Affiliate Marketing

Affiliate Marketing

Affiliate marketing is a type of performance-based marketing in which a business rewards one or more affiliates for each visitor or customer brought about by the affiliate's own marketing efforts. The industry has four core players: 'retailer' or 'brand', the network (that contains offers for the affiliate to choose from and also takes care of the payments), the publisher (also known as 'the affiliate'), and the customer. The market has grown in complexity to warrant a secondary tier of players, including affiliate management agencies, super-affiliates and specialized third party vendors.

Affiliate marketing overlaps with other Internet marketing methods to some degree, because affiliates often use regular advertising methods. Those methods include organic search engine optimization (SEO), paid search engine marketing (PPC - Pay Per Click), e-mail marketing, and in some sense display advertising. On the other hand, affiliates sometimes use less orthodox techniques, such as publishing reviews of products or services offered by a partner.

Affiliate marketing is commonly confused with referral marketing, as both forms of marketing use third parties to drive sales to the retailer. However, both are distinct forms of marketing and the main difference between them is that affiliate marketing relies purely on financial motivations to drive sales while referral marketing relies on trust and personal relationships to drive sales.

What is Affiliate Marketing?

Perhaps the simplest way to explain affiliate marketing is that it is a way of making money online whereby you as a publisher are rewarded for helping a business by promoting their product, service or site.

There are a number of forms of these types of promotions but in most cases they involve you as a publisher earning a commission when someone follows a link on your blog to another site where they then buy something.

Other variations on this are where you earn an amount for referring a visitor who takes some kind of action – for example when they sign up for something and give an email address, where they complete a survey, where they leave a name and address etc.

Commissions are often a percentage of a sale but can also be a fixed amount per conversion.

Conversions are generally tracked when the publisher (you) uses a link with a code only being used by you embedded into it that enables the advertiser to track where conversions come from (usually by cookies). Other times an advertiser might give a publisher a ‘coupon code’ for their readers to use that helps to track conversions.

For example:  when I recently released my 31 Days to Build a Better Blog Workbook I also give people an opportunity to promote the workbook with an affiliate program whereby they could earn a 40% commission for each sale. When you sign up to become an affiliate you are given a special code unique to you that enables you to promote the workbook and make $7.98 per sale. The top affiliates earned over $2000 in the first few weeks after launch through these commissions.

Advertisers often prefer affiliate marketing as a way to promote their products because they know they’ll only need to pay for the advertising when there’s a conversion. I knew when I started this affiliate program that while I’d earn less for each sale that having a network of affiliates promoting it would almost certainly increase overall sales levels.

Publishers often prefer affiliate marketing because if they find a product that is relevant to their niche that earnings can go well in excess of any cost per click or cost per impression advertising campaign.

Why Affiliate Marketing Can Work Well on Blogs

Affiliate marketing isn’t the only way to make money from blogs and it won’t suit every blog/blogger (more on this below) but there are a few reasons why it can be profitable in our medium. Perhaps the biggest of these reasons is that affiliate marketing seems to work best when there’s a relationship with trust between the publisher and their readership.

I’ve found that as this trust deepens that readers are more likely to follow the recommendations that a blogger makes.

Of course this can also be a negative with affiliate marketing – promote the wrong product and trust can be broken (more on this below).

Affiliate Marketing – Easy Money?

While affiliate marketing can be incredibly lucrative it is important to know that affiliate marketing is not easy money. Most people who try it make very little as it relies upon numerous factors including:

traffic (high traffic helps a lot)

finding relevant products

finding quality products

building trust with your readers

having a readership who is in a ‘buying mood’

you being able to write good sales copy (and more)

There’s also some risk associated with affiliate marketing in that if you push too hard or promote products of a low quality you can actually burn readers and hurt your reputation and brand.

It’s also worth noting that affiliate marketing doesn’t work on all blogs. Some blogs are on topics where it is hard to find products to promote – other blogs attract audiences who are not in a buying frame of mind and for other blogs it just doesn’t fit with the blogger’s style or approach.

Tomorrow I want to continue the focus upon affiliate marketing with another post – this one on how to find affiliate products to promote.