Mastering Incrementality Testing and Tracking Within Affiliate Marketing
If you could analyze the contributions of each of your affiliates in a vacuum, determining what they contributed to the sales process would be effortless. Unfortunately, it’s just not that simple.
Instead, you can use a concept known as “incrementality” to measure the relative impact (also called the “lift”) of an affiliate’s efforts on the customer decision-making process.
Once your brand has defined incrementality, found the right affiliate partners, and identified your KPIs, you must implement ways of testing and tracking your partnership program to ensure productivity and performance goals are reached.
What’s incrementality, and how do you test it?
Broadly speaking, incrementality is an avenue toward measuring an event that would not have occurred without a certain interaction. Whichever affiliate actions produce or influence the desired, brand-specified outcomes are considered incremental.
For instance, you can use incrementality tracking to determine whether a specific ad view was the catalyst that resulted in a conversion. You can also use incrementality tracking to see how many online orders from one particular campaign resulted in new customer orders vs returning customer orders.
There are many ways to test and track incrementality. Some of the most popular methods include:
- Monitoring exposure
- Evaluating the effectiveness of specific touchpoints, rewards, or value being offered to the consumer throughout the funnel
- Studying the average order value
- Tracking conversion rates or purchase paths
- Analyzing customer engagement – new customers, lapsed customers, return customers, and when they choose to transact with a brand or bounce from making a purchase
Example of tracking incrementality within affiliate marketing
One particular mattress retail client with Acceleration Partners (AP) was looking to define incrementality as a return on ad spend that could be attributed to nontraditional, top-of-funnel affiliates. Specifically, the client wanted to work with search engine monetization (SEM) affiliate partners.
Making the shift to nontraditional partnerships is a challenge all on its own. Attributing those partnerships to incremental ROAS is significantly more difficult, as it requires a unique weighting system so that top-of-funnel partners can be properly credited for their impact on the customer journey.
AP developed a creative approach for tracking and paying SEM partners in a manner that benefited all parties. To achieve this, AP recalibrated the client’s incrementality scorecard and assigned more weight to SEM partners that impacted the customer journey at the research stage.
The result? The client achieved:
- 160% incremental ROAS
- 15% increase in conversion rates
- $1.44 million incremental revenue generated
Enhance your program’s incrementality tracking with dynamic technology
Implementing effective methods to track and test incrementality is crucial for brands aiming to optimize their programs. With each method generating distinct data sets, it’s essential to combine these insights to gain a comprehensive understanding of your program’s effectiveness. To effectively manage this data, it is important to leverage dynamic technology solutions.
Here are key attributes to consider when implementing a dynamic technology solution for managing your program’s data:
An intuitive dashboard
The dashboard serves as the central hub for gathering insights and monitoring your program’s progress. An intuitive and user-friendly dashboard is paramount, allowing you to customize it according to the data most relevant to your goals.
This way, you can easily track your program’s performance and make informed decisions based on real-time information.
Detailed reporting capabilities
An ideal incrementality testing solution should shed light on your program and partnerships. Look for a solution that offers robust reporting capabilities, enabling you to transform your data into visually appealing graphs, charts, or other reports.
These detailed reports will help you closely monitor your program, inform decision-making, and keep stakeholders informed about your progress toward achieving your incrementality goals.
Customizable weighting systems
Every affiliate partnership program has unique characteristics, necessitating the implementation of customizable weighting systems. A suitable solution should allow you to tailor these systems to prioritize actions that align with your definition of incrementality.
For instance, if your definition of incrementality involves linking a sale to a customer interaction in the research phase, the weighting system should assign higher credit to such actions.
Two reasons why you should focus on incrementality with affiliates
Assessing incrementality at the partner or affiliate level will help your brand determine which partners and partner verticals (i.e., content, loyalty, coupon, mobile, technology, CLO, etc.) are driving incremental value according to your unique definition.
It’s essential to share your incrementality tracking goals and data with your partners so that they can support further targeting or segmenting that will continue driving increased incremental rates.
Taking an affiliate approach focused on incrementality can serve two key purposes for your business:
1. Allows you to be more budget conscious
By identifying partners driving incremental value, budget allocation becomes more effective, focusing resources on top-performing affiliates. Negotiating performance-based payment models based on incrementality ensures costs align with actual impact.
Analyzing different partner verticals helps strategically allocate resources, investing more in high-performing areas. This approach maximizes budget efficiency, avoiding overpayment for conversions that would have occurred anyway.
By optimizing budget allocation and implementing cost-conscious strategies, brands can make informed decisions and generate the most significant incremental value from their affiliate partnerships.
2. Enables better ROI within affiliate marketing
If you want your affiliate marketing strategy to contribute to the growth of your business, you have to make every marketing dollar count.
Focusing on incrementality within affiliate marketing enables better ROI by optimizing budget allocation, driving targeted optimization efforts, fostering performance-based partnerships, and facilitating continuous improvement.
An incrementality focus allows for efficient:
- Allocation of resources by identifying affiliates that drive incremental value
- Refined targeting and segmentation by sharing incrementality data with partners
- Performance-based approach that ensures fair partnerships and clear expectations
- Collaboration and continuous analysis that leads to ongoing optimization and increased ROI
Ready to get incremental?
Testing and tracking incrementality can be tough, especially if you have a diverse or complex affiliate marketing program. But it’s vital for the success of your business.
The good news is that you can take the hassle out of incrementality testing and tracking by connecting with Acceleration Partners. Our team of in-house experts works with brands to define incrementality for your program, establish a performance baseline, set incrementality goals, and optimize your program for success.
Start mastering the art of incrementality testing and tracking within your affiliate program today.
Helping brands unlock growth through partnerships.