By Salvatore Conca

Setting goals for your affiliate marketing channel sounds so simple. But the reality is there are a number of factors to consider when setting goals and choosing KPIs (Key Performance Indicators) for your affiliate marketing channel. Elements to consider include how established your brand is, the maturity of your affiliate program, and the other marketing efforts both online and offline that may influence your affiliate channel.

The most popular KPIs for retail advertisers with an affiliate program are Revenue, Sales and ROAS (return on ad spend). If you’re a new brand or launching a new affiliate program, revenue will be your easiest measure of success. How much revenue? That will depend upon factors such as brand awareness, how competitive your industry is, and seasonality. Mature brands should consider other factors, or secondary KPIs, such as whether affiliate sales are coming from existing customers or new customers. As your affiliate program grows, your goals and KPIs should evolve.

Affiliate marketing is generally known as the most efficient online-marketing channel because of its pay-for-performance model. That means it should have a high ROAS. Before calculating your ROAS, make sure you clearly define all of your cost variables. Affiliate commissions are obvious, but there are also network fees, paid placements and agency fees. If you operate your affiliate channel with a fixed budget, make sure you have allocated funds properly to hit your revenue goals and still meet your ROAS objectives. I also recommend keeping a small budget set aside for paid placements, additional exposure and testing.

For subscription products and services you’ll be looking at a whole different set of metrics, in fact revenue may not even be relevant. The number of subscriptions and your CPA (cost per acquisition) will be the means by which you grade performance.

Once you have your goals in place and you’re ready to measure your KPIs, it’s time to use these goals to build your strategy. One of the most important things to remember is that your goals are there to measure your success. If you didn’t hit your goals, make sure you understand why. You should also revisit and readjust your goals regularly depending on growth and other factors you may not have accounted for in your initial plans.

Salvatore Conca is the Director of Affiliate Marketing at NetX.