Affiliate is a commission-based system. The first commissions for brokering a deal likely appeared as soon as people started trading. Maybe even earlier. We can imagine someone who wasn't strong enough to hunt a mammoth advising someone more capable on where to find one. The hunter would catch it and reward the informant with a piece of the meat.
Rewards could sometimes mean the difference between life and death or freedom. Today, the partner system is on a different level. You don't get meat or a princess and half a kingdom as a reward. It's usually a financial commission for brokering a sale. You surely know travel agencies that sell tours for tour operators and live off commissions.
With the development of the internet, services, and e-shops, the commission system expanded into this medium as well. Globally, this system is called affiliate. A few years ago, it reached us here in the Czech Republic too.
How affiliate works technically
We will describe the most common method, which we also use in our commission system. It involves measuring conversions through affiliate links and cookies. It's not a perfect solution, but there is nothing better on the market, so most affiliate programs use this method.
An affiliate link is a specially modified link that lets the e-shop know you sent someone from your site. For us, it involves adding a piece of code (tracking code) to the URL, specifically “?ref=your number”. So, an affiliate link might look like this:
https://www.imago.cz/kozena-snurka-p-84.html?ref=”your number”
Cookies
The e-shop already knows you brought a potential customer thanks to the link it can track. However, in most cases, the person doesn't order immediately. They browse the e-shop, check out the competition, and think about whether to order or look elsewhere. What happens next? Often, they return to the e-shop after a few days and only then place an order. To ensure the shop knows it's the same person you brought in, it tracks cookies. A cookie is a unique code stored on every computer, tablet, or mobile device, which is sent to servers to identify the device. More about cookies on Wikipedia. Thanks to this, the e-shop can credit the commission to the affiliate who brought the customer in.
However, the commission isn't paid out at the moment of the order. The road to a paid commission is long. An order doesn't guarantee the sale will go through. Some people cancel their orders. Sometimes the ordered goods are out of stock, although imago keeps most items in stock, which is our advantage. Or the order value might change. Therefore, the commission isn't credited upon the order itself. It is credited to the partner once payments from carriers and banks arrive and are matched with the order numbers.
Potential issues
We mentioned in the introduction that this system isn't perfect. Sometimes we encounter issues that cannot be solved technically or where the correct solution is unclear. What are they?
The first problem is that a customer might arrive at the e-shop through various affiliate links. In this case, the order is credited to the last person who referred them. Example: Someone is reading a blog about fantasy books and notices an imago icon, expecting to find new book releases. On imago.cz, they find information about a new book—for example, The Witcher: Fox Children. Before ordering, they want to see reviews, so they start searching the internet again. They find a review of the book. At the end of the review, there is an affiliate link to imago.cz. Our reader and buyer returns to the site through this link, which in this case belongs to a different affiliate partner. Their cookies are now updated to the new affiliate partner, and if they order, the commission goes to them.
Another problem is that the person you brought to the e-shop might order from a different computer or device. Their cookies will be different from those recorded in the affiliate system. Or, they might have cookies disabled.
As serious as the above problems may seem, believe that affiliate marketing still thrives and works. All affiliates count on these issues and accept this risk.