The Future of Affiliate Marketing in a Collapsing Cookie World, ET BrandEquity

Earnkaro, a company backed by Ratan Tata, is a website that offers users the opportunity to earn money through affiliate marketing. With the demise of third-party cookies, Earnkaro employs local storage, a technology that stores data directly on users' browsers. Local storage uses the functionality of your browser to establish a tracking mechanism. The technology involves storing data on users' devices to track interactions and transactions, and operates independently of traditional cookie-based systems. This allows Earnkaro to precisely track when a transaction results in cash flow to a partner site by storing information about the transaction directly on the user's device. Basically, browsers have three types of storage: localStorage, sessionStorage, and cookies. This is where first-party, second-party, and third-party data is retrieved. Earnkaro also uses a technology called server-to-server integration. This technology is already in place with partner sites like Myntra, Nykaa, and Flipkart.

“To opt out of the use of cookies, we employ a method known as server-to-server integration. Instead of relying on cookies to track purchases and activity, we track these transactions through sessions stored on the retailer's servers. “When a purchase is made, transaction details are tracked and shared directly from our servers with our affiliates, eliminating the need for third-party data sources,” said Earnkaro and Co-Founder of Cashkaro. says Rohan Bhargava.

Earnkaro is 60% committed to implementing these technologies to prepare for a world where third-party cookies have collapsed. The primary reason we require cookies is to solve marketing attribution challenges. Every time someone visits a web link from a particular source, the cookie captures the source of the traffic.

To address attribution challenges in the absence of third-party cookies, Pradeep Kumaar, CEO of NP Digital, cited contextual advertising and tools like Google Fledge as potential alternatives for tracking engagement and behavior. mentions the feasibility of new tools. “Contextual advertising and technologies like Google Fledge represent a new frontier for tracking user engagement in a privacy-focused world,” he says.

To facilitate affiliate marketing, cookies need to be replaced on a technological level. “When someone performs a transaction, a pixel fires during the transaction phase that determines who has the last click attribute, or who has the last cookie. , obviously we can't store third-party cookies. We use local storage instead of cookies for last-click attribution,” says Bhargava.

Bhargava explains that another alternative is to use a mobile measurement partner (MMP) such as Branch or AppsFlyer. MMPs are used to determine where a user's last interaction came from (whether from Google, Facebook, or other sources) before making a transaction. MMPs are very important when advertising in in-app environments where cookies are not used. As we are moving towards a cookie-free world, the brand is incorporating MMP's software tools known as his SDK (Software Development Kit) into his website. The SDK provides the tools needed to integrate with these MMPs and provide a unified view of where your traffic is coming from. This approach ensures a consistent source of information and avoids discrepancies between different data sources. Bhargava says that by using these technologies, the affiliate industry can smoothly transition to his cookie-free operations.

The world of affiliate marketing is poised for big changes as Google prepares to phase out third-party cookies from its Chrome web browser by the third quarter of 2024. On January 4, 2024, Google Chrome began phasing out third-party cookies from his January 4, 2024. Provide the browser to his 1% of users. Once these cookies are removed, marketers will need to find other ways to collect user data for targeted advertising and personalization. For affiliates, who generally operate on a “pay-for-performance” basis, the challenge is to track the user's journey from affiliate link to purchase, which can impact the accuracy with which sales are attributed to the correct affiliate. there is.

The phaseout of third-party cookies is largely due to growing user concerns about privacy and regulations passed in other countries, such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) . GDPR was passed in the European Union in May 2018. This regulation prohibits websites from storing third-party cookies without the user's consent. In the same year, the CCPA was passed, requiring websites to provide users with an opt-out option regarding cookies that sell personal information.

Thirty percent of Paisa Bazaar's business comes from affiliate marketing efforts, but Sachin Vasishtha, Paisa Bazaar's chief marketing officer, is not worried. “Affiliate marketing makes up a small portion of our media mix spend. However, it is worth noting that affiliates that rely on third-party tools to achieve convergence will run into problems. With the retirement of third-party cookies, these tools will face challenges, and so will the affiliate marketers who use these tools,” he says.

Paisabazaar relies on first-party cookies and data and does not recommend the use of third-party tools. Vashshtha also notes that Paisabazaar has server-side attribution. Affiliate marketing campaigns for brands are limited to only a few channels, such as email marketing.

“We advertise on platforms like Google and Facebook anyway, so we don’t recommend affiliate campaigns on those platforms,” he says. He emphasized that brands are generally less reliant on third-party cookies and data, which means they will not be impacted overall by the cookie phase-out. I am. He also emphasizes the importance of investing in a robust data architecture and having the right CDP in place to capture as much data as possible using first-party cookies. These platforms help create unified customer profiles from direct interactions, significantly reducing dependence on third-party data.

In a world moving away from third-party cookies, affiliate marketers need to explore new avenues for partnerships with influencers and content creators. As influencers also dabble with affiliate marketers, adapting your strategy to maintain these collaborations becomes essential. “Most social media users are creators and influencers who focus on first-party data. They can present their audience directly about the brand and share links, and affiliates and marketers can share that link. We can utilize data from ,” Kumar said.

Publishers will also have to figure out how to diversify their traffic sources in the new cookie-free environment, and Kumar says the only way to do this is by creating more interactive and engaging content. Consent-based marketing, which builds trust between consumers and brands, is the way forward as third-party cookies disintegrate.

Kumaar also highlights the potential of deep learning and AI to maintain hyper-personalized targeting capabilities through contextual advertising, similar to the precision previously possible with third-party cookies. This advancement benefits advertisers by facilitating more accurate campaign planning and audience targeting based on consumer behavior insights. “By integrating deep learning and AI with contextual advertising, we can get even closer to achieving the level of personalization that was previously possible with third-party cookies,” Kumar said.