This post will walk you through the basics of affiliate marketing. What is affiliate marketing and how it works. Why brands should know about affiliate marketing and how to boost affiliate programs.
What is Affiliate Marketing
Affiliate marketing is a type of performance marketing. Merchants or advertisers pay affiliates or publishers commissions when they drive a sale (or click/lead/call…). The most well-known case is the Amazon associates program.
Some other definitions of affiiliate marketing:
“Affiliate Marketing is a type of perfomance-based marketing in which a business rewards one or more affiliates for each visitors or consumers brought by the affiliate’s own marketing efforts.” ——Wikipedia
“Affiliate marketing is performance-based marketing, whereby a product or service gets remunerated for every sale, visit, or subscription sent to the merchant. Because of this performance-based component, which is the cornerstone of affiliate marketing, it is also sometimes called performance marketing. ”——Affiliate Program Management: An Hour a Day
Roles of Affiliate Marketing
Therer are 4 major roles in affiliate marketing
- Advertisers/Merchants/Brands
- Affiliates/Publishers/Partners
- Affiliate Networks/Tracking Software
- Customers/Users/Shoppers
How Affiliate Marketing Works
1.The merchants set up an affiliate program promoting their products/services on a affiliate network or a tracking software and add the tracking pixel on the website
2.The publishers get the tracking links and promote the merchants’ offer via blog, social media, newsletter…
3.The Customers click the publishers’ link and place an order sucessfully. The affiliate network generates cookies when custmers click the tracking link and record the order information when the pixel is fired on thank-you page.
4.The affiliates get commissions after the affiliate networks give credit to right one for the sale.
Why Do Affiliate Marketing
2019 Affiliate Marketing Market Size
For US
Total Ad Spend 2019 – $238.63B
Digital Ad Spend 2019 -$129.34B
Mobile Ad Spend 2019 -$ 87.06B
Global Affiliate Industry Value -$15B
US Affiliate marketing Spend -$6.8 B
Over 80% of advertisers and 84% of publishers surveyed ran an affiliate program
Nearly 90% of advertisers claim AM as an important part of their marketing strategy
Source: https://jebcommerce.com/2019-affiliate-marketing-market-size/
The latest study from Performace Marketing Association show that affiliate marketing investment in the US reached $9.1 Billion in 2021.
https://thepma.org/2022-performance-marketing-industry-study/
Type of Affiliates
There are different types of affiliates that help meet your needs.
Coupon RetailMeNot, Groupon
Loyalty Rakuten Rewards(Ebates), Topcashback
Niche closetsamples.com, couponmon.com
Sub Network Skimlink, Viglink
Influencer Network LTK(rewardStyle)
Cart Abandonment Yieldify, Salecycle
Search wickfire, JWEB (trademark + bidding, PPC)
Toolbar joinhoney, wikibuy
Price Comparison pricerunner, pricespy, Idealo
Student Discount Studentbeans, UNiDAYS (verification)
Media BuzzFeed, Business Insider (editorial integrity)
Affiliate And Customer Journey
The coupon/deal/cashback affiliates work best because they are at the bottom of sale channel. If you want to work with content affiliates, your metrics should be about awarness and engagements instead of focusing on sales only. You should create affiliate marketing strategy based on your marketing goal and partner with related affiliates.
Which Affiliate Network/Software is Better
It depends on your need.
What’s your product/service? What is your budget? Which market do you want to target?
The report from Martech Record can be for reference.
https://martechrecord.com/data-and-reports/buyers-guides/buyers-guide-coverage-publishers-rate-the-affiliate-platforms/
Also, there is the Blue Book Best Cost-Per-Sale Affiliate Networks from mThink where Rakuten, Awin and CJ are the top 3 for consecutive years.
https://mthink.com/best-cps-affiliate-networks/
Is Affiliate Marketing a Good Fit for My Business
The answer is not simply yes or no.
You can think about the questions from the affiliate side——Why do I promote this merchant’s offer? How can I benefit from it?
If your products/service are popular, then your affiliate program can be easy to make a hit. However if you are a new brand with limited traffic on your website, then it will be challenging to boost the program.
If you want to know more about affiliate marketing and affiliate program managment, fee free to comment below or contact us.
Learning Resources
Affiliate Program Management: An Hour A Day
IAB Australia_Affiliate Marketing Handbook_2020
Awin Report 2020
https://www.pepperjam.com/affiliate-marketing-guide
https://www.awin.com/us/how-to-use-awin/affiliate-marketing-advertiser-guide-2020
https://www.tune.com/resources/resource-library/guides/ultimate-guide-to-partner-marketing/