Affiliates: Track These Metrics To Increase Profits – By Eric Nagel

by Jenae Reid on August 18, 2016

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feedfront-35-cover-188x240As an affiliate, there are certain metrics which you should track and understand. By measuring your traffic and how visitors interact with your site you can tweak your website to steer behavior, take action, and increase revenue.

When a user comes to your website, your goal is to set the affiliate network’s tracking cookie, which means you need to get the user to click on that link and go to the merchant’s site. Click Through Rate (CTR) measures how effective you are at convincing the user to click the appropriate link. Divide visits to a page (or impressions) by clicks to a merchant (as reported by the affiliate network) to measure your CTR. Visits can be obtained from your own site’s analytics, while some affiliate networks can track impressions for you and will give you CTR.

A heatmap can be used to understand user behavior and identify distractions which can then be used to tweak your landing page. If all other factors remain the same, increasing your CTR from 10 to 12% means your Earnings per Visitor will increase 20%!

Conversion Rate (CR) is directly controlled by the merchant but should still be measured by the affiliate. If you’re driving the same quality traffic to two merchants and the conversion rate is vastly different, reconsider who gets your visitors.

If a merchant is running their program on two different affiliate networks, split-test the tracking links to see if one converts higher than the other (you’d be surprised!).

Average Order Value (AOV) is also controlled more by the merchant than the publisher. If you’re receiving 12% commission from two different merchants and one upsells better than the other, you’ll earn more from the one with a higher AOV.

All affiliates know about Commission Rate, but few use this knowledge for negotiations. If two merchants are selling the same product and offer two different commissions, use that to negotiate higher commissions from the merchant.

What this all boils down to is Earnings per Visitor (EPV). What do you expect to earn from a user who comes to your website?

By increasing CTR, sending traffic to merchants with a higher AOV, CR, and commission rate, you can boost your EPV. EPV can also be increased through buying high-quality traffic, turning off low-quality traffic, or by increasing revenue by adding paid placements, sponsored posts, or display ads.

Here’s a cheat sheet to keep handy:

* CTR = Impressions / Clicks

* CR = Clicks / Number of Sales

* AOV = Total dollar amount of sales / Total number of sales

* Commission Rate = Amount of Sale / Your commission

* EPV = Total Earnings / Website Sessions

Now go make a spreadsheet and start measuring these metrics!

Eric is CTO at FMTC; he lives for big data and small acronyms.

This article appeared in issue 35 of FeedFront Magazine, which was published in July 2016. https://issuu.com/affiliatesummit/docs/feedfront-35

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