Although affiliate marketing has been around for almost 30 years, there's still often some confusion about what it's all about. So, what is affiliate marketing exactly?
In a nutshell, affiliate marketing is a type of working relationship between an affiliate, usually a website owner, and a merchant, or business. The affiliate promotes the goods or services of the merchant, usually on their website, such as through a blog, by adding a clickable link.
If someone visits that site and then clicks on the link that directs them to the merchant's products or services, and it results in a sale, the affiliate earns a commission.
With the affiliate earning commission and the merchant increasing their audience reach and sales, affiliate marketing offers a mutually beneficial relationship for both parties involved.
Brands
If you are a brand looking to set up an affiliate program, you will need to identify an affiliate network. Affiliate networks are a 3rd party tracking solution for affiliates to view transparent data regarding the traffic and sales they drive for a brand. Selecting the right affiliate network for your brand is important and can have a huge effect on the success of the program.
Publishers
So, how does affiliate marketing work if you want to get involved? First, you need to find an affiliate network or programme. There are lots of different programs available covering a wide range of niches, but it's always a good idea to choose a market or product area that you are interested in, or have expertise in. Niche markets tend to be more financially lucrative because they are less competitive.
It is important that the affiliate area you choose is going to attract the right audiences. If you write a blog about beauty, for instance, then you should aim to promote affiliate products related to this area, or other products that your audiences would be interested in. If there is no connection between the affiliate product you promote and your target audience, then it's unlikely you'll get them to click the link and make a purchase.
To know how many people have clicked on affiliate links and made a purchase, traffic and click-throughs need to be tracked by the affiliate network. As mentioned above, this is for transparency for the publishers and acts as a convenient all in one platform for publishers promoting multiple brands. Most programs adopt a "last click" model, meaning commission will be attributed to the affiliate where the customer visited last.
Businesses
For businesses, the affiliate marketing channel offers an amazing opportunity to work with a huge number of publishers that each specialise in a specific marketing technique. This can range from PPC / Google shopping affiliates, to email, cashback, content, voucher and many more. You pay only on a cost per acquisition basis (CPA). So, you only pay commission on a successful sale. All traffic generated is free unless a sale is made, so the channel can also act as a great cost-effective way to grow brand awareness. Publishers
Affiliate marketing can be a useful way to earn money, but it's important to decide whether it's the right option for you. While you may have heard of some affiliate marketers who take home large sums, this might not be the case for everyone.
However, if you invest a bit of time and effort into growing your affiliate business, you could find it works out well. You probably won't make big money instantly, so you need to be patient.
Affiliate marketing is especially suited to people who may work from home or part-time, particularly if you have your own website or blog, and knowledge or interests in a specialist area. The good news is that you don't need to own or invest in any equipment, apart from a computer and access to the internet. Any sales that you generate are handled by the merchant, so you don't need to get involved with any distribution aspects, either.
For merchants, having affiliates market their products or services can help to increase sales and profits, allowing them to reach wider audiences and stay competitive.
You may be interested in our article "The role of the affiliate manager"
