January 15, 2008
Not the Same Old Status Quo at CSN Stores
CSN has set a new bar in affiliate marketing tracking and commission structure.
The need for a change comes from their observations that a significant percentage of their sales are going to coupon affiliates AFTER the consumer has already been to the website.
It goes something like this:
- User visits CSN stores, possibly through an affiliate site.
- User goes through checkout process and realizes they don’t have a coupon.
- User goes back to search Google et. al. for coupon codes
- User lands on one or more coupon sites, and even though they don’t find any coupons, they click through one or more affiliate links.
- User returns to CSN and makes purchase.
The result is that the original referer, either CSN’s own marketing or a non-coupon affiliate loses the sale to a last minute click on a coupon affiliate while hunting for a deal.
The team at CSN has robust on-site tracking in addition to their tracking at Shareasale and they have observed that this is happening quite a bit. They feel that these coupon affiliates add little to no value as CSN doesn’t offer coupons. Some coupon affiliates are enticing a click on a free shipping offer when this isn’t really any special offer at all. CSN has free shipping offers on their sites all the time.
CSN deems this as unfair because the coupon affiliate hasn’t really done anything to affect the sale. They are able to capitalize on buyer behavior with some good search engine rankings.
In response to this, they have set up a special tracking and commission structure in that they will only pay a maximum 2% commission to any of these coupon affiliates if they are referring a user who has already been to CSN otherwise they get full commission.
They identify these affiliates as those who appear in the first two pages of Google search results for “CSN Stores Coupon”, “CSN Baby Coupon”, or any variation of their niche stores URLs with coupon or deal included in the keyword. Note that I call them “coupon affiliates” here, but this does not apply to all affiliates that provide coupons. This designation is arbitrary, and if CSN feels that an affiliate who offers coupons also adds additional benefits (like reviews, etc.), they may be treated like a “regular affiliate”.
CSN will do the clickstream tracking on their end to report to Shareasale via a tracking pixel a “first-in” affiliate and a “last-in coupon” affiliate.
If there’s no coupon affiliate involved, then same old procedure of last-in wins applies. In this sense, first-in is a bit of a misnomer. To me, it’s easier to think of this as Last non-coupon site gets full commission. Subsequent coupon affiliate gets a side 2% without affecting the non-coupon affiliate.
Confused? me too. Here are some scenarios…
Scenario 1:
User searches on google and ends up on CSN directly
User goes looking for a coupon and ends up clicking on one of these “coupon affiliates”.
User buys.
Since the user was already “owned” by CSN, the coupon affiliate gets the smaller 2%
Scenario 2:
User searches on google and finds a “coupon affiliate”
User clicks through to CSN for the first time.
User buys.
Since the user was referred by this coupon affiliate they get the full commission
Scenario 3:
User searches on google and finds a “regular affiliate”
User clicks through to CSN
User then goes looking for a coupon and ends up clicking on one of these “coupon affiliates”.
User buys.
Since the user was already “owned” by the regular affiliate, the coupon affiliate gets the smaller 2%. The regular affiliate gets the full commission.
Scenario 4:
User searches on google and finds a “regular affiliate”
User clicks through to CSN
45 days later, user searches and finds another “regular affiliate” (cookie period for CSN is 60 days)
Normal last-in win rule applies here. Second affiliate gets full commission.
Scenario 5
User searches on google and finds a “regular affiliate”
User clicks through to CSN
45 days later, user searches and goes directly to CSN via a CSN PPC ad (cookie period for CSN is 60 days)
Regular affiliate gets full commission.
In summary
Regular affiliates always get full commission, unless another regular affiliate comes later (standard affiliate marketing rules.) “Coupon affiliates” get full commission unless the visitor has previously visited CSN, either through an affiliate or directly, in which case they get 2%.
It’ll be interesting to see if this works out for them. There are other solutions as well, such as not presenting a coupon field at all in the checkout process (which is my favorite). For some reason, this isn’t an option for CSN.
Good for CSN for identifying an unfair situation and doing something creative about it instead of just throwing their hands up to the situation. And good for Shareasale as they surely needed to perform some custom tracking to enable this.
If you enjoyed this post, please subscribe to my RSS feed
Now that is one complected mess. Not a good way to keep affiliates in the program.
On the surface it’s complicated, but by the time I got to the summary, it turns out it’s pretty simple.
So while it’s a good way to get some affiliates concerned, I don’t think they’re going to lose anyone over it.
I’ve always felt that any affiliate who advertises a non-existent coupon (or any other offer for that matter) should be given one warning and then terminated if they don’t remove that enticement. It’s not only unfair to other affiliates, but it can leave a bad taste for the merchant in the eyes of the consumer.
In the example here, wouldn’t it be a whole lot easier for the merchant to demand no mention of coupons from their affiliates, just as merchants dictate PPC policy and enforce terminations for offenders?
If CSN doesn’t offer coupons, why do even they have the coupon box at checkout? People are going to assume there are coupons out there if they see that available, and thus search for them. I agree that not presenting a coupon field at all in the checkout process is the best way to avoid “coupon affiliates” over-riding “regular” affiliates.
I’ve talked to them about this Kim.
They do use coupons in other marketing channels, so they cannot get rid of it.
They just don’t allow affiliates to use coupons.
I’d like to see them (and other merchants who are reluctant to drop the coupon box) find another way to enable coupons than the coupon box that has GOT to be responsible for major disruption in the checkout process.
Anybody know of a study on this?
Absolutely LOVE this blog. Its my first time visitng and I find your topics right in line with things I am interested in.
What a crazy robust program/cookie they must have to track all of that movement. But I guess if companies like fetchback can retarget you with ads and follow you around the Web then anything is possible from a tracking standpoint. It is too bad that analytics has not entirely caught up with this type of robust tracking, for the most part.
I like the design of the CSN stores. Do yo know who can do the same?
Nice report, I love the examples you drew out for us.
As an affiliate who does both couponing and non-coupon marketing, I really like the solution they’ve created.
Once you grasp the angles tracked here, you’ll see this also solves “leakage” problems that can be caused by adware and affiliates who bid on traffic returning via PPC on their domain name (though ShareASale already keeps out the adware scumbags and CSN polices its domain name PPC bidders anyhow).
thanks Pat.
“though ShareASale already keeps out the adware scumbags and CSN polices its domain name PPC bidders anyhow”
yeah, it’s almost too bad this solution’s extra benefits are redundant.
It’s also worth mentioning that the networks do have all the information available to implement exactly the same solution (except scenario #1)
This would be a nice way to (a) identify, and (b) discount if deemed appropriate, any and all last-second affiliates, whether they’re coupon sites, incentive sites with browser plugins, or malicious adware.
The term “last-second snipers” comes to mind, but that word is a bit charged and they’re not all “bad”.
Also, I wrote about something like this a little over three years ago (wow, time flies!)
http://www.jangro.com/a/2004/12/21/channel-conflict-in-affiliate-marketing-acquisition-vs-retention/