Incrementality is rapidly being implemented as a key performance metric across more and more affiliate marketing programs. At some companies, incrementality is implemented with search or display channels. However, that same measurement methodology cannot be used when expanding it into an affiliate program.
Candidly, evaluating incrementality within an affiliate program is much easier said than done, but the best place to start is to first have a clear definition and understanding of what incrementality is for your company’s affiliate program.
In the most general sense, incremental sales are sales that a company would not have received if (in this case) the affiliate program weren’t in place. But even this simplified definition can be complicated as incrementality is unique to each company.
When setting incrementality goals, an experienced, performance-based account manager should first aim to gain a greater understanding of how incrementality is currently being defined within the company’s overall business and marketing strategy.
Here are some questions that should be asked – either by your internal program management team or your affiliate program management agency – in order to gain a deeper understanding of incrementality within your organization:
- Does your company look at incrementality within a first-click model?
- Are you/do you want to evaluate if the consumer comes through the affiliate channel later in the shopping journey?
- What role does sales from a new customer play?
- Is your company looking at incrementality on a per publisher basis or the program as a whole?
- Are you looking at the incremental lift of a specific campaign, media placement, or the channel as a whole?
- Is incrementality defined by sales your company wouldn’t have received if the affiliate channel wasn’t in place?
These are all important questions that need to be answered before you can start having a conversation with your publishers. Why? Because it’ll affect how you commission them, the terms and conditions you establish, how they market your brand/product/service, the expectations you have of them and vice versa.
Additionally, it is smart to do some internal investigating to gain better insight into how incrementality has been previously tested. Here are some steps:
- First, look at which tests have been run and what key data points were used to calculate incrementality.
- Next, if you are part of a multi-brand company, investigate if another brand has run an incrementality test within their affiliate channel. This will provide significant information that will be helpful in outlining a test for your program as key learnings and best practices have already been identified.
However, if you are part of a company where this information doesn’t exist yet and you are tasked with looking at incrementality for the first time, there’s no need to panic!
Starting from a clean slate provides a plethora of opportunity to evaluate all the options that are available and then determine which is right for your company’s affiliate program at this time. Keep in mind, your incrementality path is likely to evolve as your program and publisher partners do.
Here are some recommendations for where to start:
- Talk to Your Publishers: Incrementality is a word your publishers are familiar with. It’s very likely that they have worked with other merchants to run tests to evaluate their specific numbers. Have an open dialogue with them to discuss what you are specifically looking for; each publisher has their own site functionality and these conversations can help guide a test.
- Technology Tracking: Look at the affiliate network or SaaS (Software as a Service) platform that your program runs on and evaluate what tools are in place to track consumers’ click path.
- Historical Program Data: Consider how long your affiliate marketing program has been live. Is there a way to leverage pre- and post-affiliate launch data?
- Leverage Publisher Data: Do you have — or are you in the process of recruiting –publishers in your program who have the potential to be top tier conversion producers? Consider evaluating the incrementality of their performance.
- New Customers: If a new customer sign up or purchase from your site is incremental, consider incentivizing publishers (e.g. higher commission) who are driving these types of conversions. This fosters a win-win partnership and will get you more of the performance results you’re looking for.
There’s no question that incrementality can be a complex concept, but the most effective way to simplify the process and reach your end goal is to gather as much information as possible up front before implementing changes within your affiliate program.
Having a clear understanding of how incrementality is being analyzed within your company will help you create a process that provides specific numbers and creates actionable items to further improve this metric within your affiliate program and throughout your entire marketing strategy.
Find out how Acceleration Partners applied these strategies to Blurb’s affiliate marketing program to reduce their return on ad spend and increase their incremental sales.