Understanding How to Measure Affiliate Program Campaign Success

by WorkFromHome on October 3, 2011

As you promote different affiliate programs over time, you’re going to eventually need an efficient way to compare one program to another. Since affiliate marketing success is largely about figuring out how to make the most money with whatever amount of traffic you have, maximising the efficiency of your campaigns is a critical skill to have. To be able to do this well, however, you need standardised measurements that can be used to compare and contrast various affiliate programs. In what follows, we’re going to look at the different measurements you can use for these comparisons and how to decide which measurements are the most important indicators for your affiliate campaigns.

Profit: The Most Basic Measurement

Most people have a sense of the idea that profit is the most basic measurement you can have when it comes to business. If everything else is equal, then the choice that makes you the higher profit is usually the best choice. However, it’s rare that everything else is equal. If one offer gets you a profit of 40 USD, and another offer gets you 20 USD, the second offer could actually be the best choice depending on the conversion rates and return rates of each offer. Profit is a very important measurement when promoting affiliate programs, but it has to be thought of in context of other measurements.

Return on Investment

A slightly different way to think about profit is in terms of a percentage relative to how much your costs were. For example, if you made 40 USD profit with costs of 80 USD for some sale, then your return on investment would be 50 percent. The idea is to divide your profit by your total costs to get your return on investment, which is also known as ROI for short. An ROI is good for knowing what campaigns to pick if you have a set budget and want to get the maximum profit. However, it’s important to remember that ROI doesn’t take into consideration how quickly your sales will happen based on the amount of traffic you have.

For example, suppose you have a health site that promotes a gym through an affiliate program, and you also have an education website that promotes some sort of study guide. If you have 3000 USD to invest, and both programs have the same ROI, it might seem like both programs will be equally good to invest in. However, if you get traffic at a much slower rate for the health site than you do for the education site, then the education site could become the better choice. The point here is that ROI is generally going to be a better measurement than pure profit, but it doesn’t show the complete picture.

The Total Solution

If you want to have a complete idea of what one of your affiliate programs is worth at any given time, you need three key pieces of information. The first two pieces of information you need are your profit and your costs. These are the same two measurements that tell you the ROI of promoting a specific affiliate program. However, these measurements have to be taken in the context of our third metric, which is time. Knowing the amount of profit and the cost of getting that profit over a set period of time is what you need to be able to effectively plan multiple affiliate marketing campaigns at the same time.

Remember that your traffic and conversion rates will change over time, so you want to plan your campaigns based on the most recent data you have available. It’s important to always be tracking and testing new ideas so that you can keep up with the times and maintain your earning rates as you go into the future.

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