By Todd Crawford on June 16, 2015
Affiliate marketing has been around for over 20 years yet the data we use to measure it hasn’t changed much. Agencies and marketing managers need to be able to demonstrate the value of the affiliate channel as well as the value of individual affiliate partners. In my previous blog post, The Secret to Affiliate Marketing Incrementality Revealed, I showed you how to determine and measure incremental value in the affiliate channel. In this post, I will show you how to uncover the hidden value in your affiliate channel.
Typical affiliate reporting shows you which affiliate was credited with a sale, reservation or lead. This is the age old data we all use to measure and manage the affiliate channel. It allows us to see who won, and consequently got paid, for each conversion.
As with all data, there is often more to the story than what we see on the surface. If we dig a little deeper, we can uncover more data than we originally thought. For example, we may know who won a conversion and what we paid them, but what is often unknown is what else the affiliate did to help other affiliates or channels get credit for the conversion. In other words, what value did my affiliates contribute that I didn’t pay them for?
In Table 1 above, the “credited” revenues are sales the affiliates won, meaning they received commission for them. The “contributed” revenues are sales that these affiliates were involved with but did not have the winning click, so they were not paid for those sales. The credited plus the contributed revenues equal the “participated” revenues.
“Contributed” revenues are essentially the overlap with other affiliates or marketing channels. The consumer touched more than one ad across multiple partners/channels. A contributor could have been anywhere between the first touch and the second to the last touch (based on a last click crediting model).
Here’s why this is important. Historically, we have only been able to see the credited revenues by affiliate. With this data, we can now see their overall contribution beyond their wins. If we dig a little deeper we can actually see what other channels or affiliates benefited from these contributions.
In Table 2, we see examples of where these “contributions” went and detail the specific channels or affiliates that were credited with the conversions. In the middle column, we see how much revenue was credited to other channels or affiliates by Affiliate A. Conversely, in the third column, we can see which channels contributed to an Affiliate A’s credited conversions.
Often other marketing channels will complain that affiliates are getting credit for conversions that they feel they drove. Armed with this data, an affiliate manager can clearly see that this affiliate is contributing more to paid search than it is receiving from paid search.
The data detailed above shows the power of moving away from a siloed, affiliate-centric view and leveraging a multi-channel perspective instead. Impact Radius is focused on giving marketers a complete picture of their marketing mix so they can make intelligent, informed decisions that drive incremental revenues, more cost-effective customer acquisition costs (CAC) and improved ROAS. If you are interested in learning more about how to leverage the hidden value of your affiliate data, please contact us to schedule a demo.