Referral IDs are generally placed into a query string attached to a URL. In this way, a link can identify itself to the page it arrives at.
e.g. This Link would add the referral string ?RefID=self to the URL, and could be detected in the server logs, picked up by a dynamic script, or otherwise recorded for tracking.
This was once the absolute classic method for tracking online referrals. Unfortunately, it has now become questionable, as some search engines are able to pick up dynamic links and can crawl and index URLs that contain query strings.
There are a couple of hitherto unknown risks that could now surface. The first is that a search engine might index a URL with a referral string, sending all its referrals to the URL with an incorrect Referral ID.
The second risk which is only a possibility, is that search engines might fail to recognise such links as being to the same page, and decide that you had too much identical content. At the very least, it might again weaken link popularity
Where you decide to use referral IDs to track the results of a campaign, the effectiveness can be greatly increased by use of dynamic session tracking to follow the referred visitor's path through your website.
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Perhaps the best way forward is to call 020 8405 6418, take advantage of my free hour's consultation to evaluate your site and to discuss improvements. You be the judge on whether or not I can help.