Affiliate marketing will be one of the growth drivers in online marketing in 2022. That’s according to survey of a 1,100 affiliate marketers. But what opportunities, risks, and challenges are the industry dealing with? We examine this in a three-part series—part 2 of 3: Privacy and Tracking.
Affiliate Marketing 2022: Data Protection And Tracking Issues Dominate
There is still no final approval of the ePrivacy Regulation (ePR), which has been planned for years, even if the trialogue negotiations with the European Parliament have started at least since 2021.
However, because of some disputes regarding the current text of the Regulation by the Portuguese Council Presidency and the draft of the EU Council of Ministers, these will drag on. The PV is therefore not expected to come into force before 2023. Considering a transitional period of possibly 24 months, any new regulations would not come into force before 2025.
For this reason, the legislator pushed ahead and passed the Telecommunications Telemedia Data Protection Act (DSG) on December 1, 2021. The EU Cookie Directive, which the EU Commission amended in 2009, has not been fully implemented in Germany.
There were different interpretations as to whether and how the previous provisions in the TMG implemented the consent requirement for cookies. This has now made it clear that before storing and reading data from the end device for the setting of cookies, the website and online shop operators must obtain the opt-in of the users.
What Does This Mean For Advertisers And Publishers?
For advertisers and publishers, this means in any case that they have to reassess their technical infrastructure and comply with the legal requirements if they do not want to pay warnings or fines for data protection violations.
In addition, there are currently still many unanswered questions about cookie consent and the TTDSG concerning the specific consent requirements, the risk aspect, and the final design requirements for cookie-compliant banners.
These should therefore be developed at the conference of independent data protection supervisory authorities of the federal and state governments (DSK) in an orientation guide for Telemedia providers on the scope of the TTDSG, especially on the requirement for consent under Section 25 TTDSG. The date for this should take place at the beginning of 2022.
Trend Survey: Data Protection And Browser Regulations Negatively Impact Sales?
However, according to a trend survey, 42 percent of affiliates and 30 percent of advertisers saw that data protection and browser regulations harmed their sales in 2021. It is more important to look at solutions to comply with the necessary standards.
An important factor here is that advertisers switch their tracking to first-party tracking. On the one hand, this ensures attribution via the various browsers, which no longer accept third-party cookies across the board. On the other hand, the advertiser sets affiliate network and technology cookies exclusively to trigger tracking.
The responsibility of the consent management would then lie with the advertiser if the respective network evaluates the tracking as a processor and not as a data owner.
Nevertheless, according to the survey, 21 percent of advertisers still use outdated third-party tracking. Although this is less than at the beginning of 2021, when 51 percent were still using obsolete monitoring, advertisers still urgently need to implement new tracking alternatives.
Affiliate Marketing 2022: Future Tracking Models
Concerning sustainable tracking models in affiliate marketing, 89 percent of advertisers and 62 percent of affiliates see server-to-server tracking as a future model, even if only 27 percent are currently using server-to-server tracking.
This is a solution that writes tracking information, for example, with PHP, directly into a database or a log file of the advertiser. The data is often processed now on the web server. This means that the advertiser saves sales and revenues directly in the database and then transfers them to the affiliate network/technology on the server-side.
Only 3 percent of advertisers currently see login systems or ID solutions such as NetID as an alternative solution. This may be because there is still a lack of acceptance among end customers and the login alliances still have to do a lot of advertising to anchor the topic with customers.
An Exciting Development
The developments and restrictions of the browser manufacturers and political and judicial decisions will therefore remain exciting in the future. The industry must also stay bold and innovative so that the large GAFA companies do not substitute them.
The further development of so-called Personal Information Management Systems (PIMS), which the TTDSG mentions under §26, remains exciting.
PIMS are systems or software applications intended to give users more control over their data. In the future, visitors to websites should save on their end devices and not in their browser settings or via cookie banners which consents are to be given for what.
New Services With Central Management
In the future, there will be new services through which users only have to specify once and centrally whether, where, and under what conditions they agree to cookies or not. This information is then forwarded to all websites by the provider of the PIMS.
If this were to happen, cookie banners could no longer be a mandatory requirement for tracking in the future. However, there is still a long way to go because such systems would first have to be certified, which requires a recognition procedure through a statutory ordinance of the federal government. In addition, the use of PIMS is still controversial among the various stakeholders in data protection.
Consent Management Optimization Is Becoming A New Discipline
So until there are new and innovative tracking alternatives, affiliate stakeholders are still required to collect and process users’ cookie opt-in accordingly.
However, 38 percent of affiliates and 20 percent of merchants currently see adverse effects on affiliate sales through the use of a CMP. It is also surprising that 43 percent of advertisers do not yet analyse the opt-in rates of their CMP. After all, 38 percent of advertisers rate the opt-in rates at over 70 percent.
Therefore, optimising the consent management platform is all the more critical so that the approval rates are as high as possible. This makes consent optimization a new discipline. Because the more users agree to the cookies, the better the advertiser can assign the orders to the affiliates.
There are several ways to increase the approval rate. A/B testing can increase opt-in rates. The CMP design can be very different. Advertisers should therefore experiment with banner and button design to maximise opt-in rates.
The Position Of The Cookie Banner Plays A Crucial Role
The position of the cookie banner also plays an important role. The more the flag is placed, the more you can force user feedback. And there is still potential in the wording. The more transparent one communicates cookies and builds understanding among the users, the higher the acceptance.
Another option is the so-called PUR subscription model. This model became known from online portals such as Spiegel. Users can choose whether a website version is to be displayed with advertising as usual or whether paid access without advertising tracking should be provided.
By using a PUR subscription model, affiliates can increase the approval rates for the cookie opt-in to up to 95 percent. In coordination with the state data protection authorities and also recommended by the BVDW e. V., this model could represent a reasonable alternative to ensure the monetization of affiliate sites.
Affiliate Marketing 2022: Customer Journey And Cross-Device Tracking Underrepresented
Technologies for the customer journey and cross-device tracking are still underrepresented in affiliate marketing.
Despite the development that purchasing processes have also shifted due to the corona pandemic and the realisation that online marketing budgets should be increased, too few advertisers are still working in a data-driven manner.
As a result, budget decisions can still not be made efficiently. Many assumptions are still based on gut feeling or outdated knowledge, although the technical possibilities for customer-specific attribution models exist.
According to the survey, customer journey tracking has decreased from 54 percent in 2020 to 45 percent in 2021.
The Biggest Problems For Affiliate Marketing In 2022
For 31 percent of affiliates, a non-transparent remuneration structure will be the biggest problem in 2022. For 57 percent, non-functioning tracking is considered problematic. In this regard, monitoring as many touch points as possible should be a prerequisite to carrying out a meaningful attribution.
The basis for transparent channel weighting can only be created by analysing and evaluating many historical customer journeys. Nevertheless, the end of silo thinking and the watering principle still not in sight for many companies. This requires profound organisational changes, but only those who dare to do so will achieve competitive advantages in the future.
The same also applies to cross-device tracking. Although 55 percent of affiliates see a lack of mobile monitoring and 47 percent a lack of cross-device tracking as the biggest problems for 2022, only 40 percent of advertisers use cross-device search to make media breaks through different devices measurable.
Lack Of Understanding Of The Use Of Cross-Device Tracking
Even if there are already valuable technologies with CrossEngage, Piwik Pro, metric, Google Analytics, and many other providers, there is often still a lack of understanding for the use of cross-device tracking.
Already 62 percent of all sales in the global Awin network are triggered via smartphones. Influencer publishers even track 83 percent of sales via apps. On Black Friday, shopping carts increased by an average of 17 percent for orders placed via smartphones.
It is critical that these orders can also be assigned to the affiliates. A rethinking of the use of cross-device tracking is therefore urgently needed. This also applies if the topic is complex and is therefore not on the priority list for many advertisers.