If you want to track ROI from affiliate programs, there are things that you can't do without:

• The stats in your affiliate account.
• The stats in your AdWords™ account.
• An Excel spreadsheet.
• A bit of math knowledge.

Alternately, there is a lot of wordiness around tracking affiliate programs, that you can do without.

The statistics in your affiliate account provide all the necessary numbers to calculate your revenues. The statistics in your AdWords™ account will give you the cost of the campaign.

Tracking ROI from affiliate programs is more difficult than when you sell your own product, because you have to match the two series of statistics by yourself. You can't do the tracking directly on the merchant site, because you don't own it. You can't use AdWords™ conversion tools because you can't control the “Thank you” pages. You can't do the tracking directly on your web page because this is not where the conversion takes place.

Of All the Numbers, Which Ones Really Count?

Perhaps tracking gurus and other experts will urge you to reap all the data you can gather about your traffic. They'll say the richer the data, the better. This is not always true.

Here are the must-know stats:

Affiliate Statistics

Every affiliate program provides statistics that you can access when you log into your affiliate account. Consult this page. You need to recognise at least four metrics here: click thrus, unique visitors, conversions and commissions. The commissions represent your actual revenue.

Landing Page Statistics

Your campaign costs are traceable in your Google AdWords™ account. You need to know click thrus, cost per click and total costs — that is the advertising cost. It's important to have your own statistics for the landing pages, so you better check with your hosting provider (if they offer any type of statistics) or choose a good tracking software.

The AdWords™ account doesn't provide sufficient information to calculate your actual costs. Make an estimation of the other resources you consume like hosting fees, the cost of your Internet connection, software and other tools, and the value of your time.

By comparing revenues with costs you can track your results.

Here is a comprehensive list of metrics to determine:

• Click thrus (Visits to your site) and affiliate clicks (clicks on the affiliate link). This helps you calculate the click through rate and the value of your content.
• Unique visits — there are people that visit your landing page several times before they place an order, if they ever.
• Page views — there are visitors that access the same page more than once.
• Conversions — the number of sales generated by day, week, month etc.
• Conversion rate — the number of sales per 100 clicks.
• Comissions — the amount of money the merchant site pays you for the sales you've generated.
• Cost per click — how much you pay for an ad in order to generate a click.
• Total costs.
• Profits.

How Tracking Works

Keep your own affiliate workbook, that contains:

1. A traffic page

   This page should have two columns: unique visitors and page views. You can sum it all up by day, week, month — it all depends on your traffic amount.

2. A merchants' page

   For each affiliate program, you need to track separately:

   • The number of clicks you send to the same affiliate page.
   • The number of conversions.
   • The earnings from commissions.
3. The revenues page

   This is easier. You just need to sum up what you've earned from each affiliate program, and then calculate the total revenues amount/per month.

4. The trends page

   You obtain a trend when you put together similar stats from successive days, weeks, months, and compare the values. You can generate evolution curves. I.e., you can see if your comissions from a certain affiliate program are going down or up. If they are going down you need to determine the cause. It may be a problem of market evolution or a change in the performance of your ads.

Finally, discover the cycles (repetitive changes in your CTR and the sales) and exploit them.

Here is an example of a cycle: You are selling blue gadgets and you track the click thrus and conversions every day. Several weeks later, you notice that you sell the most blue gadgets on Mondays and Tuesdays. Then, the figures drop to a point throughout the middle of the week; finally, the sales become almost unexistent through weekends.

This cycle is a thing you can take advantage of in order to lower your costs (disable ads on weekends) and sell more (increase advertising Monday to Wednesday). This kind of manipulation will increase your ROI.

You can read a lot more about how to track your results from affiliate campaigns in Affiliate Business Blueprint, a book by Rosalind Gardner (author of the famous The Super Affiliate Handbook and the only woman who makes $430,000 a year by promoting affiliate programs) and Jim Edwards, who writes TheNetReporter.com, a syndicated newspaper column helping non-technical people use the Internet for both fun and profits.

Now let's talk about how to increase your affiliate profits.