This article originally appeared in FeedFront Magazine.
As the world of online retail grows increasingly global, many European merchants are looking to expand to the mega market of the United States and Canada. However, many of these companies have stumbled with their affiliate programs as they cross the pond. Why? One likely factor is the difference between the affiliate industry in North America and Europe when it comes to regulations, the agency/network landscape, and attribution.
In Europe, the IAB (an association representing the digital businesses of twenty-seven countries) has been instrumental in creating affiliate industry standards supported by major industry players. These standards make operating an affiliate program in Europe a little safer than in the United States and Canada, as much of the activity around software downloads, cookie stuffing, and other activities is self-policed by the industry, especially the networks. In the United States and Canada, however, no such standards exist. While some networks make efforts to limit certain affiliate activities, the onus is ultimately on the merchant to be the last line of defense. European merchants are often unaware of this dynamic and may be surprised to discover certain behaviors that leave their programs vulnerable.
The delivery of program management services is quite different In Europe than in the United States and Canada. European networks typically include a level of program management services along with their technology platform services, the logic being that if they can help the merchant grow their program it will increase the overall fee level. Additionally, large European advertising and marketing agencies have well-developed affiliate management. As a result, there are fewer independent affiliate marketing agencies or OPMs. This contrasts with the United States and Canada, where full service networks generally charge additional standalone fees for program management services (with a few exceptions such as Affiliate Window, which originated in the United Kingdom) and large advertising and marketing agencies generally do not have affiliate practices. The result is a confusing array of management possibilities that run the gamut of cost and sophistication, including many small OPMs with limited capabilities. European merchants may assume most management is created equal in the United States and Canada, and can be disappointed with the outcome.
Across Europe, it is increasingly the norm form merchants to look at cross-channel attribution to determine whether or not to pay affiliates. They look at their attribution model and if an affiliate is in a certain place in the click stream in relation to paid search, email, or other channels, they withhold commission. In the United States and Canada, changing payouts based on an affiliate’s position relative to other affiliates has gained traction, but companies rarely withhold commissions based on multi-channel attribution. As a result, when a European company looks at their US and Canadian affiliate programs, the data and costs could be quite divergent from what they are used to.
European affiliate programs can still find success in North America, but only if they keep these major differences in mind.