A vitally important consideration for affiliates is the way in which sales are tracked by the merchant or its third-party administrator. There are a few different methods currently in use, though fortunately, the most common is now no longer the least reliable for the affiliate.
In the past, most merchants simply used URL's encoded with the affiliates unique ID to send a potential purchaser directly to the merchants home page.
The problem here is that you will only get paid if the person clicking on your link makes a purchase on that particular visit to the merchant.
But most people don't purchase on their initial visit to a sales website.
They typically bookmark the page whilst they think about it or shop around to compare prices. When they return using their bookmark they will be taken directly to the merchants home page, entirely bypassing the original affiliate and thus not generating any commission for them.
And even on those occasions when they do buy on their first visit, you won't get anything for any purchases made on subsequent visits unless they continue to use the link from your site. And if that wasn't already bad enough, most merchants also promote their home page address to customers through invoices and follow-up emails.
Tracking With Affiliate Cookies
Thankfully these days most merchants now use an additional tracking device known as a cookie in conjunction with the affiliate referral URL. The cookie is a small data file generated when the visitor clicks on the affiliate link and it records the ID of the affiliate responsible for the referral. This file is then deposited into the visitor's browser (Internet Explorer, Netscape, etc.), effectively "tagging" the visitor as belonging to that affiliate.
Employing cookies is good since it means that whenever the person returns to make a purchase you will still get the credit.
The system isn't perfect though.
It works by having the merchant website check to see if there is an affiliate cookie present in the visitor's browser before processing a sale. However, if the person following your link has set their browser not to accept cookies (or is using a third-party application to do the same), there won't be any cookies to check, and so you still won't get any credit for the referral unless they purchase immediately.
Fortunately most people do accept cookies and for those that don't you won't be any worse off than in the basic linking method.
However, since cookies are actually stored in the browser, you will also lose sales if the person uses more than one browser or computer to access the internet (work and home, say) or regularly deletes all cookies in their browser. Although it depends on the way the affiliate program is set up, generally you will also not be credited if the customer passes through the link of another affiliate after yours – the final affiliate gets the commission.
Cookies don't last forever though. In fact some don't last very long at all. You see, besides the affiliate ID, there are a couple of other important pieces of information in the cookie file. They are the time the cookie was created, and the time it will expire. The merchant can set the expiry date to anything they want.
In the area Internet Marketing, most merchants set pretty generous expiry periods of several years or more, some even offering "lifetime cookies" (i.e., no expiry date). But sadly, when you move out into the wider world of affiliate marketing, you'll find that the vast majority of merchants give their cookies a much shorter lifespan, sometimes as little as just ten days.
Now I'm sorry, but when I see one retailer offering 60 return days (the cookie lifespan, so called since this is the number of days after first clicking on your link in which the visitor must return and make a purchase in order for you to get a commission) and another selling the same kind of products but making their cookie expire after just 10 or 15 days, the only thing that comes to mind is greed. There's just no justification for it.
Merchants know full well that making the cookie life very short reduces the amount of commission they need to pay, effectively providing them with new sales and customers for free on the backs of affiliates. (However, it's important to clarify here that if your customer makes a second purchase within the return days period you won't necessarily get a commission for it – that depends on whether commissions are paid on multiple orders, or just the first).
It is exactly because affiliates are known to lose commissions they would have got had the cookie lasted longer that merchants who offer 60 return days trumpet their "generosity" as though they are doing affiliates a big favour. They are not. The true position is that the short cookie setters are ripping affiliates off. Avoid them if you can and sign-up with their competitors instead.
Now, before you get carried away on the idea of long life cookies, I'm afraid the fact is that most of the time, even lifetime cookies aren't going to last more than a few years at most. Why? Because if not rendered useless by one of the reasons already mentioned, eventually your cookie tracking is going to get wiped out by the inevitable new computer purchase (or replacement hard drive).
Realistically then, you're looking at a maximum cookie life of about 5 years.
But that doesn't mean all affiliate programs touting lifetime commissions are misleading affiliates: Whilst true that the initial cookie generated by a click on your link isn't going to last a lifetime, another cookie is usually set when your referral makes a purchase.
At this point, some (not all) affiliate programs include the referring affiliate's ID in the purchaser's information stored in their customer database. That way, no matter how, when, or where the customer makes an additional purchase the affiliate will get a commission. These are the kind of programs you want to especially keep an eye out for.
Examples of good programs include Yanik Silver's Surefire Marketing which employs a 10 year cookie and also tracks fax and mail orders. And Ken Evoy's 5 Pillar Program has an advanced system with cookies to track your customers for life.
Some affiliate programs also track by IP the address of the referred person's computer. However, though a good method in theory, in practice it's a poor means of tracking when used alone because only a minority of the computers connected to the internet actually have their own dedicated IP address. The vast majority of Internet users are assigned one of the IP addresses belonging to the ISP they use. A new IP is assigned at random each time they log-on. Nevertheless, when used in conjunction with other means of tracking, it can add to reliability.
A number of affiliate programs provide members with a free pre-designed promotional web site that has a unique URL. These are almost always dynamically created CGI -Common Gateway Interface pages. They behave like a regular site, except that they are generated from a template when the URL is requested and usually also have all the internal links encoded with the affiliate ID.
Links to personalized web sites or pages offer the advantage that if your potential buyer wants to think about the purchase first or come back again another time and bookmarks the page, it's your unique affiliate URL they'll bookmark. When they use that bookmark to return and make a purchase, it will take them back to your site/page and so you'll still get the commission you rightly deserve.
Unfortunately, some affiliates think they can promote these affiliate pages through search engine marketing. Whilst it was possible to some degree years ago, it doesn't work at all anymore because the search engines now recognise and ignore or penalize duplicate content.
So that's tracking. Now let's take a look at affiliate stats & reporting
