Around 42% of publishers earn more than $10,000 from their affiliate marketing efforts using up-to-date affiliate marketing tools and strategies. With affiliate marketing spending quadrupled since 2011, affiliate marketing has grown incredibly efficient for expanding audience, whether in retail, telecom, travel, leisure, or other business avenues.
So how do you ensure profitable affiliate marketing lead generation, getting high-intent leads at the best price (as an advertiser) or getting paid your worth (as an affiliate)?
Read on to learn everything you need about affiliate marketing, whether publisher or advertiser.
What Is Affiliate Marketing, and How Does It Work?
Affiliate marketing is when a business (advertiser, merchant) rewards an affiliate for each visitor or customer they bring.
Affiliate marketing has three to four core players:
- The business that sells a product or service (‘advertiser,’ ‘merchant,’ ‘retailer,’ or ‘brand’).
- The publisher who promotes this product (‘affiliate’).
- The customer who is interested in this product.
- The affiliate network or program (optionally) that regulates the process.
Payment Models in Affiliate Marketing
Pay per Sale (PPS)
Pays the affiliate a commission for each sale generated as a result of the affiliate's marketing efforts. The affiliate is only paid when a sale is made, and the amount of the commission is based on the product's sale price. PPS is often used by merchants who only want to pay for successful sales.
Pay per Lead (PPL)
Rewards affiliates for each lead they generate, counting only qualified leads (for example, leads who have filled out a contact form or signed up for a demo).
Pay per Click (PPC)
Pays for ad clicks. PPC campaigns are typically managed through an ad platform, such as Google Ads, Bing Ads, or Facebook Ads. The advertiser sets a budget for their campaign and bids on keywords or phrases relevant to their target audience.
Pay Per Impression (PPI)
Pays when the affiliated ad is displayed, regardless of whether the ad is clicked. PPI is often used for display ads, video ads, and other types of digital advertising.
Three Types of Affiliate Marketing
1. Unattached Affiliate Marketing
Unattached affiliate marketing does not require a connection between the affiliate and the customer while relying on trust and reputation with the target audience. Typically, unattached affiliate marketing is conducted through a PPC advertising campaign, with the affiliate's link being used to direct people to the product.
2. Related Affiliate Marketing
Related affiliate marketing involves promoting relevant products you don’t use personally. This way, you can earn income from products and services you wouldn’t normally use or have experience with. At the same time, you must be transparent with your audience about not using the product or service yourself.
It’s also vital to research and ensure that the product or service you’re promoting is high-quality and worth recommending.
3. Involved Marketing
Involved affiliate marketing promotes products and services that affiliates use and believe in. This type of marketing requires the affiliate marketer to build trust with their audience, which takes longer than simply paying for clicks on a banner ad. However, it is necessary for creating sustainable affiliate marketing in online businesses.
Advantages of Affiliate Marketing
Low cost: Affiliate marketing requires little upfront investment and can be started with minimal effort. You don’t have to worry about product development, customer service, or fulfillment – all you need is a website and affiliate links.
Profitability: Affiliate marketing offers a high-profit potential, granting you a commission from every successful sale.
Scalability: As your affiliate marketing business grows, you can easily scale up your operations by adding more products or services to your portfolio.
Diversity: As an affiliate marketer, you have access to a wide range of products and services to promote, allowing you to diversify your income streams.
Low entry barrier: Affiliate marketing is relatively easy to start, as you don’t need special skills or knowledge. All you need is a website and affiliate links.
Disadvantages of Affiliate Marketing
Competition: Dozens and hundreds of affiliates compete for the same audience and products.
Time-consuming: You must research the best products to promote, create content, reach out to influencers, and build relationships with potential customers.
Prone to fraud: Companies may not pay you for your efforts, or they may not track your referrals accurately.
Speaking of affiliate fraud, choosing reputable companies to partner with and keeping a close eye on your links and analytics to ensure you’re getting paid for your work.
How Can Affiliate Marketing Improve Your Business Performance?
Increase Your Reach
Affiliate marketing allows you to reach a wider audience than traditional marketing methods. By leveraging the power of your affiliates’ networks, you can reach potential customers who may have been unaware of your business. That can help you to expand your customer base and increase your sales.
Generate More Leads
Affiliate marketing can be used to generate more leads for your business. By offering incentives to your affiliates, such as commissions or discounts, you can encourage them to promote your products and services to their followers.
Build Brand Awareness
Affiliate marketing can be used to build brand awareness for your business. By having your affiliates promote your products and services, you can reach a much larger audience than you can with traditional marketing methods.
Improve Your Customer Service
Affiliate marketing can be used to improve your customer service. By having your affiliates promote your products and services, you can reach a much larger audience than you can with traditional marketing methods. That can help to increase customer satisfaction and make your business more attractive to potential customers.
How to Start Your Online Affiliate Marketing Business
Step 1 – Decide on What to Promote
Finding the right products to promote can make the difference between success and failure. Start by researching affiliate markets and the websites of the products and services you use and like. Reach out directly to the owners of products you come across and inquire about their affiliate program.
To find what, where, and how to promote products, focus on what you can do best and what works for your niche. For example, if your content covers health or wellness, you may want to promote healthy products or diet programs. And if you’re in the educational niche, you may wish to advertise courses, events, and workshops.
Step 2 – Enroll in an Affiliate Program
An affiliate program involves an affiliate promoting the advertiser’s product or service in exchange for a commission on any sales generated from the affiliate’s efforts. The most common types of affiliate program are pay-per-sale model (PPS, pay-per-click (PPC), pay-per-lead (PPL), and pay-per-impression (PPI).
You must first register with the merchant or network to join an affiliate program. Then you will be given a unique link or code to use when promoting the merchant’s products or services. You will receive the commission every time your referred customers click on your affiliate link or make any other target action.
How To Find a Good Affiliate Program To Make Money With Affiliate Marketing?
Here is how you can find the best affiliate program for your needs:
1. Check the background: Whether an affiliate program for small businesses or large enterprises, research the program’s track record. You don’t want to join an unverified or unprofitable program.
2. Check the toolkit: Evaluate the program’s tools and payment model. Make sure the program resonates with your affiliate marketing goals.
3. Check the agreement: Read the agreement carefully (look for the fine print, hidden conditions, ambiguities, etc.) so you know what you’re signing up for.
You can maximize your profits and reach your goals with the right affiliate program.
Affiliate Tracking as a Way to Leverage Affiliate Marketing for Advertisers
Affiliate tracking is for a successful affiliate marketing campaign, allowing you to track your affiliates' performance, measure your campaigns' success, and ensure that your partners are paid their worth on time, as per the affiliate agreement.
- Affiliate tracking helps advertisers get high-intent customers while ensuring publishers get their payment in full and on time.
There are two main types of affiliate tracking: cookie tracking and cookieless tracking.
- Cookieless tracking uses an “invisible” script to collect data without user consent, allowing you to track customers across multiple devices and browsers.
To maximize the value of your affiliate campaigns, you need to automate your affiliate tracking. Automated affiliate tracking software can help you set up custom commission structures, issue automated payouts, and provide detailed reports and analytics. That will save you resources, allowing you to focus on more strategic decisions.