When you start an affiliate program, in order to track performance effectively and get the most out of your campaign, it’s vital that KPIs are established ahead of time.
Once you have established which types of affiliate sites are right for your business with clear goals to work towards, you should measure the performance of the program using a blend of KPIs to make decisions about the future of your strategy based upon performance compared to these targets.
In this article, we discuss which KPIs we recommend you track to measure your affiliate marketing, what they can help you identify and which tools you can use.
What affiliate marketing metrics to track
There are a number of metrics that can be tracked to measure the effectiveness of your affiliate marketing strategy, including:
By tracking the number of clicks on affiliate links through to your site you can identify which publishers are sending the most and least traffic to your site. This can help you to decide whether or not to continue working with certain publishers.
You don’t only want to know how many clicks you’re getting from the websites though, you’ll also want to link this to sales so you can identify any publishers that are driving a high number of clicks but low or no sales, as this could indicate a number of issues, such as:
- Your affiliate tracking is inaccurate.
- The audience isn’t aligned to your product/service.
- The ad promoted and the landing page do not match what the user thought they were going to land on
Aside from the tracking issue, if you discover one of the other is more likely to be accurate, you can make a decision to stop working with the publisher.
Tracking the number of sessions driven on your website through affiliate marketing will allow you to see how well the affiliate channel works for you in comparison to other digital marketing channels in terms of driving traffic.
You can also track sessions driven per publisher to evaluate which sites drive the most traffic for you and are worth investment and which are perhaps worth letting go.
Tracking the number of orders can also be a way to identify fraudulent transactions. For example, if you are seeing a large amount of revenue, but a small number of orders from a certain publisher, it could indicate that they are bulk buying which can be considered fraud and could need to lead to their removal from the programme.
Affiliate marketing is a performance-led channel and therefore revenue is an extremely important metric track. You want to ensure that affiliate marketing is driving revenue otherwise it is not worth the investment and it might not be an appropriate channel for you to be running.
COS (Cost of sale)
Because affiliate marketing is commission based and therefore every sale comes with a charge to publishers, you need to ensure that you are evaluating COS to measure how much you are paying out for each sale.
This is extremely important if you have publishers on differing commission rates as their individual COS’ will vary and should be continuously evaluated.
CVR (Conversion rate)
Conversion rate is a metric that should be tracked both on a programme and individual publisher level. If you find that an affiliate or affiliate type is driving lots of clicks, but no orders, this will affect your overall CVR and point to a problem with an individual affiliate rather than with your entire program.
Similarly, if an individual affiliate is generating a higher CVR than your average, this highlights that they are driving appropriate traffic to your site and investment in this publisher should be considered.
Tracking the number of active affiliates is extremely important as it will enable you to ensure that your programme is as streamlined and easily managed as it can be. Active affiliates are publishers driving clicks and or sales.
If you have a large number of inactive affiliates, it suggests that you are not recruiting the correct affiliates or engaging with them enough. This can provide learning towards better management of the program.
Individual publisher performance
Performance at an individual publisher level should be tracked in order to understand whether or not to continue working with a particular publisher.
However, the type of publisher should also be considered when looking at individual publisher performance, as voucher and cashback sites are most likely to be driving the highest revenue for your programme if these are live, due to them predominately being the last click in the customer journey.
There’s a growing view of revenue from the affiliate channel being non-incremental for brands and just ‘piggybacking’ off the revenue that would have been generated with or without the affiliate. This is primarily the case for affiliate publishers who, 9 times out of 10, are the last click in the user journey (e.g. browser extensions).
To enable you to fully evaluate if a publisher is driving incremental revenue or not, you could trial exposure placements with them such as newsletter sends wherein you are able to investigate and attribute sessions and revenue directly to placements.
Affiliate marketing enables you to validate your own sales after your return period has finished. It is worth monitoring the decline rate for publishers as a high return rate could signal that they are promoting incorrect benefits/information about your brand/service/product and skewing how much revenue they are contributing.
Now that you know which KPIs to track, you need to decide which blend of tools will allow you to get the most overall view of these.
How to Track Affiliate Marketing
Affiliate marketing performance can be tracked using a number of tools.
Although a performance-based channel, affiliate marketing does have some cross-overs sometimes being more of a brand awareness-building proposition, primarily with content and influencer exposure. Therefore, performance can sometimes not always be tracked in the ways of the more traditional performance-based marketing channels such as paid search. An uplift in overall revenue and sessions should be measured when running content and social exposure.
With content and influencer affiliate partners, they are often the first or middle click in the journey. To ensure that brands are attributing and rewarding partners for revenue they have contributed to, you can look at and work towards different attribution models in Google Analytics.
Through the affiliate network
Affiliate marketing performance is often tracked straight through the affiliate network (e.g. Awin, Webgains etc.), with all KPIs pulling through the network. The benefit of tracking straight through the affiliate network is that you are able to see all of the publisher information in one place and some even enable you to communicate with publishers directly through the network.
However, affiliate networks track on a last-click basis, which may result in over-reporting of revenue if you are running other marketing channels.
Google Analytics enables you to look at the affiliate channel performance in comparison to your other performance marketing channels thus highlighting which are the most efficient for your goals.
Google Analytics is a great way to track affiliate sales as it enables you to de-dupe sales. You can also set up your programme terms and conditions to ensure that you only pay out for sales that have been de-duped during the validation process so that you are not paying out twice for the same sale if you are running other channels.
Google Analytics allows you to track many of the metrics mentioned above such as sessions, revenue and CVR. You can also filter out by ‘source’ and ‘campaign’ in GA to view individual publisher data.
A key thing to note here though is that some publishers have different naming conventions when looking at them in an affiliate network vs. GA. Individual publishers should be able to advise you if this is the case.
Whichever combination of tracking methods and metrics you decide on, it is necessary to track affiliate marketing campaigns to ensure that you are evaluating the benefits of the channel and utilising publishers in the most effective way for you.
However, as discussed, you should not only look at last-click performance as this can ignore the impact of more awareness-driving publishers and would be better to use a mix of KPIs and tools to get a more overall picture.
Contact us to find out more about how Modo25 can assist with your affiliate marketing program and setting KPIs. Check out our other blogs for more information on what affiliate marketing is and how to get started.