We get asked a ton of questions about affiliate marketing every single day. What is affiliate marketing exactly? How does it work? How can I get started making money as an affiliate? What are the best ways to promote products as an affiliate? You are probably here because you have similar questions. We decided that we would share with the Internet what we believe to be everything you need to know to simply get started with affiliate marketing.
Introduction
The affiliate marketing business model does not need to be complicated. If you are confused or don’t quite get it, sit tight, we are going to demystify the key elements to affiliate marketing. There are certainly some intricate technical aspects to affiliate marketing, but we’ll reserve those for a more in depth article at a different time. It is important to note that you do not need to be a web developer or IT specialist to be successful in affiliate marketing. For this article, we will lay out the basics of the business aspects of affiliate marketing for anyone who is interested in affiliate marketing to be able to grasp and understand at a high level. Anyone with hustle, commitment, and work ethic can be a successful affiliate marketer. That’s the truth! If you have any questions or something in this article is unclear, please contact us and we’d be glad to help you.
The Affiliate Marketing Business Model
Affiliate Marketing is a highly cost-effective and scalable method of online marketing. Unlike traditional forms of online marketing and advertising, where advertisers pay for advertising based on impressions (CPM) or clicks (CPC), in affiliate marketing advertisers only pay for specific results or actions. These results can be leads or sales, and it is entirely dependent on the brand’s strategy and their affiliate program terms. The affiliate marketing form of pricing model is often referred to as Cost Per Action (CPA), Cost Per Sale (CPS), or Cost Per Lead (CPL). Affiliate marketing allows brands very precise control over their marketing budgets. With other paid marketing channels, where the results are not guaranteed, brands have to spend marketing budget upfront and test different campaigns hoping to arrive at their desired cost per action. With affiliate marketing brands only pay for the outcome. As an affiliate it is up to you to be effective in your promotion of the brand’s product. If you are spending time creating content, publishing ads on your site or promoting brands on social media, and you are only getting paid when the clicks convert to sales or leads, it is in your best interest to promote brands that are going to convert well for your audience. With highly targeted promotions, and by selecting the most appropriate affiliate programs, you can actually earn more as an affiliate than you can through earn other forms of online advertising, such as programmatic ad placements or fixed sponsorships. The goal of affiliate marketing is to establish a mutually beneficial relationship between the brand and the affiliate partner while allowing the brand to achieve a high ROI on marketing dollars, and also compensating affiliates competitively for the time they spend promoting the brand.
Affiliate Marketing: Who’s Who?
Brands
These are the companies that are selling the products or service. They are often referred to as advertisers or merchants. Affiliate partners join a brand’s affiliate program to promote the brand’s product or service and get paid to refer actions.
Affiliates
These are the independent marketers who promote a brand’s product or service. They are also referred to as partners or publishers. Affiliates can be bloggers, content sites, social media influencers, review sites, loyalty & rewards sites & mobile apps, coupon sites, and even simply super fans of the brand who want to promote the brand and get paid. There are many more types of the affiliates too, but these are the most common.
Tracking Platforms & Networks
These are the technologies that power all of the tracking, analytics, and attribution of affiliate activity. There are some tracking solutions such as Impact and Partner Stack, often referred to as SaaS tracking platforms, that enable brands to track affiliate clicks and referral activity. In addition to SaaS tracking platforms, there are some tracking solutions like CJ and ShareASale that are traditional affiliate networks that provide extensive access to affiliate partners, in addition to the tracking and reporting capabilities. Whatever you choose for your affiliate program, you need a platform or network in place to track and measure the performance of your affiliate program.
Agencies
Agencies act as an extension of your marketing team and manage the daily operations of your affiliate program which includes strategy, technical integrations, affiliate communications, affiliate applications, creative management, and program optimization. Agencies manage a brand’s affiliate program on behalf of the brand. This is often referred to as Outsourced Program Management (OPM).
Customers
This is the group of online users who the affiliate is promoting the products and services to. The goal of the affiliate is to get customers to make a purchase or register as a lead for the brand, through the affiliate’s tracking link. Here’s an illustration and step-by-step process of how affiliate marketing works and how the different players are involved in the process:
Step 1 Customer visit an affiliate’s website or mobile app.
Step 2 Customer clicks on an affiliate’s tracking link.
Step 3 The tracking platform or network tracks the activity through the tracking link.
Step 4 Customer performs the advertiser’s desired action (sale or registration).
Step 5 Brand pays the affiliate a commission for referring the customer.
Step 6 Affiliate is happy to receive commissions and repeats the process! 🙂
Tracking Platforms & Networks
There are two types of primary technologies that enable tracking for affiliate programs. These are affiliate networks and SaaS tracking platforms. They both achieve the same goal by providing a bridge between the affiliate and the advertiser, tracking all activity, and reporting the activity for both sides. There are some differences between the two types of technologies which we describe below.
Affiliate Networks
Affiliate Networks provide the tracking and reporting for all affiliate referral activity, while also facilitating the payment of commissions to affiliate partners on behalf of the advertisers. In addition to providing the tracking and reporting, networks also specialize in providing access to a network of affiliates that are easily searchable for advertisers to invite into their affiliate programs. Most top tier affiliate networks also offer a managed service, where the network will manage the affiliate program in their network on behalf of the advertiser. Affiliate networks generally charge advertisers a commission on all sales or a percentage of the commission paid to affiliates. List of the Top Affiliate Networks:
- CJ
- Rakuten (formerly LinkShare)
- Awin
- ShareASale
SaaS Tracking Platforms
SaaS tracking platforms generally provide the same tracking, reporting, commissions payment processing, and attribution capabilities that networks provide, but often do not provide as much access to a network of affiliates as the Affiliate Networks do, if they provide any access at all. There is a great benefit to using a SaaS tracking platform to launch your affiliate program, if you are looking to control technology costs, and develop more of a direct network of affiliate relationships. SaaS tracking platforms generally provide access to their software for a fixed monthly fee, which allows advertisers to more predictably control their vendor costs. List of the Top SaaS Tracking Platforms:
- Impact
- HasOffers (now Tune)
- PartnerStack
- Tapfiliate
- iDevAffiliate
There are pros and cons to each tracking technology. Some advertisers will benefit more from a traditional network and some will have more benefits going with a SaaS tracking platform. Choosing the best tracking technology will be unique to your business and your brand’s niche. If you have any questions on what is the best solution for your business we are here to help provide any information you may need during the process of launching your affiliate program.
Types of Affiliates
“Affiliate” refers to a wide range of partner types which includes independent publishers, digital marketing entrepreneurs, major media companies, and in some cases other brands who promote offers to their customers as an added value. Here is a list of some of the most common types of affiliates:
Content Partners
Content partners primarily create and publish content online, hence their name. These are websites with editorial functions that create high volumes of targeted content on a frequent basis and generally monetize that content through advertising revenue as a part of their business model. Content partners can be major media companies such as BuzzFeed or Business Insider, or they can be small independently run digital publishing operations.
Bloggers
Bloggers are a subset of content partners, and are generally independent, but high-influence partners with engaged and enthusiastic followers. Bloggers generally pick a niche and focus their writing on things they are knowledgeable and passionate about. Bloggers have a close relationship with their audience and are often highly effective affiliate partners because their audiences really trust their recommendations on products and services.
Media Companies
Larger media companies may have a variety of media types from digital to print to TV to radio to podcasting to content sites and many other types of media within their portfolio. These are generally larger partner types and incorporate affiliate programs into their content and monetization strategies to help fill advertising inventory and increase revenue. They generally have extensive distribution and audience reach. Some examples of major media companies that also operate as affiliate partners include Ziff Davis, Forbes, and The Chive.
Loyalty & Rewards Partners
Loyalty & rewards affiliates attract their audiences by offering incentives and rewards for customers to shop through their sites or apps over other shopping platforms. Rewards can include cash back, virtual currency, travel points, or contributions to charities, among many others. Loyalty & rewards affiliate partners have a highly loyal base of customers and can drive high-quality traffic to their brand partners.
Coupon Sites
Coupon sites are essentially content publishers whose primary content is coupons and discounts for online brands. Online shoppers are always searching for coupons and discount codes as a part of their online shopping behavior. A coupon site’s goal is to provide online shoppers with access to as many active coupons as possible for the brands they are searching for. Coupon sites range in size from large platforms like RetailMeNot to smaller sites like Anycodes.
Sub-Networks
Sub-networks, also referred to as “sub-affiliate networks”, are affiliate marketing companies that build networks of affiliates of their own. They often act as an “affiliate of affiliates” whereby one relationship with a sub-network can provide access to 100s of other affiliates through their network. The sub-networks manage all the relationships with the partners in their network. Sub-networks generally sign up through the brand’s SaaS Tracking Platform of Affiliate Network, but in some cases a sub-network will require a direct integration of their own. Sub-networks offer high-volume traffic opportunities and can make up a significant portion of affiliate program’s activity. Some example sub-networks include SkimLinks and VigLink.
Social Influencers
With the rise of Instagram, Tik Tok, and YouTube celebrities, social influencers can make up a significant portion of a brand’s affiliate program. Social Influencers generally take a little bit more time to develop a close relationship with and they prefer to work with brands that they believe in or products they use themselves. If you can establish a close relationship with small cohort of influencers it can be a powerful part of your affiliate strategy.
Getting Started with Affiliate Marketing
In this playbook we covered most of the high-level and important pieces of information that you need to know about affiliate marketing. If you are asking yourself what you should do next, here are some key action items you can take immediately to get started with affiliate marketing: Affiliates
- Join the top affiliate networks.
- Search for brands that are going to be a fit for your audience.
- Copy your affiliate link from the network and start promoting.
- Test, test, test! See what brands convert and what don’t. Test a lot of different promotional strategies.
- Rinse and repeat. Once you find works for you keep doing it.
- Congrats you are now making money online as an affiliate!
Brands
- If you aren’t already doing affiliate marketing you should be! Every brand who sells online or generates leads online can find success with affiliate marketing.
- Check out your competitors and see if they have affiliate programs. If they do, what are their commission structures? What networks or tracking platforms do they use? If your competitors are launched in a network you may want to consider launching in the same one, as a competitive strategy (be where your competitors are).
- If you don’t know where to start, or if you simply are looking for expert resources to help you launch your affiliate program, contact us. We offer a free audit of your affiliate program and we’ll be happy to point you in the right direction.
In Summary
There’s so much more that you can learn about affiliate marketing, but we have provided here is a helpful starting point for your journey into the world of affiliate marketing. Affiliate marketing should be a part of every brand’s overall online marketing strategy. If you don’t currently have an affiliate program as a brand, you are missing out on meaningful sales opportunities. You should launch your program ASAP! If you are an online publisher or content creator and affiliate marketing is not a part of your traffic monetization strategy then it should be! You are missing out on opportunities to increase the overall revenue of your digital publishing business by partnering with major brands through their affiliate programs. You should get started today!
If you have any questions or if something wasn’t clear, don’t hesitate to click here to contact us. We love making new online friends and we’d be happy to help.
No comment