Affiliate Marketing ROI: U.S. Programs Yield $7 to Every $1 Spent

Posted on11 CommentsCategoriesAffiliate Program Management

Encouraging advertisers to treat their affiliate marketing programs appropriately I’ve always said: “They are serious marketing campaigns and must be treated with all seriousness.” To prove affiliate marketing’s “seriousness” a good starting point would be an analysis of the ROI it yields.

Yesterday my “in UK affiliate marketing’s ROI is £11 to every £1 spent” Tweet picked up really well, but since it quoted British stats, I decided to also analyze (and bring you) the U.S. data to which I have access.

Seven Dollars ROII sat down and took a look at 9 different affiliate programs that AM Navigator manages in the United States (we manage international ones too, but here we focused specifically on US-based ones) across 5 affiliate networks: Commission Junction, LinkShare, eBay Enterprise Affiliate Network, ShareASale and WebGains.

For the calculation of my basic ROI I have used the following formula:

Affiliate Program ROI =
(Gross Net Sales – Advertiser’s Investment) ÷ Advertiser’s Investment

The “Advertiser’s Investment” was calculated as a sum of affiliate commissions and affiliate network’s fees.

And here are the results that I’ve arrived at:

Program #1 (CJ): $6.43
Program #2 (CJ): $14.09
Program #3 (CJ): $5.64
Program #4 (SaS): $7.33
Program #5 (SaS): $7.33
Program #6 (SaS): $5.94
Program #7 (SaS): $7.13
Program #8 (WG): $6.99
Program #9 (EEAN): $7.28
———————————-
Average ROI: $7.15

Obviously, my Sample was fairly small, and I did not factor in Customer Lifetime Value, or Profit Margins, but even by looking at the above numbers one can get a pretty good idea of the ROI range to expect, with an average being $7.15 net brought in per every $1 spent.

If you run an affiliate program, and can share your ROI via the “Comments” area below (anonymously is fine), I would highly appreciate it. I know my readers would do as well.

It would be especially interesting to also get network level data on this. Regardless of the affiliate network’s size, they can easily perform a network-wide analysis, coming up with an across-the-board ROI number. This can further help validate the viability of affiliate marketing as a powerful way to advertise online (and even offline).

11 thoughts on “Affiliate Marketing ROI: U.S. Programs Yield $7 to Every $1 Spent

  1. Hi,

    I’ve got a question – what do you mean by gross sales – the amount of sales that include approved sales as well as voided transactions? There is a difference between Gross sales and Net sales in ShareASale. Please specify.
    Thanks.

    1. Funny you should mention it! I haven’t even blogged about it, but you already know. Good to know. I hope you’ll find it of use!

      BTW, what ROI are you seeing in your ShareASale affiliate program?

    1. Reiser, first of all, thank you for purchasing my book. I hope you will enjoy it; and I would really appreciate your Amazon review of it once you’re done with it.

      Re the age of the programs: Great question! The oldest of the analyzed programs was launched in early 2007, while the newest – just a month ago. Interestingly enough, regardless of the program’s age, the ROI is always very close to that $7 average.

  2. Hi,

    I am a little confuse about the formula you use. I am going to give you an example:
    if you make 5000£ net sales. and the Advertiser’s Investment is 500£ … the ROI is 9£? (5.000 -500)/500

    do I understand you well?

    thank you in advanced

    1. Correct, Pablo. This essentially means that per every £1 invested the merchant received £9. Technically (in your example) per £1 spent, they got £10 back. However, because the £1 was their investment, the “return on investment” is £9 (or £10 – £1).

  3. Clever Geno!

    thanks

    I have more than 100 online shops tracked in Spain. I can not delete the purchases that are not “real” , but my experience show me that they are not more than 10-20% of the total. But also, we cann’t track the sales made by users surfing “with no cookies activated”, users clicking on a offer at the office and buying later at home, etc. So, I think the figures are quite accurate.

    With this numbers the average ROI these merchants have on Spain is 7.5€. The range goes from 40€ (merchants that only buy traffic to TV products and have a 1% conversion rate) to -1€, Merchants that with 2.000 clics (0.10€ CPC) makes 1 sales. The latest one are new and are not going to be more than a few months buying traffic.

    Let me know if you need more details.

    best!

    Pablo

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