Affiliate Marketing: Leveraging Partners for Sales

Affiliate marketing is a pivotal aspect of digital marketing, where an affiliate earns a commission for marketing another person’s or company’s products. The affiliate simply searches for a product they enjoy, promotes that product and earns a piece of the profit from each sale they make. The sales are tracked via affiliate links from one website to another.

It’s a popular tactic to drive sales and generate significant online revenue. Extremely beneficial to both brands and affiliate marketers, the new push towards less traditional marketing tactics has paid off. The affiliate marketing industry is expected to reach $6.8 billion by 2020, a clear indication of its relevance in today’s digital marketing landscape.

Function of Affiliate Marketing

Affiliate marketing works by spreading the responsibilities of product marketing and creation across parties, which leverages the abilities of various individuals for a more effective marketing strategy, while providing contributors with a share of the profit. To make this work, three different parties must be involved:

• The product creator and seller
• The affiliate or advertiser
• The consumer. 

Let’s delve into the complex relationship these three parties share to ensure affiliate marketing is a success.

The Seller and Product Creators

The seller, whether a solo entrepreneur or large enterprise, is a vendor, merchant, product creator, or retailer with a product to market. The product can be a physical object, like household goods, or a service, like makeup tutorials.

Also known as the brand, the seller does not need to be actively involved in the marketing, but they may also be the advertiser and profit from the revenue sharing associated with affiliate marketing.

The Affiliate or Publisher

The affiliate or advertiser can be either an individual or a company that markets the seller’s product in an appealing way to potential consumers. In other words, the affiliate promotes the product to persuade consumers that it is valuable or beneficial to them and convince them to purchase the product.

If the consumer does end up buying the product, the affiliate receives a portion of the revenue made. Affiliates often have a very specific audience to whom they market, generally adhering to that audience’s interests. This creates a defined niche or personal brand that helps the affiliate attract consumers who are most likely to respond to the promotion.

Consumer

Whether the consumer knows it or not, they (and their purchases) are the drivers of affiliate marketing as affiliates share these products with them on social media, blogs, and websites.

When consumers buy the product, the seller and the affiliate share the profits. Sometimes the affiliate will choose to be upfront with the consumer by disclosing that they are receiving a commission for the sales they make. Other times the consumer may be completely oblivious to the affiliate marketing infrastructure behind their purchase.

Affiliate Network

An affiliate network acts as an intermediary between publishers (affiliates) and merchant affiliate programs. It allows website publishers to easily find and participate in affiliate programs which are suitable for their website where they generate income from those programs. This allows websites offering affiliate programs (typically online merchants) to reach a larger audience by promoting their affiliate programs to the publishers participating in the affiliate network.

Traditional affiliate networks enable merchants to offer publishers a share of any revenue that is generated by the merchant from visitors to the publisher’s site, or a fee for each visitor on the publisher’s site that completes a specific action (making a purchase, registering for a newsletter, etc.).

Types of Affiliate Marketing Channels

Most affiliates share common practices to ensure their audience is engaged and receptive to purchasing promoted products. However, not all affiliates advertise the products in the same way. In fact, there are several different marketing channels they may leverage.

These include:  

• Influencers, bloggers, email marketing, large media websites, and smaller niche sites. 

Each of these affiliates will use different strategies to promote products and earn their commission: 

• SEO
• PPC
• Content Marketing
• Product Reviews
• Email Lists

Influencers

An influencer is an individual who holds the power to impact the purchasing decisions of a large population. This person benefits greatly from affiliate marketing thanks to their impressive following, which naturally directs consumers to the seller’s products via social media posts, blogs, and other interactions with their followers. 

The influencers then receive a share of the profits they helped to create. It’s important to note that influencers can be found within any market, and they often have a loyal, engaged audience. This makes them extremely valuable to affiliate marketers, as they can direct significant traffic and sales to the seller’s products.

Bloggers

With the ability to rank organically in search engine queries, bloggers excel at increasing a seller’s conversions. The blogger samples the product or service and then writes a comprehensive review that compellingly promotes the brand, driving traffic back to the seller’s site.

The blogger is awarded for his or her influence in spreading the word about the product value, which helps to improve the seller’s sales. For example, an article on the best email marketing software includes product reviews and affiliate links. The goal of such content is to inform and help the reader decide whether or not to engage with the product or service.

Benefits of Affiliate Marketing

Affiliate marketing is beneficial to both the brand and the affiliate. For brands, it helps in spreading the word about the product or service to a larger audience, thus increasing the chances of earning. For the affiliates, it provides an opportunity to earn money even if they do not have a product of their own to sell.

Since the responsibility of product marketing is shared between the brand and the affiliate, the latter can focus on ways to promote the product without worrying about the logistics of product development, customer service, and shipping. This allows affiliates to effectively earn a passive income.

Benefits to the Seller

The seller gains access to a wider audience through the affiliate’s network, which boosts their business. This is especially beneficial for small businesses. Additionally, the seller only pays for the sales referred by the affiliate, making it a cost-effective marketing strategy.

Furthermore, the seller can work with multiple affiliates, thus diversifying their customer base. The more affiliates a seller has, the more customers they will reach. Therefore, affiliate marketing can help a seller to increase their sales significantly.

Benefits to the Affiliate

Affiliates don’t need to have their product or service to sell, which makes getting started in affiliate marketing relatively easy. Affiliates can choose a product they believe in and promote it through their network. In return, they earn a commission for each sale they refer.

Moreover, being an affiliate does not require any technical skills. Most affiliate programs provide their affiliates with the tools and resources to promote their products. This includes promotional banners, tracking software, and a dedicated affiliate manager to help them succeed.

Conclusion

Affiliate marketing is a powerful and effective digital marketing strategy that can provide significant benefits to all parties. 

However, like any marketing strategy, success in affiliate marketing requires a strategic approach and consistent effort. By understanding the key principles of affiliate marketing and implementing effective strategies, both sellers and affiliates can reap the benefits of this powerful marketing tool.

Affiliate Marketing FAQs