As an affiliate marketer, you probably know important affiliate marketing metrics such as impressions, click-through rates, traffic, and conversions. But, you may not understand why knowing how to track metrics in affiliate marketing is so important – especially if you're new to the business.
In short, by tracking metrics, you're monitoring the success of your marketing efforts. This will help you grow your business. Without metrics, you can't know what you're doing right or wrong as an affiliate. As an affiliate program manager, you can't know which affiliates have the most conversions in your network.
In this post, we'll go over several of the most common tracking metrics used in affiliate marketing. This will get you started on your journey toward better tracking. Let's get to it!
Active Affiliate Ratio
The active affiliate ratio is an important metric for affiliate managers. It reveals the number of affiliates or publishers within the network who are active and perform well on a regular basis.
It also helps identify where the most impressions are coming from, and who has the highest and lowest conversion rates. Using this information, affiliate managers can know which affiliates to reward and which might be worth letting go of.
Affiliate Commission Ratio
The affiliate commission ratio shows affiliates the amount of money they will earn for generating a sale or a lead. Affiliates are wise to consider this metric because it can reveal which advertisers or merchants are worth their effort.
However, affiliates shouldn't rely only on the affiliate commission ratio when deciding whether to work with an advertiser. It's also important to consider the difficulty of earning a sale. If sales are hard to come by, a high commission won’t be easy to obtain. Advertisers will often offer high commissions per conversion when a product is unpopular or difficult to promote.
Click-throughs measure the number of visitors who have clicked an affiliate’s link or an ad and landed on the advertiser’s product page. These are important in affiliate marketing because they reveal how many clicks a link on a particular page went through to the advertiser’s page.
Click-through rate (CTR) is a tracking metric used to compare the number of clicks a link has against the total number of impressions that link has received.
This metric is important in affiliate marketing because it can reveal flaws in an affiliate’s marketing strategy. If a link has more clicks than impressions, that link is doing well. If the link has more impressions than clicks, it shows that something is likely wrong with the landing page.
The ultimate goal of affiliate marketing is to make conversions (sales and actions). A conversion occurs when a visitor carries out the desired action on an affiliate's site, which could be signing up for emails, filling out an opt-in form, or buying a product.
The more conversions an affiliate has, the greater their profit. The more conversions an advertiser gets, the more they sell, and the greater their profit.
This tracking metric refers to how “hot” or “cold” a product is on the market. If a product is hot, it is selling well, which translates to high gravity. If a product is cold, it isn't doing well on the market and has low gravity.
For example, the gravity of a product can show advertisers which products are in season or out of season. It can also reveal when a product should be pulled off the market or when the marketing strategy should be revised.
The impressions metric refers to the number of times a visitor has viewed an ad or a link on an affiliate’s website or blog. As mentioned, when considered with other tracking metrics, impressions reveal vital information about click-through rates.
A link with high impressions but low clicks indicates there may be a problem with the landing page. Meanwhile, a link with lower impressions and higher clicks is a healthy link.
The reversal rate is a very important metric for affiliates because it measures the percentage of reversed commissions. Commissions are reversed if a customer returns a product and receives a refund. The commission is deducted from the affiliate's total.
If a product has a high reversal rate, the affiliate might want to consider dropping the product or even the advertiser. High reversal rates can indicate that an advertiser is selling low-quality products, has a bad reputation, or delivers poor customer service.
Traffic, also referred to as “visitors” or “users”, measures the number of people visiting an affiliate’s website or blog. The more traffic a website or blog receives, the higher the impressions and, potentially, conversions.
The lower the traffic, the lower the number of impressions, conversions, and click-throughs. Traffic can help affiliates understand how visitors react to certain marketing strategies (i.e. promotional material, ads, links, and reviews).
Knowing how to track metrics in affiliate marketing will help advertisers and affiliates understand which marketing strategies are generating leads and sales, and which aren’t. It'll also help affiliates choose which advertisers to work with and which to avoid. In short, tracking metrics helps advertisers and affiliates make more money.
To learn more about how to track metrics in affiliate marketing, check out our blog post, What Affiliate Marketing Metrics Should You Track?