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Affiliate Program: First-click or Last-click attribution?
One of the first things to think about when starting an affiliate program or changing the current setup is how to track where sales come from. This is called understanding attribution models.
In affiliate marketing, these models help you determine how well your partners are doing and how to pay them fairly. There are two main ways to do this: first-click and last-click attribution. These two methods look at different parts of a customer’s journey to decide which partner should get credit for a sale.
The choice between first-click and last-click attribution models frequently depends on the marketing strategies implemented by companies, which steps are included in the customer journey, and what the brand’s needs are. In this post, we look at the specificities of the two models.
First-click Attribution: How does it work?
In first-click attribution, the affiliate who first directs a customer to the merchant’s website receives credit for the sale, even if the customer later returns through other marketing channels before making a purchase.
With this in mind, the first-click attribution strategy can be specifically beneficial for affiliate programs in sectors like B2B, finance, software, and SaaS that want to reward the quality of referrals and initial partnerships.
These industries often have longer sales cycles, which typically involve more complex decision-making processes. In these contexts, brand discovery and awareness take on much more significance, and brands want to collect as many insights as possible on which channels generate initial interest and how.
Thanks to first-click attribution, companies can identify and reward the role played by affiliates in the initial phases of the customer journey. This includes activities such as creating awareness or sparking interest. The recognition is possible even if the final conversion happens much later. Of course, this also depends on the cookie duration.
In other words, this attribution method values partners who introduce potential customers to the brand. And it does so even if they are not the last touchpoint before the sale. As a result, partners are incentivized to attract high-value customers and encouraged to focus on finding good leads instead of just trying to make quick sales.
Although first-click attribution provides insights into the effectiveness of top-of-funnel marketing efforts and helps brands optimize their marketing strategy, it may also undervalue how other touchpoints impact the customer journey. Evaluating all these aspects would be fundamental to understanding the processes that lead users from initial interest to conversion.
Attribution Models: Last-click Benefits and Limitations
On the other hand, an affiliate program can implement a last-click attribution, which is also the setting generally most favored by companies in industries such as retail, apparel, beauty, household, food and beverage, travel, and education (intended as online course providers).
This approach gives all credit to the last interaction before purchase.
In general, this model may be more relevant for brands interested in understanding which channels actually drive conversions and looking to optimize the direct sales channels.
However, the last-click model also has some limitations. For example, it doesn’t consider how important earlier touchpoints are in the customer journey. This can lead to undervaluing the upper-funnel marketing efforts a brand puts in place.
At the same time, if a company relies only on last-click attribution, it might invest too much in activities at the end of the sales process (also called bottom-funnel) at the expense of the awareness and consideration stage.
It’s also important to note that the last-click model might work better for brands with short sales cycles. For example, for products that people buy without much thought. However, it may be less effective for businesses where customers take a long time to decide and interact with the company many times before buying.
Attribution Models: Multi-touch approach
When deciding on the best attribution model for an affiliate program, it is good to know that neither model is superior; the choice depends on the advertisers’s specific strategy, goals, and needs.
Usually, for a more comprehensive understanding, brands often use to combine last-click data with other metrics and attribution models to get a fuller picture of their marketing effectiveness.
Basically, while last-click attribution is the most used, other models are catching on, such as the multi-touch attribution or the data-driven attribution that provides a more holistic view of the customer journey.
This approach rewards all partners for their contribution, making the affiliate program more sustainable in the long term. Also, it gives credit to everyone who helps promote the product or services and shares the resources more evenly among all the steps a customer takes before buying.
This means the system is fairer because it values every interaction a customer has before making a purchase.
