A New Balance
“Sometimes what goes on behind the scenes within an affiliate channel artificially inflates or deflates performance metrics of other Web or offline channels,” says Angel Djambazov, director of marketing at Seattle-based affiliate tools provider PopShops.com. Djambazov is like many marketers who measure channels and campaigns based on a return-on-ad-spend (ROAS) model—dollars spent against dollars generated. Once he decided to stop looking at various Web marketing channels as stand-alone efforts, he discovered something powerful. “Various channels have impact on each other,” says Djambazov. “In particular, costs and sales generated from affiliate programs often mix with costs and sales created by search and various other campaigns. Data must be collected separately and then combined to yield understanding of each channel’s true performance.”
To compare the effectiveness of marketing channels, it’s necessary to score each separately based on its ability to move the sales needle. Yet given inherent interplay between Web marketing channels, scoring can be cumbersome and—when performed in a vacuum—isn’t a reliable yardstick in a multichannel world. A new, holistic approach is needed.
Audits: Digging in the Dirt
How can marketers cope with this phenomenon? According to Djambazov and search marketing pro Alan Rimm-Kaufman of the Charlottesville, Va.-based Rimm-Kaufman Group, it’s critical to create reporting systems that separate various campaign performance data.
Data on the cost and sales revenue sides—which tie to orders—must be tracked and reported separately (by e-mail, affiliate, search, etc.) based on business rules. Next, experts recommend you perform audits that effectively weed out double-counting or situations where channels receive credit for a sale when they should not. The result are “clean,” or true, sets of orders with the associated Web channels that delivered them.
For example, “Separating various channels’ performance data allows for cross-referencing based on order number,” says Rimm-Kaufman. “This process provides a list of orders associated with multiple marketing channels or campaigns and allows for reconciliation based on your business rules.”