Moreniche unveils ‘revolutionary’ Affiliate Marketing payment method. Blogosphere goes into overdrive.

Posted on: 2:24pm, 2010 June (Wednesday 16th) By: Tim Waddington

When a press release proclaimed a ‘truly revolutionary feature’ in the affiliate marketing industry, I sat up and took notice.  It turns out that “MoreNiche are set to raise the bar and offer a truly revolutionary feature that no other affiliate network has done before which could change the shape of affiliate marketing as we know it.” (source: Moreniche blog)

These are bold claims indeed from Moreniche’s Managing Director – Andrew Slack.  In a video on Moreniche’s Youtube channel, confusingly titled Brand Portfolio Manager/Network Support Executive/Affiliate Manager – Mike Alexander-Thorn, explained how Moreniche have rolled out technology which enables them to track the consumer path to purchase, and reward both the last and first affiliate referral with a commission.

This technology in itself is not at all revolutionary.  Many agencies have been undertaking path to purchase/exposure to conversion/Clickstream data modelling in order to better understand the multiple browsing steps a consumer takes on their ‘journey’ to purchasing online.  The basic purpose is to be able to understand the key influential steps so that media agencies can be more scientific in their planning.  However, many media owners, and in particular affiliates, seem to want the natural progression of this research to be a reattribution of media spend in order to replicate the varying degrees of influence in each purchase journey.  And due to huge complications with CPMs, CPCs, CPAs and the varying objectives of different strands of online advertising, this hasn’t looked like coming anytime soon.  However, it seems that Moreniche could be about to change this.

The Moreniche proposition is simple – affiliates on the Proactol Weightloss programme will continue to be rewarded the usual 30% of sales revenue commission as the last click referrer, but now, affiliates who are responsible for the first, introductory click will now receive a £3.50 bonus commission as a ‘thank you’ for introducing the consumer to the brand.  The move is in response to growing industry concern that more and more often the last click is being ‘stolen’ by voucher code sites.  ‘True content’ affiliates  argue that they spend a lot of time and effort writing relevant content, carrying out product reviews, and comparing prices, only for savvy consumers using a voucher code once they’ve decided which product they’re going to buy.

So will this revolutionise the affiliate industry?  It’s very hard to say, but our opinion is no.  That’s not to say that it won’t contribute to the relentless evolution of the speciality.  A lot of merchants may see it as an opportunity to reconnect with affiliates who have become alienated by the seemingly unstoppable march of the voucher code sites, and there will inevitably be other clients, or maybe even networks who trial this.  However, we have our concerns over the long term viability of this as a new industry-wide payment metric for the following reasons:

Robustness of the sample: We’re yet to see truly robust data from a comprehensively executed research project which gives us a definitive picture of the influence of the various online media channels.  In Vodafone’s excellent white paper into the viability of multi payment attribution, they took the first step at oncovering the mystery behind online journeys, however they discluded post-impression sales, and online ‘brand’ display activity, choosing to concentrate on post-click direct response advertising only.  Arguably their resultant findings are consequently flawed.  They effectively render advertising views and branding activity redundant in the consumer purchase consideration process.  An argument which is heavily discredited by the huge branding display budgets spent every year by retailers.  In an industry which stresses the importance of sales de-duplication, and the hugely varied online media channels, can any research piece which isn’t comprehensive ever hold true value?

Cynicism: Is it grossly unfair of us to suggest that perhaps Andrew Slack’s organisation has built its relative success on self-promotion and PR generated publicity?  Are they just the first, boldest organisation to stick their head above the parapet and rollout a technology which has been mooted by many for years in order to claim brownie points for innovation?  Have Proactol been convinced that they will receive incremental value above the extra £3.50 they will now have to pay for every order?  I think this could prove to be a loss-leader for Moreniche (or in this case, Moreniche’s merchant) in order to generate awareness and interest in their network.  There’s no denying that it’s effective, and they should be applauded for raising awareness and forcing merchants to take notice of this issues which has been bubbling under for years.

Cost: Ultimately, developments of this kind are only ever going to result in increased media costs for merchants whilst the different online disciplines in which they operate have different payment metrics.  For example, most merchants run PPC campaigns to promote their brand.  They can justify this as it usually generates the most volume of sales and traffic at the most efficient effective CPA.  Currently, a campaign which is de-duplicated by third party software such as Atlas or DFA will result in a proportion of affiliates losing ‘their’ last click to Google.  It’s a nature of the beast, and a bitter pill which affiliates (who have built their businesses off the back of Google’s technology) have to swallow.  Arguably a merchant could start rewarding affiliates with a proportion of a commission for the part they play in getting the consumer to the purchase point, even if Google swooped in and ‘stole’ the sale.  The technology exists, so why don’t more merchants already do this?  It’s simple: Because they pay Google for clicks whether they make sales or not.  It’s already hard enough to optimise a search campaign to be efficient without having to pay affiliates on top of this, and whilst it can be argued that they contributed to the purchase, it can also be argued that they didn’t.  Did a consumer accidentally find themselves at an affiliate site when they really wanted a merchant’s official site?  It’s impossible to get this level of granularity on every single customer journey, so rightly or wrongly, merchants will continue to take the cheapest route until genuinely robust research shows them that they will receive incremental value in rewarding on influential stages of every journey.

We welcome MoreNiche’s development, if only for the debate it has created in the industry.  It remains to be seen whether it will be truly revolutionary, or whether it’s a clever marketing ploy for Moreniche to win more affiliates/merchants, but either way, there will be great attention paid to any follow-up they provide to see whether it was effective.  Then you can guarantee there will either be a whole host of bandwagon-jumpers or ‘I-told-you-so’ smart Alecs.  And then we’ll let you know which side of the fence we fall.

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