WHAT IS AFFILIATE MARKETING?
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.
Affiliate marketing is the process by which an affiliate earns a commission for marketing another person’s or company’s products. The affiliate simply searches for a product they enjoy, then promotes that product and earns a piece of the profit from each sale they make. The sales are tracked via affiliate links from one website to another.
Affiliate marketing is a popular tactic to drive sales and generate significant online revenue. Extremely beneficial to both brands and affiliate marketers, the new push towards less traditional marketing tactics has paid off.
How Does Affiliate Marketing Work?
Because affiliate marketing works by spreading the responsibilities of product marketing and creation across parties, it manages to leverage the abilities of a variety of individuals for a more effective marketing strategy while providing contributors with a share of the profit. To make this work, three different parties must be involved:
- Seller and product creators.
- The affiliate or advertiser.
- The consumer.
Let’s delve into the complex relationship these three parties share to ensure affiliate marketing is a success.
1. Seller and product creators.
The seller, whether a solo entrepreneur or large enterprise, is a vendor, merchant, product creator, or retailer with a product to market. The product can be a physical object, like household goods, or a service, like makeup tutorials.
Also known as the brand, the seller does not need to be actively involved in the marketing, but they may also be the advertiser and profit from the revenue sharing associated with affiliate marketing.
For example, the seller could be an ecommerce merchant that started a dropshipping business and wants to reach a new audience by paying affiliate websites to promote their products. Or the seller could be a SaaS company that leverages affiliates to help sell their marketing software.
2. The affiliate or publisher.
Also known as a publisher, the affiliate can be either an individual or a company that markets the seller’s product in an appealing way to potential consumers. In other words, the affiliate promotes the product to persuade consumers that it is valuable or beneficial to them and convince them to purchase the product. If the consumer does end up buying the product, the affiliate receives a portion of the revenue made.
Affiliates often have a very specific audience to whom they market, generally adhering to that audience’s interests. This creates a defined niche or personal brand that helps the affiliate attract consumers who will be most likely to act on the promotion.
3. The consumer.
Whether the consumer knows it or not, they (and their purchases) are the drivers of affiliate marketing. Affiliates share these products with them on social media, blogs, and websites.
When consumers buy the product, the seller and the affiliate share the profits. Sometimes the affiliate will choose to be upfront with the consumer by disclosing that they are receiving commission for the sales they make. Other times the consumer may be completely oblivious to the affiliate marketing infrastructure behind their purchase.
Either way, they will rarely pay more for the product purchased through affiliate marketing; the affiliate’s share of the profit is included in the retail price. The consumer will complete the purchase process and receive the product as normal, unaffected by the affiliate marketing system in which they are a significant part.
Common Types of Affiliate Marketing Channels
Most affiliates share common practices to ensure that their audience is engaged and receptive to purchasing promoted products. But not all affiliates advertise the products in the same way. In fact, there are several different marketing channels they may leverage.
An influencer is an individual who holds the power to impact the purchasing decisions of a large segment of the population. This person is in a great position to benefit from affiliate marketing. They already boast an impressive following, so it’s easy for them to direct consumers to the seller’s products through social media posts, blogs, and other interactions with their followers. The influencers then receive a share of the profits they helped to create.
Influencer marketing campaigns are particularly popular on Instagram where brands partner with influencers who are seen as experts or authorities in their specific niches. Depending on the deal, a campaign could consist of a series of product reviews with photos, account takeovers, or live videos. While an influencer might have their own branding and aesthetic, it’s important to add elements that tie up with your brand to ensure brand recall and recognition. This can be achieved by using apps like Instasize where you can quickly edit and customize your campaign’s creatives in a tap.
With the ability to rank organically in search engine queries, bloggers excel at increasing a seller’s conversions. The blogger samples the product or service and then writes a comprehensive review that promotes the brand in a compelling way, driving traffic back to the seller’s site.
The blogger is awarded for his or her influence spreading the word about the value of the product, helping to improve the seller’s sales.
3. Paid search focused microsites.
Developing and monetizing microsites can also garner a serious amount of sales. These sites are advertised within a partner site or on the sponsored listings of a search engine. They are distinct and separate from the organization’s main site. By offering more focused, relevant content to a specific audience, microsites lead to increased conversions due to their simple and straightforward call to action.
4. Email lists.
Despite its older origins, email marketing is still a viable source of affiliate marketing income. Some affiliates have email lists they can use to promote the seller’s products. Others may leverage email newsletters that include hyperlinks to products, earning a commission after the consumer purchases the product.
Another method is for the affiliate to build an email list over time. They use their various campaigns to collect emails en masse, then send out emails regarding the products they are promoting.
5. Large media websites.
Designed to create a huge amount of traffic at all times, these sites focus on building an audience of millions. These websites promote products to their massive audience through the use of banners and contextual affiliate links. This method offers superior exposure and improves conversion rates, resulting in a top-notch revenue for both the seller and the affiliate.
TIPS ON HOW TO BECOME A SUCCESSFUL AFFILIATE MARKETER
Affiliate Marketing Tips
- Create solid content
- Track your success
- Know your products
- Engage your visitors
- Concentrate on one niche
- Provide information and help, rather than sell
- Choose the right products
- Always be testing and improving
- Dedicate the time
- Set proper expectations
Create solid content
If you expect to make extra income from affiliate marketing, you will need to create quality content. Content is in every piece of communication you use. You will need knowledge of calls to action both informational, as well as transactional, and the ability to write in a broadly readable way.
You also need to make your content reader-centric. Answer their questions, provide them with detailed information, but written in a way that is accessible and engaging.
Know your audience, look at what brings them to your website. A search box is an excellent way to learn what they want to find on your site.
Write, write, write. Commit to creating regular content.
Track your affiliate marketing success
Ongoing success needs insights as to what has worked in the past. While you do not want to set it and forget it – knowing how visitors engage with your site is important. Obviously, search ranking will have an impact, as will social sharing, etc.
You need to use your visitor analytics to learn more about your visitors. What percentage are new versus returning visitors? What pages get the majority of your traffic? What links in your navigation bar and other places on each page get clicked? All these questions will provide answers that you can use to improve and add actions.
Where is your converting traffic coming from? What pages are visited most before a conversion? Use your analytics to get answers you can use to determine what new content is needed or even where to place certain links on existing pages. Use your data!
Know your products
Knowledge can distinguish you from your competitors. As an affiliate you are making recommendations to your visitors of various products, so to stand out you need to be seen as an expert, or at least a place to get detailed information about the products you promote.
Too often affiliates grab a few vendors they think will be of interest to their visitors without getting to know them. Even if you are not providing reviews of these products, you still want to know how they work and what benefits they can provide users. Don’t sign up with a new vendor just because they appear to offer something in your niche – do your research. Look at the reviews others have done to start, but try and use it yourself, even if it is just the demo.
Engage your visitors
Most successful affiliate marketers talk to their visitors. If you have a blog, allow comments. This will provide you with the opportunity to have a conversation with your visitors. Yes, you will need to filter out the spam, but if you reply to most of your commenters and start dialogues, they will return to continue the conversation.
Ask questions at the end of a blog post. “What other factors should be included?” “Would you like more information on this topic?” “Tell us your opinion!” These calls to action will help foster community interaction. When replying, use the commenters name wherever possible.
The more your visitors come to see your site as a community of like-minded people, the more they will return and increase your conversions.
Concentrate on one niche affiliate business
Too often affiliate marketers use a shotgun approach, getting as many products as possible to push when they should be focusing on their main interest and niche-related products. If you want to develop a successful affiliate marketing site, always stick to one niche. You can create other sites to promote other niches, but don’t spread yourself too thin, because that will lead to thin content sites.
Provide information and help, rather than sell
Blatant sales and self-promotion sites never gain traction. You need to help your visitors and provide quality information they find useful so that they keep coming back. If you look at the sites that rank well for the various terms used in your niche, you will find that useful information wins out. Do your research and provide more details or updated information.
Always be testing and improving
You should always be trying to improve your process. Test length, use of schema, different art, and other factors. Affiliate marketing, like any learning process, is an ongoing effort. While many of the steps above can be implemented at the start, you want to learn and improve as you go.
Dedicate the time
To become successful you need to put the time in. Affiliate marketing requires an ongoing effort, so be prepared and allocate regular time for your efforts.
Set proper expectations
You are not going to make a million dollars in a month. You need to set realistic expectations. Many affiliates spend a set amount of time to build out their original sites then commit to a smaller amount to keep adding content while starting a new site. Whether you have a single site with concentrated ongoing development or a number of initially smaller sites, set goals and work towards accomplishing them.
What Affiliate Marketing Strategies Should You Employ in 2021?
1. Only recommend products you are extremely familiar with.
Building trust with your audience is paramount in affiliate marketing, and the quickest way to lose trust is to recommend products either you haven’t used before or that aren’t a good fit for your audience. Also make sure you never tell anyone to directly buy a product, you are simply recommending the product. The more helpful you are and the more you make quality recommendations, the more likely your web visitors will come back for your expertise.
2. Promote products from many different merchants.
Don’t put all your eggs in one basket. If you only promote one merchant’s products, you are stuck with their commissions, their landing pages, and ultimately, their conversion rates. It is important to work with many different merchants in your niche and promote a wide range of products.
This affiliate marketing strategy will diversify the number of commissions you make and create a steady stream of revenue when building an affiliate website. Some examples of affiliate merchants include brands like BigCommerce, Bluehost, and SimplyBook.me.
3. Constantly test and optimize your conversion rates.
Let’s say you have a promotions page where you’re promoting a product via affiliate links. If you currently get 5,000 visits/month at a 2% conversion rate, you have 100 referrals. To get to 200 referrals, you can either focus on getting 5,000 more visitors or simply increasing the conversion rate to 4%.
Which sounds easier? Instead of spending months building Domain Authority with blogging and guest posts to get more organic traffic, you just have to increase the conversion rate by 2%. This can include landing page optimization, testing your calls-to-action, and having a conversion rate optimization strategy in place. By testing and optimizing your site, you’ll get far better results with much less effort.
4. Focus on your affiliate traffic sources.
It’s important to know where your traffic is coming from and the demographics of your audience. This will allow you to customize your messaging so that you can provide the best affiliate product recommendations. You shouldn’t just focus on the vertical you’re in, but on the traffic sources and audience that’s visiting your site. Traffic sources may include organic, paid, social media, referral, display, email, or direct traffic.
You can view traffic source data in Google Analytics to view things such as time on page, bounce rate, geo location, age, gender, time of day, devices (mobile vs. desktop), and more so that you can focus your effort on the highest converting traffic. This analytics data is crucial to making informed decisions, increasing your conversion rates, and making more affiliate sales.
Benefits of Affiliate Marketing on Your Business
According to Statistica, affiliate marketing spending in the U.S alone is expected to reach $8.2 billion by 2022.
Why are companies spending so much on affiliate marketing campaigns? Below are some of the benefits of using affiliate marketers in your business:
1. Low cost of start-up
An affiliate program does not require that you have an advertising team for ad visuals or purchase ad space.
Rather than that, you’ll have to depend on your affiliates to come up with their marketing content. Other than the initial effort of selecting and vetting affiliates, there’s little effort required from you to market your products, which is one of the reasons it’s become such a popular method of marketing.
Once a company is comfortable working with an affiliate and has built a good relationship, they can for the most part let them get on with marketing your service or product.
2. Low ongoing costs
Since most of your marketing activities are done by affiliates, they’ll also bear the chunk of the cost attached. And since it’s a commission-based program, it means that you’ll only pay affiliates from sales they bring in.
This marketing model makes cost easy to manage and does not interrupt your cash flow, unlike other marketing models such as PPC advertising that requires you to pay for every click leading to your website. But affiliate marketing ensures that you only part ways with your money when sales are made.
3. Low risk
Lost cost means low risk. There’s little risk of loss since payments are only made when there’s an actual conversion; perfect for businesses on a tight budget.
4. Targeted Traffic
Since the affiliates are handpicked by you, it can ensure that the traffic that comes to your site is from individuals that find your product or service useful. This is because affiliates that resonate with your brand will most likely have individuals with their area of influence that’ll find your brand useful.
You can easily make your affiliate program smaller or bigger at little or no cost. It also offers you a great way to scale up your business without breaking the bank.
6. High ROI
Having the keys to product innovation and effective management skills doesn’t guarantee a high ROI; you’ll also need to get your marketing right.
Affiliate marketing has been proven to have a much higher return on investment than the majority of marketing strategies.
One major reason for this is because your target audience will hear of your product or service from affiliates that are within their spheres of influence. In short, you’re channeling your marketing efforts through an affiliate who has direct access and influence over a highly targeted audience that is receptive to what you have to offer.
Affiliate marketing is quickly becoming a central aspect of many marketing strategies, largely because of the high bang for your buck that other strategies cannot offer.
As the market continues to grow, the benefits of affiliate marketing are more apparent to businesses of all sizes, and we can expect to see more organizations use the method more frequently in the future.
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