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14 December 2022

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6 min to read

How to Calculate the ROI of Your Affiliate Program

ROI (Return on Investment) is a key performance measure that is used to evaluate the efficiency of an investment. It helps to calculate the effectiveness of your affiliate program. Once you want to choose the most successful affiliate marketing campaigns, or understand which products, promotions, or links are the most profitable for you – use this indicator.

 

Let's first determine what details you require

1. The period for analysis

For example, you want to estimate the ROI of an affiliate program. To get the right ROI as possible, analyze at least 3-6 months' worth of data. 

2. The costs 

It depends on the situation and business. As a result, it might also cover the cost of creating banners, hosting landing pages, and affiliate commissions. You must take all expenses into consideration.

3. The revenue

It's easy: just track your affiliate program's rate of return.

 

The ROI formula

ROI (%) = (Gain from Investment – Cost of Investment) / Cost of Investment x 100

*The basic ROI formula

ROI (%) = (Affiliate Marketing Revenue – Affiliate Marketing Costs) / Affiliate Marketing Costs x 100

*The ROI formula for an affiliate marketing campaign

 

Let's use the example of a $2500 affiliate marketing scheme that brought in $3,000 to demonstrate how it works. Your ROI will be 20% once you enter this data into the algorithm. The formula is as follows: (3,000$-2,500$)/2,500$ x 100 = 20%

Additionally, you may use one more helpful indication to evaluate your efforts and choose the most successful ones. ROAS (Return on Ad Spend) measures the return on your advertising investment. In plain English, this is the return on every dollar spent on advertising.

 

Average ROI in Dating and Sweepstakes

Comparing these parameters you should pay attention to the data. What can influence the ROI indicator?

  • GEO;
  • Type of resource;
  • Places for traffic purchasing;
  • Placement time;
  • Placement day;
  • Type of platform.

The average ROI you can base on: for dating – 20-30%, for sweepstakes – 40-50% or higher (approximately 20-30% more than in dating). At C3PA our best offers are made up of 40-50% in sweepstakes: 

Want to work with us? Contact our manager:

Mariia
Skype: maria.b.mob
Telegram: @mariia_bestoffers
E-mail: mariia@gtoro.com

The ROAS formula

ROAS (%) = (Total campaign revenue / Total campaign cost) x 100

*The basic ROAS formula
Of course, when you analyze the effectiveness of an ads campaign you will be looking at metrics such as traffic, impressions, clicks, and conversions. But they say nothing about the cost-effectiveness of your ad. Let's say that you look at the metrics of two campaigns with the same budget – 150$:

  • “X” ad generated: 4500 impressions and 2000 clicks;
  • “Y” ad generated: 2500 impressions and 1000 clicks.

If you draw conclusions based only on quantitative indicators, you might decide that the first campaign worked better. But when you calculate the ROAS of each of them, you'll see that it's not that simple.

To see the ROAS you need to find out the revenue for each of them. For example, the total revenue from the “X” campaign was 150$, and from “Y” – 450$. Thus, the ROAS from the first will be 100%, and from the second – 300%. So, when your campaign goal is to increase brand awareness you can lean on the number of impressions, but when your key objective is to generate more sales – don't forget to use this formula. 

 

How to use ROI and ROAS 

You must accurately gauge the success of your advertising efforts, affiliate marketing plans, and partnerships if you want to succeed as an affiliate.

As you can see, the ROAS aids in defining which company makes the greatest profit more precisely. By measuring it, you can improve your advertising and identify the campaigns where you should allocate more funds. Additionally, the ROI can be used to decide which affiliate partners are worth keeping on board and which should be dropped in addition to assisting with program selection. For instance, if you spend $1,000 on advertising and receive a 200% ROI from one affiliate while receiving a 500% ROI from another, you should concentrate on the latter.

 

How to improve your Affiliate Marketing Program 

It is preferable to carefully select the networks or agencies to partner with in affiliate marketing. These days, there are many ideas, and the benefit is that you don't need to locate affiliates, manage your campaigns, or determine a profit strategy as an advertiser because these agencies already have a database of affiliates and can identify someone who will work for your niche. Additionally, if you join a network as an affiliate, you can find many opportunities to work with and earn money! All you have to do is choose the platform that works best for you.

At Grantoro you can become an affiliate, thus we provide you with profitable offers and a high level of customer support. Additionally, we only work with reputable affiliates who have high-quality traffic, and our long-term relationships are predicated on providing value to both parties. As a result, you can also advertise on our network.

 

Join us by the link here!

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