Affiliate advertising, at its core, is a branch of online marketing that involves the generation of traffic and leads by a third party on your behalf. When a company is in need of new business, they might reach out to an affiliate. Affiliates might own several email chains or websites (referred to as their networks) which they will use to promote your product or service via text ads, banner ads, or links. Affiliate advertising can be a great way to boost the reach of your company’s products or services on the internet. This article will help readers understand what affiliate advertising is, the different types of affiliate marketing, and the basics of affiliate marketing programs.
What is Affiliate Marketing?
Affiliate marketing is the promotion of a product or service by a third party for a commission. There are three key players within affiliate marketing: the advertiser, the affiliate, and the customer. The advertiser (often a business) contacts an affiliate (such as a blogger or social media influencer) in an effort to get the affiliate to promote their product for them. For each successful purchase that came from the promotion, the affiliate receives a commission by the advertiser. It can be lucrative for both the advertiser and the affiliate, and it isn’t that difficult to start.
Those who spend time reading blog posts or social media feeds know that it is not uncommon to find links embedded into the text that discuss a product or service. The links found in those posts leading to the webpage selling such a product or service, however, usually aren’t simply put there to “spread the word.” The link is actually a marketing tactic. If that link gets clicked and the product is purchased, the writer of that post receives some kind of fee or commission from the product’s company. This, in a nutshell, is what affiliate marketing looks like.
There are three main types of affiliate marketing:
This type of affiliate advertising is where the affiliate has no attachment to the product or service they are promoting. This non-attachment comes in the form of little to no knowledge or expertise with regard to the product or service. This leaves the affiliate no room to discuss the goods beyond basic advertising and promotion. This will usually come in the form of quick links and mentions or banner ads. The benefit of this type of affiliate advertising is that it is quantity-driven, making it easy to find affiliates who can be incorporated into affiliate marketing programs.
This model of affiliate advertising takes a step away from the generalization of unattached marketing and moves in the direction of affiliate authority. Here, the affiliate promotes goods that fall under their umbrella of expertise. For example, a popular florist blogger might act as an affiliate to promote a type of fertilizer. Since the affiliate has experience in the area of the product, their voice carries more weight. The benefit of this model of affiliate advertising is that your product is more likely to get attention. People will see an expert promoting a good, and will trust their word. The downside is that since it is so specific, the product will likely reach fewer people.
The product-affiliate relationship peaks with this model. The affiliate’s level of expertise isn’t taken into consideration much here. Rather, involved marketing focuses on the affiliate’s personal experience with the product or service and the recommendations they make. Whether or not the goods are in the affiliate’s niche, they can make recommendations for said goods based upon their personal use of them. This could be considered the highest quality model. Some might think of this as a more complex and commercially-driven review of a product, though the review will almost always be positive. In this case, the affiliate does also risk their reputation if the product doesn’t meet expectations.
What are Affiliate Links?
If the affiliate wants to get paid for the traffic they bring to a company through promotion, a system needs to be in place to track such traffic. That is where affiliate links come into play. This is a specific URL that is connected to an affiliate’s username and ID. When the affiliate is writing or promoting a product, they will embed this link into a banner ad or a text ad. When an internet shopper clicks on the ad, they are led to the advertised product’s page. If the customer purchases the product, the affiliate program will log the purchase under the affiliate’s ID and the affiliate gets paid. Most companies expect the affiliates to set up affiliate links on their own.
The structure of the affiliate program determines how and when the affiliate receives a commission. Usually, there are three systems that marketers use. Pay-per-click commission structures earn an affiliate compensation when their link is clicked, regardless of if the clicked link results in a lead or sale. This isn’t used often as it is not as lucrative for advertisers who are still trying to raise their click-through rate. Pay-per-lead structures focus more on quality interactions. Quality interactions include app installations, form submissions, or completed surveys. Pay-per-sale is the most common type of structure and is used by many large programs like Amazon Associates. The affiliate is responsible for not only generating traffic to the advertiser’s website but they are also expected to convince the buyer to actually spend money. If the affiliate is successful, they will receive a percentage of the sale as commission.
Understanding Affiliate Marketing Programs
Before any kind of promotions, link creation, or payouts can take place, both the advertiser and the affiliate need to partner up. This process begins with an understanding of affiliate marketing programs. These are systems that dictate how the affiliate will generate traffic to the advertiser’s webpage. When one understands these, it is easier for affiliates and advertisers to seek out compatible business partners. Of course, some programs are more likely to generate income for affiliates. There are five basic types of programs:
If an advertiser wants a simple and quick way to promote their products and services, email programs are a good choice. A link from the advertiser’s site is embedded in an email, and the email gets sent to customers within the affiliate’s network. If the affiliate has an efficient email marketing program set up already, this could prove rewarding for the advertiser. This program is most effective when used in related marketing.
Coupon Site Programs
For advertisers with goods that aren’t popular yet, coupon site programs can be extremely beneficial. In this case, an advertiser partners with an affiliate who runs a coupon site and places a link back to their own page on the affiliate’s site. The link appears as a coupon, offering the advertised good at a discounted price. While this is not ideal for popular products, it can help bring obscure ones into the public eye.
Review Site Programs
An advertiser who sells a niche or pricey product is most likely to benefit from participation in review site programs. Customers often research these kinds of products before purchase and end up on review sites. If an advertiser can partner with an affiliate review site and place a link to their page within the review text, the traffic generated will likely be of the highest quality among affiliate marketing programs. As such, this program is best when combined with a related or involved marketing approach.
Social media influencers and bloggers have the potential to reach hundreds of thousands, if not millions, of people every day. Even those who are building their blogs or social media pages can serve as valuable affiliates. Using this program, an advertiser might research popular influencers (affiliates in this case) in their industry and partner with them. The affiliates would place links in their blogs or posts in order to generate traffic to the advertiser’s site. The traffic in this program is of lower quality, so pairing this with an unattached marketing approach is best.
Search Affiliate Programs
This program is an overall quantity-style system. Affiliate SEO entrepreneurs and freelancers spend their time promoting an advertiser’s product or service on search engines and online advertising platforms to maximize exposure. With quantity over quality in these programs, they have the benefit of reaching a lot of people but tend to have lower-quality traffic. An unattached marketing approach is most effective when paired with this program.
Starting with Affiliate Advertising
The benefits of affiliate advertising are numerous. For advertisers, it provides a way to boost exposure of products and services for a relatively small price. For affiliates, it provides a way for easy, passive income. But be alert, because it does have its risks. If affiliate advertising is something you want to pursue further, reach out to our marketing team at SEO Design Chicago for a free consultation.
- What is affiliate marketing?
- How is an affiliate link used?
- What is an affiliate marketing program?
- How are affiliates paid?
- What is an affiliate link?