Affiliate marketing is a $15 billion a year industry. Yes, that’s billion with a B, and yet if you were to go around and survey most internet users, the overwhelming majority would have no idea what it is or why it’s important, least of all how cookies play a huge role in enabling this industry.
Affiliate Marketing Basics
Basically, affiliate marketing is a form of sales and marketing where a company creates unique tracking links to give out to website owners and bloggers who promote their products.
The scenario is this: you read a blog about home gardening, and in it they recommend a specific brand of tools, or show you where to buy next year’s tomato seeds online, or just about anything.
You click the link and, because your favorite blogger recommended it, you buy the product. At that point, the blogger earns a commission from the sale. Commissions can vary anywhere from 4% to upwards of 50% of the purchase prices, depending on the products (digital products, like an online course or piece of software, pay more than physical products, like your garden rake).
It’s win-win…for the company and blogger. The user often has no idea what just happened behind the scenes, let alone the details of how it happens, despite rules put in place by the FCC.
Learn more about affiliate marketing basics on Facebook.
The Role of Cookies
So how do cookies come into play in this scenario? Well, almost none of the tracking would be possible without them.
In the scenario I described above, the user goes directly from the blog to the website where he immediately purchases the product. What’s far more common, however, is that he leaves that site, and then comes back later to make the purchase.
The blogger still receives the commission,as long as the user returns within a prespecified amount of time. Amazon, for example, pays affiliate based on 24-hour tracking cookies. Other programs will pay affiliate up to 30 days after they click the initial link!
All of that is managed by cookies, and is yet another reason why you should be careful about how you manage your internet privacy.