Affiliate Marketing: What It Is & How It Can Help
As a business owner, you are inclined to know the best marketing strategies to grow your business. You probably heard about the rise of affiliate marketing over the past few years. While it’s not a new marketing tactic, it undeniably continues to soar in this social media era where thousands of blogs and influencers dominate the web. If you don’t precisely know what affiliate marketing is, you’ve come to the right place.
What is affiliate marketing?
Affiliate marketing refers to the partnership of brands and individuals in promoting the former’s products or services. These individuals (also called affiliates, partners, or publishers) share, review, and recommend the products by providing a link that their followers and subscribers can click through. The links provided can be tracked the number of click throughs and sales made through that individual’s link. The brand will incentivize the partners for every sale directed to the brand.
While it may seem like the affiliates gain more benefits in this setup, businesses also reap wonderful results. There are countless numbers of individuals, websites, blogs, and industry leaders that can expedite their marketing efforts to create brand awareness and generate sales. It all just comes down to choosing the right people to partner with.
As a rule of thumb, you should tap individuals and sites that relate to your niche and cater to the same target market. This way, people are more likely to be interested in your product being promoted.
The whos of affiliate marketing
In getting acquainted with affiliate marketing, you need to familiarize yourself with the several parties involved.
This is you, the brand that seeks promotional partnerships with affiliates.
These individuals are usually bloggers, influencers, industry leaders, niche websites, review blogs, and more. They are the ones who create content to promote your products.
These are the platforms where brands flock for an affiliate program. Affiliate programs handle the tracking, reporting, and payment disbursements to affiliates. Some programs fully manage a program, but brands can do it too.
Affiliate networks provide access to networks of affiliates who applied in their network. They also give the affiliates access to a library of affiliate programs they can apply for.
Just like affiliate networks, SaaS platforms track performance, reports, and disburses payments. But they do not manage affiliate programs and provide access to the library of affiliates. Its main objective is to maintain the technological needs of an affiliate program.
Merchants cannot have both a SaaS platform and an Affiliate network. A brand only needs one service provider.
These are the affiliate’s followers that made a purchase using the links provided.
How affiliate marketing works
Affiliate marketing follows a simple process, which goes like this breakdown:
- An affiliate publishes content promoting the brand’s products in its own blog. A link will be strategically placed to direct followers to view the product and encourage purchase.
- A consumer clicks through the links provided on the affiliate’s site to check out the product. A cookie is stored in the consumer’s buyer upon clicking through. The affiliate network or SaaS platform uses this cookie to track the consumer purchase activity.
- Upon clicking through the link, the consumer will be redirected to the brand’s website.
- The consumer purchases the products promoted by the affiliate.
- The affiliate network or SaaS platform takes care of paying commission to the affiliate that drove sales.
The benefits of affiliate marketing to your business
Here are the powerful benefits of affiliate marketing that will convince you to try it for your business:
It is performance-based.
Affiliate marketing is purely performance-based. You will only need to pay commissions when the affiliate is successful in generating sales. Otherwise, the affiliate won’t get incentivized. This creates the motivation for affiliates to strive harder in ensuring they generate sales.
It expands your audience reach.
Affiliates have vast numbers of following. Most of them have already established a name in their industries, making it easier to influence followers. Whatever your niche may be, there will always be an affiliate you can tap to promote your products. This, then, broadens your audience reach. You create brand awareness and lead conversions even from outside your target market.
It builds credibility.
Since affiliates are mostly established personalities and industry leaders, people already have trust in these persons. When your brand is being recommended from these reputable sites and individuals, you gain credibility. Consumers love opinions from people they look up to and trust. Testimonials are vital in deciding whether a product seems promising. And when affiliates deliver such to consumers, they are convinced to purchase.
It is cost-effective.
Since you are only paying for the successful sales generated, you are not wasting any penny for unsuccessful efforts. Unlike paid ads that have fixed payment even when there’s no conversion, affiliate marketing will only make you pay when leads converted.
It boosts website traffic.
Since consumers are redirected to your website, your site’s traffic is growing as well. This referral traffic coming from several affiliates linking your site generally spikes your traffic. While it doesn’t directly affect your SEO, those who are curious about you will look you up on search engines. This will then contribute to your SEO, making your site rank higher and increase organic traffic.
You can choose who to work with.
Brands have the capability to handpick the affiliates they want to partner with when using an affiliate network. This helps you assess whether these publishers are the perfect advocates of your brand or not.
You have access to the statistical data.
When working with an affiliate network, you are provided access to sales reports driven by partners. You can monitor and track progress for every affiliate. And since you have access to the dashboard, you can use it to strategize your marketing efforts further.
It has a fixed cost.
Unlike any form of pay-per-click advertising that doesn’t provide a price upfront, affiliate marketing lets you set a fixed rate for the commissions made. You identify the commission rate for every sale, making you know exactly how much each sale will cost.
It has a promising return on investment (ROI).
According to Digital Global, US affiliate marketing spend increases by 10.1% annually. In fact, it is projected to hit $6.8 billion this 2020. And there is no sign of a decrease in the demand for it since the results are always successful.
There is a vast number of affiliate marketers out there.
Many individuals understand the rise of affiliate marketing; thus, more people are getting into the industry. With a large pool of choices, you can be selective about who your partner is. This way, you know that you pick the best affiliates that can drive you the best results.
Convinced to give affiliate marketing a try? Here are some well-recommended affiliate marketing courses to take with you: