Making Sense of the Numbers

Whether you use a homegrown tracking and reporting system or the services of a third-party solution provider, making sense of the numbers will help you manage and develop your program to profitability. Making sense of the number of impressions, clicks, leads, and sales that appear on your daily reports not only tell you how well an individual affiliate is performing, but also how well your marketing initiatives are working. You’ve spent a lot of money designing your promotions and creating the creatives. The numbers generated by your tracking program can tell you a lot about how successful your marketing efforts have been—and can be—in the future.

Do

DO study and analyze your click-through reports to see how successful your marketing efforts are and whether your creative is making customers click on your offer.

So, where do you start?

First, set up a table that contains the necessary reporting statistics that you’ll need to make sense of your numbers (see Table 9.3).

Once you’ve created your table, the first step is to look at the total number of impressions your banner or text links are generating across your affiliate network. Then look at the total number of clicks or click-throughs on your banner or text links. Using these two numbers, calculate the conversion rate of impressions to clicks. You may be generating a large number of impressions, and that impression rate may be growing month to month due to the addition of new affiliates or a better job of attracting visitors by some of your better affiliates. But what’s important is the conversion rate of those visitor impressions to visitor action.

Don’t

DON’T use the same creative—graphic or text—for more than a month or so. Keep your creative fresh and constantly changing. You expect to see content change on your affiliate sites and they expect to see your creative change as well.

If your impressions are going up but the number of click-throughs are stagnant or going down, these are red flags telling you either that your offers are not generating interest or perhaps your affiliates are no longer placing your offers on their high-traffic Web pages. Bad positioning on your existing affiliate sites is one reason for a dropping impression rate, but another one is new affiliates that do not generate enough traffic—this can lower your overall impression rate. So it’s best to look at both existing affiliates and their prior impression rate. If they seem in line but your overall impression rate is dropping, its time to look at the new affiliates and what they are generating.

In other words, if you discover that the majority of your impressions are being served by the same group of affiliates, the falling click-through rates are more likely a function of the need for new creatives.

The next number to look at is the action taken after a visitor clicks on your offer. This action can result in a sale, a lead, or filling out a form or entering a contest.

Obviously you want to see these actions, or transactions, grow higher and higher each month. That’s the purpose of your affiliate program. If people are interested enough in clicking on your offer but do not perform the transaction, it reflects on your ability to justify the offer and close the sale.

Another important use for your transaction rate is seeing which affiliates are performing best in your program. At first glance, your best affiliates would be thought of as those with the highest impressions and click-through rates. But that’s not necessarily so. An affiliate could generate a low number of impressions AND a low number of click-throughs, but his conversion rate of impressions to transactions can be high. An affiliate may have lower traffic than other affiliates in your program, but that traffic may be highly targeted, resulting in higher transactions for you.

That’s why studying the numbers generated from your reports is very important in managing a successful affiliate program.