The digital currency of awarding credit is still on the last click that generated the sale, and this is what they use for awarding their affiliates and other CPA channels commission for the business they generate. However, they use the attribution analysis of the campaigns to work out if a CPA channel is producing a positive ROI – and therefore if they should continue to invest in it.

Non-brand SEO vs. Affiliates

I’d like to illustrate this by looking at two of the campaigns we are tracking for them: non branded SEO and the affiliate sales through a well known and respected network.

On a last-click win analysis (how commission is awarded), non-brand terms in natural search results generated 600 conversions with revenue of £18,000 and the affiliate generated 4,300 conversions with revenue of £170,000.

On the face of it, it doesn’t look like SEO non brand really does much for them, and that the affiliate is doing a far better job.

The catch comes when marketers have a hunch that due to cash-back and voucher-code sites, the affiliate is cannibalising the sales of the other campaigns – shall we call it goal-hanging – and make a decision to stop working with the affiliate on this hunch.

Applied attribution

However, if you look at the sales and revenue each campaign generated not by last click, but by an attribution model it tells a very different story and with the data you can make a much better decision.

Using a flat attribution model where the credit and revenue of each sale is split evenly between all the campaigns that show up in the path to conversion, we see that, over the same date range, the non-brand SEO attributed sales (that is the sales where non-brand natural results show in the conversion path) were 4,050 with revenue of £145,000 and the affiliate generated 1,900 attributed sales with £73,000 revenue.

This shows the marketers hunch was partly right, but the key number is the attributed revenue by both campaigns.  For ease of numbers, let’s say this client had a profit margin of 10%.  Therefore the profit on the SEO work was £14,500 while the profit of the affiliate was £7,300.

Change in budget spend

As it happened, this client didn’t spent nearly £14,500 on SEO marketing and as a result of this data now spend incredibly more and are looking forward to seeing this channel push up last click conversions to other channels.

Moreover, while the affiliate wasn’t generating as much value as reported by last click, the profit was still higher than the commission paid out – i.e. the affiliate is still a channel with positive ROI even with the cash-back and voucher-code sites, and so the client also continues to invest heavily in this area.

I purposefully haven’t provided the length of time this analysis was over as the idea can work for smaller companies just as much for larger companies.  Whether this data spans a single day or three months, it still ensures that as a marketer, you are basing decisions on data and not hunches.

In the post he says: “First, it is important to make the distinction between attributing credit to channels in your reports for better planning and dynamically awarding proportions of commission to partners using an attribution model.

“Obviously, Google isn’t about to accept a lower percentage of the CPC because you tell it the click it delivered only played a small part in a sale. But you can attribute different levels of ‘credit’ to it in order to provide you with data that may help determine your future spending plans.

“However, for CPA channels, where the advertiser controls the commission that gets paid, clients really can begin to award percentages of commission to multiple channels, based on insight into the role they played.”

He then explains precisely how attribution works and what it means. Whether using attribution models to attribute ‘credit’ to channels more fairly or to actually reward commission-based channels, it’s the start of a new phase, where the industry can finally move away from ‘last-click wins’.