Incrementality: proving affiliate’s impact

Incrementality: proving affiliate’s impact

Rakuten Advertising has embraced the reality of incrementality.

Like every marketer, you’re striving for positive results. Unfortunately, with rising media costs, cautious consumers, and an increasingly fragmented world, it’s more difficult than ever to find sources of growth that you can count on and demonstrate that those initiatives are really making an impact.

Historically, the specific benefits of affiliate have been difficult to demonstrate, which is why incrementality is so important. It has become the standard for navigating this unstable landscape by concretely demonstrating each marketing initiative’s incremental value. But when it comes to precisely measuring that incrementality, it’s tough to know where to begin, what to measure, and how to measure it. We’re here to help get you started.

We’ve laid out a four-phase plan to help you unlock the power of incrementality and fully grasp the impact your affiliate initiatives have on your business. For a closer look into these phases, explore the full eBook.

Phase 1: Align on your business goals–and what incrementality really means

A general understanding of incrementality is great, but without a clear operational definition for your organization–what success looks like, how you’ll measure it, and what gets optimized–it becomes harder to understand performance. If you don’t understand your performance, you can’t improve it. Setting the bar clearly and universally is crucial for exceeding it.

Rakuten Advertising’s experience working with top advertisers, publishers, and agencies has allowed us to find a definition of incrementality that’s universally agreed on:

“The additive business value driven by a singular marketing channel or partner.”

However, let us be clear–this high-level definition is different than determining the measures of what incrementality means to you. In other words, what’s the specific way your business will calculate incremental value? Increased sales? New customers? Your goals are unique. So, before you dive head first into incrementality, you need to align on what you’ll be measuring.

Start by asking a few questions to specify your understanding of incrementality:

• Are we calculating incrementality in dollars or activated customers?
• Does the value of a customer’s first purchase count as incremental?
• Are additional purchases from existing customers incremental?

Clearly answering questions like these will help you decide how to measure success, as well as identify the tactics you’ll use to achieve it.

After framing your vision of incrementality, it’s time to turn that vision into actionable benchmarks. Metrics are vital in forming your affiliate strategy. Some examples of incrementality KPIs that can quantify your success are purchase frequency, total gross sales, and new customers.

It’s also important to remember that, although it’s nice to have a formula, incrementality isn’t static. The market is ever-changing, so it’s key that your goals adapt with change. Review your definition and KPIs from time to time to ensure they still align with your trajectory.

Phase 2: Diversify–and deepen–the relationships in your marketing and publisher mix

With clear goals and a defined path, finding the right partners is your next step. Diverse, trusted partnerships allow for trial and error so you can see what’s most effective. As a result, you learn to maximize reach and enable laser-focused campaigns tailored to specific audiences.

Every successful business knows the importance of diversification. In this industry, marketers who work with a mix of publishers have more opportunities to understand the market, connect with consumers, and more. There’s no right answer when it comes to the number of partners, so just make sure that they connect with your goals.

So, how do you diversify? You need access to a vast global network of publishers, partners, and channels. It’s important to establish close relationships with those partners, so that their knowledge becomes your knowledge.

And let’s not forget about one of the most powerful tools to help you diversify: data. The right data. Privacy is on the rise, and cookies may be on their way out, but the right data is still out there to help you find the right audiences. Brands and publishers are able to combine their individual data to drive mutual understanding and connection.

Phase 3: Build the proper measurement framework–and get approval

With your partnerships solidified and targeted programs in place, it’s time to focus on measurement. Define the key data points you’ll track to accurately gauge true campaign performance, both for your individual efforts and your larger impact on overall marketing.

Now, how do you choose which data to track? Well, different KPIs require different metrics. It’s all about tying goals to audience actions. If your goal is immediate sales conversions, for instance, consider measuring click-through rates. If you want to increase customer count, you might measure net-new customers.

Remember that, when deciding on those points of measurement, you don’t just need to sell yourself. Getting company leadership on board with your standard of success is just as important because they otherwise might not view success in the same light. By proving what you’re measuring is revealing and important, you’ll be well on your way.

Defining your data takes some work, but actually gathering and integrating that data is the real challenge. Having a partner that specializes in affiliate data integration can ease the burden and simplify your incrementality journey. Experienced data scientists, robust APIs, and AI help bring your data together and show the whole story.

Phase 4: Focus, test, and optimize to build your ideal program

Accurate measurement is your roadmap to a trusted incrementality program; it reveals past performance and guides future actions. Deep-dive analysis will uncover the exact impact of each element on your KPIs, revealing the true picture of incrementality. By analyzing what works and what doesn’t, you’ll gain insights to optimize channels, partners, and placements.

There are many ways to test these initiatives: by channel, by partner, etc. Planning these tests turns loads of data into useful insights. Let’s take a closer glance at what they can reveal:

Channel testing: Comparing affiliate and non-affiliate customer KPIs reveals the incremental value of partnership programs.

Partner testing: Variations in offers, messages, and cashback rates significantly impact a partner’s incremental value. Testing these elements shows the true worth of each partnership.

Capitalize on your momentum

After implementing our four-phase plan, you’ll have a powerful incrementality program to unleash the maximum potential of affiliate. Then, you can look to grow even further by sharing your wins with leadership, advocating for the power of affiliate, and making yourself a go-to expert on modern marketing for your entire team.

This is only scratching the surface, though. If you want to dig deeper into incrementality, check out our eBook, where we go into greater detail about each phase of our plan to ensure you can efficiently measure your affiliate success.

As you dive deeper into incrementality, it’s helpful to have experienced support–experts who know affiliate, your business, and the market inside and out. That way, you can confidently execute your plan from start to finish.

Rakuten Advertising is a leader in affiliate marketing, with all the resources to help you use incrementality to your advantage–from powerful integration APIs to expert support that helps you measure the right things.

Let’s start having the right mentality for incrementality. Access the eBook today.