Being a powerful asset in your strategy, affiliate marketing will bring you leads, views and sales. In fact, affiliate marketing results in as much as 16% of online orders in the US and has a 2022 market value of $17B. So how does affiliate tracking work and what tracking software features do you need? Keep reading to find out.
What is affiliate marketing and tracking software?
Affiliate marketing features an affiliate partner (or marketer) who receives a commission for promoting a product or service. The commission for affiliate partners can come from leads, website visits, app downloads or product sales.
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A business can have a lot of affiliate partners: for example, Amazon has 900,000 affiliates. So you need to track what sale or lead came from a particular affiliate. This is when affiliate marketing tracking software comes in handy.
Affiliate marketing tracking software gives you access to many tracking methods so that you can manage your affiliate network by tracking various metrics. These include website visits, clicks of promotional content, referrals, orders and commissions paid to marketers.
Affiliate marketing tracking methods
While there are different ways you can go about affiliate tracking, some are more common than others. Here are the most popular affiliate marketing tracking methods.
1. Cookie tracking
So when you click on a promo or ad, the browser stores a new cookie with the link you clicked, along with other data, like the time and date when you clicked it. This information then helps track down whose affiliate link it was and what commission you have to pay to the affiliate.
However, while being a common affiliate marketing tracking method, it is not the most reliable. Any user can delete cookies from their browser or use the Incognito mode — these disable the ability to track affiliate campaigns.
2. Per product tracking
Tracking affiliate marketing per product implies tracking affiliate activity based on separate products. This tracking method is the most suitable if you:
- offer different commissions for different campaigns
- are selling online in several e-commerce stores
- want to customize your tracking preferences, i.e., track separate products, groups of products or product categories
Among other tracking methods in affiliate marketing, this one allows for better segmentation and management of your differently priced campaigns.
3. Postback URL tracking
Postback URL tracking is a more reliable affiliate marketing tracking method compared to others. It poses no privacy concerns and is a server-to-server tracking method.
When a user opens a website’s landing page, a unique ID is added to the URL and remains as the user browses the website. So the affiliate marketer and their commission can be identified based on the data logged to the ID.
4. Impression tracking
Impression tracking methods imply tracking how many times a user has seen your ad, regardless of whether they click on it. Because ad display increases brand awareness and may provoke interest in your product or website, impressions matter, and they’re as important as clicks.
Important tracking software features
The purpose of affiliate marketing tracking software is to consolidate various data to enable convenient and effective campaign tracking, management and optimization. And these capabilities come with the following features, which are crucial for affiliate tracking software.
IP tracking is rarely used among other affiliate marketing tracking methods, but it can be helpful when some other affiliate marketing tracking methods are unavailable. In particular, IP tracking is used when:
- cookies are unidentifiable
- the user doesn’t have a Flash Player
So when either of the conditions above occurs, the last clicks made from the same IP address are identified. Then, the clicks get assigned unique affiliate and campaign IDs so that the affiliate can get the commission from those clicks.
Lifetime, or recurring, commission is paid when a customer makes more than one purchase through the same affiliate. But to be able to pay your affiliates for every sale made through their affiliate links, you need tracking software.
The tracking tool saves the credentials (like an email) of every customer who has purchased via affiliate marketing campaigns and can identify a recurring purchase. This way, you can track what affiliates have to be paid a lifetime commission.
Action tracking provides data on every step of your customer, enabling you to observe their behavior throughout the entire customer journey. This includes actions like clicks, reading the product description, browsing through the catalog and actually making a sale, among others.
Naturally, you can create deeply customized affiliate campaigns with the action tracking option and pay affiliates for different types of user engagement they generate.
Special/private affiliate campaigns
If you want to create different conditions for different affiliate partners, like different commission fees, you can create private campaigns that other partners won’t see. This will allow you to track and manage these special campaigns separately from the others.
Affiliate marketing payment models
Now that you know the most popular tracking methods and features that are a must in tracking software, let’s consider what you can do with the data you’re tracking.
The paid marketing model you choose for your affiliates will define the type of data you have to focus on while tracking to calculate affiliate commissions:
- CPS (Cost Per Sale) — the affiliate gets a commission for every sale made via their link. This is the most common payment model in affiliate marketing.
- CPC (Cost per Click) — the affiliate is paid when a user clicks on your ad, making it a cost-efficient payment model because it is driven by the customer’s interest and brings traffic to the website even if no sales are made.
- CPM (Cost per Mille) — the commission is calculated per 1,000 impressions on your ad by dividing the entire campaign’s budget by the total number of impressions it has and multiplying it by 1,000.
- CPL (Cost per Lead) — the commission is paid when a user performs particular actions, i.e., subscribes to your newsletter, registers on your online course platform, etc., therefore showing interest in becoming a customer.
- CPA (Cost per Action/Acquisition) — this model implies that you pay a commission to the affiliate only if a user actually makes a purchase as opposed to only showing interest in your product or service.
- CPI (Cost per Installation) — the affiliate gets a commission for every download or installation, which is a suitable paid marketing model for app or software vendors.
As you can see, there are different ways you can calculate affiliate fees. Naturally, your preferred method will depend on the type of product or service you’re selling and the goal of your affiliate marketing campaign.
Affiliate marketing is a strong asset in an e-commerce marketing strategy — it brings website traffic, leads and purchases. There are different tracking methods out there that focus on tracking different metrics. And when powered by affiliate tracking software, you get access to a full view of your affiliate network and campaigns.