How to measure your affiliate performance?

Planning: Get the KPIs Right


Before starting an affiliate campaign, it’s important to determine the KPI's. With an affiliate marketing campaign, or strategy even, it's important to know what you want to accomplish. After having set the goal objective the KPI's can be determined that go along with the objectives. The KPI's help you in ask yourself, “What am I trying to achieve from this campaign?” Knowing what you want to accomplish is fundamental to determining the key performance indicators (KPIs) that go along with your program objectives. The most commonly adopted KPIs for affiliate marketing are leads, conversions, conversion rate, cost per acquisition (CPA), revenue, and return on ad spend (ROAS). While your affiliate marketing KPIs don’t need to be revenue or cost-based, they should be measurable so you can easily identify what’s working, what’s not, and adjust your strategy accordingly. Good examples of non-revenue or cost-based KPIs include new traffic (first-time visitors), social engagement (likes, shares, comments), purchase intent (store locator, shopping basket activity), and more.


Measuring: Watch for Trends


Once you’ve identified your KPIs, you need the right tools to measure against them. Traditionally in affiliate marketing, the sale is credited to the last click prior to a conversion. The affiliate partner responsible for driving a user to an advertiser’s website receives a commission for the purchase. But affiliates aren’t always the “closer” in the consumer conversion funnel – they can also be an “opener” or “advancer” within that process, creating awareness for a product or service and initiating purchase intent.


Advanced attribution enables you to track, measure and report against your affiliate marketing campaigns, as well as all the marketing touches that contributed to a conversion, such as organic search and direct visits to your website. By monitoring algorithmically attributed performance metrics via a marketing dashboard or through timely performance reporting, you can view and analyze the effectiveness of all your affiliate partners based on their true contribution to a conversion.

To achieve the best possible results, affiliate partner performance should be monitored and evaluated regularly. To set your team up for success, consider creating monthly or quarterly targets associated with the KPIs you identified above. Setting targets not only helps your affiliate marketing team become more goal-oriented, but also enables you to uncover patterns in partner performance, identify problem areas, and take corrective action if required.


Optimizing: Improve the Performance


In addition to accurate and ongoing measurement, program optimization is critical to maximizing your affiliate marketing effectiveness. Since marketers typically have little control over the quantity and quality of incoming traffic from affiliates, identifying the “right” affiliate partners is crucial. A key benefit of attribution is that it not only enables you to determine your ideal portfolio of affiliate partnerships, but also to identify which creative messages and offers are producing the most conversions. Some optimization efforts can happen relatively quickly (e.g. creative rotation changes can take just a few minutes), while others may take longer to properly execute (e.g. replacing your least productive affiliate partners or networks with new ones.)

Affiliate marketing might be the perfect match to give your sales and lead generation engine a much-needed boost, but it can be a herculean effort if not measured and optimized properly. With some detailed up front planning, proper measurement tools, and informed optimization, you can significantly improve your chances of delivering a dynamic and impactful affiliate marketing program.

Here are some examples of common key performance indicators (KPIs):

  • Revenues or sales: How much money you made in total.
  • Conversion rates: What percentage of people an affiliate encouraged to visit your website who subsequently purchased goods or services.
  • Cost per sale: How much you had to spend to make each sale happen.
  • Return on advertising spend: How much money you spent on a campaign and what your subsequent margin was.
  • Average order value: How much an average order is worth.
  • Affiliate behaviour: Understanding how many affiliates you have, how active they are and how much revenue each one generates.
  • Average earnings per click: This figure can be calculated by dividing the total commission an affiliate earned by the number of clicks they generated to help you see whether they are providing value for money.

Another newer KPI that is currently only used by about a quarter of advertisers is customer lifetime value – the idea here is to track not just sales acquisition-related data from the affiliate side, but to combine it with post-sales information from the brand side, generally over a 12-month period. Such information includes churn rates, how much each person spent on their site and whether they were a new or returning customer and taken together shows just how valuable, or not, a given customer is to the business.


What are the critical success factors for getting it right?


Forward planning is vital if brands want to effectively measure and act on the performance of their affiliates. So this means comparing any data against a 12-month strategic plan in order to ensure that activity is on track. As Hallam points out: “You’ve got to take your affiliate marketing as seriously as you would business planning.”

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