In our empirical world, data tracks our lives every day. Our phones track our time spent using certain applications, our Fitbits track our exercise routines, and our credit cards track our spending habits. In the business world, we track ROI (return on investment), net promoter scores, profit, gross margin, and most especially conversion rates, among other metrics. And for your affiliate marketing program, conversion rates are a key metric for identifying inefficiencies and rectifying them. How else will you know if your affiliates are missing, meeting, or exceeding expectations?
We’re going to examine how to calculate and optimize your affiliate marketing conversion rates. Tracking is a key pillar of a successful business and soon, it’ll be a key pillar for your affiliate marketing program.
Why is tracking conversion rates important?
From ReferralRock: “Affiliate conversion rates can be used to judge individual affiliate effectiveness. If one affiliate has a conversion rate of 8% and another has a conversion rate less than 1%, attention should be given to the higher producing affiliate. Additionally, if an affiliate has a very low conversion rate (less than 1%), this may be evidence that they are doing something fishy with your affiliate links, such as clickbait titles or maybe even unauthorized PPC [pay-per-click] campaigns.” –John Ross, CPA Exam Prep Insights
Successful marketing costs money and companies are quick to measure the results, so why is affiliate marketing an exception? If you have an affiliate program and have conversions through this, then how do you know if your program is successful?
You’ve heard the phrase “Content is King.” For affiliate marketers, conversion is queen. Conversions are the main objective. Analyzing your conversions leads to understanding which campaigns drive better conversions, minimize costs, and increase revenue.
To review, it’s important for two reasons:
- Measuring the effectiveness of ads and ad campaigns. If a campaign isn’t performing well, adjust and try again.
- Analyzing conversions can minimize costs and increase revenue. Knowing what works and what doesn’t means you can keep costs low by not wasting money on campaigns that won’t drive conversions.
Is a click-through rate the same as conversion rate?
No, both metrics serve different purposes for your affiliate program.
Conversion rates (CRs) display how many websites or application visitors complete an action out of your total number of visitors.
Click-through rates (CTRs) display how many visitors clicked your ad to visit your website or landing page.
Why are click-through and conversion rates important?
Both help you understand what’s working and what isn’t.
CTRs help you understand your customer base and clarify what does or doesn’t work when trying to captivate your intended audience.
Low CTRs may indicate you’re targeting the wrong audience or that you’re not engaging your audience enough to convince them to click on your advertisement.
High CTRs aren’t necessarily a positive sign because if your ads fail to target the correct keywords or if your ads, website landing pages, or marketing material aren’t relevant to a user, you may end up wasting money on ads that don’t help your bottom line. That’s why it’s important to test multiple elements for conversions.
Conversion rates help you measure the total success of your campaign. Again, conversions are the main objective of affiliate marketing. Without conversions, you aren’t running a successful campaign.
CR analysis reveals which methods are most effective in engaging and converting customers. Low CRs can indicate an ineffective method and highlight areas for improvement.
What is the average conversion rate for most companies and how to calculate CTRs and CRs
Click-through rates and conversion rates vary from company to company, industry to industry, but there are clear averages.
How to Calculate CTRs
Quantifying CTRs is challenging because it won’t reveal much about your target audience or the details of your ad. But typically, CTRs are around 1.9% for companies across various industries. There are variations depending on the industry, the platform, and the type of advertising.
To calculate the CTR for paid advertisements,
- Take the total number of clicks on the ad.
- Divide it by the total number of impressions (the total number of users who saw the ad).
As an example, if your ad generated 1000 clicks and was seen by 40,000 people during its campaign, then
The total number of clicks on the ad = 1000
The total number of impressions = 40000
CTR = 1000 (clicks) ÷ 40000 (impressions) = 0.025 x 100 (percentage) = 2.5%
So, the CTR is 2.5%.
How’s that for a midday (or whatever time of day it is for you) math lesson?
Tip: multiply your result by 100 to calculate the percentage.
Calculating CTRs isn’t exclusive to measuring paid advertising channels like Facebook Ads. You can also apply this to blog post visitors to reveal how many users clicked the link to your website from your blog post, out of the total number of visitors to the blog post itself.
Users who click website from the blog post ÷ Total number of blog visitors x 100 = CTR
We’ve learned how to calculate CTRs, now let’s learn how to calculate CRs.
How to Calculate CRs
On average, a good conversion rate is around 2.5-3.5%. Now, the formula for calculating CRs changes depending on the type of conversions you’re measuring.
To calculate the CR for paid advertisements,
- Take the number of conversions.
- Divide it by the number of total ad interactions tracked to a conversion during the same period.
Let’s say you have 50 conversions from 1,000 interactions.
The number of conversions = 50
The number of total ad interactions = 1,000
50/1000 = 5%
So your conversion rate is 5%. This is an above-average conversion rate!
For users visiting your website who turn into leads, your formula:
CR = Total number of leads collected ÷ total site traffic x 100 (percentage)
Another way to use conversion rates is to track how many website visitors convert into paying customers.
So, you’ll take the number of sales ÷ total traffic to the site x 100 (percentage). This is your conversion rate!
Tools for Tracking Conversion and Click-Through Rates
There are versatile tools to track conversion and click-through rates, some of which can track all sorts of marketing campaigns.
Here are two we recommend:
With LeadDyno, you can create tracking campaigns across your online marketing channels. These campaigns track how many clicks, leads, conversions, and cancellations you receive from each channel.
Take a quick look at tracking:
Once you add a tracking campaign, you can distinguish it with its own label and campaign code, enter the URL you’d like to track. Also, if you’d like to give campaigns in the same group a common tag, just enter a description, and a group name.
From here, you can track all sorts of statistics.
Once a user clicks on your link, the tracker displays all of the visitors, leads, purchases, and cancellations. Over time, you’ll quickly see which campaigns are successful, and which need attention.
You can also click on individual tracking campaigns to view specific details of that particular campaign.
Google Analytics is another resourceful tool for tracking. To assist in driving conversions, they offer Smart Goals, Smart Lists, and Session Quality data, all of which use machine learning to assist in driving conversions.
Google Analytics helps you understand who your audiences are, how they interact with your website’s content, how they discover your business (your traffic source), and much more.
Google Analytics SmartGoals gives you the ability to track whenever a user follows through with a specific action on your website (the conversion rate) like a form submission or product purchase.
This is an inside look at how Google Analytics SmartGoals tracks conversions through Macro and Micro goals:
Additionally, you can link your Google Analytics and AdWords accounts to track impressions and click-through rates.
Now, the question is
Should I Measure CTR or CR?
Andrew Chu of MGX Copy remarked that click-through rates and conversion rates affect two different sales funnel stages.
Click-through rates measure what action users perform before they visit your website. This is the TOFU (not the spongey, soy product, but it stands for Top Of FUnnel).
Conversion rates measure actions users take when they’re already on your website or the middle or bottom of the sales funnel (MOFU and BOFU).
For example, if you want to know how many users visited your website after seeing an affiliate’s Instagram ad, you’ll want to determine the click-through rate.
So, if your Insta ad garnered the attention of 50,000 users and 6500 of those users clicked the ad link or affiliate link to visit your website, your click-through rate is 13%--an unusually high number!
Taking it further, pretend you want to know how many of these users signed up for a free trial from the users who clicked on the Insta ad. This is the perfect time to measure conversion rates.
So, of the 6,500 individuals who clicked on the Instagram ad and visited your website, 25 users signed up for free trials. Your conversion rate is .38%! Uh oh, that’s a pretty low number! Why is that? We’ll examine how to optimize your affiliate conversion rates in the next section.
So, if you want to improve keyword ranking or increase blog traffic, measuring the click-through rate is imperative.
If you want to focus on growing your email newsletter, increasing free trial sign-ups, or increasing the number of products you sell, then focus on measuring and optimizing conversion rates.
The moral of the story? Use different metrics for different purposes.
How to Optimize Your Affiliate Conversion Rates
In the example above regarding Instagram ads, we found out we had an extremely low conversion rate of .38% from our ad. During your ad campaigns, you may have experienced a similarly low conversion rate and perhaps you wondered why? There are many reasons, but the question is how can we improve upon this number and increase conversions?
Glad you asked because we’re going to learn.
In affiliate marketing, the conversion rate increases as clicks on the affiliate links increase so there are two ways to get more sales:
- Drive more traffic to the landing page
- Increase the number of clicks on the links
Marketers tend to concentrate on driving traffic but increasing click-through rates is as important as increasing visitors to your landing pages.
So, to optimize your affiliate conversion rates, consider the following:
Is your website optimized and loading properly?
In this fast-paced world where social media moves faster than the speed of light, users expect a web page to load in under 2 seconds. That means that if your website is a slow-crawling tortoise barely finishing the loading race, something needs to change. And that something is your website speed.
Here’s the skinny, after one additional second of loading time, conversions drop by 7%. Then, after every additional second, conversions continue to drop by intervals of 7%.
Once, Amazon performed a site speed test concluding that they’d lose $1.6 billion every year if their website slowed down by one second. Only 1 second! That’s as long as it takes you to say “One second” out loud. Now, chances are your company isn’t the size of Amazon so perhaps these numbers are more relatable…
A one-second improvement in page load speeds leads to $70 more revenue per day (over $2000/monthly) for sites earning $1000 a day.
That’s an easy $70 if you optimize your website!
If your website is on the sluggish side, consider:
1. Running a site speed test.
2. Your hosting package. Contact your web hosting provider and find out if you’re on the right plan for your website’s needs. Look for:
- Bandwidth usage
- RAM usage
- Disk usage
- Using web optimization tools.
- Checking the responsiveness of your website across multiple devices. Responsive web design allows pages to fit all resolution sizes.
- Using a Content Delivery Network (CDN). CDNs like CloudFlare caches copies of your website’s content (images, and other large files) on servers located around the world. When a user from India visits your site, the cached files are downloaded to your visitor’s computer from a server located right around India. CDNs put content closer to your visitors.
- Auditing your plugins. If you have unused plugins installed on your website, remove them. These needlessly slow down your website. Also, consider plugin testing. To do this, delete one plugin from your website, test the speed. Then, add it back and delete another, test again. Do this until you find the culprit plugin. There may not be a culprit, but you won’t know until you check.
- Deleting spam comments. Whatever blogging software you use, delete old or spammy comments. This clears unwanted data from the database.
- Getting your code audited. Sometimes faulty website coding causes website speeds to slow down. Get on the phone with your web hosting provider and ask a support technician to look at your code.
Is your niche optimized?
If you’re this far into the article, chances are you already have an optimized niche. Which means you also have niche keywords. These are keywords applicable to your niche–any word or phrase associated with it.
To optimize your niche, add your niche keywords to everything: to your website, in your copy, on your affiliate landing page, your social media channels (especially using hashtags). Aim for low-competition keywords with around a 1-5,000 monthly search volume (or lower) and also use keyword variations. Anyone searching for these keywords is your niche buyer.
If you understand what your niche audience searches for, you can alter your content accordingly to reflect these searched keywords.
Are you creating high-quality content?
High-quality content is high-converting content that:
- Matches the audience’s search intent
- Is high-quality!
To create high-quality content: Be original. That’s a basic concept but what original content does is match the audience’s search intent.
Original content adds something new to the conversation. Remember the phrase “if you don’t have something nice to say, don’t say anything at all?” Well, I’m going to up the ante here by saying if you don’t have something original to say, don’t say it.
Don’t create content for the sole purpose of creating content and avoid spamming the internet with recycled anecdotes. Instead, create what’s called evergreen content. Like the leaves of evergreen trees, evergreen content remains relevant for years.
When creating content, ask yourself, “what is information that my audience needs? What will my audience want to hear in 10 years from now?”
Write content that stays relevant for years to come, not just for tomorrow or next month.
Don’t churn out content simply to rank for SEO purposes. SEO is important, but it’s a balancing act. Create quality content optimized for SEO but content that keeps your audience engaged.
Are you adding testimonials to your website?
Adding customer testimonials and reviews to your website tells your customers a story about what your company’s about, who your customers are, and what your products represent. Testimonials help you stand out from the competition and build trust with your audience. Interestingly, 72% of consumers say positive reviews make them more likely to trust a business.
Leverage this trust and raise your bottom line by adding customer testimonials to your affiliate marketing strategy.
Do you have a visible call to action on your website?
Are your Call to Action (CTA) buttons buried within your copy or do you feature it at the top of your page, glittering for all to see?
Call-to-actions should be near the top of your content, so users never miss it when scanning your website.
We recommend following a few CTA best practices:
- Use punchy, action-packed text. The language is striking, straightforward, and always action oriented. Substitute words like “enter” or “submit” to punchy words like “join” “try” “reserve.” Always pair these action words with specific text related to your business like: - Reserve your spot today!
- Join the Club!
- Try it Free!
- Use striking button colors. Apparently, green and orange buttons perform best, but the button color depends on your site’s design. Contrasting colors work best. Avoid camouflaging the button in with the background color (dark green button on a dark green background). Opt for on-brand, eye-catching colors.
- Use large, readable text.
- Use active voice only.
- Create a sense of urgency.
Remember: less is always better for Call-to-Action (CTA) buttons.
Do you A/B test your website?
A/B testing, also known as split testing, is a marketing strategy wherein you compare two versions of a web page or application to find which performs better.
There are three types of A/B tests and we recommend choosing whichever best fits your predicament.
- Traditional A/B test. This test presents users with two different versions of your pages at the same URL. You can compare two or several variations of a single element.
- Split tests (redirect tests). Split tests redirect your traffic towards one or several distinct URLs. If you’re hosting new pages, this is an effective testing approach.
- Multivariate (MVT) testing. This measures the overall impact multiple changes have on the same web page. With this testing, you can edit your banner, text color, landing page presentation, among other things.
For the purpose of optimizing affiliate conversion rates, we recommend traditional A/B testing.
Start with the original webpage, then create a new page with one minor change and test these two variations against one another. The variations are presented randomly to users. Some users are sent to the A version of the webpage and others are sent over to the B version. Whichever page has the most conversions becomes the new control or new A variable. Then, rinse and repeat the process. Make another small change (this is your new B variable), then test this again.
“If you double the number of experiments you do per year, you’re going to double your inventiveness,”--Jeff Bezos, CEO, Amazon 2004
Once you verify which version gets the most clicks, subscriptions, demo sign-ups, purchases, and more, you can better optimize your website for conversions.
Good sources for testing:
- All traffic sources
- Landing pages
- Paid advertisements
- Anything else you’d like to optimize
Are you promoting your products through multiple channels?
Ensure you broaden your online reach by promoting your products through multiple channels. Marketing channels communicate with your target audience, so why not capitalize on every channel relevant to your brand?
Cross-platform promotion amplifies your reach, relevance, and conversions while still prioritizing your customers’ needs.
However, proceed with caution. Remember what we said earlier about not spamming your content, but filling a relevant need of your audience? This applies here too.
When you’re cross-promoting your content or products, avoid replicating your content. Google defines duplicate content as content that completely matches other content in the same language or is “appreciably similar.” This refers to:
- Discussion forums generating both regular and edited pages targeted for mobile phones
- Printer-only version of web pages
- Items in an online store are shown or linked by different unique URLs
Google frowns on this deliberately duplicated content. So, when you’re creating content for various marketing channels, make sure it adds something new to the conversation.
And this is easy because each platform serves different purposes.
Quora is best for answering questions related to your niche, adding backlinks to your content, and generally helping your audience.
Youtube is best for entertaining and informing your intended audience.
Medium is great for short-form content answering questions or problems relating to your niche.
TikTok is best for short, snappy videos to inform or entertain your audience.
LinkedIn is best for industry-specific content that teaches your audience.
These are only a few out of hundreds of social media platforms on the internet and each serves a different purpose to the audience.
When creating original content, consider the intention for each platform.
Calculating click-through and conversion rates are necessary to track the success of your affiliate marketing campaign and tracking tools like LeadDyno and Google Analytics simplify the tracking process. Conversion rate analysis helps you measure the total success of your campaign–without it, you won’t know what works and what doesn’t. And if you don’t know what works, how do you know if your program is successful? Implementing a few of our optimization suggestions will surely set you up for conversion success.
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