Int. J. Internet Marketing and Advertising, Vol. 13, No.

1, 2019 47

The effect of social media and advertising activities

on affiliate marketing

Rainer Olbrich, Carsten D. Schultz* and

Patrick M. Bormann
University of Hagen,
Universitätsstraβe 11,
58097 Hagen, Germany
Email: lehrstuhl.marketing@fernuni-hagen.de
Email: carsten.schultz@fernuni-hagen.de
Email: patrick.bormann@fernuni-hagen.de
*Corresponding author

Abstract: The study uses data from a service company to analyse if social
media and advertising activities affect affiliate marketing results. The dataset
spans a six month period, registering 611,081 ad impressions, 15,082 clicks,
and 2,672 social media messages. The results from affiliates using social media
are analysed and then compared to the results of affiliates not using social
media. The study adds to the affiliate marketing literature by analysing the used
ad media, commission amount, length of partnership, and business focus as
campaign variables. Further, it adds to the multichannel literature:
microblogging social media activities of affiliates positively affect the number
of ad impressions and to a lesser extent the number of affiliate leads. As social
media activities of affiliates affect the results of the affiliate marketing
campaign, merchants may include social media data to get a more detailed
picture of affiliate activities and performances.

Keywords: advertising; ad impressions; affiliate marketing; business focus;

clicks; commission amount; leads; length of partnership; microblogging;
multichannel advertising; social media; social media messages; social media
reach.

Reference to this paper should be made as follows: Olbrich, R., Schultz, C.D.
and Bormann, P.M. (2019) ‘The effect of social media and advertising
activities on affiliate marketing’, Int. J. Internet Marketing and Advertising,
Vol. 13, No. 1, pp.47–72.

Biographical notes: Rainer Olbrich is a Professor of Marketing at the

University of Hagen, Germany. He completed his doctoral thesis in 1992 at the
Department of Marketing, University of Münster, where he also finished his
postdoctoral thesis. Since 1997, he has been holding the Chair of Marketing at
the University of Hagen. He has worked as a consultant for various companies
and organisations. His research interests include consumer goods marketing,
retail marketing, and online marketing. He has published a number of books in
these areas and his papers have appeared in various academic journals.

Carsten D. Schultz is a Postdoctoral Researcher at the Chair of Marketing in the

Faculty of Business Administration and Economics, University of Hagen,
Germany, where he completed his doctoral thesis in 2012. He studied business
information systems at the University of Essen, Germany, and computer
science at the University of Skövde, Sweden. His research interests focus on

Copyright © 2019 Inderscience Enterprises Ltd.

48 R. Olbrich et al.

electronic commerce and online marketing and include online consumer

behaviour, affiliate marketing, search engine advertising, and social media
marketing. He also advises companies on strategies and activities in these
areas.

Patrick M. Bormann is a doctoral candidate at the Chair of Marketing in the

Faculty of Business Administration and Economics, University of Hagen,
Germany. He studied management and economics at the University of
Wuppertal, Germany. His research interests include affiliate marketing, social
media marketing, consumer behaviour, electronic commerce, and video games.

1 Introduction

Affiliate marketing refers to an online relationship between the so-called merchant and
the affiliate, where the merchant pays the affiliate a commission to redirect potential
consumers to the merchant’s website (Libai et al., 2003). Merchants can be
manufacturers of products, service providers, or retailers. Merchants employ the help of
affiliates to expand their reach on the target (online) audience (Sarkar et al., 1998).
Affiliates are intermediaries who provide content for consumers. For merchants, affiliates
provide branding and selling functions and come in a variety of categories. Individuals
may use digital advertisements, such as banners and sponsored links, on their websites to
promote the merchant’s products or services (Duffy, 2004, 2005). Other business models
include, for example, blogs, communities and price comparison sites that redirect
consumers to the merchant’s website (Fox and Wareham, 2010; Prussakov, 2011).
Affiliates receive a commission depending on consumer actions predefined by the
merchant (Libai et al., 2003; Sarkar et al., 1998). Merchants may pay their affiliates for a
simple redirect of a consumer, such as a click-out to their online shop (Olbrich and
Holsing, 2011), for a lead, such as requesting further information about a service
(Cartellieri et al., 1997; Olbrich et al., 2016), or for a sale buying a product or service
(Lee and Lee, 2012). Moreover, merchants may organise their affiliates themselves or
employ affiliate networks that provide access to affiliates and additional services, such as
performance tracking and financial services (Fox and Wareham, 2010).
Even though affiliate marketing is one potential online channel (Anderl et al., 2016;
Klapdor et al., 2015), research on affiliate marketing is limited to specific topics, for
example, trust building (Gregori et al., 2014; Haq, 2012), differences across product
categories (Brear and Barnes, 2008; Papatla and Bhatnagar, 2002; Lee and Lee, 2012),
control and contract design (Fox and Wareham, 2010; Gilliland and Rudd, 2013), and
fraudulent behaviour (Edelman, 2009; Edelman and Brandi, 2015; Miehling et al., 2010).
The present study advances research on affiliate marketing by addressing the interaction
between affiliate marketing and social media.
Merchants can generally draw on internal and external information to evaluate their
affiliate marketing activities, such as assessing advertisements and partnering affiliates.
Examples of internal information are direct performance measures, such as impressions,
leads, and advertising spending. Merchants may also consider external information from
 The effect of social media and advertising activities on affiliate marketing 49

other sources that in comparison to internal information are generally not so readily
available. Mariussen et al. (2012) mention social media activities as one particular
external source of interest.
In contrast to affiliate marketing, social media has become the subject of increasing
research interest. Researchers have analysed various types of social media, such as blogs
(e.g., Gopinath et al., 2013; Onishi and Manchanda, 2012), microblogs (e.g., Tirunillai
and Tellis, 2012; Rui et al., 2013; Zhang et al., 2011), user-generated product rating and
review websites (e.g., Chevalier and Mayzlin, 2006; Phang et al., 2013), social shopping
communities (e.g., Holsing and Schultz, 2013; Olbrich and Holsing, 2011), and social
networking sites (e.g., de Vries et al., 2012; Katona et al., 2011). Moreover, research has
compared multiple types of social media (e.g., Dhar and Chang, 2009; Oh et al., 2017;
Schweidel and Moe, 2014; Smith et al., 2012) and considered the combination of
traditional and social media (e.g., Kumar et al., 2016; Onishi and Manchanda, 2012;
Stephen and Galak, 2012; Yu et al., 2013) as well as online and social media (Anderl
et al., 2016; Klapdor et al., 2015). However, the use of social media in affiliate marketing
has not been analysed. Following the proposition to consider social media as an external
information source (Mariussen et al., 2012), the present paper addresses this particular
research gap.
Specifically, we analyse the effect of social media activities on an affiliate marketing
campaign. The study is based on data from a service company. The social media and
affiliate marketing activities are recorded for a six month period and span 133 affiliate
partners registering 611,081 ad impressions, 15,082 clicks, and 2,672 social media
messages received by 20,541 followers. The study contributes in three main ways to the
literature.
Firstly, the research model includes key factors of an affiliate marketing campaign
that affect the campaign results, such as advertising media used, commission amount,
length of partnership, and business focus. These factors add to the understanding of
affiliate marketing success. Ad media, commission amount, and business focus
significantly affect the results of the affiliate-merchant relationship. The results for length
of partnership warrant further clarification.
Secondly, the analysis provides insights into the multichannel use of social media and
affiliate marketing. In particular, we analyse the effect of microblogging activities on the
affiliate marketing performance. The results demonstrate that microblogging social media
activities significantly affect the number of impressions and to a lesser extent the number
of leads. Social media activities appear to create some level of priming that positively
affects the likelihood to engage with the merchant.
Thirdly, the present paper contributes to the stream of literature discussing social
media as an information source. Our results indicate the use of social media as an
external information source to provide a more detailed picture of an affiliate’s behaviour
and performance.
The remainder of the paper is organised as follows. The next section discusses related
research on affiliate marketing and the multichannel literature in social media. Also, the
hypotheses and research model are derived. Afterwards, the data are presented and
analysed. The empirical results are subsequently discussed before the paper concludes
with the limitations and directions for further research.
50 R. Olbrich et al.

2 Related literature

2.1 Affiliate marketing

Research on affiliate marketing is scarce so far. It addresses, for example, trust (Gregori
et al., 2014; Haq, 2012), different product categories (Papatla and Bhatnagar, 2002; Brear
and Barnes, 2008; Lee and Lee, 2012), control mechanisms and contract designs (Fox
and Wareham, 2010; Gilliland and Rudd, 2013), as well as fraudulent behaviour of
affiliates (Edelman, 2009; Edelman and Brandi, 2015; Miehling et al., 2010).
Multichannel research on affiliate marketing and other online advertising is limited
overall (Chiou and Tucker, 2012; Gallaugher et al., 2001; Janssen and van Heck, 2007),
although affiliate marketing is mentioned as one potential online channel during the
so-called customer journey (Anderl et al., 2016; Klapdor et al., 2015). The probability of
a conversion increases, for example, if users become aware of a merchant through an
affiliate website before conducting an online search (Klapdor et al., 2015). Based on
100 questionnaires from the print media industry, Gallaugher et al. (2001) find a negative
impact of affiliate marketing on generating revenue because of the effort required to
maintain an affiliate program. Chiou and Tucker (2012) examine changes in merchants’
click-through rates when affiliates include the merchant brand in their search engine
advertisements. If more affiliates use such a branded ad, then advertising clutter
increases. The resulting spill-over effects predominantly lead to an increase in clicks on
the organic search results of the merchants. Also, when linking affiliate marketing and
search engines, a greater number of affiliates results in a higher organic ranking of the
merchant on the search engine result page (Janssen and van Heck, 2007). Furthermore,
trust towards affiliates increases when their organic search results are placed among the
top five results on the search engine result page (Gregori et al., 2014). This paper extends
this line of research by analysing the effect of social media activities on an affiliate
marketing campaign.

2.2 Social media

The present study focuses on social networking sites, specifically a microblogging
service. Microblogging is a form of electronic word-of-mouth that refers to the use of
short messages to communicate in an online social network (e.g., Jansen et al., 2009).
Research has so far addressed modelling network relationships (e.g., Katona et al., 2011;
Trusov et al., 2010), privacy (e.g., Gan and Jenkins, 2015; Jeong and Coyle, 2014),
information value (e.g., Hennig-Thurau et al., 2015; Schweidel and Moe, 2014; Tirunillai
and Tellis, 2012; Zhang et al., 2011), and multiple media (e.g., Stephen and Galak, 2012;
Smith et al., 2012; Yang et al., 2016; Yu et al., 2013).
This study relates in particular to the parallel use of social and other media.
Television advertising, for example, is found to drive blogging activities before a movie
launch or product introduction, but the effect lessens after the launch period (Onishi and
Manchanda, 2012). The number of sales also affects the blogging quantity (Onishi and
Manchanda, 2012). Blog and community posts as well as mentions in print, on the radio,
and television contribute to the number of sales in a microlending marketplace (Stephen
and Galak, 2012). While the sales per media activity are larger for traditional than for
social media, social media sales’ elasticity is significantly higher than traditional media
sales regarding message frequencies (Stephen and Galak, 2012). Social media has been
 The effect of social media and advertising activities on affiliate marketing 51

shown to have a stronger effect on stock performance than conventional media while the
interaction effect of both media also influences this performance (Yu et al., 2013).
Considering online and offline transactions, brand messages positively affect spending,
cross-buying, and profitability of consumers (Kumar et al., 2016). Social brand messages
work synergistically with television advertising and e-mail communication (Kumar et al.,
2016), thereby confirming an earlier synergy between social and conventional media (Yu
et al., 2013).
Besides the combination of traditional and social media, researchers have studied the
parallel use of multiple types of social media (Dhar and Chang, 2009). Researchers
generally note differences in social media types (He et al., 2013; Oh et al., 2017;
Schweidel and Moe, 2014; Smith et al., 2012; Yu et al., 2013). The level of activity
varies across brands and social media channel (He et al., 2013). User engagement on a
social networking site, such as, e.g., Facebook, is higher than on a microblogging site and
brands also use more promotional and engagement activities on a social networking site
than on a microblogging site (He et al., 2013). Using social media to predict stock prices,
Schweidel and Moe (2014) find that sentiment may differ in blogs, forums, and
microblogs. Also, consumers tend to discuss different products or attributes in different
media. Oh et al. (2017) find no effect of social media metrics from Twitter on box office
revenue. However, social metrics from Facebook and Youtube are found to correlate with
box office revenue (Oh et al., 2017). Rui et al. (2013) show that positive (negative)
microblogging messages relate to higher (lower) movie sales. Furthermore, the extent of
these effects depends on the number followers, so that messages followed by more people
have significantly higher effects (Rui et al., 2013).
So far, few studies have addressed the interaction between social media and other
online media. Blogs have been mentioned as a potential affiliate partner while analysing
multichannel behaviour to predict online transactions (Klapdor et al., 2015). Similarly,
Anderl et al. (2016) mention social media and affiliate marketing along with other online
channels with regard to the customer journey. The study by Yang et al. (2016) is a
notable exception; they study the effect of brand social media activities on the
effectiveness of search engine advertising. Specifically, the authors find that affiliation,
conversation, and responsiveness, as three types of brand engagement in social media,
positively affect click-through rates and conversion rates. Further, social media
engagement is a moderator variable affecting the relationship between search
advertisement rank and click-through rate as well as conversion rate (Yang et al., 2016).
This study is, to the best of our knowledge, the first to address the multichannel effect
of social media on affiliate marketing.

3 Hypotheses and research model

The present paper contributes to the multichannel literature by studying social media use
in the setting of affiliate marketing. We investigate internal and external information in
the affiliate-merchant relationship. Internal information refers to the performance of
affiliates measured by traditional metrics, such as the number of impressions, number of
ad media used, commission amount, and advertising spending. External information is
additional information from other sources that merchants may evaluate to get more
insights into the performance of their affiliates. One type of external information are
52 R. Olbrich et al.

social signals that refer to brand and user interactions in social media generally available
via web crawlers (see, e.g., He et al., 2013; Schultz, 2016).

3.1 Social media in affiliate marketing

In general, social media activities may contribute in two ways towards the affiliate
marketing results. Affiliates may directly draw the attention of users towards the
merchant, for example by messaging about the merchant or by drawing attention towards
a related topic on their own homepage that refers to the merchant, thus increasing
advertisement reach and exposure (Goh et al., 2013; Stephen and Galak, 2012). A more
indirect effect arises when the social media activities affect the consumer attitude towards
the merchant (Brodie et al., 2013; Wirtz et al., 2013).
Social media provide different functions across the purchase funnel (Fulgoni and
Lipsman, 2015). Social networking sites and microblogging, for example, are positioned
at the top of the funnel driving awareness and interest (Fulgoni and Lipsman, 2015).
Affiliates may increase their overall reach using such social media services. Social media
also have been shown to drive direct interactions, such as sales (Dhar and Chang, 2009;
Goh et al., 2013; Rui et al., 2013; Stephen and Galak, 2012). Regarding the
affiliate-merchant relationship, affiliates may draw consumers’ interest to a specific
website on their homepage that includes a merchant’s ad media via social media
messages or directly include the ad media in the social media message. Consequently, the
direct use of these social media services increases ad exposure and ad reach and thus the
number of ad impressions:
H1 The higher the level of activities and reach in social media, the more impressions.
Beyond the direct effect of increasing the reach and exposure of a merchant’s
advertisements, social media messages, especially at the top of the purchase funnel, may
affect the consumer attitude towards the merchant and the products offered (Brodie et al.,
2013; Wirtz et al., 2013). A comparable indirect effect has been found for print
advertising (Olbrich and Schultz, 2014). Brand activities in social media positively
influence the likelihood of consumers to click a search advertisement and convert on the
target website (Yang et al., 2016). Similarly, social media activities increase the
likelihood of consumers interacting with the merchant, for example by positively
influencing the attitude towards the brand. Thus, the number of messages and the reach of
the social media channel positively affect the number of leads:
H2 The higher the level of activities and reach in social media, the more leads.

3.2 Affiliate marketing campaign

Apart from social media activities, the present study includes the number of used ad
media, commission amount, length of partnership, and business focus as affiliate
marketing campaign variables. To generate views, affiliates utilise the ad media provided
by the merchant. Affiliates generally increase impressions and thus views with more and
different ads. However, affiliate networks in general only register an additional view for
the same user if the next advertisement has a different shape or creative design compared
to the previous ads. Ad variety may also increase consumers’ interest (Yaveroglu and
Donthu, 2008) and decrease potential negative effects, such as wear-out and banner
 The effect of social media and advertising activities on affiliate marketing 53

blindness (Benway, 1998; Cho and Cheon, 2004). Some researchers warn that different
ads decrease the likelihood of a purchase (Manchanda et al., 2006), other findings suggest
positive effects for the use of multiple advertisements (Braun and Moe, 2013; Robinson
et al., 2007; Yoo et al., 2009). Different message lengths and banner sizes have a positive
effect on the click probability, while large banners generally have a higher click-through
rate (Robinson et al., 2007). Using multiple banners increases purchase intention as well
as evaluation of the ad campaign and the advertising brand, as long as the advertisements
are consistent in their theme (Yoo et al., 2009). Furthermore, the use of multiple
advertisements prevents wear-out effects and may increase the number of visits and
consequently conversions (Braun and Moe, 2013). Hence, our proposition is:
H3 The more variations of text links an affiliate uses, the higher the number of
impressions.
H4 The more variations of banners an affiliate uses, the higher the number of
impressions.
A merchant determines the commission amount for a predefined consumer action. As
clicks are vulnerable to click fraud (Edelman, 2009), merchants can avoid fraudulent
clicks by paying the affiliates for leads or sales instead (Mahdian and Tomak, 2008;
Bandyopadhyay et al., 2009; Prussakov, 2011). Commissions for leads or sales are higher
than for clicks. Affiliates thus need to trigger the consumers’ interest in a product or
service. Merchants thereby shift some of the commercial risk of having to activate
consumers’ for their offer to the affiliates (Cartellieri et al., 1997; Duffy, 2005; Hu et al.,
2016). Consequently, the affiliates need more effort to trigger the consumers’ interest.
Increasing commissions for affiliates in general results in more effort and therefore
more performance from affiliates (Hu et al., 2016). This situation, known as
pay-per-performance, is also a principal-agent phenomenon (Levinthal, 1988; Lo et al.,
2011). Higher jumps in commissions may sometimes be the right ‘incentive basis for
efficient effort allocation’ [Jacobides and Croson, (2001), p.211]. Thus, we propose:
H5 The higher the commission for an affiliate, the more impressions.
The length of a partnership is another relevant aspect of the affiliate-merchant
relationship. Researchers warn that affiliates prefer short relationships over long
relationships when the merchant’s industry is dynamic (Gilliland and Rudd, 2013).
However, longer relationships indicate satisfied affiliates happy to stay in a relationship
with a merchant. Merchants also use the time to monitor consumer actions from affiliates
in order to detect fraudulent behaviour (Edelman, 2009). Consequently, merchants select
relevant affiliates over time. Thus, long relationships are an indicator that affiliates
produce more and genuine contacts:
H6 The longer the duration of the partnership between an affiliate and the merchant, the
more impressions.
In general, affiliates follow one primary business focus. For example, an affiliate that
maintains a content website may focus on delivering political news, a blogging affiliate
may focus on food testing, or an affiliate with a comparison website may provide
information on financial services. An early study analyses low and high affinity between
websites, finding that websites with high affinity have a higher probability to redirect
consumers to a shop (Sherman and Deighton, 2001). However, there are no clear
54 R. Olbrich et al.

recommendations as to elements that a high-affinity website should include to be

effective and efficient in redirecting users.
Research also describes business focus as an environment or context with some
similarity between two websites (Papatla and Bhatnagar, 2002) or advertisements used on
the website (Lohtia et al., 2003; Lee and Thorson, 2009; Hsieh et al., 2016). In affiliate
marketing, the business focus relates to the overlap between affiliate and merchant. A
majority of practitioners does not seem to focus on a congruent business focus but relies
rather on a mixed portfolio of affiliates (Fox and Wareham, 2010). Yet, similarity – in the
sense of congruent business focus between affiliate and merchant – may reduce
uncertainty when consumers engage in online transactions. Consumers may, for example,
have concerns about the opportunistic behaviour of a website owner. Fear of high
opportunism or hidden information of a seller may prevent consumers from buying online
(Pavlou et al., 2007). If similarity exists in business focus between affiliate and merchant,
users encounter more relevant (advertising) content and are less afraid of opportunism.
Affiliates reach a relevant part of the merchants’ target group, thus reducing consumers’
dissatisfaction and advertising leakage. On the one hand, affiliates are more inclined to
expose the target group to the advertisements. On the other hand, consumers have a
higher likelihood to engage with the ad and in consequence with the merchant. The
higher likelihood manifests itself in higher click and lead rates when the business focus is
congruent. Thus, a congruent business focuses results in more impressions, clicks, and
leads:
H7a An affiliate that has a congruent business focus with the merchant creates a higher
number of impressions.
H7b An affiliate that has a congruent business focus with the merchant creates a higher
number of clicks.
H7c An affiliate that has a congruent business focus with the merchant creates a higher
number of leads.

3.3 Measures of advertising performance

Affiliates integrate the merchant’s ads on their website, for example, banners or text
links. The advertisements are placed on the website either at varying positions and times
(e.g., banner rotations) or at predetermined positions and times (Prussakov, 2011). When
visitors access the website, the ads are impressioned and thus generate a so-called view.
Affiliates are interested in triggering impressions and thus views to redirect consumers.
Literature supports the positive effect of more views on consumers’ interest, generally
referred to as wear-in effect (Gong and Maddox, 2003; Manchanda et al., 2006;
Yaveroglu and Donthu, 2008). Additional impressions and views of banners, for
example, lead to higher brand awareness and brand perception (Gong and Maddox,
2003), higher advertising recall, and intention to click the advertising media (Yaveroglu
and Donthu, 2008). Even for ten (Schmidt and Eisend, 2015) or 20 (Fang et al., 2007)
repeated impressions, researchers find no significant wear-out effects, especially when
advertising designs are creative (Lehnert et al., 2013) and competition of other merchants
is low (Yaveroglu and Donthu, 2008). Furthermore, ad impressions and views may
increase purchase probability due to brand-building over time (Manchanda et al., 2006).
Thus, creating more impressions and thereby exposure and ad reach increases the number
 The effect of social media and advertising activities on affiliate marketing 55

of predefined consumer actions. An impression is also the basis of the number of clicked
advertisements, which in turn is necessary for a lead (Olbrich and Schultz, 2014). In the
sense of a consumer decision path, leads attributed to an activity depend on
corresponding clicks, and these clicks depend on corresponding impressions. We term
these dependencies as relations, in contrast to the hypotheses analysed in this study.
Relation 1 The higher the number of impressions created by an affiliate, the more clicks.
Relation 2 The higher the number of advertisements clicked, the more leads.
Figure 1 presents the research model of the present study.

Figure 1 Research model

messages followers

social media
H1 activities H2

textlinks H3

H4
banners
R1 R2
impressions clicks leads
H5
commission

H7a H7b H7c

length of
H6
partnership

business
focus

4 Methodology

4.1 Dataset and sample

A service company provided the data of an affiliate marketing campaign including
133 affiliates. The service company is the merchant. To establish the partnerships, the
company used two affiliate networks, undisclosed by request of the service company.
Both networks provide access to numerous affiliates spanning various industries. A six
months campaign period represents one advertising period for the service company. The
service company also deleted all affiliates which initiated fraudulent consumer actions.
The offered services are characterised by high involvement for the majority of the target
group. For example, high psychological (Cox, 1967) and financial (Rothschild, 1979) risk
potentially induce high involvement. Higher prices, for example, result in perceived
higher risk, and therefore higher involvement.
56 R. Olbrich et al.

To account for the affiliate activities on social networking sites, we registered the
number of messages on Twitter, so-called ‘tweets’, and the number of people following
the affiliates per day, so-called ‘followers’, during one advertising period. Twenty-four of
133 affiliates actively used Twitter during the study period. As our study also analyses
the effect of the length of partnership, the object of analysis is an affiliate month resulting
in a total of 600 observations including 107 affiliate months with social media activities.
Not all 133 affiliates were partnered over the entire six month period, thus the resulting
total of 600 observations. Sixty-eight affiliates were partnered for six months,
11 affiliates for five months, 11 affiliates for four months, six affiliates for three months,
18 affiliates for two months, and 15 affiliates for one month. The analysis takes the
overall length of partnership including the duration before the study period into account.
Over the six month study period, the 133 affiliates used a maximum of six text links
and four banners per month. This usage of advertising media resulted in a total of
611,081 impressions, 15,082 clicks, and 192 leads. In this case, a lead represents the
request for a service contract. For the service company, the number of leads is an
important measure as service contracts are their sales target which need to be signed in
writing. In addition, prospects take a considerable time to decide for or against the
service. During the study period, the affiliates posted a total of 2,672 tweets. Descriptive
data on the advertising spent and the commission amount are undisclosed, as requested
by the service company. The commission for each lead varied between c1, c2, and c3.
Table 1 show the variables used in the study. ‘Social media activities’ is a latent construct
referring to the number of messages and the potential reach of the social media activities.
Table 1 Description of variables

Variable Description
Affiliate Text links The average amount of different text links used by an affiliate
marketing per month
Banners The average amount of different banners used by an affiliate
per month
Commission The amount an affiliate receives for a lead in a given month
Length of The duration an affiliate is in partnership with the merchant
partnership in month
Business focus Binary variable of whether the business focus of an affiliate
corresponds with the merchant’s business focus
Impressions The number of ad impressions the affiliate creates through
text links and banners per month
Clicks The number of clicks per month induced by an affiliate
Social Social media Latent construct for the social media activities measured by
media activities messages and followers
Messages The average amount of existing messages by an affiliate per
month on the social networking site Twitter
Followers The average amount of existing followers that an affiliate has
on the social networking site per month
Transaction Leads Number of requests for a service contract per month induced
by an affiliate
 The effect of social media and advertising activities on affiliate marketing 57

The level of analysis is an affiliate month. We recorded a total of 107 affiliate months for
24 affiliates using Twitter. One hundred nine affiliates not using Twitter account for
493 affiliate months. Every affiliate month is based on daily affiliate data – a total of
12,081 data records. Due to technical errors of the ad measurement, 3.576 (29.6%)
impressions and 81 (0.6%) click data points were corrupted and had to be estimated. To
estimate the data points, the impressions and clicks were inferred from mean results of
the click-through rate and conversion rate as we checked for the number of leads. The
corresponding rates were derived from one of four bases for comparison. The four bases
aim to preserve as much information as possible.1 First, if data from the same ad medium
and the same affiliate are available for the same month, the estimation is based on the
other monthly data points. Second, the estimation is based on the same advertisement
from all other affiliates at the same point in time. Third, the comparative base is
constructed from the same affiliate and the same category of advertising media for the
same period of time. By the same category, we mean that data from either banner or text
links were used. Fourth, the basis of comparison was drawn from the other affiliates for
the same ad category and the same period of time.
Table 2 provides a data overview regarding descriptive statistics for the used
variables on a monthly basis.
Table 2 Descriptive statistics per affiliate month

Variable Mean SD Min Max

Text links .77 .68 .00 3.71
Banners .51 .62 .00 3.13
∗
Commission * * c1 c∗3
Length of 28.37 16.96 1 51
partnership
Business focus .66 .47 0 1
Impressions 1,018.47 4,554.85 .00 50,354.00
Clicks 25.14 62.03 .00 539.00
Messages# 1,815.08 3,554.94 .00 12,658.50
Followers# 529.97 835.91 .00 4,978.33
Leads .32 1.24 .00 18.00
Notes: *Undisclosed as requested by the service company; n = 600 affiliate months;
#
n = 107 affiliate months using social media.

4.2 Data analysis

With low theoretical information, the aim of the present study is not to compare
competing models, but to analyse the underlying relationship displayed in Figure 1.
Therefore, in accordance with Jöreskog and Wold (1982), the partial least squares (PLS)
approach was used to evaluate the proposed theoretical model. SmartPLS 2.0 was used to
perform the calculations (Ringle et al., 2005).
The inner structural model is accordingly given by the following equations:
58 R. Olbrich et al.

ηviews = γ1 ⋅ ξ social _ media _ activities + γ2 ⋅ ξtextlinks + γ3ξbanners + γ4 ⋅ ξcommission + γ5 ⋅ ξlength

+ γ6 ⋅ ξbusiness _ focus + ξ1
(1)
ηclicks = β1 ⋅ ηviews + γ7 ⋅ ξbusiness _ focus + ξ 2
ηleads = β 2 ⋅ ηclicks + γ8 ⋅ ξ social _ media _ activities + ξ9 ⋅ ξbusiness _ focus + ξ3

The measurement model for the social media activities is represented by:
xmessages = λsocial _ media _ activities , messages ⋅ ξ social _ media _ activities + δ1
(2)
x follower = λsocial _ media _ activities , followers ⋅ ξ social _ media _ activities + δ2

5 Results

First, we present the results for the affiliates using social media. The model is thus based
on 107 affiliate months. The model includes one multi-item variable that measures the
activities on one social networking site. All other variables are measured directly. Firstly,
we assess the measurement and the structural model for the affiliates using the social
networking site. Then, we compare these results to all other affiliates not using the social
networking site.
To assess the multi-item variable, we inspect the individual item reliability,
composite reliability, and discriminant validity. The factor loadings are 0.945 and exceed
the threshold level of 0.7. Indicator reliability for followers and messages are 0.994 and
0.712, respectively, and above the 0.7 threshold value. Composite reliability is assessed
by Cronbach’s α = 0.880 and Jöreskog’s ρ = 0.852 and both exceed the threshold of 0.7.
The latent variable also exhibits good convergence validity, as the average variance
extracted is 0.748 and exceeds the 0.5 level. Discriminant validity is also confirmed, as
both the Fornell-Larcker criteria and the cross-loadings criteria are fulfilled. Considering
the individual item reliability, composite reliability, and discriminant validity, the results
confirm the quality of the measurement. The component measures are reliable, internally
consistent, and have discriminant validity.
In the model for affiliates using social media, the explained variance R2 of
impressions, clicks, and leads are 0.446, 0.588, and 0.455, respectively. Following Chin’s
(1998, p.323) results, R2 can be considered moderate for all three endogenous variables
above Chin’s ‘moderate’ level of 0.33 and below the ‘substantial’ level of 0.67.
Naturally, a considerable amount of the explained variance can be attributed to the click
path from impressions over clicks to leads, in the sense of relations 1 and 2. Additional
demographic characteristics, for example, could not be considered because of privacy
concerns by the service company. Even if available, a merchant generally only has access
to ‘successful’ activities – consumer demographics are available only for those who
complete the request for the service contract.
We use the bootstrapping procedure to evaluate the statistical significance of the path
coefficients. The bootstrap estimation is run with 107 cases for 1,000 subsamples. The
path coefficients from social media activities to impressions and leads are both
significant, supporting H1 and H2. The path coefficients from text links and banners to
impressions are also highly significant and thus support H3 and H4. While the path
coefficient from commission to impressions is significant, it does not support the
expected direction. Furthermore, length of partnership showed no significant effect on
 The effect of social media and advertising activities on affiliate marketing 59

impressions. So, H5 and H6 were not supported. The lack of support for H5 is explained
by the lack of commission variance. Ninety-seven of 107 (90.7%) affiliate months had
the same commission amount. Regarding the effect of business focus, the analysis only
supports the relationship between business focus and clicks. Thus, we find support for
H7b, but not for H7a and H7c. So, a corresponding business focus between merchant and
affiliate may not increase the number of prospects reached, but may positively affect the
likelihood of prospects clicking the advertising media. Finally, both R1 and R2 show the
expected strong relationship. All significant path coefficients are greater than 0.1. Table 3
and Figure 2 summarise these results.
Table 3 Hypotheses summary for affiliates using the social networking site

Independent Dependent Expected Path

t-value p-value Support
variable variable sign coefficient
Social media act. Impressions +(H1) 0.250 2.140 0.05 Yes
Social media act. Leads +(H2) 0.182 1.801 0.10 Yes
Text links Impressions +(H3) 0.835 6.850 0.01 Yes
Banners Impressions +(H4) 0.709 5.282 0.01 Yes
Commission Impressions +(H5) –0.165 2.078 0.05 No
Length of partn. Impressions +(H6) 0.127 1.263 n.s. No
Business focus Impressions +(H7a) –0.098 1.063 n.s. No
Business focus Clicks +(H7b) 0.428 6.775 0.01 Yes
Business focus Leads +(H7c) –0.054 1.274 n.s. No
Impressions Clicks +(R1) 0.619 11.914 0.01 Yes
Clicks Leads +(R2) 0.634 9.732 0.01 Yes
Note: n.s. = not significant.
Effect size f2 was calculated to assess whether a predictor variable exerts a substantial
influence on the dependent variable. The higher the f2, the greater the effect of the
predictor. Following Cohen’s approach in multiple regression, Chin (1998, p.317)
suggests 0.02, 0.15, and 0.35 for whether a predictor variable exerts a small, moderate, or
large effect. To assess the predictive relevance of the model, the Stone-Geisser criteria
are calculated for the dependent constructs Q2 and the q2 for the model relationships. An
omission distance of D = 7 was chosen for the blindfolding procedure. A value above 0
generally indicates the predictive relevance. For q2, the same categories are used as for f2.
Q2 for impressions, clicks, and leads is 0.388, 0.584, and 0.461, respectively. Table 4
reports the f2 results alongside the q2 results. Except for the q2-value for social media
activities on impressions, all other effect sizes and predictive relevance values confirm
the hypotheses results. All considered statistics indicate an overall good fit of the model.
We also computed the total effects of the exogenous variables on the number of leads.
The statistical significance is calculated by bootstrapping with 107 cases for
1,000 subsamples. Table 5 lists the total effects.
For the effect of social media use, the empirical results indicate support for both the
direct effect on impressions and the indirect effect on leads. The direct relationship
between social media and affiliate impressions is significant and has a moderate effect
size. However, the predictive relevance value was negative. The indirect effect (social
media activities → leads) is significant at the level α = 0.10. In this case, both effect size
60 R. Olbrich et al.

and predictive relevance value are above Chin’s 0.02 small category. Additionally, the
total effect of social media activities on the number of leads induced by affiliates who use
the social networking site is significant at the level α = 0.05 and has the second highest
path coefficient of all exogenous variables. Overall, the empirical analysis supports a
positive interaction effect of social media activities on affiliate marketing.

Figure 2 Results for affiliates using the social networking site

messages followers

social media
.250** activities .182*

textlinks .835***

.709*** R2 .446 R2 .588 R2 .455

banners
.619*** .634***
impressions clicks leads
–.165
commission

–.098 .428*** –.054

length of .127
partnership

business
focus

Notes: ***p < .001, **p < .05, *p < .10.

Table 4 Effect sizes and predictive relevance values for affiliates using the social networking
site

Impressions Clicks Leads

2 2 2 2 2
f q f q f q2
Social media act. 0.101 –0.015 - - 0.057 0.054
Text links 0.415 0.386 - - - -
Banners 0.329 0.201 - - - -
Commission 0.043 0.011 - - - -
Length of partnership 0.022 –0.067 - - - -
Business focus 0.010 –0.082 0.443 0.435 0.004 0.004
Impressions - - 0.929 0.913 - -
Clicks - - - - 0.574 0.591

Beyond the separate inspection of the research model, merchants could be interested in
differences between merchants using and not using the social networking site. Thus, we
used data from the same affiliate marketing campaign over the same period to calculate
the same model without the social media use and then compare the results by multi-group
analysis.
 The effect of social media and advertising activities on affiliate marketing 61

Table 5 Total effects for affiliates using the social networking site

Total path t-value p-value

Social media act. 0.280 2.154 0.05
Text links 0.328 4.758 0.01
Banners 0.279 4.518 0.01
Commission –0.065 1.979 0.05
Length of partnership 0.050 1.242 n.s.
Business focus 0.179 3.191 0.01
Note: n.s. = not significant.
The model on affiliates not using the social networking site draws on 493 affiliate
months. In this instance, all variables are directly measured, so that no multi-item
measurement needs to be evaluated. Again, we assess the structural model by inspecting
the path coefficients, explained variance, effect sizes, and predictive relevance.
R2 for impressions, clicks, and leads is 0.212, 0.482, and 0.378, respectively. The
explained variance of impressions is slightly above Chin’s (1998) weak level and R2 for
clicks and leads exhibits a moderate to substantial level. All three R2 are below the results
in the social media model. For the statistical significance of the path coefficients,
bootstrapping was used drawing 493 cases for 1,000 subsamples.
In contrast to the model including the social media affiliates, commission and length
of partnership have a positive significant effect on the number of impressions. However,
the path coefficient length of partnership → impressions is below 0.1 which is generally
considered a threshold value. Table 6 and Figure 3 summarise the results for this model.
Table 6 Path coefficient summary for affiliates not using the social networking site

Dependent Expected Path

Independent variable t-value p-value Support
variable sign coefficient
Text links Impressions +(H3) 0.440 9.614 0.01 Yes
Banners Impressions +(H4) 0.517 11.344 0.01 Yes
Commission Impressions +(H5) 0.180 5.221 0.01 Yes
Length of partnership Impressions +(H6) 0.076 1.953 0.10 Yes
Business focus Impressions +(H7a) 0.047 1.156 n.s. No
Business focus Clicks +(H7b) 0.237 7.570 0.01 Yes
Business focus Leads +(H7c) –0.034 1.284 n.s. No
Impressions Clicks +(R1) 0.644 25.233 0.01 Yes
Clicks Leads +(R2) 0.623 19.892 0.01 Yes
Note: n.s. = not significant.
Also, effect sizes f2 and predictive relevance values Q2 and q2 are calculated. Omission
distance for the blindfolding procedure was again D = 7. Q2 for impressions, clicks, and
leads is 0.213, 0.478, and 0.377, respectively. Table 6 reports the f2 results alongside the
q2 results. The effect sizes and predictive relevance values confirm the earlier results of
the path coefficients (see Tables 6 and 7).
62 R. Olbrich et al.

Figure 3 Results for affiliates not using the social networking site

textlinks .440***

.517*** R2 .212 R2 .482 R2 .376

banners
.644*** .623***
impressions clicks leads
.180 ***
commission

.047 .237*** –.034

length of .076*
partnership

business
focus

Notes: ***p < .001, **p < .05, *p < .10.

Table 7 Effect sizes and predictive relevance values for affiliates not using social media

Impressions Clicks Leads

f2 q2 f2 q2 f2 q2
Text links 0.105 0.109 - - - -
Banners 0.147 0.151 - - - -
Commission 0.037 0.038 - - - -
Length of 0.007 0.011 - - - -
partnership
Business focus 0.003 0.004 0.108 0.106 0.002 0.002
Impressions - - 0.799 0.791 - -
Clicks - - - - 0.582 0.578

Table 8 presents the total effects of the exogenous variables on the number of leads.
The statistical significance is calculated by bootstrapping with 493 cases for
1,000 subsamples.
Table 8 Total effects for affiliates not using the social networking site

Total path t-value p-value

Social media act. - - -
Text links 0.176 7.462 0.01
Banners 0.207 9.704 0.01
Commission 0.072 4.329 0.01
Length of partnership 0.031 1.887 0.10
Business focus 0.133 4.248 0.01

As statistics show an overall good fit for both models, effects of the endogenous variables
are compared by testing for significant differences in path values. Table 9 provides an
overview of the corresponding t-tests.
 The effect of social media and advertising activities on affiliate marketing 63

Table 9 Test results between the two affiliate groups

Using social media Not using social media

Path Standardised Standard Standardised Standard t-value p-value
coefficient error coefficient error
Text links → 0.833 0.125 0.446 0.046 3.370 0.01
impressions
Banners → 0.719 0.146 0.520 0.046 1.677 0.10
impressions
Commission → –0.146 0.078 0.179 0.037 3.712 0.01
impressions
Length of partn. → 0.119 0.103 0.075 0.040 0.449 n.s.
impressions
Business focus → –0.103 0.091 0.048 0.042 1.527 n.s.
impressions
Business focus → 0.429 0.065 0.235 0.032 2.582 0.01
clicks
Business focus → –0.054 0.043 –0.034 0.027 0.322 n.s.
leads
Business focus → 0.174 0.054 0.131 0.032 0.582 n.s.
leads (total effect)
Impressions → 0.619 0.053 0.645 0.025 0.455 n.s.
clicks
Clicks → leads 0.622 0.066 0.622 0.031 0.008 n.s.
Note: n.s. = not significant.
Comparing affiliates using and not using the social networking site, the results indicate
some significant differences. Even though the path from business focus to clicks is
significantly different in the models, the total effect of business focus on the number of
leads is not. The significant difference in commission on impressions is due to the
one-sided distribution in the model of affiliates using social media as noted earlier. The
primary differences between affiliates using and not using the social networking site
seem to correspondent with the use of different advertising media. Both text links and
banners show differences between the two groups. Further research may study this result
in more detail.

6 Discussions

The study examined the influence of external information in the form of social media, on
an affiliate marketing campaign. By using an additional channel, such as a microblogging
social network, affiliates may actively address and reach existing and new consumers and
thereby may move some part of the target audience from their own website to social
media. As such, the target audience consumes social media messages and, in turn, if a
social media message evokes the interest of an individual, the propensity to engage with a
merchant’s advertisement on the affiliate’s website increases. Furthermore, new
consumers may contribute to the results of the affiliate marketing campaign by increasing
the reach and exposure of the advertising media and thus influencing the number of
64 R. Olbrich et al.

impressions, clicks, and leads. Based on the direct and indirect effect of external
information, merchants may proactively engage their affiliates to incorporate social
media activities. However, the increase in social media activities may also extend
towards competitors of the merchant, thus creating more competition and potentially
reducing the direct and indirect effects of social media. Consequently, merchants should
consider whether and how many competitors are present on an affiliate website. This
proactive management may also lead to different arrangements between the merchant and
the affiliate.
The study also considers internal information, such as affiliate marketing campaign
data. Using multiple banners and text links increases the variety of used ad media,
thereby reducing wear-out effects, and raising advertising impact. Consequently,
additional advertising media create more impressions (and potentially views) and in turn
more clicks and leads. The commission amount variance was only sufficient for affiliates
not using social media. For these affiliates, the commission amount positively affects the
number of ad impressions, clicks, and leads. Results for length of partnership were not
significant at the α = 0.5 level, suggesting that a longer partnership does not affect
advertising performance. However, merchants are advised to integrate qualitative
feedback from affiliates to better understand affiliate motivation. A congruent business
focus leads to a positive increase in the number of clicks. If the affiliate business focus is
congruent with services offered by the merchant, users on the affiliate website are more
likely to engage with the advertising media. Thus, a congruent business focus may
provide access to an already activated target group. On the other hand, a congruent
business focus may also imply a more competitive situation, as competing offers may be
present at a merchant’s website. Thus, the users are the more engaged the more they are
interested in competing services – especially if they are highly involved as the majority of
the target group in the case of the service company. This may also explain that business
focus did not significantly affect the number of leads. The potential different effects of
congruence and non-congruence in business focus between the affiliate and merchant
asks for awareness of managers and further research.
Overall, the present study contributes to the affiliate marketing literature in three
ways. Firstly, our study analyses the number of used ad media, commission amount,
length of partnership, and business focus as affiliate marketing campaign variables. The
results demonstrate the significance of advertising media, commission amount, and
business focus. Length of partnership only showed some relevance for affiliates not using
the social networking site. This result should be investigated further. The use of multiple
advertising media creates more impressions and overall ad exposure. However, affiliates
have to consider the right amount of ad media they can show without annoying their
users. Merchants, in turn, have to provide different types of ad media not only to
accommodate different affiliate website designs but also because they need to enable
affiliates to reduce wear-out effects by alternating ad design and combining advertising
types. The findings on business focus are in line with earlier results (Lohtia et al., 2003;
Lee and Thorson, 2009; Papatla and Bhatnagar, 2002) and thereby indicate the
importance of congruent business focus in contrast to the current practice (Fox and
Wareham, 2010). As affiliates bear the commercial (advertising) risk, they also have to
ensure the congruence between the merchant’s advertisements and their website content,
although this is no guarantee for more customers. Commission amount also positively
affects the number of leads. A follow-up question is whether the commission amount also
impacts the affiliate’s effort (Hu et al., 2016).
 The effect of social media and advertising activities on affiliate marketing 65

Secondly, this study introduces the multichannel communication aspect into the
affiliate marketing literature. Specifically, social media has a potential influence on the
outcome of an affiliate-merchant relationship. In the model of affiliates who employ
microblogging, social media activities showed a significant effect on the number of leads
generated by the affiliates. Affiliates predominantly use social media to engage with their
target audience. Especially if an affiliate’s business focus is congruent with the
merchant’s, affiliates may employ social media messages to draw their audience’s
attention to the relevant merchant. All in all, this study points out the importance of
considering multichannel effects in affiliate marketing. In this way, the study also adds to
the multichannel literature by inspecting affiliate marketing and social media.
Multichannel research in social media has focused on comparing various social media
(e.g., Dhar and Chang, 2009; Schweidel and Moe, 2014; Stephen and Galak, 2012) as
well as the combination of social media and other media, such as print (e.g., Yu et al.,
2013), e-mail (e.g., Kumar et al., 2016), and television (e.g., Onishi and Manchanda,
2012; Kumar et al., 2016; Yu et al., 2013). Affiliate marketing is under-researched in this
line of literature. So far, affiliate marketing has only been mentioned as one potential
online channel, in combination with organic and paid online search, e-mail marketing,
and display advertising, to study multichannel consumer behaviour (Klapdor et al., 2015)
and attribution modelling (Anderl et al., 2016). Thus, we provide additional insights into
the multichannel effects in the affiliate marketing context and point out the need to
account for multichannel effects.
Thirdly, the present study adds to the discussion of social media as an information
source (e.g., Wirtz et al., 2013; Schultz, 2016). Merchants have to consider internal and
external data when engaging in affiliate marketing. Internal data provided by tracking
technology refer to the direct results of the affiliate-merchant relationship, such as the
number of impressions, the number of ad media used, and the commission amount.
External data provide additional information for a merchant to obtain a more detailed
picture of the affiliate activities and performance. The number of followers also adds to
the discussion of the applicability of social media metrics (Aichner and Jacob, 2015;
Barger and Labrecque, 2013; Peters et al., 2013). Specifically, the number of followers as
a measure of reach has been questioned by some practitioners and researchers (Avnit,
2009; Cha et al., 2010), while others consider this a viable variable (Hennig-Thurau et al.,
2015; Rui et al., 2013; Zhang et al., 2011). Our dataset provides some evidence for the
viability of followers in social media. Future research may examine this aspect further.

7 Limitations and future research

The study provides insights into the effect of social networking activities on affiliate
marketing campaigns. Even though the study was conducted carefully in accordance with
and appropriately for its aim, there are inevitably some limitations. Future research
should therefore bear in mind these limitations.
The dataset represents one service characterised by high involvement for the majority
of the target group. As such, the results provide some insights for similar industries in
which consumers compare offers, consider information, and take the time to decide, as,
for example, finance or insurance. Future research should confirm the results and extend
the focus to other services and products.
66 R. Olbrich et al.

Social media activities were recorded by the number of messages and the number of
followers. Both numbers represent relevant activity metrics and have been used in
previous research (e.g., Hennig-Thurau et al., 2015; Schultz, 2016; Zhang et al., 2011).
Beyond these quantitative metrics, we plan to extend our research to include qualitative
tweet characteristics, for example, to capture a tweet’s content.
Although the service company did not select its affiliates based on social media
activities (only 24 of 133 affiliates actively use social media), it is possible that the
affiliate selection process yielded those 24 affiliates whose level of social media activities
results in more impressions and leads. Future research may additional verify the selection
process.
The present study focuses on one type of social networking site, a microblogging
service. Social media is, however, decentralised. One consequence is for example that
different social media channels address different target groups (Barger and Labrecque,
2013). Researchers should thus extend their approaches to multiple social networking
sites, considering different types of services as well as the interaction between these
types.
This study considers the length of a partnership between the merchant and an affiliate
and the object of analysis is an affiliate month. However, the study analyses only one
advertising period of the service company. Future research could consider a longitudinal
approach and study how changes in social media strategies may affect affiliate marketing
campaigns. Length of partnership was significant at α = 0.1 only in the case of affiliates
not using the social networking site. As the findings are inconclusive, future research
should further inspect this effect. One aspect of particular interest is whether a longer
partnership demonstrates signs of fatigue and wear-out effects or reflects a continuously
and actively managed partnership. Consequently, merchants have to consider how they
may motivate their affiliates in the long-term.

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 The effect of social media and advertising activities on affiliate marketing 71

Notes
1 The authors of the study have listed an example estimate in Appendix.

Appendix

Four exclusive approaches are used that utilise different rate per month to estimate the
missing values. From Approaches 1 to 4, as much information as possible is preserved.
All calculations are conducted on the granular (daily) level for a whole month.
Approach 1 Using the click-through rate of the same ad per month from the same affiliate

Estimation for Affiliate 1

Click-through-rate
Ad of Ad Estimated ad
Day Clicks (not counting the four
Affiliate 1 impressions impressions
clicks of June 4)
Textlink 1 June 1, 2014 10 3 - 0, 2 (24/120)
June 2, 2014 10 3 -
June 3, 2014 10 2 -
June 4, 2014 0 4 20 (4/0, 2)
June 5, 2014 20 6 -
June 6, 2014 30 4 -
… … … -
June 30, 2014 40 6 -

The process is identical for clicks, for which the estimation is based on the conversion
rate (leads/clicks) instead of the click-through rate (clicks/impressions). We used
Approach 2 before Approach 3 because the advertisement is assumed to have a greater
effect than the context of the affiliate.
Approach 2 Using the click-through rate of the same ad per month from another affiliate

Estimation for Affiliate 1

Click-through-rate of
Ad of Ad Estimated ad
Day Clicks Textlink 1 of
Affiliate 1 impressions impressions
‘Affiliate 2’
Textlink 1 June 1, 2014 0 3 12 0, 25
June 2, 2014 0 3 12
June 3, 2014 0 2 8
June 4, 2014 0 4 16
June 5, 2014 0 6 24
June 6, 2014 0 4 16
… … … -
June 30, 2014 0 6 24
72 R. Olbrich et al.

Approach 3 Using the click-through rate of a different ad per month from the same affiliate

Estimation for Affiliate 1

Click-through-rate of
Ad of Ad Estimated ad
Day Clicks ‘Textlink 2’ of
Affiliate 1 impressions impressions
Affiliate 1
Textlink 1 June 1, 2014 0 3 20 0, 15
June 2, 2014 0 3 20
June 3, 2014 0 2 13, 33
June 4, 2014 0 4 26, 66
June 5, 2014 0 6 40
June 6, 2014 0 4 26, 66
… … … -
June 30, 2014 0 6 40

Approach 4 Using the click-through rate of a different ad per month from another affiliate

Estimation for Affiliate 1

Click-through-rate of
Ad of Ad Estimated ad
Day Clicks ‘Textlink 2’ of
Affiliate 1 impressions impressions
‘Affiliate 2’
Textlink 1 June 1, 2014 0 3 30 0, 10
June 2, 2014 0 3 30
June 3, 2014 0 2 20
June 4, 2014 0 4 40
June 5, 2014 0 6 60
June 6, 2014 0 4 40
… … … -
June 30, 2014 0 6 60