Cookie Stuffing - The Reason Why You Should Not Have an Affiliate Program.

Cookie Stuffing - The Reason Why You Should Not Have an Affiliate Program.

Merchants need to aware of a tactic used by sneaky affiliates to rob store of marketing money.

What is Cookie Stuffing?

What is really being described is the practice of automatically simulating a physical click of an affiliate link. Generally, it is used to described a simulated click that is happening on a web site versus a simulated click happening through adware. Although occasionally people will use the term in conjunction with adware.

When a simulated click of an affiliate link happens, the clickstream happens as it normally would if a real person had actually clicked the link. The affiliate link is sent to the respective Network (or Merchant in the case of an in-house program) servers, the click is recorded and tracking cookies are placed on the end user's computer. Hence the term cookie stuffing since in many cases the most obvious sign that something has happened is the appearance of the tracking cookie(s) on the computer.

There are many ways to technically automate a simulate a physical click of an affiliate link, but we aren't saying what those methods are. The term cookie stuffing generally encompasses any of the various ways of achieving a simulated click of an affiliate link.

Cookie stuffing really describes a result of the behavior rather than the actual behavior itself. As such, we prefer the term forced click.

About Affiliate Programs:

Affiliate tracking systems are intended to pay commissions to independent web sites ("affiliates") when users click through these sites' links to affiliate merchants. Merchants are not intended to pay commission when users merely visit affiliates' sites. Instead, commission ordinarily only becomes payable in the event that a user 1) visits an affiliate's site, 2) clicks through an affiliate link to a merchant, and 3) makes a purchase from that merchant.

However, some affiliates use "cookie-stuffing" methods to cause affiliate merchants' tracking systems to conclude that a user has clicked through a tracking link (and to pay commissions accordingly) even if the user has not actually clicked through any such link. If the user subsequently makes a purchase from that merchant -- immediately, or within the "return days" period specified by the merchant's affiliate program -- the affiliate then receives a commission on the user's purchase.

This page presents the incentives that have allowed cookie-stuffing to continue, and captures selected examples of cookie-stuffing.

Merchant ARE Affected by Cookie-Stuffing

Affiliate merchants suffer financially from cookie-stuffing. Cookie-stuffing causes merchants to pay commissions that, according to program rules, they need not pay. Cookie-stuffing also causes merchants to pay commissions to the wrong affiliates -- to affiliates who never caused an actual user click-through -- which is likely to reduce the quality and effort of affiliates participating in the merchant's program.

Affiliate merchants ordinarily pay their affiliate networks a percentage of all affiliate revenues passing through the network. For example, Commission Junction's public pricing list reports that CJ charges a merchant 30% of all amounts to be paid to affiliates. (In other words, if a merchant sells $1,000,000 of merchandise and pays a 5% affiliate commission, then it must pay $50,000 of commission to its affiliates. It must further pay 30% of $50,000, or $15,000, to Commission Junction.) As a result, in the first instance, affiliate networks benefit from cookie-stuffing. Such cookie-stuffing increases the total volume of sales flowing through affiliate networks, and increases the affiliate commissions on which, for example, CJ can charge a 30% fee.

Set against this short-run incentive is the long-term problem that if affiliate networks fall greatly in value to merchants, or if affiliate networks are perceived to facilitate fraud, then merchants may no longer be willing to pay affiliate commissions and affiliate network fees. But in the short run, affiliate networks benefit from more money flowing through their networks.

To date, affiliate networks have failed to aggressively pursue, stop, and punish those affiliates using cookie-stuffing. Indeed, LinkShare has repeatedly granted a $15,000 award to affiliates later found to be using cookie-stuffing. In each instance LinkShare has subsequently withdrawn the award after pressure from affiliates, merchants, and others. But the repeated awards to affiliates using cookie-stuffing nonetheless demonstrates that many large affiliates use cookie-stuffing. (MediaPost coverage)

All that said, affiliate networks' black-letter rules generally officially prohibit cookie-stufing. For example, Commission Junction's Publisher Service Agreement states that an affiliate publisher "may earn financial compensation ... for transactions ... made from such publisher's web site ... through a click made by a visitor ... through an Internet connection (link) to a web site." In all the examples set out below, no such click occurred, and therefore no commission is fairly earned given the limitations set out in the PSA.

Cookie-Stuffers Profit from Cookie-Stuffing

Cookie-stuffing apparently proves profitable for those who do it. Suppose an affiliate ordinarily has a 10% click-through rate from its site to its merchants. The affiliate ordinarily receives affiliate commission only if a purchase is made by one of the 10% of users who clicks through the affiliate's link. In contrast, by cookie-stuffing, the affiliate can claim commissions from any purchases made by the entire 100% of the affiliate's visitors.

Rule-Following Affiliates Suffer from Cookie-Stuffing

Rule-following affiliates suffer from cookie-stuffing. For one, rule-following affiliates' cookies may be overwritten by cookie-stuffers. Suppose a user clicks to affiliate site A, a rule-follower not using cookie-stuffing, and clicks through A's link to a given merchant. The next day, the user visits affiliate site B, a rule-breaker using cookie-stuffing as to the same merchant site. Using cookie-stuffing, site B sets an affiliate tracking cookie that overwrites A's cookie. If the user subsequently makes a purchase from the merchant, the affiliate commission will be paid to B, not A.

Rule-following affiliates also suffer from cookie-stuffing because cookie-stuffing encourages merchants to cut their commission rates. Without cookie-stuffing, merchants would be paying commissions on fewer orders. At least some merchants would likely then choose to increase commission paid on each order.

Merchant Beware!

Carefully review your payouts if you offer an affiliate program. If you think there is even a change of cookie-stuffing or fraud - look into it! Don't be asleep at the wheel can fall prey to a common criminal.