Affiliate marketing metrics, why you need them and why are they important? If you’ve already started an affiliate marketing program or you have intentions to start one, then it’s important that you’re tracking its progress. After all, it’s good to know how well your affiliates are performing and the level of sales that are being generated.
With affiliate marketing, there is a lot of ground to cover when measuring its performance. By measuring your affiliate marketing properly, you’re likely to track its success with more accuracy.
In this article, you’ll understand what affiliate marketing metrics you should be tracking in 2024 and how beneficial this type of marketing can be for your business going forward.
What is affiliate marketing?
Affiliate marketing has become increasingly popular with a lot of online businesses that are looking to utilize the help of others in order to generate sales.
You may find that a lot of the brands you buy from have their own affiliate program. Anyone can often use this program but particularly those who have an influence on others to buy what they’re promoting.
With affiliate marketing, it’s a low-risk form of advertising that is tracked through the individual affiliate’s efforts to promote the links or codes they’re given.
It’s a form of advertising that certainly helps many businesses make money. Uniqodo found that affiliate programs generate 15-30% of all sales for advertisers. That’s a substantial amount of the company’s sales that rely on affiliate marketing.
What types of affiliate marketing metrics are there?
For any affiliate program already in place, there’s plenty of data that can be tracked. This data comes from individual metrics, which are useful to be aware of when implementing affiliate marketing as part of your overall marketing strategy.
There are a variety of affiliate marketing metrics available when running a program. Some of the most popular ones to track include:
- Clicks
- Completed transactions
- Conversion rate
- Return on ad spend
- Earnings per click
- New leads/customers from the affiliate program
- Revenue growth over time
- Percentage of active affiliates
But which ones are important to track when looking at these metrics? There are some that are more useful than others to monitor when running your affiliate program.
Create a custom report online with affiliate marketing data
Monitoring your affiliate marketing can be helpful when it comes to proving its effectiveness with various stakeholders or individuals who make the company’s financial decisions.
Having this data available can then be used to create a custom report online. These reports prove useful in helping secure budgets for affiliate marketing in the future or to make any necessary changes.
5 Affiliate marketing metrics to track in 2024
As affiliate programs grow and develop, there will be changes in what metrics prove to be most useful to measure. In 2024, here are five affiliate marketing metrics that are worth tracking this year.
Conversion rate
One of the most commonly used metrics with affiliate marketing is the conversion rate. This is the amount of affiliate link clicks that have led to a purchase. Converting a lead to a customer is challenging. Many affiliates that sign up to your platform may have to promote the link multiple times before the lead finally converts to a paying customer.
This type of metric can also keep track of an individual affiliate’s performance and identify which affiliates are the best at converting customers. Those top affiliates may be worth nurturing further by offering them bigger commission cuts. As a result, it may end up inspiring those affiliates to drive even more sales for the business.
Revenue
There are a number of metrics when it comes to revenue that you can track. Monitoring your revenue in any way, shape, or form, is crucial. It can help to discover what profits are being made during a specific period of time and what data is available for overall growth.
Under the revenue metric, you’ll want to pay attention to overall revenue growth and incremental revenue.
Overall revenue growth of the affiliate program over time is a great way to see how much of an impact it’s had on your profits in general. Incremental revenue is a measure of revenue that has been made without the affiliate program or any other marketing channel. This could be paid advertising or email marketing, for example.
Comparing these two metrics can help the marketing team and those responsible for budgeting, to target the right strategies and marketing efforts in order to help make the most money possible. It also helps to see how the performance of an affiliate program is doing against other marketing channels.
Return on investment (ROI)
Talking of revenue, the return on investment is essential for a lot of financial decisions made for the business.
It’s often referred to as the return on ad spend or ROAS for short. This is the revenue that is generated from your affiliate program once you’ve subtracted all the costs that come with creating and maintaining the program.
These are costs like affiliate commissions, the cost of using the software or affiliate network, etc. You may also have salary costs of individuals you’ve hired to manage the affiliate marketing and program itself.
To calculate this, you could just subtract all the costs overall from the revenue earnt or you could divide the total revenue earned from the program to understand how much you’ve got back for every dollar spent.
ROI is a great way to understand how financially effective affiliate programs are for your business.
Active/Inactive affiliates
Affiliates don’t often stick to one platform or network. Statistics reveal that 94% of publishers will use multiple affiliate marketing networks. That can influence how many of your affiliates are active or inactive at any time.
Measuring the percentage of active affiliates is important to do because it can often help identify whether having your own affiliate program or putting your business on multiple networks is more useful.
This metric is useful to see how many affiliates are helping to generate sales and to understand how you could improve this bottom line of your business. After all, affiliates can help make up a substantial amount of your business’s overall revenue.
Overall engagement
Many businesses can benefit from using an affiliate program. However, not all of them are going to be worth the effort that is put into marketing them. That’s why it’s a good idea to take a look at the overall engagement.
It is difficult to measure this accurately but there are a few ways that you can track this engagement.
Take a look at the number of visits that come to your website from affiliate links specifically. Identify the number of conversions that are generated from affiliates and look at the number of affiliate links that have been created and led to your site.
There’s a lot of useful data that you can take from these metrics and measure them on a regular basis.
The benefits of affiliate marketing for your business
What is the point in tracking these metrics or utilizing affiliate marketing in general? Is it viable for every business to be using?
In order to grow your business, affiliate marketing is an effective way to help generate sales and help convert leads into sales. It can also help with reaching audiences you perhaps struggled to reach before.
Here are some of the benefits of using affiliate marketing for your business.
Doesn’t cost much to start up
An affiliate program doesn’t cost that much to start up in comparison to other advertising methods. For smaller businesses that have tighter budgets, it’s a suitable marketing opportunity that has minimal setup costs involved. It also doesn’t require much in the way of marketing your products.
Improves brand awareness
Improving brand awareness is always important to help the business thrive online this year and beyond. With affiliate programs, your affiliates can improve overall engagement and reach with your audience online and across many territories.
Low risks
There are a lot of advertising and marketing methods that can come with risks to your money. Not all of them are as effective as they can be for what you invest into them. For example, some paid advertising on certain platforms may generate very little return due to a lack of effective targeting.
With affiliate marketing, there’s low cost and with low cost comes a lower risk of losing the money you spend.
High ROI
Affiliate marketing has a great return on investments and likely a higher return than most of your marketing efforts. The affiliates that promote your products or services have direct access to your target audience and may end up converting more leads into customers than what you’d typically spend on paid advertising for example.
There are plenty of benefits that come with affiliate marketing and having an affiliate program for your business this year. However, it’s important to measure the metrics and to gather the data that will help you enhance your affiliate programs for the better.
Conclusion
This article outlined five important affiliate marketing metrics that should be tracked in 2024. It provides insights into the key performance indicators (KPIs) that are crucial for measuring the success of an affiliate marketing campaign.
Key takeaways:
- Tracking affiliate marketing metrics is essential for evaluating the effectiveness of your campaigns and making data-driven decisions.
- The five metrics highlighted in this article include conversion rate, average order value, customer lifetime value, return on ad spend, and affiliate revenue.
- Conversion rate measures the percentage of visitors who complete a desired action, such as making a purchase.
- Average order value indicates the average amount spent by customers in a single transaction.
- Customer lifetime value quantifies the total revenue a customer generates throughout their relationship with your business.
- Return on ad spend measures the profitability of your advertising investments.
- Lastly, tracking affiliate revenue helps evaluate the overall performance of your affiliate marketing program.
Last Updated on December 5, 2023
