Affiliate marketing KPIs
KPI stands for key performance indicator. This metric allows you to understand
how well your advertising campaign is performing. If the KPI is reached or
exceeded, then the webmaster did a fine job. If the KPI has not reached the
desired value, then the ad campaign was set up poorly.
Today we’re talking about the main metrics that are used to evaluate KPIs.
Important: the list of indicators that are needed to evaluate the
effectiveness depends on the tracker, product, vertical, affiliate program
and the webmaster themself.
Metric: ROAS — ad campaign profits;
Formula: ROAS = Advertising Revenue / Advertising Cost x 100%;
Description: ROAS is the ad campaign’s income/expenses ratio. If it’s over 100%,
the campaign is successful, if it’s not - you’re suffering losses.
Metric: CPA — cost per action;
Formula: CPA = Ad spend/Number of completed actions;
Description: This is the amount you pay Facebook, Ads or whatever other
platform once a user performs the target action. The lower the indicator, the
better
Metric: CAC — cost per client;
Formula: CAC = Customer Acquisition Cost/Number of New Customers clients;
Description: This is the amount that you spent to attract 1 client. Calculated the
same way as CPA
Metric: CR — conversion rate;
Formula: CR = Number of conversions/Number of website visitors x 100%;
Description: Determines the number of people who performed the target action
Metric: CPC — cost per click;
Formula: CPC = Cost per number/Number of clicks;
Description: This is a very superficial indicator, but useful for monitoring costs
and generating forecasts for your AC.
Metric: Time to Payback CAC — time the ad campaign needs to break even;
Formula: Time to Payback CAC = Customer Acquisition Cost (CAC)/
Average revenue per client per transfer (ARPC);
Description: This metric shows how much time it will take to recoup the cost of
attracting 1 client
Metric: ARP U — average user income;
Formula: ARPU = Total Revenue/Number of Users;
Description: Shows how much income each user generated for a specific period
Metric: Display frequency;
Description: Here you can track how often a person sees ads over a certain time.
Metric: CPL — cost per lead;
Formula: CPL= Ad spend/Number of leads acquired;
Description: The metric is very similar to CPA and CAC, only here we are talking
about potential customers
Metric: Churn Rate — user engagement and bounce rate;
Formula: Churn Rate = Number of clients who left for the transfer/
Number of clients at the beginning of the period x 100%;
Description: This is a customer churn rate. If it is high, there are some problems
with the product, funnel, price or landing page
Each webmaster decides which metrics are most vital based on their particular ad
campaign. To keep tabs on its performance, you can use trackers or built-in tools
of the affiliate program itself.
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