In the age of technology and digital marketing, data plays a very significant role in everyone's lives. Whether you are tracking your heart rate during a run or checking on how many likes you received for an Instagram post, for most of us data analytics form part of our everyday routines. When it comes to affiliate marketing, two key metrics that are tracked are conversion rates and the ROI or ‘Return on Investment’.
Conversion Rates Defined
Conversions and your conversion rates refer to the actions taken by your target audience that you would utilize to measure your affiliate marketing performance and identify areas that are working and others that can be improved. These would include clicks, sign-ups, shares etc.
Are Conversion Rates and Click-throughs the Same Metric?
The simple answer is no, both these data sets serve different purposes in regards to your affiliate marketing.
Conversion Rates (CRs): shows how many website or application visitors complete an action on those platforms, out of the total number of people visiting the respective site or app.
Click-through (CTRs): usually refers to how many people have clicked on your ad or link to your website or landing page but not the action they take once they are there.
Why are Conversion and Click-through Rates Important?
Both these metrics help you identify and understand what is working and what is failing with regards to your campaigns. Low CTRs may indicate that your content is not engaging enough to convince your audience to click on it or perhaps that you are targeting the wrong market of people.
CTRs are the lifeblood of your affiliate marketing, without conversions your campaigns simply are not successful and you won’t be making much income from your efforts.
Here is an example of how to calculate your CTRs for paid advertisements.
Step 1: Take the total amount of clicks on the advertisement
Step 2: Divide this by the total number of people who actually saw the advertisement (impressions)
Here's an example:
Your advertisement generated 10,000 clicks and was seen by 400,000 people while it was published.
Total clicks: 10,000
Total Impressions: 400,000
CTR = 10,000 ÷ 400,000 = 0.025 X 100 = 2.5%
Therefore, your CTR is 2.5%
Here is an example of how to calculate your CRs for paid advertisements.
Step 1: Take the total amount of conversions on the advertisement
Step 2: Divide this by the total number of advertisement interactions tracked to a conversion during the same time frame
Here's an example:
Your advertisement generated 500 conversions and 10,000 interactions while it was published.
Total conversions: 500
Total interactions: 10,000
CR = 500 ÷ 10 000 = 0.05 X 100 = 5%
Therefore, your CR is 5%
Don’t worry, there is more information on the horizon...
There is more to come regarding optimizing your conversion rates so stay tuned to keep learning and keep an eye out for part 2, available exclusively in our Affiliate Learning Centre. Should you require help or have queries regarding any affiliate matters, feel free to reach out to our 24/7 customer support channels and one of our agents will connect you directly to an affiliate manager.
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