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How to measure the ROI of your affiliate marketing campaign

The customer path to conversion is a complex journey and one that will span across a number of various touch points.

As a result, it is becoming increasingly challenging for retailers to attribute sales to a specific channel.

In order to ascertain the ROI associated with each channel, it is important to determine the influence of each upon the customer’s eventual purchasing decision. When looking at implementing an effective attribution model, there are some key factors that need to be considered.

What are the key touchpoints?

There are numerous touchpoints a consumer will navigate on their path to conversion. It could start with looking at a review of a particular product, then visiting a price comparison site to ensure the best deal, and then finally completing the transaction having found a site offering cashback for the purchase. As well as the various online channels, purchasing intent can also be triggered by offline media – an advert in a newspaper or on the TV could spark this for example. Additionally, operating in an rapidly connected world with the rise of mobile commerce, there are new ways in which consumers are interacting with retailers. With smartphone penetration in the UK now exceeding 60% and our own network stats demonstrating that one in every five clicks is now through a mobile device, retailers need to understand how online and offline touch points are becoming increasingly blurred.

By undertstanding the key touchpoints involved in a path to conversion, retailers are able to begin to understand the value offered by each of them.

How can you track and measure these touchpoints?

There are a number of third-party tracking providers allowing retailers to monitor cross channel activity and de-duplicate these channels against one another. It is essential that full visibility of de-duplication policies is provided to give complete transparency over the campaign. Rather than looking at each channel individually, retailers should aim to uncover the multi-channel paths most effective at driving conversions.

De-duplication is often used as a way to ascertain incrementality across the performance marketing channel and is a process for identifying the channel or activity that has driven the conversion. This allows for spend to be apportioned effectively. It is important the logic for the de-duplication policy is centred on the understanding of a customer’s path to conversion and how they have interacted with various touchpoints prior to the conversion.

Retailers should note that de-duplication is not an attribution strategy. It is advisable for retailers to work from attribution towards de-duplication rather than vice versa.

What is the value of each touchpoint?

While a number of retailers are looking to embark on a multi attribution strategy, I would argue that value attribution is a more appropriate model. Multi attribution insinuates that each touch point has a bearing over the final conversion and each should be ‘rewarded’ for their role in the sale. An issue with this approach is the fact that a click is an arbitrary measure. There is nothing associated with the click to assign a measurement of value behind it. If there are three publishers involved in a sale, there is nothing to really indicate who has had the most influence over the conversion. By contrast, in a value attribution model, there are additional KPIs in play. Using this model you would know that a customer that typically converts through publisher A is a lot more valuable than one that converts through publisher B, so commission is weighted to represent the value added. By understanding the customer path to conversion, retailers are in a better position to understand the incrementality and value of sales and tie this back to an effective return on investment.

Measuring the ROI of an affiliate campaign goes beyond just looking at the top level figures. While the sales revenue generated is a good indicator of the return, it is important for retailers to look beyond this to truly understand the value of the channel. Once retailers are able to measure the value of their online campaigns effectively, they are better placed to implement and execute a strategy that will see an improvement in ROI.

Matt Swan, client strategist, Affiliate Window

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