Someone has asked me to address this question in my blog. So here is my answer:
The conversion rate of your affiliate program will always be highly dependent on (i) how established your brand is, and (ii) what industry you work in. It will also roughly correspond to the overall conversion rate that you, as an online merchant, register.
To illustrate how a strong brand contributes to the conversion of an affiliate program, let’s look at the overall conversion data for the following brands:
- ProFlowers – 28%
- OfficeDepot.com – 23.65%
- Blair.com – 20.15%
- 1800Flowers.com – 19.22%
- L.L. Bean – 18.67%
- QVC – 18.32%
- Amazon and eBay.com ~ 15-17%
I have arrived at the above figures upon an analysis of data presented by Nielsen Online / Marketing Charts for the past 6 months (Aug. 2008 – Feb. 2009). A conversion range from 15% to 25% is not unusual for established online merchants.
As to the differences in conversion ratios depending on the industry, it is helpful to turn to the data that Fireclick Index provides. Here’s the data that they are currently showing:
- Software ~ 4%
- Catalog ~ 3%
- Specialty ~ 1.4%
- Outdoor & Sports ~ 1.3%
- Fashion & Apparel ~ 1%
Analyzing conversion rates over “a number of different segments” of the online market, Foreclick Index arrives at an overall conversion range of 2.4%-3.3%, which corresponds to the conversions I have been noticing with affiliate programs across different verticals over the past 5 years. A good overall conversion rate for affiliate programs ranges from 2.5% to 3.5%. If you’re registering something significantly lower, I would highly encourage you to study the conversion rates in your particular vertical (some verticals — for example, high end jewelry, furniture and electronics — do generally convert at lower rates) to see how you compare to your peers, and if your conversion is significantly lower than your vertical’s average, it’s time for you to vigorously look for the reasons behind it (they may range from uncompetitive pricing to poorly designed webpages, shopping cart, etc).
Dear Mr. Prussakov,
When you are talking about a good conversion rate of 2.5% to 3.5%, are you refering to the overall conversion rate – from traffic to my site to transaction on merchants’ site, or otherwise?
Thanks,
Dan.
Dan,
No, it’s not the traffic to your site that is important, but rather: how many click-throughs on a merchant’s ad it takes to convert into a sale.
In other words, if your affiliate website gets 500 visitors a day, of which 100 click on a merchant’s ad, and this results in 3 sales a day, it is not the 500 that you want to focus on, but rather the 100 that clicked-through. If 3 of them ended up ordering, that’s your 3% affiliate program conversion rate.
Pingback: Competitive Intelligence at the Service of Affiliate Program Managers | Search Engine People | Toronto
Hello.
I started promoting for a affiliate program and most times i see just clicks on my stats no conversion. I’m having problems understanding what or how conversions are made?
Need help.
P.s. Am a newbie in affiliate marketing.
David, conversion is the % of clicks that convert into sales. So, for example, if on 100 clicks you get 1 sale, that’s a 1% conversion rate. Hope this helps.
In Travel (Hotels) the average affiliate probably converts in the region of around 1.5-2.0% with a maximum of around 3%.
After a few years working with major Hotel providers I have yet to see anything convert above 2% (from quality targeted traffic that I provide).
Hotels simply don’t convert easily – likely due to the vast choice (of sites) and the shop around mentality consumers (rightly) have.
Thanks for this insight, Ed. I’m sure many readers will find this data of help.
If conversion on your website through affiliate links is not great, it doesn’t mean, that conversion of website is wrong.
Conversion depends on quality of traffic delivered by affiliate.
e.g. some of our affiliates deliver traffic with conversion up to 10% and some of them less than 1%.
If you see, that particular affiliate delivers high traffic with low conversion, it is worth to make custom landing page for this affiliate and try to optimize it for his type of visitors.
Good points, Viktor. This is precisely why I always say that the responsibility for conversion is always mutual or shared between the affiliate (who is supposed to be sending targeted traffic to the merchant) and the merchant (who is to ensure that his/her website actually converts).
Lead generation seems to have a much lower conversion rate from what I see.
It would definitely be interesting to put together a similar comparison of lead gen conversion rates (by vertical). What do you register, Brian, and in what niche/field/vertical?
I am early days in my affiliate program and it will be interesting to see what conversion I get. For now, I am having a hard time getting my head around the conversion rates discussed here. From the 28% conversion for the top-brand to the 3% average conversion is quite a gap. In general, what that is telling me is that the few top-brands get most of the business and many others get very little.
Many of the above-quoted “top brands” do a lot to achieve these high conversion rates (e.g.: Amazon continuously runs tens of thousands of split tests to increase conversion). Plus, brand recognition contributes at lot to it too.
Interesting to see how these conversion rates have changed over the years. Do you happen to know what sites would be categorized as Catalog and Specialty? Theoretically, any site can have a catalog. And unless you’re someone like Amazon, Walmart, Target, etc., every site can be lumped into Specialty.
I believe by “specialty” they mean niche sites (e.g.: gift baskets, hardwood floors, hair accessories, etc), while by “catalog” they imply larger all-in-one type “online malls” like Amazon, Overstock, Walmart.com, etc
This is exactly the information I was looking for. Would you say the overall affiliate conversion of 2.5-3.5% still holds (even in Canada?). Secondly, thank you for introducing a valuable site like Fireclick (http://index.fireclick.com/fireindex.php); is Fireclick data updated in real-time or is it 2003/2004 data?
Pingback: Analysis: How Wikipedia Could Make $2.8 Billion in Annual Revenue
I wouldn’t recommend assuming that 15% affiliate conversion rate (CR). As I wrote in the above post a “2.5% to 3.5%” CR would be a much more realistic assumption.
Totally depends on who you target as an audience and then what you deliver through your content. I personally follow a tried and true formula for content marketing that delivers an average of 10 to 50% conversion rates but it’s because I do my homework beforehand and then follow my templates for creating really compelling content.
What would you say the average conversion rate is for affiliate marketing products in the “make money online” niche?
Could you please be more specific, Marissa? Are you referring to “products” that teach/coach how to make money online? And then wondering about affiliate programs for these products?