How does the Affiliate Marketing Technology Model work?

[JoeTheBlack]

Hi all,
I'm studying affiliate marketing networks, and I was wondering if anybody knows how Affiliate Service Providers (ASPs)like cj.com or linkshare.com track successful sales on merchant websites.

As far as I know the algorithm should be:
1) The affiliate publishes a link with his ID and the Merchant ID in his website (ie.

http://www.cj.com/redirect.xxx?id=12345&merch_id=54321

)
2) The visitor clicks on the link with the intention to buy from the Merchant
3) The link takes the visitor to the site of the Affiliate Service Provider (in this case cj.com) that logs the visit, referrer, etc. and sets a cookie in the visitor's PC
4) The visitor is redirected the the Merchant's web site that logs the new visitor as coming from the ASP either by reading a special ID on the GET string or by reading the referrer value
5) The visitor proceeds to shop while the Merchant tracks the visitor around the site with an id binding it to the ASP and probably the Affiliate
6) The visitor checks out paying on a secure server with a credit card

Now here comes the puzzle. How does the Merchant notify the ASP of the successful transaction?
My hypothesis are:
- The ASP gives the Merchant a snippet of code to be embedded in the source code of the "Thank you" page that connects to the ASP server notifying the details of the succesful transaction.
- The ASP tells the Merchant to embed an <IMG> tag in the "Thank you" page linking to a server-side script in the ASP server.
- The ASP gives/sells a custom e-commerce platform along with the subscription to the service to the Merchant (not likely)
- The ASP tracks the visitor throughout his journey on the Merchant's webserver via embedded <IMG> tag or some other tracking technique, including his checkout process in the HTTPS secure pages (not likely).

All of these artifices are perfectly viable, but what puzzles me is that they all suffer from one huge flaw: the merchant can cheat.
Obviously the whole point of tracking the visitor is to credit successful sales to the rightful Affiliates (thus giving them the right commission), but if the Merchant cleverly manipulates the server-side code in his scripts, for example by randomly or deterministically disabling ASP's tracking tecniques, he can receive free leads for sales that neither the Affiliate nor the ASP will never be aware of.

Now, my big question is: am I missing something here or is the whole model of affiliate networks heavily reliant on trust?

I would love to ear from you guys if you know anything about the "real" mechanics going on behind the scenes of ASPs.


Regards
Joe Black

 

[redhatvswin]

Wow, I don;t exactly know how it works. It can work either way. But make your life a bit easy, I can tell you one thing. Before any site goes alive with credit card purchase and authorization, they have to be certified with the gateway. So, when they do get certified, the gateway/processor makes sure that the transactions information only flows directly between USER PC <--> Merchant Server <--> Gateway/processor server. Sometimes even they take out Merchant server due to the new requirements such as VbV. The only thing that comes in mind will be notification from merchant about succesful sale. There is no other way, even using tag's or sniffets, for ASP to know that sale is succesful even if customer clicked on by now button.

 

[fhlee]

JoeTheBlack,
Your observation is correct. The entire model is based on trust that the sellingSite WILL track their sales and gives out the correct commission. It doesn't really pay for the sellingSite to cheat their affiliates because if they do and someone finds out, their entire affiliate base will riot. Also, it depends much on people like CJ to ensure that their customers are not cheating...

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