If you're involved in affiliate marketing and need to track where sales are coming from to pay or collect your commissions, experts say you may want to avoid tracking options that use cookie- or pixel-based technology.
Companies such as LinkShare say that the new browsers, for instance, Google Chrome and Internet Explorer 8, will block this tracking activity in its privacy settings.
"Online marketers should take a good look at the cost per action as it applies to their business and how these browsers — Chrome and IE 8 — might have an impact on the CPM or CPC advertiser models," said Ed Bendy, director of product management for LinkShare, a company that helps advertisers track marketing referrals from affiliates, or publishers.
Evan J. Andrews, an analyst at Forrester Research, agrees. He said, "Browser privacy settings can be set such that they block affiliate cookies, which have potential to severely damage affiliates' commissions if these settings become ubiquitous."
Meanwhile, Google, which runs an affiliate network that includes DoubleClick, countered claims that Chrome is particularly a problem for marketers.
"As with most browsers, users can modify their cookie setting if they choose to do so, but this is not unique to Chrome," a Google spokesperson said in a statement to ECommerce-Guide.com. "There is no reason to believe that affiliate marketers will be more adversely affected by the privacy settings in Chrome than they are with other current browsers in the marketplace today."
According to Google, Chrome's default settings accept all cookies.
As for Microsoft, the browser and search giant took the middle ground on the interests of consumers and advertisers. "We believe that transparency and trust are vital to balance consumers' desire for both privacy and content with the needs of advertisers and publishers to ensure the long-term vitality of the online industry," a Microsoft spokesperson said in a statement.
"Our goal is not to block their content by default, but to give users a choice about how their online presence is tracked," Microsoft said. "Microsoft believes those who embrace consumers' desire for notice and control will benefit from a higher degree of consumer trust, and that increasing accountability in business practices benefits publishers and advertisers alike."
According to Microsoft, the company is working with the advertising and publishing communities to "provide guidance on user consent and accountability for their ads and content that they serve."
Bendy used the example of Overstock.com as an advertiser looking to track referrals from comparison-shopping or blogging sites. "When the user clicks on those links and goes back to the advertiser's Web sites, LinkShare's technology makes sure we're keeping track of where the traffic is coming from," he explained. If there's a sale on Overstock.com, LinkShare would ensure payment of commission to the affiliate, he said.
"They want to make sure that whatever network they belong to...that they're being properly attributed for the sales they're driving to the merchants Web site," Bendy said.
Server-to-Server Option
According to Bendy, rather than a cookie or pixel-based solution, the company uses a server-to-server transmission to track sales coming from affiliates. "LinkShare doesn't drop cookies to track that information," he explained. "Because we're receiving the data from the merchant's Web server as opposed to the browser, it's a lot more secure in terms of the data we receive and attributing it back to the affiliate.
"Because we're not relying on cookies that we drop and we're not relying on a pixel to transmit that data back to us, we think our tracking solution is inherently more secure and reliable," he said.
Forrester's Andrews explains that LinkShare's method of server-to-server transmission allows for a direct link between the advertiser and LinkShare, eliminating the browser from the equation.
According to Bendy, being able to accurately track where sales are coming from is crucial to online marketing. "If you have some questions about the reliability of the tracking from an affiliate marketing provider, it makes it harder to make key online marketing decisions for the future. The CPA model is quite important, so I think the future bodes quite well for affiliate marketing," he said.
Vendors using LinkShare's tracking solution include Neiman Marcus, Walmart.com, Macys.com and Dell.com, he said.
JupiterResearch's Andrews hints that the privacy settings in browsers spell bad news for affiliate marketers' using cookie-based methods. "Unless publishers themselves are equipped with more sophisticated tracking technology, like batch or server-side scripting, then you could argue that they will be more reliant on the affiliate networks that do offer such solutions — or affiliate technology vendors that exist to find ways to track and deliver advanced ROI and conversion and accounting metrics that subvert cookies or other browser limitations."
Brian T. Horowitz is a new contributor to ECommerce-Guide.com, and is a freelance technology writer based in New York. He has written for publications such as Fast Company and USA Weekend, and writes a blog about innovation at InternetNews.com.
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