Affiliate Marketing for beginners or pros has become a world-renowned tactic to generate online revenues through driving sales. It’s not the same old-school tactic, but it has been effective for brands and 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 has reached $6.82 billion in 2020, in the United States only.
- Among retailers, affiliate marketing spending is about 7.5% of total digital expenditure.
1. What Affiliate Marketing Really Is…
Affiliate marketing is a type of performance-based marketing in which a business rewards one or more affiliates for each visitor or customer brought by the affiliate’s own marketing efforts.
Although the two terms are often used interchangeably, affiliate marketing is not the same as referral marketing.
In simple terms, affiliate marketing is like a commission-based sales job. As an affiliate, your job would be to search for the products you enjoy, promote them and get your share of profit on each sale you make. The more sales you generate, the higher your commission will be.
The product manufacturer has to track each sale through affiliate links made to his website from the affiliate’s website. It is a popular way to make money online, and it can be very profitable if done correctly.
However, there is a lot of misinformation out there about affiliate marketing, many scam offers pretending you’ll get rich quick, thanks to AI software that will work 24/7 for you without having you to do anything.
Just to be 100% clear, this is not possible. Make yourself a favor and forget about short-term, easy-made money. Affiliate Marketing is like any other business: it requires hard work (especially at the beginning), and dedication. Otherwise, you’ll fail. I have no doubt about that.
2. Working with 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 provides 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 marketing process.
2.1 The Seller
The seller can be a solo-entrepreneur or an enterprise. It may have any of these roles: the product creator, merchant, retailer, or a vendor.
It is the entity that is responsible for getting the payment and sending the product to the customer (and sending your commission 😉).
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 that 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 makes the purchase) while sharing the profit of purchases made through affiliates.
This is one of the first caveats of Affiliate Marketing, especially nowadays when people don’t necessarily purchase right away, but do some brand search before making any purchase.
2.2 Publisher or Affiliate Marketer
An affiliate doesn’t necessarily have to be a publisher, but most of the time, he/she is.
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.”
It 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.
2.3 The Consumer
Who is driving affiliate marketing? Consumers!
The reason why affiliate marketing works even for beginners 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. Consumers don’t necessarily have to know how much commission an affiliate is getting because the cost for him is the same. He’s more interested in paying the price that’s been reflected on the product.
3. 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 are different from one network to another. Here are some ways you can get paid:
3.1 Per-Click Basis or CPC
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.
So if a visitor clicks your link, then you get paid. This kind of payment structure is very popular for ad networks, like Google AdSense, Mediavine or Native Ads networks.
This is the most simplest way of making money online but not the easiest. You’ll need a website with a ton of traffic to get very small commission…
3.2 Per-Lead Basis or CPL
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, or downloading software…
Here, the main focus is on lead conversion, not sales. So whether your leads convert into sales or not, you’ll get paid. To be 100% accurate, this is in theory because if your leads are low quality, or not converting at all, the merchant will not hesitate to freeze your commissions until they understand why. Obviously if you try to cheat the system, it won’t work, and you’ll be banned from the affiliate network.
Contrary to the previous one, this kind of payment structure is very common for agencies, but also for affiliate marketers working with CPA networks.
Lead generation or “lead gen” is an entire business model, which can be very lucrative.
As an agency owner, I can tell you this is a very lucrative activity because companies are always looking for new customers which can be very costly for them. So if you find a way to bring them new leads, they’ll be more than happy to give you a commission.
This payment structure is for everybody, but I would say it is best for agencies or intermediate affiliates. It can be super lucrative, and if done well, you can even send you leads to multiple merchants, to multiply your income. However keep in mind that the cost of generating leads is increasing so you must find a great offer to promote and master your lead generation channel to be profitable.
3.3 Per-Sale Basis or Rev Share
This is the basic structure of affiliate marketing, the most well known.
In this structure, affiliate marketer gets a percentage of the sale price as an acknowledgment of his marketing strategies that resulted in purchases made by the consumer.
That means, only after consumer’s purchase, and also after the refund period (if any), the affiliate can get his due compensation.
This kind of payment structure is very popular thanks to affiliate networks like ClickBank, for example, and can bring you monthly recursive income (depending on the offer of course).
This is by far the most common and most accessible way to start affiliate marketing. However the fact that you’ll lose your commission if the customer asks a refund represents a risk that you need to take into account. For example, ClickBank freezes automatically 10% of your commissions and will give it to you after 60 days. This means that you need to manage your cash flow very seriously if you use paid advertising to drive traffic. On the other hand, if you focus on promoting SaaS softwares with monthly billing, then you’ll get monthly recurring income that will continue to flow even if you stop promoting the offer.
3.4 Per-Action Basis or CPA
This type of affiliate program is gaining popularity. In this structure, affiliate marketer gets a fixed amount of revenue for a specific action. It can be an opt-in (like CPL), a sale (like Rev Share), an app install, a call… The difference with Rev Share is that if the consumer asks for a refund, you will keep your commission.
But it is a fixed amount that most of the time does not include bump offers, upsells and additional offers that would increase your commission on a revshare basis. Also, like with a CPL offer, if there is too much refund, the affiliate network will freeze your commission and will ask you some questions to determine whether you are trying to cheat the system or not.
For that reason, affiliate networks with CPA offers are very restrictive in term of accepting new affiliate. They will ask you to take a call on Skype or Zoom to talk to you and will ask you questions to know if you are a total beginner, how you will promote the offers etc…
If you are a beginner, or if you don’t really know how to promote an offer, then it is not for you. Affiliate Networks offering CPA offers are very selective. However it is an entire ecosystem where you can make a lot of money if you follow the rules and don’t try to hack the system.
3.5 Lifetime Affiliate Commissions
This one is my favorite.
The way it works is pretty simple: you refer someone to an offer, most of the time FREE, and if the person opts-in via your referral link, he/she is bound to you for life.
This means that, if your referral purchases something right after the opt-in, or 5 years after, you’ll get a commission because you were the first to refer this person to the affiliate network.
As a bonus, the affiliate network does all the after-opt-in marketing, like email follow-up, retargeting, social media marketing etc…
Your job is to send traffic to an opt-in page. Obviously, the warmer the traffic is, the better. One book that explains everything about this system is “The Iceberg Effect” by Dean Holland.
This is, without a doubt, the easiest way to make money online with affiliate marketing, because you don’t have to sell anything. This is like CPL offers, where your referral just have to opt-in. However you don’t get a commission when they opt-in, but you’ll get many commissions later, if they purchase something from this network. And because they do all the marketing, and they are really good at that, it can be very lucrative.
4. What Are The Most Common Affiliate Marketing Channels?
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 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.
The best kind of posts for affiliate marketing are product reviews, product comparisons and round-up articles. They work because they are MOFU (Middle Of the FUnnel) or BOFU (Bottom Of the FUnnel) in the customer’s journey. Maybe they saw an ad, or heard something about a product. They search on Google, find your article and click your link to start a trial or get your special offer…
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 to direct people to the merchant’s website. They can do so by social media posts, blog posts, emails, or other modes of interaction. In response, they get compensated by the seller.
4.3 Native Advertising via Large media sites
Large media sites attract a massive audience. Their main focus is to get their audience in millions.
Even if they sometimes promote affiliate offers directly, their main core of focus is to sell digital real-estate, in other words, a place to put your ad on their website.
Normally, these sites promote products through affiliate links on banners or link to advertorials through news articles’ lookalike to ads.
This type of affiliate marketing requires a lot of hard work in 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.
4.4 Email list
Amongst all 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.
4.5 Micro Niche Sites
These also have a lot of potential 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 for beginners is the best source of passive income. Since affiliate marketers are tasked with linking customers to 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 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 with free traffic, 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 people where they can find all product-related information.
If you want to speed up your results, then you need to focus on paid traffic. In this case, you’ll need to choose an offer, understand where the potential customers are, and finally market the offer via paid ads on this channel.
Remember, you only need to market one offer, and to master one marketing channel to be successful.