Ending Affiliate Commissions
The newest Microsoft Internet Explorer and Mozilla Firefox include a privacy feature that has a lot of webmasters concerned about losing their monthly affiliate commissions. "Private browsing" will prevent browsers from retaining browsing history, temporary Internet files, saved passwords, search history and — of greatest concern to webmasters — cookies. Cookies are used by most affiliate programs to track which affiliate referred a surfer, so when they are erased by the browsers, affiliates no longer will receive signup credit if the surfer joins a site at any point in the future. As a result, the existing business model will need to adapt — and pronto because IE 8 and Firefox 3.1 are already being downloaded to consumer-end users.
The purpose of private browsing is to prevent any information from being retained after the browser is closed — i.e. nothing is written to disk. Microsoft and Mozilla avidly promote that private browsing has many different use cases, such as researching a medical condition or shopping for a surprise birthday gift. But in actuality, there's only one major use case: porn surfing. In fact, tech bloggers already have dubbed the feature "porn mode."
Private browsing is not the default setting on any browser; users have to enable it by pressing a button or selecting it from a menu. When enabled, the browser launches a new session and copies all existing cookies into memory. Any new cookies acquired during the session are deleted when the session ends. This basically reduces all cookies to "session" cookies that expire when the user closes the browsing session. In terms of affiliate marketing, affiliates mostly will have to rely on users clicking on an affiliate link and signing up during the same browser session. If a user clicks on a link before beginning a private session and signs up during the session, the affiliate still will get credit. But if a user clicks on a link during a private session and signs up anytime afterward — for example, an hour later they open a new browser in either private or nonprivate mode, then sign up — the purchase won't be tracked.
IE and Firefox are not the first browsers to introduce this feature. Apple's Safari has had the feature for some time, and Google's Chrome browser includes a similar "incognito" mode. However, with a combined market share of 80 percent, the new releases of IE and Firefox will make a huge impact as users really begin to adopt the new functionality.
How fast will users adopt the new browser versions? Microsoft and Mozilla use auto-update mechanisms that are very effective. For comparison, looking back at the release of Internet Explorer 7 in October 2006, users updated at a rate of 1.2 million a day, reaching a 30 percent market share within five months. Assuming a similar trajectory, and also making the assumptions that one in three users will adopt private browsing while surfing porn and that 50 percent of purchases will be lost because of cookie deletion, we arrive at the following projections: By the end of 2009, affiliates around the world would lose 9.17 percent of their commissions. By the end of 2010, the loss would approach 12.5 percent.
So how will the affiliate-marketing model adapt to these changes? There are three potential fallouts:
The first is simply a market solution. Affiliates will continue working with sponsors, knowing that a portion of their sales are continuously lost. This already is happening on a small scale as a result of users who have manually disabled cookies. Sponsors even might compensate for the loss by raising their payouts.
The second possibility is that affiliates could pressure sponsors to convert to a publisher/advertiser model, which does not depend on cookies. Affiliates simply would get paid for ad impressions or clicks instead of actual signups. Many affiliates already are doing this with part of their ad inventory, and the trend could move considerably in this direction. This would complicate matters for many sponsors because the quality of clicks and impressions varies greatly, and sponsors would need to track their affiliates' performance constantly.
A third possibility is for affiliates to persuade their users to adopt their own browsers. One site doing just that is xPeeps. By promoting its own xPeeps browser — powered by HeatSeek.com — the site is able to provide its users with the same privacy features they want, while retaining all the affiliate credit. The HeatSeek software allows users to surf in private but preserves all cookies normally across uses. The relationship also helps xPeeps to increase user retention because the xPeeps browser always starts on the xPeeps home page, thereby continuously turning visitors into return visitors.
Heatseek is a pornography focused browser that quietly launched. The point of this software is to make porn browsing more efficient and more secure. The browser is available on Windows machines only, and is built on top of Internet Explorer.
They’ve clearly thought this through. Every feature is aimed at either making porn consumption easier or making it less likely that others will know what you are up to. I’ll walk through some of the features first and save my editorial for the end.
On the security side: Credentials are needed just to open the browser. Downloaded files are encrypted and viewable only through Heatseek. They do their best to eliminate popups, spyware and viruses. Finally, they’ve even included a panic button to shut down the application immediately.
On the ease-of-consumption side: Downloading of images and videos is assumed, and can be accomplished with a single click. As mentioned above, these files are encrypted and can only be opened within Heatseek. Downloaded files can be organized in, well, playlists, and can be dragged and dropped to reorganize. They’ve included a bookmark feature that allows users to quickly jump to their “favorite” scene.
Heatseek is also guaranteeing that their software contains no spyware.
The basic version of Heatseek is free, with a premium version available for a one time fee. The main feature of the premium version is that it allows the user to unencrypt downloaded files and move them directly to the hard drive for use in other browsers and media players. The premium version also allows users to access “special content”.
The Heatseek team is making significant efforts to remain anonymous, although there is at least one tie to another browser startup - the Mozilla-based media browser Songbird. Rob Lord, the founder of Songbird, is also a shareholder and board member of Heatseek.
A note to would-be users: Many employers install monitoring software on computers that Heatseek will not bypass.
A note to my fellow webmasters: Start promoting HeatSeek on your site and begin to require your affiliates to provide you with more better ways to ensure you won't lose sales. The best affiliate programs are those that allow users to sign-up for free using an email address. When sales occur from that email address you will always get credit regardless of cookies - as long as your guys maintains that email address you are all set !
You can also see where this article was ran on a April 6, 2009 Edition of XBIZ.com. Tole at Heatseek is the author of The End of Affiliate Commissions. I have supplemented this article with the Heatseek review which would not appear in the printed version made by XBix.
The End of Affiliate Commissions?
"Private browsing" will prevent browsers from retaining browsing history, temporary Internet files, saved passwords, search history and — of greatest concern to webmasters — cookies.
Like any other market segment, the gay/lesbian audience is a moving target. And given the flux in broad social attitudes about sexual orientation, it's a population group whose attitudes are especially apt to be in motion. Brands that decided a decade ago to pursue this audience and haven't closely examined it since then are at risk of failing to connect with an evolving cohort. A report released this month by San Francisco-based Community Marketing Inc. examines the attitudes and media usage of gay and lesbian consumers, touching on ways in which advertisers are reaching (or failing to reach) them.
Recession or no recession, this continues to be a lucrative market. One part of the report's survey work (conducted over a period from late July to mid-September) asked respondents to cite some big purchases they'd made during the previous 12 months. Twenty-nine percent had bought a laptop computer during that period, and 26 percent had bought a high-definition TV set. Among other pricey items bought in the previous 12 months by double-digit percentages of respondents were PDA/smart phones (28 percent), cars (17 percent) and desktop computers (13 percent).
WHAT YOU DO, NOT WHAT YOU SAY
The study suggests such purchase decisions are less influenced than you might suppose by ads that target the lesbian/gay/bisexual/transgender (LGBT) population in particular. Twenty-two percent of respondents identified "advertising in LGBT newspapers and magazines" as something that quite strongly influences their buying behavior; 21 percent cited "companies [that] use LGBT spokespersons" and 18 percent "advertising on LGBT Web sites." By contrast, 45 percent said a company's employment practices ("such as non-discrimination in hiring or recognition of domestic partners") exert a very strong influence on their purchase decisions. Forty-two percent put "companies actively promote gay-friendly policies" in that category, and 37 percent said the same about company support for "LGBT political causes."
Why does LGBT-oriented advertising stand relatively low on this hierarchy? "I think there is a combination of issues here," says David Paisley, senior projects director at Community Marketing, which specializes in this market. "First, gay men and lesbians don't necessarily look at the LGBT media every week. The number of LGBT print and Internet media is such a small fraction of the overall media. Also, when you go to an LGBT Web site, many of the ads are somewhat generic, and don't necessarily qualify as 'targeted LGBT.'" When asked whether they recalled "seeing an advertisement within the last week that specifically targeted the LGBT community," fewer than half the respondents (44 percent) said they did.
In any case, the report indicates that gay and lesbian consumers want companies to be out and proud when they target this community, and not simply to reach it via media seen exclusively by an LGBT audience. Twenty-eight percent of respondents said they are very strongly influenced by general-market advertising that "shows diversity and inclusion." As Paisley puts it, "They are looking for gay men and lesbians to be included in the 'diversity and inclusion' advertising in the mainstream market." As an example, he mentions a Kaiser Permanente ad (which ran in Time magazine) whose photo of widely assorted people included a gay couple holding their child. "That type of ad tests through the roof," says Paisley.
READ THE REMAINING AND FULL STORY AT AD WEEK
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