Did you know businesses using affiliate marketing often grow their revenue 10% faster every year?
Plus, over 80% of brands run affiliate programs, which account for about 15% of all digital media revenue.
If managed well, affiliate programs can significantly boost a business’s revenue.
However, just launching an affiliate program isn’t enough. To truly tap into this potential, you need to master the art of measurement and optimization.
That’s where affiliate Key Performance Indicators (KPIs) come into play. These metrics are not just numbers—they are the compass that guides your affiliate program toward success.
Tracking these KPIs effectively is essential to avoid affiliate program failures.
As an affiliate manager, I think it’s crucial to track these affiliate marketing metrics well. Doing so can turn an average affiliate program into a highly successful one.
Not all KPIs are the same. Some are easy to understand, like how many people click on your website. Others are more complex, like how much money your business makes each year compared to the year before.
But all these KPIs, no matter how simple or complex, can teach you something useful about your business.
This article will dive deep into the common affiliate marketing KPIs every manager must track.
If you want to improve your affiliate program, understanding these affiliate marketing metrics will help you make better decisions. This will help your program run smoother and grow over time.
What is Affiliate Marketing KPI
Affiliate marketing KPIs (Key Performance Indicators) are metrics that measure the success and effectiveness of an affiliate program.
These indicators help managers track their performance and make informed decisions to fine-tune their strategies.
By keeping an eye on these KPIs, businesses can evaluate how well their affiliate program is doing.
Core Functions of Affiliate Marketing KPIs
1. Measure Success and Performance
Affiliate marketing KPIs let you check how well your affiliates and the whole program are doing. They show if your affiliates are achieving goals like making sales, getting leads, or prompting specific actions from customers.
By looking at these metrics, you can see how successful your marketing is and how much your affiliates are helping meet your business goals.
2. Optimize Marketing Efforts
KPIs act like a feedback tool. By looking at these metrics, you can spot strategies that are doing well and areas that need work.
For example, if the conversion rates from a specific affiliate are low, you might need to check their methods or give extra help to boost their performance.
On the other hand, if some strategies are leading to a lot of engagement or sales, you can expand them to get even better results.
3. Allocate Resources Wisely
Knowing which parts of your affiliate program give the best return on investment helps you spend your marketing budget wisely.
KPIs like ROAS (Return on Advertising Spend) or AOV (Average Order Value) show which campaigns or affiliates are making the most money. This helps you decide where to put more money and where to spend less.
4. Improve Affiliate Relationships
KPIs also help you manage your relationships with affiliates.
By regularly checking these metrics, you can spot your best performers who might deserve higher commissions, bonuses, or better partnerships.
This not only keeps affiliates motivated and happy but also builds a culture of hard work and responsibility.
5. Forecasting and Strategic Planning
Long-term planning is essential for growing any business effort, including affiliate programs. KPIs such as year-over-year growth and affiliate recruitment rates give you a clear picture of trends and growth patterns.
This information is crucial for predicting future performance and making smart decisions, like moving into new markets or launching new affiliate products.
6. Ensure Compliance and Reduce Risk
Tracking KPIs ensures that affiliates follow your program’s rules. Metrics such as click traffic and conversion rates can also show signs of fraud if the numbers are unusually high or low.
By keeping an eye on these, you can quickly fix issues, reducing risks and costs to your brand.
11 Affiliate Marketing KPIs that Every Affiliate Manager Must Track
1. Click Traffic
Click traffic is the total number of clicks that affiliates generate on the links directing to your product or website.
How to calculate it: Use your affiliate tracking software to count all the clicks over a certain period.
Why it’s important: Keeping an eye on click traffic is essential because it tells you how far and effectively your affiliate campaigns are reaching potential customers.
A high number of clicks usually means that your affiliates are doing a good job promoting your products and that your offers are appealing to people.
By understanding click traffic, you can get a clearer idea of which promotions work best and which need more optimization.
2. Conversion Rate
The conversion rate tells you what percentage of clicks on affiliate links lead to a sale or the action you want, like signing up for a newsletter.
How to calculate: To find the conversion rate, you divide the number of sales or completed actions by the total number of clicks on the links. Then, multiply the result by 100 to get it as a percentage.
Why it’s important: This metric shows how well your affiliate links are working to achieve the desired actions.
If the conversion rate is low, it might mean that even though people are clicking the links, something is stopping them from making a purchase or completing an action. This could be because the landing page isn’t appealing or the offer isn’t attractive enough.
Understanding the conversion rate helps you identify where improvements are needed, either in how the product is presented or the effectiveness of the landing page.
By addressing these issues, you can enhance the performance of your affiliate program and increase sales or other desired actions.
3. Percentage of Active Affiliates
This metric shows the percentage of your affiliates who are actively promoting your products.
How to calculate: To find this percentage, you divide the number of active affiliates (those currently promoting your products) by the total number of affiliates you have. Multiply the result by 100 to convert it into a percentage.
Why it’s important: Tracking the percentage of active affiliates helps you understand how engaged and effective your affiliates are in promoting your products.
A high percentage of active affiliates usually means your affiliate management is effective and your affiliates are motivated.
This insight can indicate the health of your affiliate program, showing you whether your strategies for engaging affiliates are working or if you need to try new approaches to boost their activity.
4. AOV (Average Order Value)
AOV, or Average Order Value, is the average amount of money spent each time a customer purchases through an affiliate link.
How to calculate: You calculate AOV by dividing the total revenue generated from affiliate-driven sales by the number of those orders.
Why it’s important: AOV is crucial for understanding how much customers are spending when they come from affiliate links. It gives you insight into the buying patterns of these customers.
Knowing the AOV helps you assess the quality of the traffic that your affiliates are sending. If the AOV is high, it suggests that the affiliates are directing customers who are willing to spend more.
This information is essential for deciding how much to pay affiliates in commissions. By understanding AOV, you can set commission structures that are fair and motivate affiliates to send you valuable traffic that converts into sales.
5. Revenue Growth YOY (Year Over Year)
This metric, Revenue Growth YOY (Year Over Year), shows how this year’s total revenue from affiliates compares to last year’s, in percentage terms.
How to calculate: First, subtract last year’s revenue from this year’s revenue. Then, divide that result by last year’s revenue. Finally, multiply by 100 to get the percentage.
Why it’s important: Tracking YOY revenue growth is essential because it shows the long-term trends in how effective your affiliate program is.
This metric helps you understand whether your program is growing, stagnating, or declining over time, providing insight into the sustainability of its growth.
It indicates if the strategies and affiliates you have in place are improving your earnings year after year. This long-term view is crucial for making strategic decisions, such as changing your approach or investing more in successful tactics.
6. Total Active Affiliates
This metric counts how many affiliates have generated at least one click, lead, or sale within a specific period.
Why it’s important: Keeping track of the number of active affiliates is key because it shows you the real extent of your program’s reach.
By knowing how many affiliates are actively engaging and contributing to your campaign, you can gauge the health and potential of your affiliate network.
This information helps you understand whether your affiliate base is actively promoting your products or if many are inactive, which might indicate issues in affiliate engagement or the effectiveness of your program’s strategy.
7. Number of Total Affiliates
This metric shows the total number of affiliates who have signed up for your program.
Why it’s important: Keeping track of how many affiliates join your program is crucial because it helps you see how appealing and scalable your affiliate program is.
A growing number of total affiliates suggests that more people are interested in promoting your products, indicating that your program is attractive.
This insight is valuable for assessing whether your affiliate program can scale up, potentially reaching more customers and generating more sales as more affiliates join and promote your offerings.
8. Affiliate Recruitment Rate
The Affiliate Recruitment Rate measures how many new affiliates are joining your program compared to the previous period.
How to calculate: To find this rate, first subtract the number of affiliates you had last month from the number of new affiliates this month.
Then, divide that difference by the number of affiliates you had last month. Finally, multiply the result by 100 to get a percentage.
Why it’s important: A positive recruitment rate indicates that your affiliate program is healthy and growing.
It shows that your affiliate recruitment strategies are working effectively and that your program is attractive to new affiliates.
This growth is a good sign because it means more affiliates are available to promote your products, potentially increasing your sales and expanding your market reach.
9. MoM Revenue Growth (Month Over Month)
MoM (Month-over-Month) Revenue Growth percentage tells you how much your revenue from affiliates has gone up or down from one month to the next.
How to calculate: To find this percentage, subtract last month’s revenue from this month’s revenue. Then, divide that number by last month’s revenue. Multiply the result by 100 to get it as a percentage.
Why it’s important: Tracking MoM Revenue Growth is crucial because it helps you see short-term trends and seasonal changes in your affiliate program.
This understanding is key for making quick adjustments to your marketing strategies and planning effectively for future growth.
For instance, if you notice a significant increase in revenue during a particular month, you might identify a successful campaign or a seasonal peak, which you can capitalize on in the future.
If your earnings go down, it might be a sign that you need to take another look at your marketing strategies and make some changes.
10. Number of Affiliate Campaigns
This metric counts how many different affiliate marketing campaigns you’ve run during a specific period.
Why it’s important: Keeping track of the total number of campaigns is crucial because it shows how varied and broad your marketing efforts are.
Launching new campaigns regularly helps keep affiliates interested and involved. It also allows you to reach different types of customers effectively.
By understanding how many campaigns you are running, you can assess whether you’re providing enough variety to appeal to both affiliates and different customer groups, which can help improve your overall marketing success.
11. ROAS of Affiliate Campaigns (Return on Advertising Spend)
ROAS is a critical financial metric used to measure the effectiveness of specific advertising campaigns, including those driven by affiliates.
It assesses the amount of revenue generated for every dollar spent on affiliate sponsorship.
How to calculate: ROAS is calculated by dividing the revenue generated from affiliate advertising by the total cost spent on the affiliate campaign.
Why it’s crucial: ROAS is vital for evaluating the financial effectiveness of affiliate marketing campaigns. It helps affiliate managers understand the efficiency of their investment in affiliate marketing efforts, guiding decisions on budget allocation and campaign adjustments.
A high ROAS indicates that the affiliate campaign is generating significant revenue relative to the cost, while a low ROAS may suggest that the campaign needs to be reviewed or optimized.
Final Thoughts on Affiliate Marketing KPIs
The world of affiliate marketing is always changing and competitive. That’s why it’s important to track and understand these KPIs (key scores) we talked about.
Each score is like a piece of a puzzle that helps you make smart decisions and improve your program. By tracking things like how many people click on affiliate links (click traffic) and how much money you’re making over time (revenue growth year over year), you can see what’s working and what’s not.
This will help you build a stronger affiliate program that makes more money in the long run.
The best affiliate marketing isn’t just about getting a bunch of people to sign up. It’s about using data to build strong relationships with your affiliates, create better marketing strategies, and get more sales.
By understanding these KPIs, you’ll be able to adapt to what’s happening in the market and make your program even better.
If you’re a business owner and want to learn more about these KPIs or how to improve your program, we can help! Our team is here to make your affiliate program successful.
We can help you come up with better strategies, get the most out of your investment, and reach new heights. Contact us today to get started!
