A Primer on Affiliate Metrics

Affiliate programs are cropping up everywhere. No longer just a dot-com phenom, even traditional dirt-world retailers are getting into the act.

In fact, “Affiliate Program” has become an obligatory link on thousands of sites web-wide. Just because everyone has built an affiliate program, don’t let the numbers fool you. Launching a program isn’t half the battle. Making the most of an affiliate network requires extensive care and pruning. Fortunately, like every other aspect of Internet marketing, the numbers are never far behind.

Understanding Your Total Affiliates

It’s easy to be blinded by the numbers and miss the real game. Sure, it’s fun to plot the proverbial hockey stick graph showing the tremendous growth rates of “your” base of affiliates – but the affiliates aren’t yours… at least not yet.

While lots of affiliate managers may content themselves by using “total affiliates” as the measure of their program’s health, I think a better perspective is to view affiliates as merely registered voters. They may have bought the party line, but they’re still undecided. At this stage of the game, unless you’re able to turn these registered affiliates into “voters,” your program will just be another also-ran.

Making Impressions Count

Sooner or later, you’ll get some webmasters to the polls; they’ll start featuring some of your banners, buttons and boxes – becoming what I term “current affiliates.”

They’ll chat your wares up on their site and let visitors kick the tires. When everything goes as planned, your code works, webmasters give you good positioning, and they promote products and services relevant to their content. Of course, it rarely goes as planned – at least not without some intervention.

One of the warning signs I look for is high impression counts with no/low click-throughs. Start with the low-hanging fruit. I’ve seen situations where a site may serve 100,000 impressions for a particular program and never send a click. A small change in placement, a different piece of creative… many times it doesn’t take much, and most affiliates are all too happy for the attention.

Things Start Clicking

After working with a selection of your high-traffic affiliates, you should see the clicks start flowing. Once traffic materializes from these “active affiliates,” you face the same issues as with any visitor from any source: getting them to convert.

While click-to-buy rates will certainly vary, LinkShare reported that for the first week of December, one sale was generated for every 18 clicks, versus 1:23 for November and 1:35 for October.

Whatever product or service your site sells, benchmarking within your base of affiliates is another good way to spot problem areas. Experience has shown there are always sites sending meaningful traffic where the conversions never occur. Often it simply requires adjustments to the types of links, products and placements.

The important thing is to go through the motions. Until you develop a process, it’s not always obvious what tweak is needed. Any assistance you can provide an affiliate shows up in their commission check.

Forging Ahead

Most affiliate managers quickly realize that the 80/20 rule often applies. In fact, I’ve observed several programs where the distribution is even more skewed. You may find in excess of 90 percent of your conversions are produced by ten percent or fewer of your affiliates.

While in the long term there are steps that can be taken to broaden the base of commission-generating affiliates, in the short term the best thing is to incite these super-affiliates to stay loyal to your program. A few personal emails recognizing their effort and some well-timed commission increases go a long way toward aligning top-performing webmasters to your program.

Overall, there are several steps along the path to generating conversions through your affiliate program. It starts with recruiting the affiliates to your program and moving them from the sidelines to the ranks of your current affiliates. Turning impressions into clicks creates a base of active affiliates. Ultimately, the value of any program happens with acquisition.

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