Long ago Forrester Research had forecast that the affiliate marketing spending would reach close to 4 $ billion in terms of annual revenues in 2014 alone in the U.S. Albeit its explosive growth around the globe, many marketers are still struggling to exactly measure the ROI and effectiveness of their affiliate marketing strategies. So today, we are listing some essential practices that will help you in measuring the return and success of affiliate marketing.
Before starting an affiliate marketing program, it is crucial for you to know and understand what exactly you are trying to achieve from this affiliate campaign. Determining what actually you want is a basic thing in finding the key performance indicators (KPIs) that can go together with your program main goals. Leads, CPS (Cost per acquisition), conversions, revenue, and conversion rate are the most often adopted KPIs for affiliate marketing.
Not everyone’s KPIs should be revenue based, but they need to be measurable so that you can easily find what’s working and what’s not and modify your strategy accordingly. Some of the fine examples of non-revenue based KPIs include social media platforms (likes, shares, and comments) and traffic of first-time visitors.
Tools for Measuring KPIs
Once you have found out your KPIs, now you need the right tools to measure them. In conventional affiliate marketing, the sale is accounted only to the last click before a conversion takes place. The affiliate partner who is accountable for a driving a visitor to the merchant’s website gets a fixed amount of price as a commission for the sale. But, always affiliate isn’t the closer in the conversion scenario – They can even be an advancer or opener in that purchasing process, right from creating product or service awareness to the purchasing point.
Advanced attribution will let you track, measure and report your affiliate campaigns. You can view and analyze the impact and effectiveness of all your partners depending on their complete contribution to close a conversion by closely observing algorithmically attributed performance measures through a marketing dashboard or via appropriate performance reporting. In order to get better results, affiliate partner performance needs to be observed and analyzed frequently.
Optimization for Program Effectiveness
To add exact and ongoing metrics, affiliate program optimization is essential to double your affiliate marketing effectiveness. As marketers have no control over the number of incoming visitors from affiliates, it is food to identify the right affiliate partner is important. One of the main advantages of attribution is that it not only allows you to find your ideal portfolio of affiliate partnerships as well as to determine what and which kind of innovative messages are offering the most conversions.
Affiliate marketing could be the right fit for you to boost your affiliate sales and affiliate management system but it can also be a disaster if not measured and analyzed properly. With some good planning, right measurement tools and metrics, proper optimization, you can drastically enhance your chances of providing an effective affiliate marketing program.