Affiliate marketing is an arrangement between the marketer of a product or service and the publisher of a blog or website or social media influencer in which the marketer pays a commission to the publisher of the blog, website, or social media influencer to promote his products or services. The commission paid can be on a per-click basis, a per lead basis, or a per-sale basis. The marketer shares a unique link with each publisher which enables the marketer to track the traffic being directed by the publisher. The commission received by the publisher is called the affiliate commission or affiliate fees and the arrangement is organized through an affiliate program. The publishers promote the marketer’s products or services through ads or links on their website or social media channels. Publishers may also use Email Marketing to promote their marketer’s offerings.
Types of Affiliate Marketing
Affiliates who promote products and services may do so either by merely displaying the ads on their website or by promoting products and services in the niche in which they specialize or through personal experience. Irrespective of the affiliate’s connection with the marketer, they have to bear some responsibility for the products and services they advertise on their platform. The reputation of the affiliate is closely connected to the performance of the products and services they advertise. Many marketers require affiliates to disclose that they may receive a commission for sales or leads generated by showcasing the marketers’ products and services.
Affiliate Marketing Industry
The global affiliate marketing industry was worth 12 billion US dollars in 2021. The United States accounted for a 39 percent share of the global affiliate marketing industry in the same year. More than 80 percent of global brands have an affiliate program. Affiliate marketing is responsible for 16 percent of global e-commerce sales. Marketers generate over 15 percent of sales through their affiliate programs. There are several platforms available for marketers through which they can connect with affiliates.
Effective use of Social Media Channels and Search Engines
The Affiliate marketing industry has been growing by leaps and bounds in recent years. With an increasing number of bloggers and social media influencers in the digital age, brands are increasingly turning to affiliates to promote their products and services. The digital era has been marked by a decline in traditional media viewership such as television and radio. People, especially the younger generation are more attracted to digital media and social media channels such as Facebook, Twitter, Instagram, Youtube, etc. There is also a strong and visible orientation among people to search for information on the internet leading to a widespread proliferation of blogs and websites.
Advantages of Affiliate Marketing
Research has shown that Brand owners are increasingly becoming comfortable with the use of affiliate marketing as a means of promoting their products and services. This is because of the high success ratio of affiliate marketing as a means of promoting brands.
- The cost of engaging in affiliate marketing also works out to be lower than traditional forms of advertising. Moreover, companies can easily manage their affiliate marketing campaigns and networks at minimal costs.
- Companies have the option of promoting their offerings through advertisements on affiliate websites and blogs. They can also associate with social media influencers and industry specialists to review and recommend their offerings.
- People trust the products and services which are recommended to them by bloggers and social media influencers who they follow and appreciate. Therefore, there is a better probability of the product being sold and the conversion rates are high.
- Affiliate marketing also leads to word-of-mouth publicity among the followers of blogs, product reviewers, and social media influencers through likes and comments on the blog and social media pages. Positive as well as negative reviews of products can gain widespread attention in minimal time because of the tendency of information to get viral on social media channels.
- It is an effective means of marketing to attract new audiences. Affiliate marketing is highly cost-efficient and the cost of selling a unit of product is low as compared to other media.
- Affiliate marketing enables brands to generate sales and increase revenue. It helps them acquire quality leads. It helps to increase brand awareness.
- It helps brands to increase their digital presence. Affiliates help drive high intent traffic to the company’s website. New brands can use affiliate programs to introduce themselves in the market through qualified bloggers and social media influencers. One of the biggest advantages of affiliate marketing to brands is that they pay only when they generate a sale or a high-quality lead. Brands can customize their affiliate marketing programs to suit their needs. With affiliate marketing, brands don’t have to spend money to generate sales. They pay only after the sale has been generated.
Affiliate marketing has established itself as a credible form of marketing over a short period.
Backlinks to your Website
A less discussed but highly useful advantage of affiliate marketing is that Brands get quality backlinks to their website. This helps them to rank higher on search engines and generate high-quality organic leads. Affiliates may link to different pages on the company website and each link is a quality backlink that will help the brand rank higher in search results. Also, affiliate domains may have high domain authority which increases the value of the backlinks.
Points to watch out for before using Affiliate Marketing
- Companies looking forward to engaging in affiliate marketing must thoroughly vet the affiliates with who they associate. Thorough scrutiny of the affiliates in terms of their following and readership must be ascertained.
- Companies must ensure that their affiliates do not engage in any kind of malpractice or misselling to promote the company’s offerings. Affiliates must not spam their followers or publish information about the company which may be misleading.
- Companies must take all possible legal measures to ensure that affiliates follow all rules and regulations laid down by the company while promoting their products and services. If they find that the affiliate is engaging in any kind of mis-selling, they must immediately terminate their contract with the affiliate.
- Companies will also be required to take a call if they want to have an independent affiliate program or if they want to associate with an established affiliate networking platform. Larger organizations will find it easier to manage an independent network of affiliates. Affiliate marketing platforms can help smaller organizations to expand the reach of their network. They can also guide brands with their affiliate programs.
Affiliate marketing is a popular method of marketing in current times. Brands must engage in affiliate marketing to explore its potential. They can hire professionals experienced in affiliate marketing to manage and design their affiliate programs. Companies must ensure that they associate with the right people to promote their offerings otherwise such programs may harm their reputation. Minor challenges must not stop companies from engaging in affiliate marketing and experiencing the rewards.
Also, check how to start affiliate marketing with no money.