Affiliate Marketing has become a world-renowned tactic to generate online revenues through driving sales. It’s not the same old-school tactic, but affiliate marketing has been effective for brands and affiliate marketers alike. And here are some proofs:
- According to Mediakix, 81% of brands leverage affiliate marketing. Also 84% of the publishers.
- According to eMarketer, Affiliate marketing spending would reach $6.82 billion by the year 2020, in the United States only.
- Among retailers, affiliate market spending is about 7.5% of total digital expenditure.
- The structure of Amazon’s affiliate program changed in 2017. Creators would get 1-10% of product revenue. And so, based on the niche they’re selling, affiliate marketers were given massive opportunity to increase their passive income.
What Affiliate Marketing Really Is…
As an affiliate, your job would be to search the products you enjoy, promote them and get your share of profit on each sale you make. The product manufacturer or seller tracks each sale through affiliate links made to his website from the affiliate’s website.
Working of Affiliate Program
The process of affiliate marketing works by distributing product marketing responsibilities across different parties. For a more effective strategy, the seller leverages the skills and expertise of a variety of individuals and provide all the contributors a share in the profit. So, the process includes three different parties:
- Product manufacturer and Seller
- The Advertiser or affiliate marketer
- The consumer
It’s a complex relationship. So, let’s find out how these parties contribute to a successful affiliate marketing process.
1. Product manufacturer and seller
The seller can be a solo-entrepreneur or an enterprise. The seller may have any of these roles; the product creator, merchant, retailer, or a vendor. They have the product to market.
A product can be anything from a small household item to heavy industrial machinery, or a service, an eBook or a tutorial.
The seller may not be the active marketer, but it doesn’t mean they can’t advertise their products. As an advertiser, they keep the profit if the sale is made without affiliate links (consumer visits their website directly and make the purchase) while share profit of purchases made through affiliates.
2. Publisher or affiliate
An affiliate doesn’t necessarily have to be a publisher, but most of the time, they’re publishers too.
According to Investopedia,
“In e-commerce, a company that sells other merchants’ products on its website is an affiliate company. Merchandise is ordered from the company’s website, but the sale is transacted at the principal’s site. Amazon and eBay are examples of e-commerce affiliates.”
The affiliate can be a person or a company who promotes the seller’s products on their affiliate website, channel, social media page, or elsewhere. Their job is to market the products in an appealing way, to attract interested consumers. If the customer shows interest and goes on to buy that product, the affiliate gets his share of profit.
Don’t think affiliates can promote any product. Well, they can, but then they cannot focus on a specific audience.
As an affiliate, you can promote different products by using multiple websites, with a different kind of audience for each. In this way, you’ll have a lot of room to highlight the best features of the products and you can share tips to use the product, too. By doing so, you’re actually contributing to develop the product’s image, as well as create your own brand out of it.
3. The Consumer
Who is driving affiliate marketing? Consumers!
And how affiliate marketing helps them?
The reason why affiliate marketing works is that:
- Most of the consumers don’t know whether the thing they’re interested in is available online, or not. If it does, where to find it? Affiliates help them by bringing that product close to them
- Unless they’re daily surfing online sellers, consumers wouldn’t know about discount deals, coupons, and other promotional campaigns. Affiliates search those deals and share with consumers.
- Sometimes, due to the similar nature, it’s hard to distinguish which product is better. Affiliates, on their websites, share analysis and give recommendations based on customer reviews and their own personal experiences. Such information always proves helpful for the end-users.
Whatever the situation may be, the profit is shared between the seller and the affiliate. To add, consumers don’t necessarily have to know how much commission affiliate is getting. He’s more interested in paying the price that’s been reflected on the product.
Affiliate Marketer Getting Paid
Affiliate marketing is all about linking end-users with the seller.
But how do you get paid?
It depends on the affiliate program. KPIs for affiliate marketing is different. Here are some ways
This type of affiliate program is gaining popularity, especially in the services industry. In this payment structure, the affiliate is supposed to direct the end-user to the merchant’s website regardless of the fact that they do or do not make any purchases. The primary focus is on increasing web traffic.
This type of affiliate program is one step ahead of the one discussed above. In pay per lead structure, the affiliate is required to lead the consumer to the seller’s website and persuade him to take the desired action. It can be a newsletter subscription, free-trial of a product, filling out a form, downloading software, and the likes. Here, the main focus is on lead conversion, not sales.
This is the basic structure of affiliate marketing. In this structure, affiliate marketer gets a percentage of the sale price as an acknowledgment of his affiliate marketing strategies that resulted in purchases made by the consumer. That means, only after consumer’s investment in the product the affiliate can get his due compensation.
What Affiliate Marketing Channels Are Available
Affiliate marketing doesn’t have any product manual or one formula. Most affiliates tend to follow what’s common in the industry while others do it differently. Let’s take a look at some common affiliate marketing channels.
Blogging is by far the most sought after channel because of its long-lasting impact on the product. In fact, they’re the ones who help transform an ordinary product into a brand. Affiliate blogs contain a lot of information about the seller’s products, so they have a high probability of getting searched organically. The blogger promotes the product by sharing a complete analysis of the product.
You can be an influencer in your own niche and make an impact on the purchasing decision of your audience. If you can influence others to make a purchase decision, imagine how much you can earn through affiliate marketing. Influencers are those people who have built a large number of followers, so, it will be quite easy for direct people to the merchant’s website. They can do so by social media posts, blogposts, electronic media message or other modes of interaction. In response, they get compensated by the seller.
Large media sites
Large sites attract a massive audience. Their main focus is to get their audience in millions. Normally, these sites promote products through affiliate links or banners. This type of affiliate marketing requires a lot of hard work at the backend, but large websites can boost conversion as no one does. As a result, both; the affiliate and the seller are in for huge revenues.
Amongst all the affiliate marketing channels email marketing is the oldest, and probably, the most effective tool. There are different ways to perform email affiliate marketing.
- Some people have a large list of email addresses – ideal for promoting products.
- Some people use newsletters with links to the seller’s products.
- Others make use of the email list they have accumulated over time – through campaigns and promote the products.
These also have a lot of potentials to garner sales. They can be advertised inside a partner site, but the best practice is to place them on the sponsored listings of Google, Yahoo, Bing, and other search engines. Microsites are separate from the main site.
Product-related content is what they seek. As opposed to the seller’s main site, the microsite has more direct and straightforward CTAs.
Affiliate marketing is the best source of passive income. Since affiliate marketer is tasked with linking customers to the product manufacturers and sellers, they don’t have to deal with customer satisfaction or other kinds of support.
Affiliate marketing is quite convenient and flexible, more suited to freelancers who like working from home. As a freelance affiliate marketer, you don’t have to follow strict schedules.
Moreover, there is no startup fee and you don’t need financial support to keep your business running. The performance will decide your reward.
The more you put into it, the better you’ll get. Unlike full-time employment, it depends upon your interest how much you want to earn.
If you have decided to try affiliate marketing, you need to learn the basics of SEO. With proper SEO, well-researched keywords and clean link-building practices, you can create a helpful resource for the people where they can find all product-related information.