Setting Referral Fees in Affiliate Marketing
| Autor: | Eitan Gerstner, Barak Libai, Eyal Biyalogorsky |
|---|---|
| Rok vydání: | 2003 |
| Předmět: |
Organizational Behavior and Human Resource Management
Sociology and Political Science Referral Affiliate marketing business.industry 05 social sciences Customer acquisition Alliance 0502 economics and business 050211 marketing Marketing business 050203 business & management Information Systems Web site |
| Zdroj: | Journal of Service Research. 5:303-315 |
| ISSN: | 1552-7379 1094-6705 |
| DOI: | 10.1177/1094670503005004003 |
| Popis: | Affiliate programs offer affiliates referral fees in return for directing potential customers into a merchant's Web site. Affiliates are commonly paid based on the number of leads converted by the merchant into customers (pay-per-conversion) or based on the number of leads referred to the merchant (pay-per-lead). Given the prevalence of both, interesting questions for research are as follows: Why do both formats prevail? Under what conditions is one format preferred over the other? The authors find that pay-per-lead is more profitable when a merchant negotiates a separate deal with an affiliate. In this case, pay-per-conversion is not optimal for the affiliation alliance because it leads to suboptimal pricing by the merchant. In contrast, pay-per-lead is less profitable than pay-per-conversion for a merchant that works with a large number of affiliates all under the same terms because it is susceptible to bogus referrals that cannot be converted into customers. |
| Databáze: | OpenAIRE |
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