How to Calculate the ROI of Your Affiliate Program
ROI (Return on Investment) is a key performance measure that is used to evaluate the efficiency of an investment. It helps to calculate the effectiveness of your affiliate program. Once you want to choose the most successful affiliate marketing campaigns, or understand which products, promotions, or links are the most profitable for you – use this indicator.
First of all, let's see what information do you need
1. The period for analysis
For example, you want to estimate the ROI of an affiliate program. To get the right ROI as possible, analyze at least 3-6 months' worth of data.
2. The costs
It depends on the situation and business. Thus, It may include the price you paid for banners creation, hosting landing pages and your affiliate commissions. You have to account for all expenses.
3. The revenue
It's simple – count the rate of return you get from your affiliate program.
The ROI formula
ROI (%) = (Gain from Investment – Cost of Investment) / Cost of Investment x 100
*The basic ROI formula
ROI (%) = (Affiliate Marketing Revenue – Affiliate Marketing Costs) / Affiliate Marketing Costs x 100
*The ROI formula for an affiliate marketing campaign
To see how it works, let's say that you spent 2500$ on your affiliate marketing program, and the program generated 3000$ in revenue. After you put this data into the formula your ROI will be 20%. Here’s the calculation: (3,000$-2,500$) / 2,500$ x 100 = 20%
Besides, there is one more useful indicator that can help you to analyze your campaigns and select the most profitable. ROAS (Return on Ad Spend) – it is a measure of the ROI of your ad spend. In simple terms, this is the profit you make for every dollar you spend on advertising.
Average ROI in Dating and Gambling
Comparing these parameters you should pay attention to the data. What can influence the ROI indicator?
- GEO;
- Type of resource;
- Places for traffic purchasing;
- Placement time;
- Placement day;
- Type of platform.
The average ROI you can base on: for dating – 20-30%, for gambling – 40-50% or higher (approximately 20-30% more than in dating). At C3PA our best offers made up 40-50% in dating:
DreamSingles [SOI]
GEO – US, CA, UK, AU
WEB/WAP – $6.5
Girlsformeet [DOI]
GEO – US
WEB/WAP – 3 EUR
Seitensprungtreff24 CPL [SOI]
GEO – DE, AT, CH
DE: web – 3 EUR; mob – 2.7 EUR
AT: web – 4 EUR; mob – 3,5 EUR
CH: web – 5 EUR; mob – 4.5 EUR
Want to work with us? Contact our manager:
Alex, Telegram: @holoden
Skype: live:.cid.58d26dc470c6be31
The ROAS formula
ROAS (%) = (Total campaign revenue / Total campaign cost) x 100
*The basic ROAS formula
Of course, when you analyze the effectiveness of an ads campaign you will be looking at metrics such as traffic, impressions, clicks, and conversions. But they say nothing about the cost-effectiveness of your ad. Let's say that you look at the metrics of two campaigns with the same budget – 150$:
- “X” ad generated: 4500 impressions, and 2000 clicks;
- “Y” ad generated: 2500 impressions, and 1000 clicks.
If you draw conclusions based only on quantitative indicators, you might decide that the first campaign worked better. But when you calculate the ROAS of each of them, you'll see that it's not that simple.
To see the ROAS you need to find out the revenue for each of them. For example, the total revenue from the “X” campaign was 150$, from “Y” – 450$. Thus, the ROAS from first will be 100%, and from second – 300%. So, when your campaign goal is to increase brand awareness you can lean on the number of impressions, but when your key objective is to generate more sales – don't forget to use this formula.
How to use ROI and ROAS
To be a successful affiliate, you must correctly measure the effectiveness of your ad campaigns, affiliate marketing programs, and partnerships.
As you can see, the ROAS helps to more clearly define which company generates the most profit. Measuring it, you can optimize your ads, and understand in which campaigns you should invest more budget. And the ROI, in addition to choosing the best program, can help determine which affiliate partners are worth continuing to work, and with whom it is better to end cooperation. For example, if you spend $1000 on promoting and one affiliate gives you 200% ROI while the second produces 500% you should focus on the last one.
How to improve your Affiliate Marketing Program
In affiliate marketing it's better to accurately find the agencies or networks to work with. There are a lot of proposals nowadays, and the advantage is that you don't need to find affiliates, control your campaigns or find out a profit strategy as an advertiser because such agencies already have a database of affiliates and can find someone who will work out for your niche. Besides, if you are an affiliate – you can choose the network to join, and then find the different offers to work, and earn the money! All you need to do is find the best platform for you.
At C3PA you can become an affiliate, thus we provide you profitable offers and a high-level of customer support. Also, we collaborate with only trusted affiliates with HQ traffic and aim on building long-term relationships that are based on mutual benefits for both parties. So you can also join our network as an advertiser.
Why C3PA?
- We generate high ROI traffic for our clients from 2015;
- monitor performance and always optimize the campaigns;
- analyze the profitability of traffic;
- advise advertisers and affiliates on how to optimize traffic, or improve the offer;
- and we are always ready to negotiate favorable terms for both parties!
Join us by the link here