A Systemic Problem with Sales Attribution

The issue (and systemic error) is that content providers, influencers, and pre-sales are not getting fairly compensated for purchases that they ultimately contributed to. The value of influence versus sales needs to be stripped down to it’s barest essentials and measured.

Background for this post:

Chris, Fred and Jonathan have spent some cycles digging into what I see now as a great opportunity for market disruption. Advertising as we know it is about to go through a pretty heavy shift. But it’s not only advertising which is about to flip, it’s also manufacturing, online stores, warehouses, drop shippers, customer service, and sales.

Here’s the revolution I see brewing in the relation between the Net, manufacturing, storing/delivery, and sales:

I can smell the opportunity. We need to shift the system so that the problem is reframed.

1) As a content creator and affiliate you would like to be compensated for downstream purchase actions directly or indirectly related to your link and commentary

2) Those downstream (as Liad stated below) have no financial incentive to change the status quo

3) To improve the analysis of downstream actions, whether they happen a day later or a few months later, real time data needs to be collected from sites/services which opt in to a Universal Tracker (protocol/standard).

4) Simple statistical models that correlate user purchase actions with multiple relevant product referrals can fairly distribute affiliate revenue.

5) Fully decoupled manufacturing processes from single brand drop shipping (Amazon and other big online brands, are ripe for disruption), will allow the market to fairly assess the value of an affiliate sale.

6) Quantization of sales influence, versus the various steps of design, manufacture, product warehousing, drop shipping, or other segments of product to consumer flow will be optimally rewarded to benefit not only the consumer, but all parties involved.

The preceding comments from AVC (my favorite blog hangout for a good reason).

I see tracking as a HUGE part of the solution to this problem:

It’s great seeing an important systemic error getting attention. Let’s invent some brilliant tracking solutions to renew the affiliate concept and maybe make a few bucks along the way.

What we need are smarter links. First off users should see something like a shortened URL. We can do all sorts of fancy link tracking with shortened urls. We need a way of identifying user action with high confidence that was at least partially the result of earlier content sharing.

When three of my super human filters or friends all praise a service or product who should get the affiliate cut? Right now only the last one does, unless I choose to go directly to the source or puchase from another friends affiliate link.

On average the link value has the greatest value when it leads me to relevant and quality information, maybe even free of charge. How about a regular donation (user decided each month) that let’s us show appreciation for quality links and sharing.

It’s clear that affiliate link value is under rewarded, driving us to search and invent more motivating models. Victus Media’s personal ads are initially designed around affiliate revenue (via Amazon), but we’re more than happy to consider more effective alternatives.

Users could even tip us with a mini-payment if they appreciated a quality shared link, or go as far as signing up for a monthly or various per click fees to advertise their links through are matching system.

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  • http://arnoldwaldstein.com awaldstein

    Well stated Mark

    The opportunity is huge because the value chain is shifting to the affiliates like Fred.

  • http://www.victusspiritus.com/ Mark Essel

    I can't see the end, but I can recognize the beginning of a big shift. Once any reasonable opportunity becomes available the market will flock to it. Hope I'm part of the solution :D

  • http://arnoldwaldstein.com awaldstein

    Trust me ;) You and I will both be part of this next wave.

  • http://www.thehackensack.blogspot.com/ DaveinHackensack

    Mark,

    I'm not sure this requires such a technically complex solution. Let me show you how I handle this with my subscription-based site Short Screen. Once you become a premium member, you have the option of becoming an affiliate by clicking here. You then get a unique bit of code to cut and paste on your blog.

    That code appears as a clickable affiliate badge in the shape of the site's logo. If your readers click on it, they get taken to a sign up page where they are automatically offered a 5% discount on the site's regular membership fee. If they join, the site knows they clicked over from your blog, so it credits your affiliate account with the commissions. You can log onto your account and track your earnings in real time (the actual money gets sent to you by check on a monthly basis, once you accrue $100 in referral commissions).

    Now, what happens if your readers click over to my site through your affiliate badge but don't join right away? What if they go directly to my site the next day? They'll see that it costs more to join than it did when they clicked through the affiliate badge on your blog. So they'll probably go back to your blog and click through your badge to join. It's possible they could go through another blog's affiliate badge, but it's also possible that could work to your advantage in other cases, i.e., say Arnold is an affiliate as well, and a mutual reader of yours first reads about the site there, and then clicks through your affiliate badge after reading about it a second time.

    The salient point is that my site isn't competing with its distribution channel, because it is charging a slightly higher price for those who join directly than it is for those who join through affiliates.

  • http://www.victusspiritus.com/ Mark Essel

    That's a great way to get users to buy on any affiliate site versus the main site. And I agree that I'm probably asking too much with: “simple statistical models that correlate user purchase actions with multiple relevant product referrals can fairly distribute affiliate revenue”. Maybe one day we'll have the Net integration/information availability necessary to make this plausible, but we're not there yet.

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