What affiliate marketing is?
Affiliate marketing is marketing which an affiliate earns a commission for promoting products of another person or company. Some affiliates find a product they enjoy and want to promote, then they promote the products and earn a piece of the from each sale they make, which is tracked through affiliate links of the product owner.
How does affiliate marketing work?
Affiliate marketing works by leveraging the abilities of a variety of individuals for a more effective marketing strategy and provides the marketer with a share of the profit. Three different parties make it work, seller and product owner, affiliate marketer or advertiser, and at last the consumer.
Simplified the relationship of these three parties ensures the success of affiliate marketing:
- Seller and product owner:
The seller or product owner is typically an entrepreneur or enterprise, who is the product creator, vendor, merchant or retailer with a product they want to sell, such as online services or physical products.
The seller does not need to be involved in marketing, but they profit from the revenue sharing associated with affiliate marketing. For example, if the seller is an online service provider, who has a new service and wants to reach a new audience by paying affiliate websites to promote the services.
- Affiliate marketer or advertiser:
The affiliate marketer or advertiser can be a person or a company that markets the sellers’ product or service to potential consumers. Which means the marketer/advertiser promotes the product to convince the consumers to purchase the product. When the consumer buys the product, the affiliate receives a portion of the revenue earned from the purchase.
Often the affiliates promote to a specific audience, which creates a defined niche or personal brand that helps the affiliate attract consumers that most likely are interested in the product and to act on the promotion.
- The consumer:
The consumer either knows it or not, but their purchases are the essential keystone of affiliate marketing, by the shared products from the marketer/affiliates on social media, blogs and websites.
Sometimes the affiliate chooses to be upfront with the consumer by announcing that they are earning commission for the sales. But sometimes the consumers are not aware of the affiliate marketing relationship behind their purchases. That does not mean that the consumer pays more for the product, which rarely happens because the affiliate shares of the profit included in the retail price. Which means the consumer is not affected by the affiliate marketing system as they will pay and receive the product as usual.
How affiliate marketing is important in digital marketing?
Affiliate marketing provides benefits for eCommerce businesses by providing an appropriate marketing solution for every eCommerce store. According to recent studies, 81% of brands rely on affiliate links because of the minimum involvement of investment. The eCommerce stores only have to sign up to an affiliate program offered by a retailer to promote and sell their products and services on a commission-based payment model.
Affiliate marketing is a form of expanding a marketing team by hiring the services of a third-party company or person, which are paid when the leads are converted and made a sale, which makes affiliate marketing a popular choice among businesses and brands in a world where we constantly are targeted with marketing strategies from different companies.
Not only has affiliate marketing become a popular choice, but it has evolved into a huge global industry worth around over $12 billion. This marketing form has variable advantages that small, medium and large companies are trying to exploit, also because it contributes 15% of the total revenue made from digital marketing efforts.
There are also other advantages:
- Effective use of advertising budget
- Affiliate marketing is a performance-based marketing strategy that reduces investments. Also, it reduces the risk of bad ROI because of the less amount spent.
- Easy tracking
- Affiliate marketing programs give access to track things such as click-through rates or site views. Which is important to build an affiliate program, by giving an idea of which affiliates work and not.
- Advance SEO
- It can grow SEO through numerous backlinks via affiliate websites, blogs, social media pages.
- Brand awareness
- It can grow brand awareness as customers usually prefer to buy from familiar retailers, which allows a business to grow their brand awareness by increasing the audience base and attracting potential customers.
- Foreign market
- By using affiliates abroad you can tap into the global marketplace. The affiliate’s local knowledge can be used to market the products to foreign audiences utilizing strategies to the specific area. It is also a low-risk method of identifying if a product is saleable elsewhere.
Affiliate marketing offers a flexible approach and a cost-effective method to increase and produce new leads while using less investment in advertisements.
That is the advantages of using affiliate marketing as a product owner, but how can it benefit if you want to become an affiliate marketer.
Why become an affiliate marketer?
As an affiliate marketer, you do not need any physical stock of products before making money, so there is no need to think about arranging logistics, packaging and delivery of products.
Aside from that, there are also loads of benefits to promoting affiliate programs such as:
- Passive income
- While you have a regular day to day job, you can earn money with affiliate marketing on the side. Also, you will get continuous returns from the customers’ purchases, which means you can earn money without being in front of your computer, so you will be earning a steady flow of income.
- No support
- The product owner has to deal with customer support, which means that you will never have to provide customer support after the purchased. You only have to connect the seller with the consumer through the link, and the seller deals with any consumer complain and support.
- Home-based office
- With affiliate marketing, you can work from home or any other places you want, as you will be able to launch campaigns and earn revenue from the products.
- Low cost
- You can get started quickly and without a startup fee or cash flow to finance the products because of affiliate marketing can be done at a low cost. You even do not need to worry about affiliate program fees or the creation of products.
- You will be working as a freelancer, which gives freedom to schedule your own work time, setting your own goals and choosing the products that interest you.
- Performance-based pays
- All you reward are based on your performance, which means you get from it based on what you put into it. It is all based on your reviewing skills and writing appealing content to increase your revenue.
- Power of SEO
- It is important that you learn the basics of on-page SEO, which makes your website or blog better for visitors and generates organic traffic for you.
How to get paid as an affiliate marketer?
There are different ways to get paid as an affiliate marketer depending on the affiliate program. You can get paid per sale, lead and click.
The standard affiliate marketing structure is pay per sale, which means the seller pays the affiliate a percentage of the consumers’ purchases. In this structure, the affiliate must convert the leads to a sale.
The second and more complex is the pay per lead affiliate programs, that compensates the affiliate through the conversion of leads by persuing the consumer to visit the sellers’ website complete actions such as filling contact forms, signing up for trials, downloading software etc.
The third payment method is pay per click, which focuses on redirecting consumers from the affiliates marketing platform to the seller’s website and by doing this, the affiliate is paid by increasing the seller’s website traffic.
Affiliate marketing is ideal for individuals or companies who look to gain an income based on performance. You are able to achieve a passive income when and where you want to without producing products or services. Though success depends on your marketing skills because it all depends on pursuing consumers via blogs, social media, and other platforms to take action.