Incrementality of Affiliate Publishers

by Ross Dahlke and Zac Henschel
December 16, 2019

A key component of Enterprise Marketing Return is measuring the incremental value of your media. Incrementality looks beyond attribution and measures causal impact to understand if an individual touchpoint could make or break the purchase as a consumer works their way through the buying process. For retailers, determining incrementality can be especially challenging when trying to understand the value of investments being made in affiliate marketing.

Retail brands are often frustrated by their limited ability to test the incrementality of affiliate publisher partners such as coupon websites. Ideally, affiliate publishers drive incremental additions to a customer’s basket size, offer discounts that increase conversion and expose loyal audiences to products they may not have otherwise purchased. However, the biggest challenge retailers face when investing in affiliate partnerships is how to avoid adding discounts to purchases customers would have made without the discount in the first place.

This is a critical question we always push to answer with our clients. To accomplish this, brands must identify, measure and manage affiliate media based on the quality of a publisher’s interaction with its customer audience.

We’ve answered this question for several clients by building an affiliate incrementality model that helps our clients do just that. It helps retailers understand the true value of their investments in affiliate marketing. This model assigns a level of “causality” to all affiliate touchpoints occurring in a customer’s path to purchase. By quantifying the incremental value of consumer behavior, it allows marketers to optimize to a publisher’s unique effectiveness.

Let’s bring this to life through an example. If an affiliate publisher is the only touchpoint a customer engages with prior to purchase, we would expect that publisher was a large driver in getting the customer to purchase. Therefore, affiliate marketing would be deemed incremental. Conversely, if a publisher is taking credit from other media right before a purchase, we expect the other media is driving the customer to purchase. In this case, affiliate marketing would be less incremental.

To help you understand what our affiliate incrementality model can do for you, we’ve broken it down into what we believe are the most relevant components.

  1. Customer behavior we investigate pathing data to understand the different types of interactions we see across publishers, as well as other media channels.
  2. Purchase triggers – we identify meaningful interaction patterns expressed in the path to purchase based on publisher behavior. For example, in what percentage of paths did we see the publisher as the only touchpoint before a purchase? Are there alternative channel paths besides affiliate that should receive a larger share of the credit?
  3. Incremental value – once we understand the share of a publisher’s responsibility in the path to purchase that are incremental / not incremental, we weigh those interactions for each publisher to inform a final incremental value. 

The result: an incremental ROI by publisher with insights ready for implementation. If you’re interested in learning more about how our affiliate incrementality model can help your business, please contact us.

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