Affiliate marketing guide to driving incremental revenue

How Do You Know If Your Affiliate Marketing Program is Driving Incremental Revenue?

Some elements in the marketing mix enhance a brand’s position in the marketplace, reinforce or build on brand reputation, and extend reach to build awareness. These efforts, however important, take time to measure and are often difficult to align with sales and revenue growth. 

But in the world of performance marketing, we live and breathe accurate and unbiased metrics that help us allocate resources, and fill gaps in our pipelines. This is where the matter of incrementality –  the measurement of additional value or revenue – becomes critical to marketing planning and budgeting. 

With finite performance marketing spending budgets, brands must know where every dollar is going and the exact return on investment they yield. Understanding the value of spending against strategic priorities, whether it be acquisition of net new customers, reinforcing loyalty through repeat purchasing, or expanding purchase frequency among existing customers, depends on accurate data and analysis of truly incremental growth attributed to each channel or program. 

Despite all the technology that aims to crunch data into minute pieces, there’s more re-reporting than there is true insight based on accurate attribution. This is the case across many marketing channels and affiliate marketing is no exception.

What is incrementality in affiliate marketing?

Incrementality in affiliate marketing refers to the measure of additional value or revenue generated by an affiliate marketing campaign that would not have been achieved without the presence of the affiliate channel. In other words, it assesses the impact of affiliate marketing efforts on driving sales or actions that would not have occurred through other marketing channels or organic means. The robust landscape of digital marketing makes knowing what revenue is truly incremental can be a confusing, time-consuming task that may be underserved, The result is that spending is often misattributed to incorrect channels, and budgets are misallocated based on surface data sets.

How do affiliate marketers define incrementality?

Affiliate marketers define incrementality as the additional value or revenue generated as a direct result of their affiliate program placements or campaigns. It refers to the measurable increase in sales, conversions, or other desired actions that can be attributed to the affiliate marketing activities, beyond just looking at last click attribution.

Incrementality is the impact that affiliate marketing has on driving additional business compared to what would have naturally occurred without the affiliate’s involvement. This concept is crucial for assessing the effectiveness and ROI of affiliate marketing campaigns. 

Affiliate marketing programs are built on many pillars: publishers who have the right audiences to view affiliate content and links, networks who track the activity with publishers, and brands who often support growth with a mix of powerful – and sometimes overlapping – marketing channels. 

With all the varying “sources of truth” delivered by different partners in the affiliate space, it’s often a puzzle to know which data is correct, or to understand why some data differs from that which marketers use in their own internal analyses across channels. Finding a way to clear out misattribution avoids overpayment of commissions, and over- or under-stated investment in the channels or programs that work best to deliver incremental growth. 

Why is understanding Incrementality important?

Incrementality is important for a few reasons:

Optimizing ROI: By understanding the incremental impact of affiliate marketing efforts, advertisers can optimize their budgets and allocate resources more effectively. They can focus on partnerships and strategies that deliver the highest incremental value, maximizing return on investment (ROI).

Preventing Cannibalization: Without measuring incrementality, there is a risk of attributing sales to the affiliate channel that would have occurred anyway through other channels or organic means. Brands often fear that affiliate marketing sales could just be cannibalizing from their other marketing efforts and by having clear insight into attribution, this is avoided and brands can see the true incremental value of the channel.

Enhancing Partner Relationships: Incrementality analysis can provide valuable insights to both advertisers and affiliate partners. In one example, when testing new partnerships, we saw better incremental performance from a set of smaller publications than we did with a more traditional partner based on the specific strategy set by that brand. What is incremental for one business may not be for another, based on the objectives of a specific affiliate campaign. 

By demonstrating the true value that affiliates bring to the table, advertisers can build stronger relationships with their partners and foster collaboration based on mutual understanding and trust.

Improving Strategy and Decision Making: Incrementality insights help advertisers make more informed decisions about their affiliate marketing strategies. They can identify areas for improvement, refine targeting and messaging, and experiment with new approaches to drive incremental value. Without reliable incremental data, for example, marketers may be allocating resources that reward repeat users when their affiliate strategy is all about new user acquisition

Aligning with Business Goals: Ultimately, incrementality measurement ensures that affiliate marketing efforts align with broader business objectives. Understanding at the most granular level what is reported as truly incremental helps advertisers focus proven campaign strategies rather than simply attributing sales to the channel in general without understanding the interaction between sales drivers and revenue results. 

Overall, incrementality in affiliate marketing is crucial for accurately assessing performance, optimizing strategies, and maximizing the impact of affiliate partnerships on business outcomes.

Common obstacles to understanding incremental  affiliate program performance 

Attribution Complexity: Attribution models used in affiliate marketing often involve last-click or multi-touch attribution, which may not accurately capture the incremental value of affiliate efforts. Assigning credit for conversions solely based on the last interaction can overlook the contribution of every other affiliate and touchpoint in the conversion path.

Overlapping Touchpoints: Customers may interact with multiple touchpoints across various channels before making a purchase. It can be difficult to isolate the influence of the affiliate channel from other marketing efforts, leading to challenges in assessing incrementality accurately.

Cannibalization: Affiliate marketing activities may inadvertently cannibalize sales that would have occurred organically or through other channels. Without proper measurement techniques, it can be challenging to distinguish between sales driven by affiliates and those that would have happened anyway.

Data Limitations: Limited access to comprehensive data and analytics from the networks can hinder efforts to assess incrementality accurately. Incomplete or inaccurate data may obscure the true impact of affiliate marketing on sales and conversions. It’s effective to recruit publishers based on data vs. just gut feelings. 

How Can Technology Drive Better Insights Based on Understanding Incrementality Data?

Understanding incrementality helps marketers optimize their strategies by allowing them to identify high-performing affiliates, allocate resources effectively, optimize commission structures, improve targeting and messaging, conduct testing and experimentation, and build stronger partnerships, all of which lead to increased ROI from affiliate marketing efforts.

PartnerCentric developed the FUSE Incrementality™ Technology to address one of the most critical challenges in partnership marketing: accurately measuring and optimizing the real incremental value from affiliate partnerships, content creators, and publishers. Its effectiveness for clients is evident in several key aspects:

• Precise Incremental Value Assessment: It quantifies the specific impact of each marketing activity, enabling businesses to discern the true incremental value generated by their partners, distinguishing between effective growth drivers and less productive partnerships.
• Enhanced ROI Analysis: By providing a detailed correlation between partner contributions and revenue increases, the technology ensures that marketing budgets are allocated to the most effective channels and partners, maximizing the return on investment.
• Data-Driven Strategy Optimization: FUSE Incrementality™ aids in refining marketing strategies based on solid data, allowing clients to focus their efforts on partners and tactics that drive genuine growth, enhancing campaign impact and efficiency.
• Comprehensive Customer Journey Insights: Offering insights into how different partners impact various stages of the customer journey, it allows clients to align their marketing efforts more closely with customer behavior, boosting overall marketing effectiveness.
• Objective Decision-Making Support: Furnishing data-driven insights, the technology moves brands away from intuition-based approaches to informed decision-making, leading to more strategic and impactful marketing initiatives.

In essence, the FUSE Incrementality™ technology is always on and tackles the challenge of accurately measuring and enhancing the true incremental impact in the affiliate channel, resulting in better resource allocation, strategy development, and understanding of the customer journey for clients. This isn’t a one-off report. It is happening in real time, all the time.

More about FUSE Incrementality™ Technology

The PartnerCentric FUSE Incrementality™ technology is a revolutionary intelligence platform for brands and affiliate marketers that sets a new standard for true incrementality measurement. Its multifaceted approach assesses new customer creation, influence across the purchase funnel, and reactivation of purchase paths. These elements are combined into a clear, actionable score harmonized with a brand’s analytics, ensuring comprehensive, unbiased business growth insights.

Key Benefits of FUSE Incrementality™:

1. Comprehensive Partner Contribution Analysis: Analyzing partner contributions throughout the customer journey helps marketers link ROI to early interactions, offering detailed insights into partner impact and user engagement.
2. Optimized Marketing Strategies: Refining strategies by pinpointing growth drivers, such as the most effective channels, creatives, targeting options, and customer segments, to ensure maximum campaign impact and efficiency.
3. Enhanced Customer Experience: Offering an unbiased incrementality analysis deepens insights into the customer journey and conversion triggers, facilitating targeted and personalized marketing strategies that resonate.
4. Data-Driven Decision Making: Providing valuable insights and data, it enables brands to comprehend the true impact of the affiliate channel, leading to informed, evidence-based marketing decisions.

These innovations have been pivotal in generating a staggering $2 billion in revenue for our clients to date. Check out our Fuse Incrementality™ insights dashboard here. 

Current Enhancements

The PartnerCentric FUSE Incrementality™ technology stands out in the partnership marketing analytics field with unique features that have evolved significantly over the past year:

• Patented FUSE Technology Integration: This technology merges advanced analytics with industry-specific insights, offering a sophisticated tool for nuanced partner performance evaluation.
• Client-Specific Marketing Data Utilization: It leverages clients’ internal marketing analytics for personalized, relevant insights, aligning with their established marketing metrics.
• Transparent, Comprehensive Scoring Models: The Index uses multiple scoring models to provide a holistic view of partner impacts across the customer journey.
• Facilitation of Test-and-Learn Experiments: Designed for actionable insights, client teams can conduct test-and-learn experiments with partners more effectively.

Latest Benchmarking Feature Overview:

FUSE Incrementality™ recently launched a benchmarking feature that delivers a dynamic, real-time evaluation of success and growth possibilities. This tool empowers businesses by pinpointing affiliates that contribute genuine incremental value. Marketers can delve into the analysis of specific affiliate partners or categories, fine-tuning the assessment to any date range. This precision allows for the creation of targeted optimization strategies. Moreover, the Benchmarking feature provides valuable insights into publisher scores, offering both holistic benchmarks and detailed scores within individual brand programs. This comprehensive view enables marketers to make informed decisions, ensuring maximum performance and strategic success.To see how PartnerCentric helped our client, Sideshow Collectibles, Increase orders by 250% due to optimizing the best partnerships with our FUSE IncrementalityTM technology, read the full case study here.