Posts from ecommerce

Affiliate Marketing Undervalues The Link

Two days I posted about Gretchen Rubin's new book, The Happiness Project. When I linked to the book in the original post (and here too), I included an amazon affiliate code.

And here is the data two days later:

Happiness project

So, in two days, that blog post generated 535 views of the Amazon page and 40 purchases. The affiliate fees associated with those 40 purchases add up to $6.50.

But those 535 views are pretty valuable. Those 535 clicks translated into a total of 118 orders in the past two days, including a Kindle. The total affiliate fees associated with those 535 clicks were $25.20.

But even including all the commerce that was generated from that link, that $25.20 is a cost per click of roughly 5 cents. I think that's low for a bunch of reasons.

First, let's take the 535 views of Gretchen's book. Yes, only 40 of them actually bought it right then and there. But surely more of them will convert over time into buyers. Maybe when they see Gretchen on TV. Maybe when they get hooked on her blog. Maybe when they see the book on Amazon's bestseller list.

And of course, the same is true of all the other things those 535 visitors/visits saw and did on Amazon.

comScore once did a panel-based survey of people who saw a banner ad. Very few of them actually clicked on the banner ad and transacted. But many who saw the banner ad eventually searched on the item they initially saw in the banner and transacted later. comScore has also observed that many products that are initially found and/or researched online end up being purchased offline. I wish I could find both pieces of comScore research. If I can find them, I'll come back and link to both (got one of them now).

The point is that my blog post drove a lot of value to Amazon that is not totally captured by the 40 purchases of Gretchen's book or even the 118 transactions that were done by those visitors in the past two days. The value of that link, in my opinion, is significantly greater than $25.20 and as a result bloggers and other users of affiliate services are getting under compensated for the value they are providing.

UPDATE: Gian Fulgoni, co-founder and Chairman of comScore left a great comment which you can see if you click on the comment link and scroll down to the end. Here is part of it where he shares links to the research I cited above:

Fred, you're correct that past comScore research has shown that search and display ads cause latent buying and offline buying that are not reflected in the click:

Essentially, it all comes back to the fact that the click does not reflect the "view thru" impact of ads (i.e. the impact of ads that are not clicked) — and that even clicks don't accurately measure all the latent buying that occurs (because of cookie deletion).