In this episode of Partnership, host Alex Standiford discusses the concept of ‘cookie windows’ in affiliate marketing, explaining what they are and how they impact affiliate programs. The episode covers various strategies for determining the optimal length of a cookie window based on the customer’s journey, product commitment, and competition.
Alex jumps into the pros and cons of long and short cookie windows, and introduces the split commission affiliate program as a solution to balance commission rewards and window duration. The episode also emphasizes the importance of GDPR compliance and adapting affiliate programs to different types of products to make them more attractive and effective.
Show Notes
Episode links:
- How To Create a Better Pipeline Generation Strategy For Your Agency
- These 3 different program structures can change your business
What Is a Cookie Window?
A cookie window determines how much time an affiliate has to convert a site visitor into a customer. Usually, this is measured in days.
A cookie is just a little piece of information provided by the website that is stored in the website visitor’s browser. Cookies are used for all sorts of things, such as remembering that you logged into a website, or tracking a visitor for analytics.
The “window” part of “cookie window” references a “window of time” or “window of opportunity” – since the cookie can have limited time period before it is deleted by the browser, and no longer available. So, the term “cookie window” came into existence because some affiliate platforms rely solely on the tracking cookie’s expiration date to automatically delete the tracking ID after the window of time expires. If there’s no tracking ID, there’s no way to credit the affiliate, and therefore the opportunity to get credit for a sale is lost.
Transcript
Before we get to thick into this discussion, we need to understand what a cookie is, and what a cookie window is.
A cookie window determines how much time an affiliate has to convert a site visitor into a customer. Usually, this is measured in days.
For example, an affiliate program with a 30-day cookie window would credit affiliates with a sale if the visitor that uses their affiliate link makes a purchase within 30 days. Conversely, a 7-day cookie window would work in the same way, only the visitor would have to make a purchase within 7 days, instead.
But how did we get the term “cookie window”? It’s kind of a weird term when you think about it. It would make more sense for this to be called “referral expiration”, or “engagement window”, but “cookie window” remains the primary term people use today.
A cookie is just a little piece of information provided by the website that is stored in the website visitor’s browser. Cookies are used for all sorts of things, such as remembering that you logged into a website, or tracking a visitor for analytics.
Cookies can be set to automatically expire after a certain date. When a cookie expires, the browser deletes that cookie forever.
In the case of most affiliate programs, a cookie is used to assign a tracking ID to a visitor. This tracking ID is used to associate the visitor with affiliates. Usually, visitors get associated with affiliates when the visitor visits your site with an affiliate link, or an affiliate coupon code.
The “window” part of “cookie window” references a “window of time” or “window of opportunity” – since the cookie can have limited time period before it is deleted by the browser, and no longer available. So, the term “cookie window” came into existence because some affiliate platforms rely solely on the tracking cookie’s expiration date to automatically delete the tracking ID after the window of time expires. If there’s no tracking ID, there’s no way to credit the affiliate, and therefore the opportunity to get credit for a sale is lost.
Modern affiliate platforms, like Siren, don’t rely on the cookie expiration date at all. Instead, they store the expiration date in a different location, inside the database. Either way, the term “cookie window” remains a commonly seen term in affiliate marketing.
Quick note – If you’ve been paying attention, you’re probably aware of things like GDPR, and other legislation regarding tracking cookies. Depending on what platform you’re using, you may, or may not need to ask for consent before using a tracking cookie for your affiliate program. It really depends on how the affiliate program tracks the visitor, and how much information they capture when tracking the visitor. This is a complex, and ever-changing topic, so it’s important that you directly ask your affiliate platform if they are compliant with GDPR to confirm that you don’t need to get this consent, because this can render your platform a lot less effective.
Modern platforms like Siren prioritize GDPR compliance, and the cookie can be considered as essential functionality.
Okay, so now that we understand what a cookie window is, let’s talk a little bit about how it impacts your affiliate programs.
Affiliates like long cookie windows, because they allow for more time for the affiliate to get credited with a sale. With more time for conversions to occur, affiliates have a better chance of generating more sales, leading to higher earnings.
A longer cookie window also means affiliates can benefit from retargeting efforts if the cookie remains active. If the merchant runs retargeting ads to remind users of the products they viewed, the affiliate can still earn a commission if the user converts after seeing these ads within the extended cookie window.
A longer cookie window is a significant advantage when attracting and retaining affiliates. Many affiliates will compare cookie windows when choosing which programs to promote, and a longer window can make a program more attractive compared to those with shorter durations.
But that doesn’t necessarily mean you should make your window 300 days long just to attract affiliates. This is because the best incentive programs directly associate the reward with the desired action. In the case of an affiliate program, the desired action is generating a sale. If you set a cookie window that is longer than your actual sales cycle, you might be crediting your affiliates for generating a sale, when they actually didn’t generate the sale themselves.
So, how do we actually figure out how long our cookie window should be?
Ideally, your cookie window is based on how long you expect a customer’s journey through awareness, research, consideration, and purchase to take. Ideally, you have a sense of this based on customers who have purchased your product, but if you don’t have that, a good way to get a feel for this is to think about how much of a commitment your product is to purchase. The more commitment, the longer the sales cycle, and I have a few different indicators that can help you get a feel for that.
The most obvious factor, of course, is the your product’s price. If something is priced low-enough that someone can purchase it without any planning prior to, there’s a lot less risk if the product doesn’t meet their needs, so the commitment to purchasing the product is less. For example, I purchased my iPhone case on a whim, in minutes, because it was inexpensive, looked cool, and solved my immediate need for a case.
Another factor is when you’re purchasing something that is intended to last for several years. If you’re buying something that you want to use a lot, for many years, there’s some extra commitment there. You wouldn’t want to buy something that you intend to use for a long time that you dislike. Even if it’s not priced too high, it will still elicit some extra research. A good example here is a pocket multitool. When I purchased my multitool, I spent a fair bit of time researching the different options, watching videos, and doing comparisons of each one, before I finally settled on the one that I wear on my hip every day. The tool I purchased was less than $90 dollars, so price wasn’t a huge factor – but I knew I wanted to have something that would last, and serve my needs well.
Another less-obvious factor is the usage commitment. If you’re offering something that’s complex, and requires a lot of education to get ramped up and using your solution to its fullest extent, there’s more commitment there. Most any software fits into this category, especially because getting out of a piece of software can be difficult, so many people are hesitant to buy until they can trust that the software will serve their needs both now, and in the future. This is why even if software is given away for free, there’s still friction to using it – because of the commitment needed to actually learn the software, plus the confidence that your time learning it won’t be wasted.
Look at what you offer, and consider the journey for your product. How committed to your product does your customer need to be before they purchase your product? Can you imagine a time where you were in a similar situation as your customer? How long did you research before you made a purchase?
Once you start to understand your customer journey, you can understand how long your cookie window needs to be. But there’s one more factor here that you should consider – your competition. Do your competitors have affiliate programs? If so, do they talk about their cookie window? Remember, affiliates will probably be comparing your program to your competition’s program, so you’ll want to make sure you’re competitive. Don’t blindly copy your competition, but definitely weigh their cookie window in as a factor to help you decide how long yours should be.
There’s a few different ways you can compete with your customers that doesn’t just mean making your cookie window longer. An obvious option is to make sure your percentage is a bit higher than theirs to compensate for the shorter window, although that is only an option in some cases.
I find that an effective way to compete with other programs is by building a split-commission affiliate program, instead of a single affiliate program. Siren’s own affiliate program is using one of these right now, and it’s a great way to offer a both a higher affiliate commission rate, and a larger commission window.
A split-commission affiliate program splits the commission for a sale into two pieces. The first piece is a smaller commission, with a big cookie window, and the second piece is a larger commission, with a small cookie window.
What I love about this approach is that it splits your affiliate program into two distinct rewards – one rewards people for generating leads, and the other rewards people for converting those leads. If someone isn’t particularly good at closing sales, but they’re really good at getting people to visit your website, they will get a commission for generating the lead, but not a commission for generating the sale. This allows you to give them something for their efforts, and potentially motivate them to nudge their visitors to make a purchase sooner, so they can get a full commission instead of a partial commission.
Siren handles this with its multi program approach to affiliate management. In this case, you’d create two programs – one program for each commission and cookie window, and assign all of your collaborators to both of them.
The benefit of this approach is that it allows you to offer a total commission that’s much higher than your competition, since only some of your affiliates will actually get both parts. This will keep your average commission lower, but still motivate your affiliates to convert quickly so they can get the maximum reward.
Let’s break down the numbers with an example.
Let’s say your competitor is offering a 20% commission and a long 60 day cookie window. You could compete with this by making a split program. The first half would offer a 10% commission with a 60 day cookie window. The second half would offer a 20% commission with a 15 day cookie window.
In this example, you are giving people an opportunity to earn as much as 30% commissions from your program, and are also able to compete with your competitor’s long 60 day cookie window. But, on average, you’re probably not going to pay that 30% commission on all of your sales, which means your average commission amount would be less than 30% – potentially even less than 20%.
Remember, the best programs directly associate the reward with the desired action. By splitting the commission in two like this, you’re rewarding for two separate actions – generating leads, and generating sales.
This will motivate your most-ambitious affiliates to nurture their leads more-effectively, and reward them for keeping the sales cycle short. It simultaneously ensures that affiliates who just want to send leads to your business without necessarily focusing on conversion can get an opportunity to earn a commission, as well.
I think agencies and other companies selling expensive things can make a lot of use out of a split commission program. Their long customer journeys are very compatible with this approach. If you happen to be an agency, definitely check out the episode “How To Create a Better Pipeline Generation Strategy For Your Agency”. I’ll link it in the show notes.
Now, let’s take a moment to think about a website that sells a lot of products, instead of just one. The examples I’ve mentioned above allow people to create programs that reward affiliates based on a single customer journey, but if you’re selling a lot of products, that journey is likely to vary based on what you’re selling.
The same rules apply here, though. Think through the journey, and consider the commitment level of the product.
Take an online music store, for example. These places can sell everything from guitar picks to grand pianos. Guitar picks definitely do not have a long customer journey, whereas a grand piano could be several months of preparation leading up to the sale. Not only that, but the music store’s profit margin for a grand piano versus guitar picks is probably wildly different, too. Let’s assume the profit margin on guitar picks is a lot tighter than grand pianos for this example.
By having different percentages, and different cookie windows, based on what type of product is being sold is be an effective way to make these programs actually make sense. Maybe you have a program that’s specifically for accessories, such as guitar picks, and then you also have a program that’s specifically for instruments. The instruments program has a much larger cookie window, and a higher percentage since the profit margin on that is larger than a guitar pick. Conversely, the guitar picks have a very short cookie window, and a lower percentage since their profit margin is tighter.
An effective way to handle this is to categorize your products based based on the commitment required, and build your programs around each of these levels of commitment. Some, or all of these categories can use a split-commission program, if you think that makes sense.
This would allow you to tailor your programs to different products, making it possible for your affiliates to succeed regardless of what they can sell.
If you haven’t watched my episode on different program structures, definitely give it a listen. This episode is starting to edge into the territory of that episode, and I think if you want to explore more creative ways to build an affiliate program’s structure, you’ll get a lot of value out of that episode, as well. I’ll link that in the show notes below.
There’s so many different ways you can structure your affiliate program. Just remember, your goal is to make your program attractive to potential affiliates, but more than anything it’s vital that your program rewards your affiliates for the desired action you want them to make. The tighter you can associate the two, the better your program will be. In the case of affiliate programs, that’s always going to be generating the sale, which is why we always reward people when the sale is made, instead of directly paying our affiliates for visits.
A cookie window is just one part of your offering for your affiliate program. Other factors, such as commission rate, and the product itself all play into your overall offer. Make sure your cookie window aligns with the commitment that your product requires, and you’ll build a fair, and compelling program for your affiliates. I hope this episode gave you the information you needed on how to use a cookie window effectively.
