If you’re like most marketers, you know that affiliate marketing is an important component of an overall digital strategy. In fact, it accounts for over 15% of all digital media revenue, and is expected to grow by 10% in the next few years.
But do you know if your affiliate marketing efforts are actually paying off? The truth is, marketers still struggle to accurately measure the return and overall effectiveness of their affiliate marketing campaigns.
Here are four tips to help you overcome some of the most common measurement challenges.
1. Define Affiliate Success
Before embarking on an affiliate marketing initiative, it’s important to 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.
2. Understand True Affiliate Impact
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.
Multi-touch attribution helps you understand the value of your affiliate marketing efforts, even when they aren’t the closer. It also shows you how affiliate stacks up to display, search, email, etc. so you can make sure you’re allocating the appropriate amount of the department’s budget to affiliate programs.
3. Try Different Programs
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.
You might find that it’s time to switch things up or broaden your partner portfolio. You wouldn’t be alone. A Forrester study showed that 94% of publishers use two or more affiliate programs, 39% rely on three separate networks, and 20% work with five or more affiliate marketing partners.
Monitor and evaluate your affiliate partner performance regularly. Consider creating internal, monthly or quarterly targets for each partner 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.
4. Optimize Your Content
Multi-touch attribution 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).
No matter how effective you find your current affiliate programs to be, attribution will help you identify strengths and weaknesses so you can maximize the potential of the powerful marketing strategy that is affiliate marketing.
To learn how you can be a better marketer in the digital era, download our ebook: Untangling Attribution's Web of Confusion: A Primer for Marketers
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