9 Affiliate Performance Metrics and What They Say About Your Program -
A proper affiliate marketing funnel, similar to all online channels, offers an insight into program performance by analyzing various indicators. The measures that are used to measure results from affiliate sales are similar to other online metrics that may have the same name. However, in the context of affiliate marketing, they could be a completely different narrative about the health of a program.
The integration of affiliate channels in your other marketing activity dashboard will assist you in define not just affiliate marketing activities but may help you rethink the other marketing strategies you can use online to incorporate the model into a performance-based one as well. This is a brief overview of the key metrics you must monitor and analyze in order to gauge your affiliate marketing programs' effectiveness.
1. Impressions
The number of impressions indicates your product's level of exposure among affiliates' promotional channels. An extremely high number of clicks or impressions correlated to a small number of sales or clicks could signal faulty affiliate tracking, a lack of relationship between affiliates' audience and your product or services, or an inconsistent relationship between the advert that is promoted and the landing website that your ad redirects users to.
Please note that not all software or ad types allow reports on impressions. It may not be a useful indicator for your campaign except if you intend to reward some affiliates based upon impressions.
2. Clicks
The number of clicks is an indication of the interaction between the impressions given by your adverts and how the audience interacts with the displayed banner or link. They are a gauge of engagement with the material on which the ads related to it are displayed. In essence, a click could be equated with the user "taking another step" toward the end goal of a sale or the action.
3. Actions
The amount of actions performed is representative of the total amount of conversions in the affiliate program. Sales are the most common measurement of conversion, however other actions like lead generation, trial downloads or even lead generation may also be part of a program and count as actions. When affiliates do not drive the actions of their affiliates, it's important to know why. A lack of actions for your entire program might indicate integration or tracking issues and the affiliates who don't drive action may offer a chance to boost your program's performance by addressing their requirements.
4. Conversion Rate
The conversion rate of affiliate marketing is typically measured by subdividing the total number of steps by the number of clicks resulting in the percentage. As one of the more highly used performance indicators for e-commerce, the conversion percentage of affiliate traffic will indicate the effectiveness of affiliates, specific ads as well as ad types and campaigns. The rates of conversion above 10% are usually considered to be extremely high. They could indicate that an affiliate's website is in a close relationship to your target market. However, sometimes, it may indicate that an affiliate is using unorthodox marketing strategies.
5. Cost
Cost in the most fundamental sense within affiliate marketing is the percentage of your commission you pay to affiliates in relation to the action they create. The metric can be broken down into different silos depending on the platform that you choose to use. Therefore, it's important to know how the expenses relate to the particular report you are viewing. Sometimes, the calculated bonus, platform fees, ad serving charges and the other expenses associated with affiliate marketing aren't included in sales reports that are purely based on numbers, so be sure to check and know the full cost of your system so that you are aware of how each expense fits into the total cost of your program. If your platform costs or serving costs are too expensive they could impact the commission amounts you are allowed to provide or the types of ads included in your plan.
6. Revenue
Revenue for affiliate marketing is similar to revenue generated by any other channel of marketing and is defined by the numbers of sales that are tracked in the system. Going another step further, the incremental revenue refers to additional revenues attributable to a specific channel. Although it is difficult to identify and sort out with one hundred percent assurance, it is especially true for marketing campaigns that include multiple touchpoints from various different channels. The ability to determine the value of incrementally your activities to at least some degree plays a crucial part in determining the most important tasks to your marketing mix and the determination of which kind of marketing is most effective for the specific task.
7. Active Affiliates
Most of the time an active affiliate generated a click, an action, or both. Certain programs employ one variant of these criteria to create outreach programs that help bring affiliates back to an active status. Especially in cases where an affiliate was previously active but has recently been inactive, proactive outreach to understanding the reasons for this change and how an affiliate might be encouraged to move back to active status will help keep your program in a healthy state. You might even get some valuable feedback from affiliates about the competitive rates of commissions or lack of resources.
8. Affiliate Mix
Traditionally, affiliates are grouped according to how and how they interact with their audience to bring traffic and revenue on your website. The most common categories are influential people, creators of content, media sites such as deals and coupons targeted search, email marketing, bloggers or even affiliate networks working as affiliates subordinate to. By keeping your affiliates in groups you can allow them to message them more effectively with relevant and timely messages tailored to their requirements, as well as let you identify areas where you may want to expand or reduce the number of affiliates you sign up for certain categories to maximize your affiliate marketing mix.
9. Returned Orders
Returned orders simply refer to the number of returned sales within your system. The return rate of returned orders from affiliate traffic ought to not be that different than your general return rate. If you find an affiliate that has a greater than the average rate of return on the sales they have made, investigate how they are promoting your product and driving customers to your site. You may find you are able to see that they exaggerate the benefits of your products so your clients who are referred to them by them are disappointed, or you may be able to determine that they're using illegitimate practices to generate revenues and ought to be removed from your affiliate program.
