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Analyzing Affiliate Software for Higher Profitability

Posted on 3.16.2010

Knowing what campaign will deliver the best ROI in the shortest time possible is the goal of any good marketer; it saves time, money and increases profitability. Marketers who can identify where their strengths are in the acquisition process can accurately anticipate how a campaign is going to perform and then optimize it accordingly. Affiliate marketing software can provide in-depth reporting (beyond mere conversions), help you gather such intelligence, then test and optimize campaigns on an ongoing basis as market trends evolve.

There are four types of affiliate reporting to optimize your affiliate program: traffic, earnings, creatives, and period comparisons. Together, these reports provide valuable metrics on acquisition and ROI of your affiliate program and other marketing efforts.

Traffic Report
A traffic report helps identify and focus your strengths in the acquisition process or the sales funnel by allowing you to compare relative success at the click, registration, and conversion levels. This depth of intelligence provides a view into the full cycle of customer acquisition and the two influences on your key performance indicators (KPI’s); creatives and landing pages.

By comparing click-through-rate (CTR) against conversions, a traffic report helps you understand where campaigns engage users the most. For example, if you are experiencing high CTR’s but low conversions, you know that affiliates and the creatives you provide them are working, but your landing pages need optimization. Conversely, if your conversion rate is high but you’re not getting much traffic (a low CTR), then you know that either your creatives and/or affiliate strategy requires more resources.

Earnings Reports
An earnings report provides intelligence on what affiliate promotions and commission structures deliver the greatest return. This type of report lets you determine how individuals and groups of affiliates are performing, what’s working for them, and what you can do to maximize their performance.

Through an earnings report, you can identify top-earning affiliates, as well as analyze the performance of special promotions. For example, if you want to reward your highest-earning affiliates by offering a special promotion, the earning reports will help identify who those affiliates are. Once those affiliates are running the promotion, you can run then additional earnings reports to determine how well the promotion is working, and see which affiliates are having success and, therefore, should be considered for future promotions.

The level of intelligence provided by an earnings report allows you to identify which affiliates, promotions, and commissions deliver the best results. This insight helps determine where to focus your energy, and how to optimize the distribution of your resources — e.g. which affiliates are suited for a special promotion or custom commission structure.

Marketing Creative Reports
The creative report can be used to gain insight into what creatives deliver the best return. This kind of intelligence can be used to both maximize the performance of your affiliate program and test creatives before deploying them across other acquisition channels.

By analyzing what creatives convert at the click and acquisition level, you can maximize the ROI of your marketing spend on three fronts. First, you gain insight into what banners to drop and keep, respectively. For example, if you notice that text links are converting well, you know to invest more resources into text links. Similarly, if a banner receives no impressions, you know it is not popular with affiliates.

Second, a creative report can help increase affiliate retention and cut recruitment costs. If affiliates begin to consistently experience higher conversions with the creatives you provide, they will be much more likely to remain active. Your affiliate program will also develop a reputation for better conversions, which should reduce affiliate recruiting costs.

Finally, your creative report can help test and optimize creatives before rolling them out to other channels. By identifying what creatives convert, you can determine what design elements resonate with your target market, and then incorporate those elements into the development of additional creatives. Consequently, when you roll out optimized creatives across other channels, you will be maximizing your chance of getting not just impressions and clicks, but actual conversions.

Essentially, the performance-based model of your affiliate program minimizes the risks associated with testing new creatives. Because you’re only paying for results, losses on any new campaigns are limited to the time it takes to set up and monitor them. Your affiliate marketing software can also help control the scope of that testing so that you can test what creatives work best for particular products and their respective markets.

Period Comparison
A period comparison overview can be used to identify effective promotions, determine their value and optimize them. By providing an overview of changes in your affiliate program performance over time, a period comparison allows you to identify what caused a change in program performance, and then capitalize on it to maximize your program’s ROI.

The period comparison overview is particularly useful for conducting quarterly or seasonal analysis of a program’s performance. It will show a ratio of change for your affiliate program, for example, by what percentage conversions increase or decrease from one month to the next. That ratio can then be compared against other market performance metrics to determine whether a change was spurious, seasonal, or a result from a change in your acquisition strategy (such as a change in promotions, banners, or landing pages).

For instance, if last month showed an increase conversions, but there was not a consumer holiday (such as Christmas), that increase might be due to something else; such as an affiliate or consumer promotion. Consequently, you know if a promotion was successful and, if so, by what factor sales increased as a result. Similarly, if you launched a promotion last month but performance stayed the same, then you know that promotion does not resonate with your target market. This kind of intelligence can then be applied to developing and optimizing promotions that have a proven, positive impact on your ROI.

Maximizing Results
Getting the most out of your marketing campaigns requires that you monitor, analyze, and optimize them on an ongoing basis. As markets fluctuate from season to season, so do consumer behaviors — and so must your acquisition strategy. Affiliate software can be a powerful tool for monitoring changes in market performance, testing new strategies, and optimizing campaigns ahead of market trends. Because affiliate software tracks the complete acquisition cycle, from impression to conversion, it’s ideal for monitoring campaign performance. The performance-based model of affiliate marketing also makes affiliate software a perfect tool for testing campaigns inspired by your observations. Finally, because affiliate software can help identify the cause of a change in performance from one campaign to the next, it is also a great resource for optimizing campaigns on an ongoing basis.

Maximizing the ROI of your marketing spend requires that you (1) possess intelligence on market performance, and (2) take informed risks associate with new campaigns. The right affiliate software is capable of serving both functions, in order to help you get the most out of your affiliate program and campaigns across channels.

About the Author:
Nicky Senyard is the CEO of, an affiliate marketing agency that provides comprehensive affiliate marketing solutions to both merchants and affiliates.

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