What is affiliate marketing?

You have a product with which you want to reach new customers. Your financial condition allows you to share some of the profits. At the same time, you feel that the company’s advertising reach does not guarantee sales at the expected level. Maybe you should be interested in affiliate marketing?

Affiliate marketing – what it is, the theory

On one side stands your company, which cares about more sales. On the other side is an affiliate partner who has a solid reach and can reach specific audiences potentially interested in your company’s products. On the third side are potential customers who want to get the product as soon as possible and at the best possible price, with some kind of promotions or discounts. Faced with this, you and your affiliate partner decide to work together.

That is, purely theoretically, affiliate marketing is a business model where company X recommends products from company Y, although it is not affiliated with it at all. The payment to company X is a share of the profit. The billing model depends on individual arrangements – it can be a percentage of the purchase value or a fixed rate for specific customer actions. The most popular billing models are:

CPS / PPS (Cost / Pay per sale) – in this case the payment to the affiliate partner is when the product is sold.

CPI / PPI (Cost / Pay per install) – a billing model common in the marketing of mobile applications, the payment is for the installation of such an application.

CPA / PPA (Cost / Pay per action) – payment is for the action you expect from the customer, which is to be provided by the affiliate partner.

CPL / PPL (Cost / Pay per lead) – payment for each lead an affiliate partner provides you.

CPC / PPC (Cost / Pay per click) – payment for a specific click on your or your affiliate partner’s website.

Participants in affiliate marketing come to an agreement on the division of responsibilities. There are cases when the ordering company simply puts its product on the table and that’s the end of its role (except, of course, for paying the affiliate partner and logistical issues, deliveries, complaints, etc.), and all sales and marketing around the product is taken over by the affiliate partner. In such an arrangement, the affiliate will put a lot of effort into acquiring new customers, because without sales it will earn nothing.

How to start affiliate marketing?

Is affiliate marketing worth it? A lot depends on the affiliate you manage to find. It could be a popular person on the Internet (we’ve dealt with influencer marketing in THIS post), or a company that you know can reach a customer segment you’re particularly interested in. As a rule, looking for affiliate marketing partners has a common denominator in terms of reach. Companies – vendors looking to benefit from affiliate marketing – want companies or individuals with the ability to present products to the widest possible audience.

Often the business model of affiliate marketing uses so-called reflinks (referral links, or simply affiliate links). These are unique links with additional parameters given to them, which allow the seller to easily see which affiliate source it came from.

You can look for affiliate partners on your own. For this it will be useful to know more about your customers – demographics, online activity, shopping habits. A Marketing Automation platform is useful for gathering such information. You can also use online platforms that specialize in finding affiliate partners.

Examples of affiliate marketing

We will present the types of affiliate marketing without indicating which one is the best. It always depends on the specific industry in which your company moves, your business plan and the quality of affiliate partners you manage to find.

YouTube – a very good sales channel that generates huge reach. For most products, the video format sells best. But beware – a great product is not enough, you still need to package it properly in an engaging, attractive video. It doesn’t have to be long, the important thing is that there’s meat in it. Check the statistics of your previous productions on YT – see when people stopped watching and which part of the video was the most popular. Learn from these experiences and produce cool content. It sells.

Social Media – guarantee large reach, in some cases (TikTok) it can be even larger than on YT. In addition, Social Media will work well for affiliate marketing of virtually all products, provided like on YouTube, that is, make a good ad that stands out in a flood of other, competing creations.

Blogs – good old content still sells. Ba, even before the explosion of popularity of Social Media, it was through blogs that the most frequent campaigns in affiliate activities went. Here the key condition is quality content – a meaningful text solving the reader’s problem will sell better than a simple copy-paste from other sites, not to mention the unfortunate content written by artificial intelligence. A nice bonus is also the positive effect of this form of affiliate marketing on SEO: if your affiliate partner has a credible, well-regarded blog by Google, affiliate links coming from it to your site will boost its search engine ranking.

Mailings – it would seem that they are already passe, but no. A well put together mailing sent to the right audience can still do a lot. Mailings are also a graceful material to combine with other platforms – for example, a blog or YT. To manage mailings by creating specific communication scenarios, of course, a marketing automation system will come in handy.

Affiliate marketing – is it worth it?

It depends. The operation of affiliate marketing can be beneficial for businesses that do not have their own marketing department or for some reason want to outsource advertising activities.

Businesses that are just starting out, or are poorly known in the industry, can benefit from affiliate marketing. This is where the larger reach of an affiliate partner comes in handy.

Keep in mind that two parties will earn money from affiliate marketing – the seller and the affiliate partner. So for financial reasons, affiliate marketing works best with high-margin products.

At the same time, be aware that affiliate marketing is not for everyone. If you’re good at selling products, if your online ads are doing the job, and if your marketing department has the capacity and interesting ideas, then you don’t necessarily have to rely on affiliate marketing, unless you want to treat it as a supplement to your marketing efforts.

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