Channel Attribution Risks and Hurdles in Affiliate Marketing – Phonexa Canada

For those running multiple affiliate marketing campaigns, precise channel attribution is essential. After all, how else could you differentiate top-performing affiliates and marketing channels and issue commissions on time?

Now, allow us a data-driven guess: your channel attribution is imperfect, with some blind spots in the customer journey and affiliate performance. You are fighting tooth and nail to dissect your affiliate campaigns, yet you cannot always come on top.

How do we know that? You’re not alone. For the lion’s share of affiliate marketers, channel and conversion attribution is a challenging undertaking, if not unknown territory. Evaluating touchpoints is extremely difficult for complex customer journeys abundant with transitions and switches.

Source: Statista

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Imagine a potential customer has discovered your brand on YouTube, clicked on an affiliate link, and signed out without making a purchase. In the following weeks, they rediscovered your brand on Instagram and made an impulse purchase using an Instagram influencer’s affiliate link.

Here’s the conundrum: How could you know which channel triggered the purchase: YouTube or Instagram? How would you distribute the revenue? Were both touchpoints equally helpful?

That’s the complexity of channel attribution. Even refined multi-channel attribution may not reflect non-linear, unpredictable, and at times obscure customer behavior.

Source: GIPHY

• Multi-channel attribution, also known as omnichannel attribution or cross-channel attribution, is assigning value to multiple channels that a customer has interacted with before the conversion. Multi-channel attribution identifies how different marketing channels have affected the purchase decision and allows for issuing a fair commission that reflects an indirect contribution to the conversion.

However, the complexity of channel distribution doesn’t mean you have no chance. In fact, you can still overcome the majority of channel attribution hurdles as long as you identify them and have an action plan.

Today we’ll wade through to the murky waters of channel attribution, trying to find out what beasts are lurking there and how to tame them. Put on your galoshes and prepare for valuable insights on data-driven multi-channel attribution.

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Channel Attribution in a Nutshell

As you draw customers from numerous marketing channels, you must measure how these channels perform – unless you assume all your channels are equal (which is never the case). To identify your affiliate goldmines and eliminate unprofitable channels, you need accurate channel attribution.

• Channel attribution evaluates touchpoints that a customer undergoes on the conversion path so you can understand what triggered the conversion and how much this effort is worth.

Like advertisers, affiliates and affiliate networks can also benefit from channel attribution:

• For affiliates, accurate channel attribution means counting marketing efforts regardless of whether they spearheaded the purchase or contributed to it indirectly.
• For affiliate networks, accurate channel attribution means higher customer trust, timely payouts, and bottom-line growth.

But it’s not all that rosy. No single attribution model can satisfy all campaigns, nor can you keep your attribution model accurate at all times. But you should try.

Source: Thinkwithgoogle

The Flaws of Standard Channel Attribution Models

Before switching to tailored affiliate marketing software, most marketers leverage classic Google Analytics attribution models: Last Click, Last Non-Direct Click, Last Google Ads Click, First Interaction, Linear, Time decay, and Position-Based.

Unfortunately, all these models are inherently flawed and unable to provide effective attribution under changing circumstances. Let’s review each of them and what risks and sacrifices they entail.

Last Click Channel Attribution: I Came, I Saw, I Conquered

As its name suggests, last-click attribution – direct, non-direct, or ads click – gives credit solely to the pre-purchase touchpoint while ignoring everything that happened before. Like scientists who prefer not to think about what happened before the Big Bang, last-click aficionados consciously ignore the entire customer journey for the sake of its pinnacle.

• The main benefits of direct causality are insights into the sole sales touchpoint and simplicity. However, last-click attribution leaves everything else in the shade and completely disincentivizes early efforts. With this model, raising brand recognition and awareness is out of the question.

Last-click attribution severs the coherence of a sales funnel, reducing complex cross-channel interactions and decision-making to the idea of an impulse purchase by a customer. Can such a model be effective? For sure, it can, but only for sales-focused campaigns that you will not use as a benchmark for general assumptions about your affiliate marketing performance.

First Click Channel Attribution: Back to the Big Bang

If relying on the last click is so wrong, what if we turn the tables? First-click attribution is another model popular with a fair share of marketers. The longer the customer journey, the less effective the first-click attribution model.

For a journey started on a third-party website, developed on Instagram, and climaxed in a re-engagement AMP email, would it be fair to give all credit to whoever was the first in the chain? Fetishizing touchpoints is unfair and unprofitable.

Source: GIPHY

Linear Channel Attribution: An Imperfect Attempt To Balance It Up

The linear attribution model may seem like an attempt to revitalize communism within the framework of affiliate marketing. You know what “linear” means, right? Everyone involved in the process gets exactly the same reward regardless of the magnitude of one’s impact.

• With linear distribution, an affiliate link clicked months before the purchase will receive the same reward as the one that actually triggered the purchase.

It might resemble a fair game in which everyone has a fighting chance, but what about fair evaluation and reward proportional to the contribution? Why would anyone put extra effort into promoting your products if it doesn’t pay off?

But let’s not be too harsh on linear distribution. At least it recognizes the full customer journey and encourages cross-channel marketing. With every channel valued the same, marketers can promote your products and services on their best medium without worrying about its commercial side.

Time Decay Channel Attribution: Time Is Money

Finally, we’ve come to a more or less objective channel attribution model, which assumes the interest in your product grows – proportionally or non-linear – closer to the purchase. And it’s hard to argue with. Regardless of what triggers the purchase, it happens at the peak of interest and motivation. It’s easy to imagine customers buying a product they don’t need, but much harder to imagine customers buying a product they think they don’t need.

However, even time decay channel attribution is not a deus ex machina for affiliate marketers, with the biggest drawback being the oversimplification of the customer journey. There’s no guarantee your predetermined time decay pattern will play out with all your campaigns – most likely, it won’t.

Ask yourself, is there a chance some of your customers were so impressed by your Instagram, Twitter, or TikTok performance that it contributed to the purchase more than the technical trigger of this purchase? Complex decision-making cannot be accounted for by time decay attribution, but don’t get discouraged.

Meet our winner: data-driven channel attribution.

Data-Driven Channel Attribution: The Crown of Creation

Data-driven channel attribution is the only way to avoid the pitfalls of simplistic models when connecting and evaluating marketing campaigns, channels, touchpoints, and affiliates. Not only does it provide an overarching view of your campaigns, but it also audits your affiliate marketing business to identify room for improvement.

Alas, multi-channel attribution with Google Analytics isn’t perfect. Even if you switch from the default last-click attribution to data-driven attribution, you may not be able to unlock as much data as with professional affiliate marketing software.

Attribution Issues With Google Analytics

No attribution for offline and external channels	For online channels, Google Analytics requires direct integration. It will not provide attribution data for offline channels and channels that are not integrated.   Measuring offline ads, display ads on third-party websites, and social media interactions that are beyond your digital reach may be channeling, if not impossible, with Google Analytics.
Suboptimal multi-channel attribution	Google Analytics will not provide accurate conversion attribution after cookie expiration or if a customer switches devices.
Lack of attribution details	Google Analytics does connect some dots, but not all of them. Quite effective for tracking touchpoints, Google Analytics lacks insights into affiliates’ performance and their impact on your campaigns.

Overcoming the Channel Attribution Limitations

Custom data-driven attribution models are the best way to meet the specific needs of different business avenues. As flawed as standard channel attribution models are, they can synergize if combined.

Channel Attribution by Business Objectives

Attribution Type	Business Objectives
First-Click	Understanding initial brand discovery Increasing brand awareness Developing effective top-of-funnel strategies
Last-Click	Maximizing immediate profits Revealing profitable sales triggers Developing effective bottom-of-funnel strategies
Linear	Equating all marketing channels Mitigating risks of ignoring profitable marketing channels
Time Decay	Encouraging sales-focused channels while giving credit to all involved channels Rewarding top-of-funnel channels within long sales cycles
Position-based	Prioritizing top-of-funnel and bottom-of-funnel strategies at the expense of the rest of the journey Encouraging the first and the last interaction while giving some credit to everything in between
Data-driven	Relying on the actual data from previous affiliate campaigns Developing business strategies that reflect the real state of affairs
Custom	Tailored attribution that resonates with unique business conditions, objectives, and capabilities

While data-driven channel attribution encompasses numerous, if not all, existing channel attribution models, there are quite a few obstacles to overcome before you can safely switch from your current attribution model to a more advanced one.

These challenges include a lack of integration data, limited technical capabilities, high integration costs, complexity of interpretation, resistance to change, and lack of knowledge of data-driven channel attribution and its implementation.

Source: Think with Google

That said, you shouldn’t underestimate the power of third-party affiliate tracking software and lead management systems for channel attribution. Having all data brought to a single dashboard and clear marketing insights from AI algorithms, you leverage multi-channel attribution modeling to develop your unique multi-attribution model.

Don’t waste any more time! Learn to improve attribution and maximize affiliate profits with affiliate marketing software.

Long story short, there are two surefire ways to improve your channel attribution:

• Integrate affiliate marketing software into your CRM or lead management system.
• Design an all-encompassing lead management system that uses all available marketing data.

Let’s explore further.

How Affiliate Marketing Software Can Improve Channel Attribution

Proprietary affiliate marketing software like Lynx will take your multi-channel attribution to the next level through sophisticated tracking, precise targeting, and real-time analysis of your affiliate marketing campaigns. Whether you are an advertiser or an affiliate network, you will get your customer journey on a silver platter, including who, when, and why clicked on your links and whether the journey resulted in a conversion.

Lynx will smoothly integrate with lead management products like LMS Sync and Call Logic to create a holistic affiliate management system that covers every marketing campaign and touchpoint.

How a Lead Management Ecosystem Can Improve Channel Attribution

If affiliate marketing software like Lynx addresses marketing, an all-encompassing lead management platform like LMS Sync can revolutionize your business as such. From lead tracking to distribution to analytics, LMS Sync will dispel the mystery of the customer journey into measurable actions a customer takes on their way to conversion.

LMS Sync can forecast affiliate campaign outcomes based on the historical data, analytical algorithms, and parameters you want to model. You will replace the costly trial-and-error approach with data-driven, free, and riskless predictive modeling.

Redefine Your Channel Attribution With Phonexa

With its unique all-in-one approach, Phonexa oversees and improves your marketing ecosystem without guesswork and risk. The exhaustive details you get within a single intuitive dashboard unlock the full spectrum of business opportunities, including channel attribution, effective lead trade, and more.

Take your affiliate marketing to the next level with your custom affiliate marketing software suite, or schedule a consultation to learn more about Phonexa.

Frequently Asked Questions

Affiliate Marketing Fraud Types and Objectives

Fraud Type	Objective
Fake referrals	Increase commission earnings through fake referrals
Cookie stuffing	Earn commissions by stuffing a cookie onto the user’s device without the consent of the latter
Click fraud	Earn commissions by clicking your own affiliate links using bots
Misrepresentation	Increase sales through deceptive marketing strategies