As a newbie affiliate, having a better understanding of the affiliate marketing metrics can make a huge impact. They have a substantial impact on the growth and profitability of your affiliate business and allow you to identify shortcomings and make the necessary changes to keep the business growing. In particular, affiliate marketing metrics can help you decide which products work for you and best suit your target audience. We highly advise you to use the metrics as an affiliate marketing guide. The primary purpose of using metrics in the affiliate business is to measure how your affiliate business performs. What is not measured cannot be improved. Metrics provides you with all the information about your business to make more informed decisions. In this chapter, we are going to look at 9 helpful affiliate marketing metrics and help you understand what they mean. So you can use them before making decisions on your affiliate marketing business.
You can create an affiliate account even without a website. The simplest way to do this is to create a YouTube channel or a Facebook page. This way you can easily create an affiliate account with a trusted affiliate network like Amazon. Whatever medium you choose, affiliate marketing metrics can help you grow your affiliate business. Once you start earning affiliate commissions, you can decide whether or not to build a website for your affiliate business.
If you use multiple affiliate channels, it is important that you integrate affiliate accounts into a single online marketing performance dashboard that visually displays vital marketing metrics and KPIs. This way, you can easily get a concise report on overall affiliate sales performance and how each affiliate channel performs.
These metrics are quantifiable and transparent measures; therefore, everything can be tracked and reported. Before we go through each affiliate marketing measure in detail, let’s first discuss why metrics are vital for affiliate marketing success.
Importance Of Affiliate Marketing Metrics
Tracking metrics for your affiliate marketing business will help analyze the overall success of your business
It helps you align your people and processes with the business objectives you outlined at the outset of your business
Affiliate marketing metrics help in the establishment of realistic key performance indicators (KPIs) for achieving short and long-term business objectives
Identify underlying business issues that would otherwise go unnoticed if affiliate marketing metrics aren’t monitored
It highlights areas where you should refocus your efforts and define the priorities you should take immediate action to improve business performance
To efficiently allocate resources based on identified priorities
Get a better understanding of an appropriate action plan to achieve overall affiliate business strategies and business objectives
Now you know why business metrics should be used for your affiliate marketing success. Next, we’ll go over each affiliate marketing metric and why it’s important to you.
This refers to the average amount of money you earn as an affiliate for each purchase your consumers make in layman’s terms. Most certainly, you think now that all you have to do to make a lot of money is promote the products with the highest commissions. Well, that is not the case. Let me explain this. Refer to the below illustration.
It is crystal clear that relying solely on the commission rate of a specific product will not maximize your revenue. When choosing a product, the conversion rate must also be taken into account. This is why the conversion rate is more important than the absolute commission value.
One smart alternative is to find high ticket affiliate programs that pay recurring commissions, create high-quality, long-form content, and use appropriate advertising strategies to promote the products. This way, you can earn more affiliate commission from customers who make repeated purchases such as monthly subscriptions.
Earnings Per Click (EPC)
Earnings Per Click simply means the average amount of money you earn as an affiliate marketer each time a visitor clicks one of your affiliate links. In my opinion, this is one of the most important metrics that an affiliate can use as it solidly indicates your earning potential. Let’s look at how earnings per click are calculated.
Earnings Per Click = The Total Amount of Commissions You Earn / The Number of Clicks To Your Affiliate Links
Creating high-quality content with catchy headlines will get you more clicks. Still, that won’t be enough to convert those clicks into sales if the landing page of your affiliate link doesn’t seem decent enough to gain the visitor’s trust. This is why you must take extra caution when deciding which products to promote on your affiliate blog. EPC provides insight into whether a product is worth your time, effort, and resources, allowing you to lower the bounce rate.
Many affiliate networks out there provide you with helpful metrics before you choose a product to promote, helping you to make well-informed decisions. However, Earnings per click (EPC) can be deceptive at times. You must know that the earnings per click metric reflect the value of the total number of clicks you receive, not simply the value of a single click.
By tracking earnings per click, you can identify how much you are earning compared to your spending and evaluate if the advertising you are paying for is worthwhile. EPC helps you determine which affiliate marketing channel offers the highest yield and income. It also pinpoints your invalid, broken, and affiliate links with high bounce rates.
Conversion Rate (CR)
The conversion rate is the percentage of website visitors who complete a desired goal (making a purchase, filling out a registration form, or opening an email) out of the total number of visitors during a defined period of time. The conversion rate directly impacts your affiliate income; therefore, affiliate marketers should be familiar with this affiliate marketing metric. This is how the conversion rate of a product is calculated.
Conversion Rate = (Total Number of Conversions / Total Number of Visits) * 100%
For example, last month, 5000 people visited one of your affiliate landing pages. Still, only 50 people bought the product you promote on your affiliate marketing blog. Therefore your conversion rate is 1%. You may feel that your affiliate business is failing due to its lower conversion rate. No, you aren’t a failure at all. The standard average conversion rate would generally be between 0.5% and 1% in the affiliate marketing industry.
This is why you must drive enough traffic to your affiliate blog if you want to make money with affiliate marketing. However, the traffic you bring must be aligned with what you promote and the buyer’s intentions. The ideal way to get relevant traffic to your affiliate blog is to optimize it for search engines.
SEO will ensure that only those genuinely interested in your website’s content will visit your website. They are more likely to click on your affiliate links because they actively look for a sustainable solution to a pressing problem. As a smart affiliate, you offer them products or services to help them solve their problems.
Your affiliate marketing website must be fully functional, user-friendly, content-rich and have a well-designed user interface. This is the magic formula for achieving a higher conversion rate.
Click-Through Rate (CTR)
The number of clicks your affiliate ads or affiliate links receives in comparison to the number of times your content is shown to visitors is referred to as the click-through rate (CTR). It is a helpful affiliate marketing metric for determining the performance or success of your affiliate marketing promotion. Always remember that an affiliate marketer is only a message. You distribute someone else’s message to a group of people you haven’t even met. You have to be as creative as heck to get them to listen to your message. CTR indicates how creative your message is and how well you communicate with your targeted customers.
This is how click-through rate (CTR) is calculated;
For example, if you have 1000 impressions and 20 clicks, your ad or affiliate link will have a click-through rate of 2%
CTR is an important affiliate marketing metric that affiliates should keep an eye on because it gives you insight into how well your ads and keywords in your blog posts are performing. Suppose your affiliate blog has a high click-through rate. In that case, it means that users find your ads and content to be useful and highly relevant. If your CTR is poor, it may indicate that your affiliate site receives little organic traffic.
What can you do to improve the click-through rate? You can optimize the headings of your content, add more images to your content, change the colors and placement of your affiliate ads, add more call to action buttons and keyword optimization.
As an affiliate marketer, you should strive for a CTR of at least 2%. However, CTR might vary depending on the keywords you’ve chosen.
If you’re new to affiliate marketing, you might not be familiar with the term “Gravity.” That is why we felt it was super necessary to explain this to you. Gravity is an affiliate marketing metrics unique to ClickBank. ClickBank defines Gravity as the number of distinct affiliates who earned an affiliate commission by promoting the merchant’s product in the last 12 weeks. But this is not the actual number of affiliates.
This is just a ranking determined by the algorithm they employ. A higher gravity indicates that more affiliates are promoting the product. In contrast, a lower gravity denotes just a few affiliates promoting the product. In simple terms, higher gravity means higher competition, whereas lower gravity means lower competition. To be on the first result page, you must outperform thousands of other affiliates, which is challenging.
If you’re using ClickBank, then you should promote products with a gravity of between 15 and 70. It should not be too low or too high. When choosing products, you could use the filters in ClickBank to sort them out.
A cookie is a small text file that carries useful information about the visitors to a website. When you visit a website, it stores information about you in that small file known as a cookie on your computer. When you revisit the same website, it will be able to read the cookie that has been saved on your computer.
In this manner, the websites can remember your information such as language preferences, usernames, and passwords, items added to a shopping cart, and previously entered information into form fields. Basically, cookies were created to improve visitors’ web browsing experience, and each cookie has an expiration date.
Cookies have a set expiration date. A cookie is usually saved in the web browser of a computer for 1–30 days. On the other hand, Session cookies will expire immediately once the browser is closed because the expiration date is not specified in such cookies.
Let’s look at why this cookie duration is so important to affiliates.
The duration of the cookies is one of the factors that determine your affiliate income earning potential. People do not buy products merely because they saw creative advertisements on the internet. Especially if they are pricey. Multiple factors influence a consumer’s buying decision. Also, keep in mind that more expensive products usually take longer to make a decision about. Therefore, you want to have a longer cookie duration.
A cookie’s duration may change based on the affiliate network or program you are registered with. For example, the duration of an Amazon affiliate cookie is 24 hours. This means you can only earn affiliate commission if the visitor purchases a product within 24 hours of clicking on your affiliate link. However, suppose the potential customer adds the product or any other product to the cart within the 24-hour timeframe. In that case, the cookie duration will be extended for another 89 days.
ClickBank cookies last for 60 days. While this may increase your likelihood of earning affiliate income to a certain level as a ClickBank affiliate. However, relying solely on cookie duration as an affiliate marketing metric is not a smart idea. Customers of more competitive affiliates can override it. Cookie duration becomes proportionately less important, especially with higher gravity products. Overall, taking cookie duration into account, with other affiliate marketing metrics, while formulating your affiliate marketing strategy can yield outstanding results.
This is another useful affiliate marketing metric that people often overlook. You’ll implement a number of strategies to increase traffic to your website once it’s up and running. However, many of you will not dedicate enough time to analyzing the valuable information that Google Analytics provides. If you conduct a thorough analysis, you will be able to ascertain which channels (Organic Search, Social media, emails, referrals) bring more visitors to your affiliate blog.
You can promote your blog post with affiliate links across several social networks. You will notice that your affiliate blog gets a fair amount of traffic from the post you shared on social media. Identifying which ones bring in the most visitors can help you fine-tune the social media strategy of your affiliate business. You can watch the below video to learn how Google Analytics can be used to keep tabs on traffic sources.
Average Payout Time
This affiliate marketing metric basically means the average number of days an affiliate will be paid from the day they made a sale. This varies depending on the affiliate program you sign up with. However, you should be aware of this before choosing an affiliate network. Usually, the average payout time is published in the advertiser directory so that affiliates can make informed decisions about which affiliate program to join.
When new affiliates join an affiliate marketing network, the first thing they do is google to see whether the affiliate program is legit and pays its affiliates. Then they will draw hasty conclusions from what they’ve googled. As a smart affiliate, you should not overlook any affiliate marketing metric simply because the affiliate program or network is legitimate and reputable.
Always treat yourself as an entrepreneur running a digital business. You are solely responsible for the decisions you take for your affiliate marketing success. The average payout time is absolutely crucial for you to make certain business decisions, as this affiliate marketing metric is related to the cash inflow of your digital business. You should understand why cash flow is critical for any business, regardless of its size.
For example, after you have a steady stream of affiliate income, you may want to take your digital business to the next level. Increasing brand awareness and gaining the trust of prospective customers could be your priorities. Therefore, you decide to hire a content writer and post frequent, high-quality evergreen content relevant to your niche. This is going to be a recurring expense for your business. Keeping tabs on your business cash flow can help you understand where your money is going, maintain healthy business relationships, and make sound business decisions.
Void Rate / Cancellation Rate
The void rate is the number of voided or canceled transactions of a product you promote compared to the total number of successful sales (completed transactions) of that product. You can determine if you should continue to promote a given product or not by tracking this affiliate marketing metric. Affiliates can also use this to determine whether or not to continue working with advertisers with higher cancellation rates. Usually, customers don’t give canceled orders or abandoned shopping carts much thought. But there are ways to combat canceled or voided transactions and increase affiliate marketing conversions.
Even though a product’s void rate is high, you can still earn a significant amount of affiliate income. All you have to do is make a few sales of a high-paying affiliate product each month. You can make a massive profit on fewer sales.
Affiliate Marketing Metrics Conclusion
And that brings us to the end of our roundup on useful affiliate marketing metrics.
The success or failure of your affiliate marketing business solely depends on the business decisions you make. To make the right business decisions at the right time, you need the right information. Affiliate marketing metrics help you gain a broader view of your entire business operation. Therefore, use these affiliate marketing measures to help you overcome obstacles and put you on the path to success with your affiliate marketing campaign.
Yes, you will need to commit extra time to calculate and evaluate these measures in addition to your other responsibilities. However, your time and work will undoubtedly be rewarded. We all know that SEO will not produce instant results, but it will accomplish miracles in a matter of months. Just like SEO, the business decisions you make based on these affiliate marketing metrics may not have immediate effects, but you will soon notice your business is evolving.
Lastly, not all of the affiliate marketing metrics listed above are applicable to you at the outset of your affiliate business. Some business metrics require the collection of business data over a period of time in order to be calculated.