Retargeting in Affiliate Marketing - What Matters?

In affiliate marketing, there are many publishers who want to help improve the performance of your online store. In addition to the usual content and coupon publishers, retargeting publishers have become increasingly present and important in recent years when it comes to maximizing sales for your online store.

Let's take a closer look at the things to consider when setting up a cost-efficient retargeting campaign in affiliate marketing.

Fig.1 The Principle of Retargeting

The retargeting principle is well-known: A user navigates through a search engine and potentially lands in your store. However, they do not complete the purchase immediately. The customer should then be re-engaged to encourage them to make a purchase at a later time. Retargeting publishers assist by using a pixel on the store page to target this specific customer again with various banners. To do this, they use pre-purchased display slots where your advertising material can be placed. These display slots are well-compensated in affiliate marketing, so when working with retargeters, it is essential to ensure that tracking is correctly implemented.

Nowadays, various providers use complex algorithms to capture customers at the critical point of sale (POS). It is not always clear to online store operators that while retargeting publishers have many advantages, they can also pose a cost risk if the methods used by these publishers are not understood.

Keeping Attribution Models and Costs in Mind

Let's assume we manage client X and develop a well-structured sales campaign with them. The client invests not only in affiliate marketing but also allocates a significant budget to SEO activities and paid search to achieve a high ranking on Google. In affiliate marketing, network XY is added, through which all leads and sales can be tracked, evaluated, and paid out to the publisher. You should not start incorporating retargeting publishers into your program without due consideration, as this can lead to double compensation across different channels.

Let's consider where the customer originally came from. With a touchpoint analysis in Google Analytics, it can be traced how the customer journey began. You will find that the customer usually doesn't come solely through the affiliate channel but has interacted with other channels like Direct, Paid, or even Retargeting beforehand.

Fig.2 Multi-Channel Analysis

Ultimately, as many contact points as possible would like to benefit from a sale. It is essential to adjust the attribution model

to prevent potential double compensation across channels.

A possible approach could be splitting the commission within all channels or minimizing the commission at the last touchpoint, based on how often the retargeting publisher needs to engage before a sale is finalized. By dividing the commission, the affiliate marketing channel will weigh less in the overall view of all channels, as the initial touchpoints occurred in other channels. However, you will eventually realize that this payment model is more straightforward and significantly more profitable for store operators.

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