You only have one shot at a first impression. But when it comes to online marketing, you’re hoping to make tons of follow-up impressions. Yes, from clicks to conversion percentages to banner impressions, statistics are the lifeblood of a marketer. Clearly that goes for affiliate marketing as well.
With powerful reporting tools like Google Analytics, SEO Moz and internal reporting from various affiliate network platforms themselves, affiliate managers are literally drowning in data. The bigger and more successful the affiliate pool, the bigger the data. For newcomers, it can all be a bit overwhelming. Which stats are most important? Which should you ignore? What do these affiliate marketing terms mean?
Obviously, the answers vary depending upon your site’s needs and goals, but to help demystify all this data talk, this post will take a closer look at the key stats keeping the affiliate life blood flowing.
One of the most important stats from a marketing perspective, impressions have long been overlooked in the affiliate marketing industry. And that’s a shame, because it’s shocking how huge this number can be! Many networks, like Commission Junction, include impression tracking on all their creative… but the majority of affiliates strip this tracking capability out. That means overall impressions aren’t being fully recorded. When comparing marketing channels within a company, that creates a huge disservice to the affiliate channel.
When discussing marketing areas such as display or search, impressions is one of the leading statistics shared, but in terms of affiliate marketing, it’s generally just clicks and conversions. Obviously with much less numbers, that makes affiliate marketing seem like small potatoes in comparison. Yet, if you were to include impressions when comparing the affiliate channel with others, you’d be floored. Despite most affiliates stripping out the impression tracking, Commission Junction estimates it’s tracking around 200-300 billion impressions! Yes, billion. That staggering number shows how valuable the affiliate channel truly is in comparison to other ones.
Click-Through’s (or Clicks for short) are simply when a user clicks on an affiliate link (could be on your website, in an email, on a Facebook status update, etc.) and is brought to a merchant’s site. The Click Thru is the last time an Affiliate interacts with that customer. After that click, it’s all up to the merchant. Now, that doesn’t mean you can’t influence what happens after the click. The right phrasing of a text link or the look of a banner can help increase the number of clicks. What you say and how you say it can not just motivate a user to click on it, but you can even have an effect on what they do after they land on the merchant’s page. Offer coupon details, product descriptions or any other important information and a customer will remember that as he or she browses through the merchant site.
No matter what you’re selling, no matter what you’re goal, ultimately you want conversions. A conversion is when a customer goes through one of your affiliate links and makes a purchase on the merchant site. It’s a sale. Plain and simple. Generally, the more conversions you have, the more revenue you make.
Click Through Rate
Click-Through Rate (or CTR) is simply a comparison of how many clicks you have out of your total impressions. If you’re only getting a few scant clicks out of millions of impressions, then something’s wrong. Clearly you’re wasting a ton of impressions and need to focus on where you’re loading the creative, what the message is, who you’re targeting, etc.
This is another one of the real important statistics as it reveals the number of users that make a purchase out of the total numbers of users an affiliate sends to the merchant’s site. Industry average is real low, roughly 2% or 3%.
Return on Ad Spend
One of most important aspects of any online marketing manager’s job is making sure each marketing channel is yielding a positive return on investment, or ROI. In world of marketing ROI means Return on Ad Spend. How much you are spending to acquire a new customer and what is the lifetime value (LTV) of that customer you acquire. In the affiliate channel this includes determining how many customers affiliates are referring that are Net New vs. Existing customers, how much commission you’re paying affiliates, as well as any other fees associated with the channel (affiliate network, affiliate management agency, etc.).
Active Affiliate Ratio
Having 20,000 affiliates in your program may seem great on the surface, but what if only 30 of them are actually active on a regular basis? Knowing your top performers is a huge asset but it’s also important to know how many of your affiliates are actually performing. How many have sales in the last month? How many have even just one click? Those types of metrics can help you hone in on a smaller more focused group of affiliates to better concentrate on improving results.
Average Order Size (AOV)
If clicks and impressions are fairly consistent with an affiliate, yet the revenue’s way off from month to month, you may want to look into the AOV, or Average Order Value. Some affiliates may be better than others at promoting the high-ticket items versus the super cheap ones. Generally, the higher an AOV, the higher the commissions.