The world of marketing is an interesting one.
You can’t really put a date on when exactly it became a thing, but there is a timeline. It was only two decades ago that marketing was mainly dependent on extremely expensive methods.
Marketers would spend thousands – and sometimes hundreds of thousands of dollars – to create and launch TV adverts, put up billboards, play radio ads, and distribute print ads. All of this in the hopes of increasing brand recognition and growth.
Even though there were promises of success made in these tactics, it was still difficult to make an impact. The common cause would be small businesses going up against big corporations. Compared to the latter, small businesses didn’t have a multi-million dollar marketing budget. They were instead forced to hold on to the stick’s shorter end.
However, times have changed since then. We’re not saying that these big-budget companies don’t spend millions on campaigns, but there are new ways to market for the newcomer. An internet connection and an astute mind, and you have a perfect platform to make money.
The creativity of marketers and the internet gave rise to affiliate marketing. This makes the tactic not entirely brand new. In fact, affiliate marketing has been around for a few years. It is now more widely accepted and used because it helped break the monotony of conventional marketing efforts.
And as a result, it was successful in driving sales and generating revenues. For example, 81% of brands and 84% of publishers leverage affiliate marketing currently and will continue to do so in the coming years.
What is it?
With so much success recorded with it, one must wonder what affiliate marketing is.
To answer these questions, the definition of affiliate marketing is simplified here. When stripped down to its basics, affiliate marketing is a way an affiliate earns a profit by promoting another person’s or company’s product.
For example, let’s consider you love collecting bags. You find this one particular brand that you love and decide to start a blog and write about them, promoting the company.
What if you were to make a dollar off of that?
By becoming an affiliate, the company will get you a link that you would include in your promotional media. Whenever a sale is made through that affiliate link, you would get a portion of the profit.
You can do it from anywhere in the world. You need an internet connection and a mode to receive the payment. With that, you can earn money even when you’re asleep.
How does it work?
To better understand how affiliate marketing works, let’s take a look at all the parties involved in it: the seller, the affiliate, and the consumer.
The Seller is where the story starts. They are entrepreneurs, companies, vendors, retailers or product creators that have a product or service to market. In our example above, the bag manufacturer you love is the seller.
The product can be anything that can be sold. Whether it’s a physical object like household goods, décor items, baby supplies or a service such as travel packages, the seller will be providing them.
The affiliate is the middle-man, also known as a publisher. It can be one individual or a company that markets products on various online platforms. Their job is to create and share content that promotes the brand’s product.
Usually, affiliates have an audience they’ve already built. They use the audience to their advantage and try to persuade them to buy a product the audience will love. The goal is to attract consumers who will be convinced by the marketing.
The consumer is the audience that subscribes to the affiliate’s content or consumes it in some capacity. This party in the affiliate marketing chain is the main driver. The affiliate’s job is to market the product, but unless the consumers decide to make a purchase through the affiliate link, the affiliate earns nothing.
This doesn’t impact the price the consumer has to pay at the time of the purchase. They receive the product as is and the affiliate gets their share of profit from the retail price.
Often, affiliate marketers inform their audience of their involvement as an affiliate. The choice to disclose the fact that they receive a commission from the sales can be a good thing. It can build trust among the audience and make persuading them easier. However, there are many instances where the consumers are oblivious to it.
You would begin the process by joining an affiliate program. Once you’ve done that, you have to choose a product(s) to promote. When you’ve made the choice, you’ll receive a unique affiliate link that will be monitored to calculate your share of the sale profit.
With the link, you’ll market the product using various platforms such as social media, blogs, YouTube videos, etc.
When you successfully convince a consumer, they’ll click on the link you provided to make the purchase. You’ll earn a commission as the affiliate.
How do you get paid?
There are several ways affiliates get paid. However, this aspect of affiliate marketing is a bit more complex because a purchase is not always the condition for earning. Here are a few examples:
- PPC or Pay-per-Click: The aim of using PPC is mostly increasing traffic on the seller’s website. The incentive here is to get people to just click the link and move from the affiliate’s site to a landing page on the seller’s site. The affiliate is paid for the number of clicks.
- Pay-per-Lead: This is a step up from PPC. Here, the system is based on persuading a consumer to not only visit the seller’s website but fulfill a particular action. This could be filling out a form, subscribing to a newsletter or downloading free software.
- Pay-per-sale: As the name suggests, this affiliate marketing structure pays a portion of the sale to the affiliate. Without a purchase made through the affiliate link, there will be no compensation.
As you see, affiliate marketing is an effective marketing tactic. When done the right way, it could be a source of significant earnings for the affiliate marketer. For more information, contact Business Marketing Solutions Group today.