The issue (and systemic error) is that content providers, influencers, and pre-sales are not getting fairly compensated for purchases that they ultimately contributed to. The value of influence versus sales needs to be stripped down to it's barest essentials and measured.
Background for this post:
- Chris Dixon: Why content sites are getting ripped off
- Fred Wilson: Affiliate Marketing Undervalues The Link
- Jonathan Mendez: The Market Forces Killing Display Advertising
Chris, Fred and Jonathan have spent some cycles digging into what I see now as a great opportunity for market disruption. Advertising as we know it is about to go through a pretty heavy shift. But it's not only advertising which is about to flip, it's also manufacturing, online stores, warehouses, drop shippers, customer service, and sales.
Here's the revolution I see brewing in the relation between the Net, manufacturing, storing/delivery, and sales:
I can smell the opportunity. We need to shift the system so that the problem is reframed.
1) As a content creator and affiliate you would like to be compensated for downstream purchase actions directly or indirectly related to your link and commentary
2) Those downstream (as Liad stated below) have no financial incentive to change the status quo
3) To improve the analysis of downstream actions, whether they happen a day later or a few months later, real time data needs to be collected from sites/services which opt in to a Universal Tracker (protocol/standard).
4) Simple statistical models that correlate user purchase actions with multiple relevant product referrals can fairly distribute affiliate revenue.
5) Fully decoupled manufacturing processes from single brand drop shipping (Amazon and other big online brands, are ripe for disruption), will allow the market to fairly assess the value of an affiliate sale.
6) Quantization of sales influence, versus the various steps of design, manufacture, product warehousing, drop shipping, or other segments of product to consumer flow will be optimally rewarded to benefit not only the consumer, but all parties involved.
The preceding comments from AVC (my favorite blog hangout for a good reason).
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I see tracking as a HUGE part of the solution to this problem:
It's great seeing an important systemic error getting attention. Let's invent some brilliant tracking solutions to renew the affiliate concept and maybe make a few bucks along the way.
What we need are smarter links. First off users should see something like a shortened URL. We can do all sorts of fancy link tracking with shortened urls. We need a way of identifying user action with high confidence that was at least partially the result of earlier content sharing.
When three of my super human filters or friends all praise a service or product who should get the affiliate cut? Right now only the last one does, unless I choose to go directly to the source or puchase from another friends affiliate link.
On average the link value has the greatest value when it leads me to relevant and quality information, maybe even free of charge. How about a regular donation (user decided each month) that let's us show appreciation for quality links and sharing.
It's clear that affiliate link value is under rewarded, driving us to search and invent more motivating models. Victus Media's personal ads are initially designed around affiliate revenue (via Amazon), but we're more than happy to consider more effective alternatives.
Users could even tip us with a mini-payment if they appreciated a quality shared link, or go as far as signing up for a monthly or various per click fees to advertise their links through are matching system.
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