What Affiliate Marketing is and how it works – why is it booming
What Affiliate Marketing is, how does it work, and why affiliate marketing is booming? Affiliate marketing is a marketing strategy involving affiliates promoting your brand and referring potential customers in exchange for a commission.
In the past, referrals or “word of mouth” advertising helped businesses grow their brand and develop a loyal customer base. In today’s online world, this type of marketing still exists, but it has a different name: affiliate marketing.
Affiliate marketing is an easy, cost-effective way to increase your sales and grow your brand.
To craft the perfect affiliate marketing strategy for your business, you need to know what affiliate marketing is, how it works, and the way to approach your affiliate marketing strategy.
What affiliate marketing is and how it works
Affiliate marketing is a marketing strategy involving affiliates promoting your brand and referring potential customers in exchange for a commission.
It typically involves four main players: the brand, the affiliate platform, influencers, or the customers.
Affiliate marketing can be implemented in the form of coupon codes or unique, trackable links that are provided by an affiliate platform. Thanks to these links, it is possible to track exactly how many clicks and sales are made as a result.
How affiliate marketing works
Affiliate marketing works by tapping into the existing trust between the affiliate and the user. Whether you provide a B2B service or sell to consumers, trusted referrals are still the most valuable form of marketing.
With affiliate marketing, you can reach a wide variety of potential customers with one affiliate link. These are customers who have never heard of your brand directly but are now aware of who you are and what you provide.
Users tend to trust the accounts they follow. So when the affiliate promotes your link, your business is seen as trustworthy and verified.
The user is more likely to choose your brand over an unaffiliated brand because you are partnered with an ambassador or influencer they already resonate with.
Why affiliate marketing is booming
Why is affiliate marketing booming? Affiliate marketing has been around for a long time, and it continues to be one of the most effective ways to generate leads and users. The reason is simple: It works. According to Forrester Research, affiliate marketing will drive as much as $six billion in sales this year alone.
Affiliate marketing is becoming an increasingly important part of many businesses’ overall marketing strategy, and more companies realize just how valuable it can be. So if you’re looking for a reliable way to generate leads and users, affiliate marketing should be at the top of your list.
Affiliate marketing is the future of advertising. Despite its effectiveness for many advertisers and its potential to be a great source of income, Google Ads and Social Media advertising are becoming more expensive as time goes on. This leads advertisers across the web to look elsewhere to build their brands and grow their businesses.
How to create an effective affiliate marketing strategy
Affiliate marketing has become one of the most effective lead generation tactics. With affiliate marketing, you can reach out to thousands of people and create data-based reports with accurate information about your target audiences, such as their interests and preferences.
To craft the right affiliate marketing strategy for your brand, it is crucial to evaluate the profiles of who you want to partner with. Think about how you aim to attract leads, and how to measure the effectiveness of your affiliate plan.
Consider these tips as you begin to form your affiliate marketing strategy:
Turn Customers into Affiliates With Coupons, Promotions, and Deals
Customer promotions can be very powerful. In fact, 92% of consumers believe suggestions from friends and family more than advertising.
Using their personal social media accounts, customers can promote and share referral links to your site. Promotions can include posts about why they love your product, images of the product in use, and reviews of their overall experience.
Links attached to coupons, promotions, and deals for new customers are even better. Work with ambassadors or blogs to create specific promo codes for their link to reinforce the affiliate relationship.
Deals and coupons bring customers to your site, where they will also browse the other products or services.
Recruit Niche Influencers
Discover and recruit niche influencers as affiliates. A successful niche influencer has authority and power in their field, meaning they wield significant influence over their niche-specific audience. If potential customers hear from their favorite influencer on social media that they can receive a discount off your product with a promo code, they are likely to check out what you offer.
Influencer tools like VoxFeed can help you easily discover influencers in your niche or area of interest.
If your product fits perfectly with their audience’s needs, working with that influencer can lead to your business becoming the authority for the service or product you provide. There is a niche influencer for almost any topic imaginable, so search for the top influencers you know would love your product.
Build an Affiliate Network
Build a varied affiliate network using different channels to bring in leads and make sales. Partner with affiliates whose social media have a solid social following. Work with different types of bloggers and influencers, including those who review products for content.
Build your affiliate network with reputable, genuine affiliates who bring in unique leads and believe in your brand.
How Affiliate marketers get paid
The consumer doesn’t always need to buy the product for the affiliate to get a kickback. Depending on the program, the affiliate’s contribution to the seller’s sales will be measured differently.
The affiliate may get paid in various ways:
Pay per sale
This is the standard affiliate marketing structure. In this program, the merchant pays the affiliate a percentage of the sale price of the product after the consumer purchases the product as a result of affiliate marketing strategies. In other words, the affiliate must actually get the investor to invest in the affiliate product before they are compensated.
Pay per lead
A more complex system, pay per lead affiliate marketing programs compensates the affiliate based on the conversion of leads. The affiliate must persuade the consumer to visit the merchant’s website and complete the desired action — whether it’s filling out a contact form, signing up for a trial of a product, subscribing to a newsletter or downloading software or files.
Pay per click
Affiliate marketing is largely about generating traffic to websites and trying to get customers to click and take action. So, the myth that affiliate marketing is all about SEO (search engine optimization) is no surprise.
However, while organic traffic is free, SEO simply can’t sustain affiliate marketers in such a saturated market — which is why some affiliate marketers utilize PPC.
PPC (pay per click) programs focus on incentivizing the affiliate to redirect consumers from their marketing platform to the merchant’s website. This means the affiliate must engage the consumer to the extent that they will move from the affiliate’s site to the merchant’s site. The affiliate is paid based on the increase in web traffic.
There are two common concepts in PPC:
- CPA (cost-per-acquisition). With this model, the affiliate gets paid each time the seller or retailer acquires a lead, which is when an affiliate link takes the customer to the merchant’s online store and they take an action, such as subscribing to an email list or filling out a “Contact Us” form.
- EPC (earnings-per-click). This is the measure for the average earnings per 100 clicks for all affiliates in a retailer’s affiliate program.
Pay per install
In this payout system, the affiliate gets paid each time they direct a user to the merchant’s website and installs a product, generally a mobile app or software.
- What affiliate marketing is and how it works?
- Why affiliate marketing is booming?
- How do affiliates get paid?
- How to create an effective affiliate marketing strategy?