any merchant who are unknown nor in the process of establishing a brand. What is often overlooked is affiliates don’t just refer new customers, they also remind customers to come back, again and again, and have a very good track record of doing this.
As we don’t have any merchants with 24 hour cookies, it was impossible for us to be able to see the new customer return metrics.
Day 2 & 3
Almost 9% of new customers referred via an affiliate link will go on to buy.
This metric shows us that the 24 hour cookie would have expired for the affiliate, thus the affiliate will have registered clicks but no sale, where is the incentive for this affiliate to continue promoting the merchant?
Day 15 to 30
20% of New customers that affiliates referred made their first purchase.
This clearly says that the affiliate did their job in referring a potential new customer who did not buy anything in their first visit. We can only speculate that the reasons for this are, they may be doing their research first before they buy, as in can they get it cheaper elsewhere? Maybe they were waiting for payday, maybe they got distracted. Whatever the reason, this metric alone tells us that some customers will not buy on their first affiliate click to the merchants site and supports the debate on setting cookies for minimum of 30 days.
Day 60
10% of affiliate referred new customers made their first purchase within the 60 day cookie period.
This clearly shows that affiliates not only have their own regular visitors, but with a cookie date of 60 days, they are more likely to promote a merchant with a longer cookie date, meaning they still get a commission for sending the merchant a new customer. It’s easy to forget that a lot of affiliates use affiliate marketing as their business and only business and will either promote a merchant based on best commission, best conversions and the cookie date maybe a deciding factor too.
Day 60 and over
4% of new customers referred via the affiliate went on to make their first purchase.
There are a myriad of different reasons why the customer did not buy as I mentioned above. But what we do know is that the affiliate has done their job by referring a new customer and I would be confident in saying that this could be attributed to the affiliate reminding their own visitor of where to purchase certain items. This leads nicely into our average of return customers coming from an affiliate.
Average is 34 – 40 days
22% of repeat sales originated from the affiliate links. There is no question that the affiliate did their job and the percentage reflects that 22% of our clients got that all important second order (Customer retention) Affiliates not only remind customers to go back but can sometimes bridge the gap and in most cases support the merchants own customer retention initiatives.
I think we have demonstrated why cookies should be longer than shorter. But the decision is ultimately with the merchant and he/she needs to think about the objectives of having an affiliate program and factor their affiliates into their marketing in terms of new customer acquisition and retention.
Before any merchant even thinks about having an affiliate program, they need to understand their own website metrics and the defining metric has got to be their own website conversions, it is the most important metric any merchant can and should be measuring. By measuring a percentage of visitors, merchants will know how well or how badly their website is doing regardless of traffic levels.
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