To What Extent are Cashback Sites Hurting Affiliates?
It wasn't long after the birth of affiliate marketing that cashback sites started to appear. These are sites which offer consumers a refund on what they purchase, through the use of affiliate schemes. For example, if a merchant were to run an affiliate program, offering affiliates a 10% commission on all sales, a cashback site could offer consumers anywhere up to 10% off their order value. From the merchant’s point of view, it is still worth paying a commission in the form of a refund to the buyer, if it results in a new sale. At first glance, this appears to be a system which benefits everybody. Merchants get extra sales, affiliate networks get extra commissions, and consumers get a better deal. The person who loses out is the affiliate who might have already referred the customer.
If a review site funded by affiliate revenue advertises by PPC to get traffic, then they would not be out of line to expect that if any of their visitors went on to make a purchase based on the reviews, they should receive a commission. However, if at the point the visitor was about to make a purchase, they went through a cashback site; this would overwrite the most recent cookie set. This means that the affiliate has gone to all of the work of getting the customer to the point of sale, for the cashback site to take the credit. There is evidence to suggest that people just use cashback sites at the point of purchase. The EPC for some merchants is up to 5 times higher for incentivized traffic, suggesting that they only go through the cashback site when they are intending to make a purchase. Is it right that affiliates are being denied commissions because of cashback being a more attractive incentive to purchase?
If a review site funded by affiliate revenue advertises by PPC to get traffic, then they would not be out of line to expect that if any of their visitors went on to make a purchase based on the reviews, they should receive a commission. However, if at the point the visitor was about to make a purchase, they went through a cashback site; this would overwrite the most recent cookie set. This means that the affiliate has gone to all of the work of getting the customer to the point of sale, for the cashback site to take the credit. There is evidence to suggest that people just use cashback sites at the point of purchase. The EPC for some merchants is up to 5 times higher for incentivized traffic, suggesting that they only go through the cashback site when they are intending to make a purchase. Is it right that affiliates are being denied commissions because of cashback being a more attractive incentive to purchase?
