Book chapter
Investigating the Antecedents of Affiliate Control System: An Abstract
Creating Marketing Magic and Innovative Future Marketing Trends, pp 905-906
07 Jan 2017
Abstract
The boom of internet and network technology has fostered the emergence of a new type of advertising model: affiliate marketing. Affiliate marketing spend has reached to four billion dollar in the USA in 2015. Surprisingly, however, affiliate marketing is still considered as one of the least understood components of the online marketing mix. Also in academic research, affiliate marketing has received little attention. Affiliate marketing has been described as performance-based marketing, and the primary compensation models employed in affiliate marketing industry are performance-based and outcome-driven (e.g., pay-per-sale, pay-per-click, and pay-per-action). Those performance-based compensation methods compensate only on results rather than input, focus solely on direct performance (e.g., revenue) and ignore indirect performance (e.g., quality of customers), and fail to take affiliate’s risk attitude into account, and thus they have been proved to be insufficient and ineffective under certain circumstances. It calls for a better compensation system, which will go beyond the purely performance-based mechanism.
In salesforce literature, control system is a broader concept than compensation method, which will also consider other control activities such as monitoring and evaluation, besides compensation. The design of salesforce control system could be either outcome-based or behavior-based. In this paper, we define Affiliate Control System (ACS) as: merchant’s set of procedures of monitoring, motivating, directing, and evaluating its affiliate partners. The outcome-based affiliate control system means merchant’s control procedures mainly focus on the outcomes and performance of affiliate (e.g., sales and traffic generated); the behavior-based affiliate control system emphasizes the importance of affiliate’s behaviors (e.g., tactics applied and resources devoted). Based on agency theory and transaction cost analysis, we studied the antecedents for choosing between outcome-based and behavior-based affiliate control system from three levels: environment, merchant characteristics and affiliate characteristics. Specifically, we propose that high environment uncertainty will encourage merchant to choose behavior-based over outcome-based affiliate control system; larger affiliate team size will increase merchant’s willingness to adopt behavioral-based control system due to improved efficiency, but this willingness is moderated by merchant’s risk attitude and its ability to measure affiliate’s behaviors; different types of affiliates will also have their own preferences: content provider prefers behavior-based control system, shopping incentivizer prefers outcome-based control system, while there is no preference for shopping assistant. The effect of affiliate’s own preferences on merchant’s decision of control system is moderated by affiliate power.
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Details
- Title
- Investigating the Antecedents of Affiliate Control System: An Abstract
- Creators
- Zhen Yang - Drexel UniversityZhengjie Li - New York UniversityBert Rosenbloom - Drexel University
- Publication Details
- Creating Marketing Magic and Innovative Future Marketing Trends, pp 905-906
- Series
- Developments in Marketing Science: Proceedings of the Academy of Marketing Science
- Publisher
- Springer International Publishing; Cham
- Resource Type
- Book chapter
- Language
- English
- Academic Unit
- [Retired Faculty]
- Scopus ID
- 2-s2.0-85125189011
- Other Identifier
- 991019173637104721