How Do You Evaluate the Success of an Affiliate Marketing Campaign?

The ultimate goal of affiliate marketing is to put money in your pockets. However, to reach that goal, you’ll need to monitor the key performance indicators (KPIs) to determine if you are running a successful affiliate marketing campaign. The KPIs include clicks, sessions, and impressions. Of course, it all starts with you joining the best affiliate program and developing a strategic marketing plan. 

Like every other business, affiliate marketing has its highs and lows. The aim is to keep progressing, but you should also know when your affiliate business is stagnating or losing ground. 

KPIs are performance measurements that give definitive results for your marketing campaign. They’ll show if there are clicks to your paid ads or affiliate site,  your target audience, and the conversion rate. 

Without KPIs, you’d be running your affiliate business in the dark. You will never know of opportunities right before you, or if you’re wasting money on an ineffective marketing campaign. You may also not realize the potential of affiliate partnerships.

It may take time for your business to take off, but these KPIs will show you if your marketing strategy is working, if you need to tweak it, and if you’re investing in the best-paid ads for affiliate marketing.

According to the current market trends, affiliate marketing share is expected to have a market share of $36.9 billion by 2030, and for you to have a slice of the pie, you should pay close attention to the following KPIs.  

1. Clicks

In affiliate marketing, clicks are the key performance indicators that show the appeal of the affiliate link or affiliate ads to the audience. You don’t have to wait until your commission starts trickling in before telling if your efforts are paying off. 

On close examination, clicks tell the story of your affiliate marketing journey and the channels that generate the most or least traffic to your affiliate site. For example, if you’re running Facebook ads and Google ads, the number of clicks will show which site brings better returns on your investment. 

You can use different analytics tools, including Google Analytics and Bitly, to keep track of the clicks.

2. Sessions

A session refers to your audience's visit or interaction with your affiliate site within a specific period. This KPI will help you analyze consumer behavior and engagement. For example, if the users click the link and barely spend a few seconds on the site before moving on, it may be a sign that the landing page is not what the audience expected. 

You can also use sessions to identify products that drive user engagement or sites responsible for the traffic to your affiliate site. 

3. CRT (Click-Through Rate)

CTR is another metric you can use to check the success of an affiliate marketing campaign. If you’re running multiple affiliate ad campaigns, CTR will help you identify campaigns that perform well and those that are failing. 

Your ads can have the same impressions but with a different CTR. 

CTR = (No. of clicks / No. of impressions) x 100

If two affiliate advertisements appear on a website 200 times, one attracts 100 clicks, while the other has 20 clicks, the CTR is 50% and 10%, respectively. The higher the CTR, the more successful the ad. 

4. Conversions

The other important KPI is the conversion metric, which is directly responsible for putting money in your pockets. Conversions also reflect the sales the brand makes from your affiliate link. When you have a high conversion, you’ll have a higher revenue. It is also a signal that the marketing strategy you used paid off. 

5. Conversion Rate

Besides conversions, you can also look at the conversion rate to determine the percentage of people who saw your affiliate ad and took action by buying the products. 

Conversion rate = (the number of conversions/ total visits) x 100

The higher the conversion rate, the better because it means you are promoting the right products to the right audience. Affiliates with a higher conversion rate also make more money.

6. Revenue

Your income is also a performance indicator showing the level of success you’re having in affiliate marketing. Most affiliates use this to determine if their business is thriving or not. It is also a popular KPI because it is tangible, and frankly, easier to keep up with, especially if you’re working with the best affiliate program. One that pays regularly and has a low payout threshold. 

For example, Luca’s Gift affiliate program has a $10 payout threshold, and payments are made weekly. If you receive a commission every week, you can easily identify the most active months, the events that led to a spike in your income, and whether you need to do more to reach your target. 

7. Average Order Value (AOV)

The other metric you need to consider is the average amount customers spend when they use your affiliate link. AOV has a direct connection to the commission you earn because most affiliate programs give a percentage of the price tag as commission. 

AOV = Revenue / No. Of orders.

For example, if you make $1000 and have 50 orders, the AOV is $20. 

In the above example, the AOV shows that your audience can afford to spend $20, so you should focus on promoting products in this price range. If you have a low AOV, you’re earning a low commission. It may be due to the low percentage offered by the brand, but as an affiliate, it is also a sign that you are either not marketing enough, or should change your strategy.  

8. New Customers vs. Returning Customers

A brand’s strength is in its ability to attract new customers, and at the same time maintain a loyal following. As an affiliate marketer, you should understand that building a loyal following is important because this audience keeps returning for products. They also see you as their connection to the brand you represent. 

They may also be a source of new customers through affiliate referrals. So, keep tabs on them by adding them to your email lists and communicating with them frequently. If you notice that you’re not retaining customers, but are instead only selling to new customers, you should find out why this is a trend. Are they dissatisfied with the products or are you not marketing enough? 

Remember, out of sight, out of mind. Return customers also show that you are in the right affiliate program. After all, you have no control over the quality of products or services offered by the brand you represent. If they keep coming back, you should market your affiliate site even more because you are guaranteed customer satisfaction. 

9. Returns on Ad Spend (ROAS)

When you’re using paid affiliate ads, you need to know if they are adding value to your affiliate business, or if you’re just throwing money into a bottomless pit. The success of an affiliate marketing campaign depends on how much you put in and what you get back. 

ROAS =  Revenue/ Investment

A high ROAS shows that the ads you place on social media or websites are attracting clicks and conversions. You should look at the cost of each advertisement, the clicks it gets, and how many conversions you get from the said ad. 

If the revenue is higher than the investment, the ROAS will be high. However, if you have a low ROAS, you’ll need to decide if you should drop the ad, make adjustments, or switch to another platform likely to yield desirable results. 

10. Decline Rate

Affiliate marketing has its highs and lows, and you should use KPIs for both. The decline rate refers to how quickly you’re losing money or dwindling purchases due to fewer consumers using your affiliate link. It may also be the loss of user engagement to your social media pages.

You may also notice a decline in revenue even when you have the same number of conversions. This may be because users are buying cheaper products, and you need to understand why. It may be because you are not promoting high-ticket products enough or you need to target a different audience that can afford them. 

How to Successfully Use KPIs in Affiliate Marketing

Now that you have all the affiliate marketing KPIs, you need to find the tools to use. Unfortunately, monitoring KPIs can be a challenge for affiliates because the data is scattered. You also don’t have absolute ownership of the data on all the platforms, except for your affiliate site. The data may also be flawed. 

Fortunately, there are several steps you can take to truly benefit from affiliate KPIs.

• Choose the KPIs that match your goals and target audience.
• The KPI should also be measurable and time-bound.
• Start small, with the KPIs you need most because too many KPIs will be overwhelming, especially when starting affiliate marketing. Fortunately, affiliate marketing is scalable, and you can introduce more KPIs. 

When you use the right KPIs on the best affiliate program, the likelihood of you running successful affiliate marketing campaigns. Use tools that allow you to track marketing campaigns across different platforms. They should also generate daily, weekly, and monthly KPI reports to help you build a profitable affiliate business.