The Elements of Tracking and Reporting

The purpose of a tracking and reporting program is to first give you a picture of how your affiliate network—and any particular affiliate in your network—is performing. Second, it should give you the necessary information to compensate each affiliate for traffic and sales generated by her. And third, it should provide an easy and timely process for your affiliates to obtain reports on their individual performance.

The basic elements of any tracking and reporting program consist of the following (see Table 9.1):

• Number of Impressions

• Number of Click-Throughs

• Number of Sales or Sales Leads

• Compensation Earned for Sales or Sales Leads

• Orders Shipped (where appropriate)

• Total Compensation to be Paid

Table 9.1. Sample Reports For the Week of July 17

Impressions	Click-Throughs	Sales	Compensation Earned	Orders Shipped	Total Earned
1000	126	6	$293	5	$222

All these elements must be tracked by or for you and posted on the Web for your affiliates to see in an easy to reach location. Let’s look at them one at a time.

Number of Impressions

This is one of the most important bits of information you can capture. It gives you a clear picture of how many times potential customers view your product or service offer. This component of your tracking program will tell you how many times your banner, graphic, or text link is seen by a visitor to an affiliate’s site. That is to say, how many times an affiliate’s visitor has seen your offer. The number of impressions of your offer from an affiliate site forms the basis of how well your program is performing. Even though you cannot accurately determine the amount of traffic an affiliate site attracts, by tracking impressions on the individual-affiliate and network levels, you can determine a number of things.

First, you can look at an affiliate’s application to your program and see what total traffic numbers he claimed his site generates. Keeping in mind that the numbers could be exaggerated, compare those numbers to the number of impressions that are being reported for that affiliate. See if there is a wide discrepancy between his traffic and your impressions.

Second, if there is a wide discrepancy, then perhaps the affiliate is not placing your program links on many of the pages of his site or not on the pages most frequented by his visitors. If so, it would warrant a visit to the site to see where your links are placed. You can remind the affiliate that it’s in his best interest and will generate more potential revenue if he would place your program links on the high-traffic Web pages of his site.

Third, if the affiliate is providing all the impressions he can but they are still very low, does mean that the affiliate should be dropped from the program? Not necessarily. The number of impressions is important, but what’s more important are the click-throughs that follow.

Number of Click-Throughs

If the importance of generating impressions for your offer rests on the shoulders of your affiliates, the number of click-throughs rest with you both. A click-through is the number of visitors to an affiliate’s site that actually click on your program link. There are a number of important variables here that will determine whether a site visitor will click on your offer. The first one, of course, is the offer itself. Is it strong enough to make a site visitor click on it to either find out more about the offer or make a purchase?

Your creative must be good enough to motivate a visitor to take action. As noted before, an affiliate can help by providing a personal recommendation for your offer using his or her credibility that visitors might trust, but as a merchant, the click-through responsibility rests squarely on your shoulders.

The click-through metric is important for another reason. You may have affiliate sites with a very low number of impressions, but their click-through rate may be as high or higher than those affiliates whose sites generate a larger number of impressions. What’s important in the affiliate game is not so much the number of impressions a site delivers, but the number of sales, leads, or actions it produces.

Number of Sales, Leads, or Actions

This is where the rubber hits the road. The whole objective of your affiliate program is to provide a cost-effective way to generate sales, produce leads, or have a consumer perform some kind of action, such as filling out a form, joining a club, or entering a contest where you can capture marketing information in the process. Capturing and recording the number of orders and their dollar amount, or the number of clicks-throughs or actions taken, is vitally important for both you and your affiliates. If you want to see how well your program is performing, and if you want to have accurate information to compensate your affiliate, you must capture and record this information. Your affiliates, of course, will be equally interested in seeing this data on a daily basis.

Compensation Earned

The metric of most interest to your affiliates is the amount of compensation earned from the actions taken by visitors to their site. Your tracking and recording program must provide affiliates with the amount of money they have earned on a daily basis through your affiliate program for sales made, clicks recorded, and forms filled out by their site visitors. The reports should be timely and made easily available to affiliates.

Keep in mind that this metric shows the amount earned—not necessarily the amount that will be paid. For example, an order can be taken and a commission earned on the sale but that compensation amount might not be the amount finally paid to the affiliate. The amount earned could be less after all deductions are made, such as amounts collected for sales taxes, duties, shipping, and handling.

Orders Shipped and Actual Compensation

If your affiliates are earning commissions on products, they must understand that they are paid only on orders that are actually shipped. This metric should be included in your reporting program for affiliates to see.

After all orders have been shipped, click-throughs recorded, and any and all actions required taken by an affiliate site visitor, the actual amount of compensation paid should be made available to the affiliate for review. This amount would be exclusive of amounts collected for sales taxes, duties, shipping, and handling—even credit card fraud and bad debt—and will reflect the actual amount paid to the affiliate.

Timeliness of Reports

Affiliates are an impatient bunch. They’ve been known to check their activity and sales reports on an hourly basis. Your report postings do not have to be that frequent. Updating affiliate reports once very 24 hours is adequate. But the more ways for them to request reports the better. Affiliates should be able to view their activity and sales reports by day, week, month, and quarter. They should also be able to view individual sales and total sales for each of these periods.

You should make a separate, password-protected Web site available to them to view the different reports. If you are running your own report tracking and reporting program, you pretty much do all the previous. But if you use a third-party affiliate solution provider, make sure that it provides both the elements of the tracking and reporting program discussed and a timely way for affiliates to view their report.