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  • What is affiliate marketing?

What is affiliate marketing?

Are you struggling to make ROI with your marketing efforts?

Marketing has become trickier since the average person views around 5000 ads per day.

But if you are looking for a foolproof way to profit from your marketing efforts, then affiliate marketing is the right choice for you. 

So, what is affiliate marketing anyway? 

Affiliate marketing is a way to earn money while you’re asleep. It is basically a process where you earn an agreed commission for promoting a product or a service. But let’s dive deep into the in-depth explanation below. 

Affiliate marketing definition

As we previously stated, affiliate marketing is a process where an individual called an affiliate promotes a product or a service for a company. The affiliate acts on behalf of the company, basically like a salesperson. Therefore, after each desired action is complete, the affiliate gets a commission. The desired action varies from business to business, and it is always agreed upon beforehand. For instance, it could be sign-ups to a mailing list, subscriptions, clicks on a website, or sales. 

Companies interested in affiliate marketing have two options to choose from. They can either create an affiliate program or join an affiliate network. So what’s the difference between those two, you might ask?

An affiliate program is a program your company creates from scratch. Therefore, the company is in charge of terms and conditions, guidelines for content, email outreach to affiliates, etc. 

An affiliate network is essentially a third party, which connects affiliates with companies. Affiliate networks are already set up with rules, guidelines, and so on. Thus, you usually just sign-up, pay, and wait for sales.  

So, which one is better? 

Although affiliate programs might be more time-consuming at the beginning, it is definitely worth the long-term investment, as you can make sure the affiliates fulfill your guidelines and conditions. And probably the most crucial differentiator is a price, which is higher for an affiliate network. Although it is understandable, since affiliate networks are the third party that arranges the whole flow, you need to consider if this is suitable for your budget and the company since often you cannot change the narrative affiliates oblige to/execute the promotions. 

To learn more, check out the Affiliate network vs the Affiliate program.

How does affiliate marketing work?

There are usually 3 or 4 parties. First, the affiliate, who is essentially the advertiser/publisher of products/services. Second-party is the merchant – the company that offers physical products or digital products. The third party is the consumer. And the fourth party can be an affiliate network, which is optional since companies can create their own affiliate programs.

Now that we clarified all the possible parties involved in affiliate marketing let’s look at how it works. When a company has their own affiliate program, they usually reach out to potential affiliate marketers with the audience/niche they seek. If both parties agree on the terms & conditions, the affiliate usually gets product links or tracking links that include cookies to indicate where the lead/sale came from them. To get these affiliate links, companies typically use a tracking platform or software to generate and track them.  

Examples of businesses using affiliate marketing

Why is affiliate marketing important? 

Affiliate marketing is a really effective and beneficial business model since it allows companies to promote their products/services through their targeted niches. 

As we all know, recommendations still carry considerable weight when it comes to a purchasing decision, and affiliates have the loyalty of their audience. So, if they believe in the product and see the value, the chances are a majority of their audience will as well.

Another aspect is the budget. Affiliate marketing is cheaper since you do not have to run the ads. Therefore, you not only save money but time as well without a lot of effort. 

Is affiliate marketing worth it?

For anyone asking if affiliate marketing is worth it, the answer is yes! You might think that it is not for everyone. However, that is far from the truth. The usual reason is that affiliate marketing is only for people with a following since they can promote and convert those leads. But affiliate marketing is for everyone who has the drive to make it. All you need to figure out is how to navigate paid traffic, which could be through Instagram, Facebook, or other relevant social media platforms. There has never been a better time to start with affiliate marketing for companies or individuals who want to make extra/passive income than now. 

How fast can you make money with affiliate marketing?

Merchant

If you are a merchant, it definitely depends on the route you choose when it comes to affiliate marketing. Either you go for an affiliate program or affiliate network. Those two have both different pros and cons. However, one can deliver results/money faster, and it is obviously the affiliate network since they already have an established system with affiliates and set terms & conditions. Therefore, it is just about pairing them with your business, so the execution takes less time. On the other hand, creating your own affiliate marketing program takes much more time since you have to build it from scratch and do the outreach to potential affiliates alone.  

Affiliate

For any individual who is seeking an affiliate income, they need to consider one crucial factor beforehand. Do you have a sizable audience/niche? If the answer is no, then it would be hard for you to make affiliate sales fast. Building an audience takes time, and you can do it through many different platforms. For instance, you can create your own blog with a niche you’re interested in. However, this takes a lot of effort and time since you have to create great content for your niche and optimize it for search engines. So unless you already have an audience, you would not be able to make money fast.

However, when there is a skill, there is a way. Paid advertising through the proper marketing channels is a clever way to promote even though you do not have an audience. It might seem there is much more risk involved, which might be true for anyone without paid advertising experience. So do not rush into paying for some ads before you know what to do. But, if you’re up for it, it is definitely the fast way to scale up leads/sales for your merchants without having an audience. 

Benefits of using affiliate marketing

Increased web performance 

Targeting the right audience through affiliates often equals a new traffic source from multiple media channels. This brings more brand awareness and potential new organic backlinks to your website, strengthening your domain rating and improving your position on Google. 

Improved business reputation

Having well-known affiliates brag about your business can only lead to sales improvement and a better business reputation. As a result, you can get more opportunities to improve, such as through new partnerships. 

Low costs

Since an affiliate handles all the marketing, you do not have to invest or worry about creating the perfect marketing strategy, which is an effective marketing strategy. 

High ROI

As the affiliates you choose usually have a large influence over the niche you are targeting, the ROI is typically higher than other marketing efforts. 

Flexibility 

Affiliate marketing allows your business to enter new markets without the need to spend a lot of resources. Simply search for affiliates within your interest area and start reaching out to the new audience. 

Are you ready to gain all of these benefits? All you need to do is have a dedicated account manager for affiliates and excellent affiliate software. Check out Post Affiliate Pro and test it out immediately. 

https://www.youtube.com/watch?v=9bpwD8b2PbU

Types of affiliate marketing

Check out the different types of affiliate marketing before you get started with affiliate marketing. Consider them all, since each has its pros and cons. 

Unattached affiliate marketing

Unattached affiliate marketing means the affiliate has no experience, knowledge in your products/services. To be specific, the affiliate does not produce content or knows the merchant’s type of niche. 

Related affiliate marketing

Related affiliate marketing is the opposite of unattached. The affiliate has the expertise, knowledge, and audience related to your products/services. It also means the affiliate has tried the product/service, understands it, and recommends it to the correct/targeted niche. Thus, these affiliates are the best for companies looking to get the most out of affiliate marketing. 

Involved affiliate marketing

Involved affiliate marketing is similar to related affiliate marketing. The affiliate has the audience, knowledge, and experience in the same niche. But what’s more, the affiliate is also involved within the company, such as product creation. This can be really beneficial to merchants as the audience usually converts more since the reviewer was more involved and is not just advertising a random product. However, this could be potentially risky for affiliates since they can be associated with a company if something goes wrong. 

Types of affiliate marketing channels

Influencers

An influencer is someone who has a following based on the same hobby, lifestyle, or preferences. Therefore, these make great affiliates as they can promote the products/services to their audience quickly and easily. The companies can choose influencers based on their niche, so they are explicitly targeting their potential consumers. This is a convenient and fast way to gain leads or sales for your business. 

Bloggers

Bloggers attract an audience through search engines. Firstly, they usually try out the product/service and write comprehensive reviews on their websites. As a result, they can organically reach a massive audience with the targeted review blog post. People trust online reviews as much as personal recommendations. Actually, almost 93% of customers say it was an essential factor in their decision process. Thus, niche bloggers are beneficial to drive leads or sales and spread positive awareness for your business. 

Email list

You might be thinking, emailing? Yes, it is still very much a great way to convert leads into customers. Actually, the ROI for email marketing is 122%. Therefore, creating engaging emails with hyperlinks is nothing to underestimate these days. However, be aware of spamming as it can have the opposite effect. 

Media sites 

Another great channel for affiliate marketing is huge media sites like Facebook, Instagram, or Youtube. Since these big platforms have huge audiences, you can use that to your advantage to promote your products/services with targeted campaigns if you do not have a substantial following. You can either create ads, like banners, or promote through affiliate links. 

Example:

For instance, Youtube is a huge social media platform where consumers follow their favorite channels based on their hobbies or lifestyle. Amazon has created an affiliate program called Amazon Associates that generates a unique link that they can insert in the description under a youtube video. Thus, the affiliate gets a commission when the youtube audience purchases a particular product through the link. Of course, different products have different ranges of commissions. However, it is essential to state that consumers do not pay more for the products. 

Paid search microsites

Paid search microsites are a lot like bloggers. They are websites that talk about a specific niche and are pretty straightforward. Thus, it converts easily and fast. 

Conversion rate (CR) in affiliate marketing

Conversion rate is the percentage of online visitors who completed your desired action. Therefore, it is a great predictor of how successful the overall marketing campaign is. For instance, it is a great way to measure and evaluate how well you perform as an affiliate. Therefore, you can prove and negotiate the commission rate/flat rate easily. 

So, how can you calculate the conversion rate for your affiliates?

To calculate your conversion rate, divide visitors by the number of actual conversions/actions completed. So, for instance, if you have 4000 visits on your page and 400 people complete your desired action, that means that your conversion rate is about 40 percent. 

Affiliate marketing models

There are several ways a company/merchant can compensate an affiliate for their work, such as;

Cost Per Sale

Cost Per Sale, or in other words, Cost Per Order, is a payment method where the merchant only pays the affiliate for actual orders/sales. This is a safe choice for merchants that want to see immediate results. 

Cost Per Action

Cost Per Action means that affiliates get paid based on how many customers complete the desired action, such as email sign-ups, demo calls, free downloads, free trials, etc.

Cost Per Click

Cost Per Click is a method where the merchant pays for each click to the website from an affiliate. This method is usually used when the merchant wants to obtain high traffic to the website from affiliates.

Cost Per Mile

Cost Per Mile is another payment method, where affiliates get paid by every thousand impressions they bring to the merchant’s product/website. 

What skills are required for affiliate marketing?

If you are a merchant seeking the right affiliate for your online business, consider choosing an affiliate with a wide range of skills, such as; 

  • Great communication skills
  • Creativity
  • SEO knowledge
  • UX knowledge
  • Problem-solving skills (detecting problems, interpreting analytics)
  • Digital marketing & sales skills
  • Preferable: experience in website design
  • Preferable: eCommerce platform experience

SEO is not dead

Do not underestimate search engine optimization. It is not dead. Although seeing improvements and ranking might take a long time with SEO, it is definitely worth the investment as the results are long-term and free. Since SEO is the organic way to attract your audience, it is the purest form of attracting your niche to your website. Simple ON/OFF page optimization can be a key for your website to rank for the product/service in Google for free. SEO takes time. However, it’s definitely worth investing your time and energy even in 2022.

Highly targeted influencer marketing

Influencer marketing is becoming stronger by each year, and 2022 will be no different. Influencers know their niche and can present a detailed review through creative marketing, such as video creation or comprehensive product reviews. In addition to that, we predict micro-influencers will be on the rise since more focus will be placed on localization to improve customer relationships.

Expansion of seasonal themes

Affiliate marketing is booming throughout Christmas, Black Friday. So, why not expand it? Check out your National holiday calendar and explore new days/ideas to increase sales. 

Artificial intelligence

In 2022 you can expect more AI integration into affiliate marketing since it helps you get more insights and data, which tremendously improves sales. 

Third-Party Cookies blocked by Chrome 

Chrome is the last web browser to comply with these rules. However, the change is coming in 2022, and you should be ready to diversify with it. So, what does it mean for affiliate marketing? Well, one thing is for sure. It will have a massive impact on affiliates that use paid ads to drive traffic to websites. However, it is not a very popular way to do affiliate marketing these days. 

Conclusion

To summarize, affiliate marketing is a great way to level up your business with new prospects and sales. According to Statista, the market is estimated to reach 8.2 billion U.S. dollars by 2022. Needless to say, affiliate marketing is not dead. So, what are you waiting for? 

Post Affiliate Pro is affiliate software that enables you to manage all your affiliates without hustle effectively. Learn more about it and try it out with our free demo right now. 

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