trends

The End of 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 scheduled for final release by the end of March.

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.

We understand that HeatSeek stands to benefit as a viable solution, but we also believe that this is an important issue that needs to be brought to light and examined.

Related:  

Copyright © 2024 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More Articles

opinion

To Cloud or Not to Cloud, That Is the Question

Let’s be honest. It just sounds way cooler to say your business is “in the cloud,” right? Buzzwords make everything sound chic and relevant. In fact, someone uninformed might even assume that any hosting that is not in the cloud is inferior. So what’s the truth?

Brad Mitchell ·
opinion

Upcoming Visa Price Changes to Registration, Transaction Fees

Visa is updating its fee structure. Effective April 1, both the card brand’s initial nonrefundable application fee and annual renewal fee will increase from $500 to $950. Visa is also introducing a fee of 10 cents for each transaction, and 10 basis points — 0.1% — on the payment volume of certain merchant accounts.

Jonathan Corona ·
opinion

Unpacking the New Digital Services Act

Do you hear the word “regulation” and get nervous? When it comes to the EU’s Digital Services Act (DSA), you shouldn’t worry. If you’re complying with the most up-to-date card brand regulations, you can breathe a sigh of relief.

Cathy Beardsley ·
opinion

The Perils of Relying on ChatGPT for Legal Advice

It surprised me how many people admitted that they had used ChatGPT or similar services either to draft legal documents or to provide legal advice. “Surprised” is probably an understatement of my reaction to learning about this, as “horrified” more accurately describes my emotional response.

Corey D. Silverstein ·
profile

WIA Profile: Holly Randall

If you’re one of the many regular listeners to Holly Randall’s celebrated podcast, you are already familiar with her charming intro spiel: “Hi, I’m Holly Randall and welcome to my podcast, ‘Holly Randall Unfiltered.’ This is the show about sex, the adult industry and the people in it.

Women In Adult ·
trends

What's Hot Now: Leading Content Players on Trending Genres, Monetization Strategies

The juggernaut creator economy hurtles along, fueled by ever-ascendant demand for personality-based authenticity and intimacy — yet any reports of the demise of the traditional paysite are greatly exaggerated.

Alejandro Freixes ·
opinion

An Ethical Approach to Global Tech Staffing

One thing my 24-year career as a technologist working to support the online adult entertainment industry has taught me about is the power of global staffing. Without a doubt, I have achieved significantly more business success as a direct result of hiring abroad.

Brad Mitchell ·
opinion

Finding the Right Payment Partner

Whenever I am talking with businesses that are just getting started, one particular question comes up a lot: “How do I get a merchant account?” It’s a simple question, but it has a complicated answer.

Jonathan Corona ·
opinion

The Taxman Cometh for Every Business

February may be the month of romance, but it is also a time when we need to think about something that inspires very little love: taxes. April is not far away, and the taxman is always waiting. This year, federal and most state income taxes are due Monday, April 15.

Cathy Beardsley ·
opinion

The Continuous Journey of Legal Compliance in Adult

The adult entertainment industry is teeming with opportunity but is also fraught with challenges, from anticipating consumer behavior to keeping up with technological innovation. The most labyrinthine of all challenges, however, is the world of legal compliance.

Corey D. Silverstein ·
Show More