Today, I’m going to give you a clear image of what affiliate marketing metrics you should take into consideration when you’re launching or analyzing campaigns/performances.
Before that, though, we need to distinguish some basic definitions.
6 Affiliate Marketing Metrics You Should Be Tracking
1. Earnings per Thousand Impressions (eCPM)
The acronym can be tricky because eCPM works with both gains and impressions.
This is a media buyer’s main reference.
It’s our compass!
Calculating the earnings per a thousand impressions will offer you more accuracy to measure your performance and be able to place your bid.
We’ll know how many gains we got and how many costs we should have maximum in order to have profitable campaigns.
This value will give you a reference but you need to analyze and compare it with other features so as to come to conclusions.
To calculate the eCPM, you can use the formula:
Payout is the value you’ll gain for each conversion.
On Mobidea, you can notice there are different payouts per segment (country > operator > operating system) because we have more than one offer rotating inside each segment.
The payouts can vary a lot between countries.
Usually, the most expensive countries have higher payouts.
One of the main factors to set the payout is the billing.
A simple billing with one step will convert more easily than a billing with 3 or 4 steps before the conversion.
4. Conversion Rate (CR)
This ratio will tell you how many clicks you need, on average, in order to get a conversion. The conversion rate also has positive correlation with billings, websites and targets performances.
The maximum value you’re willing to pay for a thousand impressions.
If you’re launching the campaign, you should take the country, impressions available, and spots characteristics into consideration.
If you run the campaign and collect data, you can calculate your eCPM to adjust your bid.
6. Cost per Thousand Impressions (CPM)
To compare costs and gains correctly, media buyers use the thousand impressions as a reference.
CPM provides you precious info: how many costs you had, on average, in order to get a thousand impressions.
7. Effective Cost per Acquisition (eCPA)
An average of how many costs you had until you got a conversion.
Wanna get to know all those mysterious terms that make you dizzy?
Find them all in the Mobidea’s Affiliate Marketing Glossary!
8 Myths about Affiliate Marketing Metrics
“Belgium payout is 14.70€ and India payout is 0.35€, so Belgium will be more profitable.”
It’s very common to see affiliates mistaking payouts for performance.
As we told you before, payouts don’t measure profitability.
Payouts are merely an idea of what we’ll receive for each conversion.
If you receive hundreds of small payouts you can make more money than with a few huge ones.
The key point in this myth is the Conversion Rate.
The best balance between Conversion Rate and Payout will make the difference in your performance.
Also, the payout is really important to set the amount of traffic you need before optimizing.
If you’re promoting an offer with an average payout of 0.40$, spending 30$ on the campaign is enough for you to start optimizing it.
On the other hand, if you promote, for example, a PPS offer, where the payout can be 70$, you’ll need to spend 500$ or more to have data in order to optimize properly.
“I won’t have good performances with lower payouts.”
Some affiliates are afraid to work with small payouts.
Once again, the payout is not the best performance metric.
You always need to be focused on the eCPM.
“The affiliate network shows eCPM=132.43€ for Portugal/MEO and I only got 87.30€”
Let’s focus on Mobidea’s eCPM. Your eCPM is calculated based on your gains and the visits that reached Mobidea.
When we provide eCPMs we get aggregated data from media buyers, webmasters, networks and social networks.
Their performance may vary among them but we have the global average from all the accounts.
When you work with Mobidea, your account will reflect only your results.
You may have a lower, similar or even bigger performance than the main average according to the quality of the users.
“I only work with big ratios.”
Lower ratios don’t necessarily mean you’re gonna have fewer gains.
When you check Conversion Rates you should also look to payouts and the eCPMs.
Consider the same amount of impressions for the following scenarios:
Scenario 1: Conversion Rate = 1/20; Payout = 0.50€; Revenue = 25€.
Scenario 2: Conversion Rate = 1/40; Payout = 2€; Revenue = 50€.
A higher payout can compensate a lower Conversion Rate.
Each segment has a different behaviour; your traffic quality also influences the ratios, the offer’s flow, etc.
You must look at all the data you have, compare similar parameters and work accordingly.
In those scenarios, the one with lower Conversion Rate (Scenario 2) has a better performance, because it has the best combination of Conversion Rate vs Payout.
Working with high Conversion Rates will provide you data sooner and that’s a huge advantage to media buyers.
“Portugal global eCPM is 25€ and my Payouts were 1€!!!”
Payouts are not eCPM. We should always look at eCPMs in order to analyse performances; the real gains per a thousand visits.
You can have good performances with low payouts and bad performances with huge payouts.
To compare performances, you should calculate your eCPM.
“If Mobidea shows eCPM=25€ it means that I will receive 25€ if I get 1000 impressions.”
It’s false! The eCPM shows an average of all Mobidea’s accounts for a specific segment.
This means that eCPMs are not fixed numbers.
To reach that eCPM, you should get 25€ on average for a thousand visits (not impressions) on Mobidea.
If you get a thousand impressions, you need to check how many were counted as visits on Mobidea and then check how much your signups had done.
“How many signups will I have with an eCPM=20€?”
You can have only one signup, you can have many of them or none of them.
eCPM is an average.
For example, with a 1€ payout, you can have 10 signups in a thousand visits and, in the next thousand, you can have 30.
The average will display 20€ per a thousand impressions.
Also, with one thousand visits, you can have one signup with a payout of 20€ or 20 signups with a payout of 1€.
“I sent the same amount of traffic my friend sent and I got less revenues.”
Even with the same traffic source and with the same offers, the performances won’t be the same for everybody.
The eCPMs are an average of all performances.
The banner spot, content, the payout or the operators can explain different performances for the same amount of traffic.
Optimize your campaigns, look for the best combination of offers VS traffic characteristics in order to get the best performance possible.
I think this article can be helpful to clarify and distinguish these metrics and concepts.
When you check Mobidea, remember that your performance is influenced by a combination of different factors and not only by a specific payout or a good conversion rate.
The eCPM is always the best metric to take into consideration when you want to know your performance.
Moral Support Hero
Xavier comes from a background of Finance and Management which means he loves numbers, sheets, data and lives for analysis. This is the reason why he likes to say he was born to be dedicated to Media Buying. This business is all about analyzing, testing and experimenting with different banners; it’s about seeing what others don’t after spending hours surrounded by numbers. It’s a thrill and a hunt and he happens to think it’s the best job he could possibly have. When he isn't worried about helping Mobidea become better than it's even possible, Xavier enjoys playing softball with his childhood friends!
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