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Tips & Guides — 01 Jul 2022
Beginner’s Guide to Affiliate Marketing
Affiliate marketing (also known as partner or performance marketing) has seen huge growth in recent years. In fact, between 2015 and 2021, it saw 223% increase as a search term. While it is certainly not the get rich quick scheme that some sites would have you think, if done well, it can provide a steady stream of passive income.
Wondering how you can enter the world of affiliate marketing? It’s important to understand how it works in the broader ecommerce marketplace. What does it entail? How do you choose what products to focus on? Are there certain platforms you should use?
If you are considering affiliate marketing, then read on as we guide you through the maze ahead.
Let’s start with the basics: what is affiliate marketing? Quite simply, it’s a type of marketing where an affiliate (sometimes referred to as a partner) establishes a relationship with a particular retailer or brand. This affiliate offers that brand the opportunity to see their products or services widely disseminated, and they earn money for successfully doing so. Utilizing major platforms like Affise can offer a lot of help to any size of affiliate or program.
In theory, performance marketing is an easy concept to understand. The potential partner has some sort of online presence; they could be an influencer, a blogger or someone with an existing website. Brands believe that through that presence, they can extend the reach of their products.
In order to catch brands’ interests, potential affiliates must offer the opportunity to boost sales, drive traffic, and to expand brand awareness. They can achieve this many tactics, including banner ads, integrated links or email campaigns.
When conditions are met – sales, subscribers, or another measure of success – the affiliate is paid accordingly. This could be a set amount or a percentage of profit on an item.
That means brands get attention and increased sales, while affiliates get paid. It’s the perfect combination.
Building effective partnerships is valuable to both affiliates and brands, for a number of reasons. Beyond the increased popularity of this tactic, here are three key benefits to consider.
For brands: Costs are always going to be important to your organization and you may have some hesitancy that an affiliate marketing program will come with high costs. However, think about how much less work you have to do, since you don’t have to provide affiliates with a marketing strategy. You also don’t need to invest any money in them up-front.
The vast bulk of any marketing efforts is down to your performance marketing partners, which is what makes it attractive to so many brands. While you may vet and monitor their marketing work (to ensure they are not making unsubstantiated claims that could damage your brand for example) it is mainly a hands-off program.
For affiliates: While you can invest a lot of money upfront, it’s easy to get started on a shoestring budget. Whether you use a free WordPress website, cheap web hosting, or a social media platform, all you need is a presence. The key investment you’ll need is time.
For brands: Particularly for small ecommerce brands or startups, risk can be a major factor. Of course, risk is directly related to costs and with performance marketing, you have such negligible costs that there is virtually zero financial risk. Instead, it’s mostly your reputation you’ll need to be aware of – but as long as you’re careful in choosing the right people, you should be fine.
For affiliates: Thanks to the aforementioned minimal monetary investment, affiliate marketing brings low financial risk to you. You also remain self-employed, meaning you’re not responsible for the success or failure of any businesses you work with. Your focus is on your own links – and nothing else.
For brands: Every online business wants to grow, but growth has to be approached with caution. With performance marketing, scalability is simple. As long as you can provide the products, then you can scale up your partnerships as there is almost no cost or risk involved. This can be a great strategy for cautious growth that does not affect your in-house costs.
For affiliates: Once you’re firmly established in your niche, there’ll be a large range of brands available to you. As a trusted partner, you can promote multiple products and services at once, scaling both your reach and your passive income.
If you are considering entering the world of partner marketing, then you want to ensure that you choose channels that offer the most exposure. However, it’s worth remembering that the biggest platforms aren’t always the best for you – you need to find the channels your intended audience are on.
Love them or hate them, influencers play a major role in modern ecommerce marketing. Influencers can, in some circumstances, have millions of followers, usually across main social media channels such as Tik Tok or Instagram. They are also likely to have a Facebook page and may offer a regular podcast or webinar to their followers.
Of course, micro influencers (those with a few thousand followers) are incredibly valuable too – especially in more niche areas.
Influencers make money in a number of ways, but when it comes to performance marketing, they can be a potential gold mine, both for the brand they represent and themselves. How useful an influencer will be to you will depend on what you sell and what their niche is but some influencers can earn more than $5,000 every month just from affiliate links.
It is estimated that some one third of all webpages that currently exist are blogs. Blogs can be a great channel for online marketing as they can often tie in directly with your company’s products or services.
For example, if you sell SaaS products and you find a dedicated tech blog, with good knowledge of the subject and a high readership,you might just have found a perfect partner. The blog can do product reviews, comparisons with competitors, and other content that drives traffic to your site.
There are even sites which focus solely on product reviews, such as Wirecutter, owned by the New York Times Company. Finding the right niche for your blog, or the right blogs to match your brand, can be of benefit to both parties.
Anytime you search for something on Google, you will notice a number of ‘paid results’ at the top of the page. These are from specialized microsites that focus only on paid searches. They may also be ‘sub sites’ within an organization’s main website too. When utilized correctly, these microsites can be a good driver of traffic and sales.
Microsites tend to have smaller audiences. While that may seem initially off putting, the audience they do have is more focused on the content and more enthusiastic. Going back to the previous example of SaaS products, a microsite may focus only on that area and thus have an audience who are only interested in products and services related to SaaS.
Even in an era of AI-driven martech and automation, email marketing remains a hugely useful tool with the global market valued at $7.5 billion (and estimated to grow to $17.9 billion by 2027). That means it is a channel you can’t afford to ignore.
Affiliates may have an existing list of email subscribers for a variety of reasons. By adding links to high converting landing pages in their newsletters, they can drive significant traffic to a brand’s site and earn lucrative commission by doing so.
One thing to avoid is thinking that any affiliate partner will be a small entity. Larger media websites can be a fantastic channel for your brand. They tend to have high volumes of traffic and can thus be a good source of traffic and revenue. For instance, take a look at how Buzzfeed compile their quirky product lists and link back to Amazon:
Ideally, you want to find sites that align with what you offer. If, again, you sell SaaS, then a website that sells other tech products could be a perfect fit. The site will place banner ads or links to your site in appropriate places which can include their own landing pages or any onsite blog. With a likely large audience, this can be a great way of widening the exposure of your brand and providing high conversion rates.
A major decision for both brands and potential partners is choosing which affiliate products or services to promote. After all, there’s no point at all in linking with business technology solutions if you are a fashion influencer!
Therefore, the first thing to do is identify your market and research that market’s needs. Tools like Affise BI can help ensure you have the most up-to-date data. If you have a blog about pets and pet care, then you want to see if there are gaps in the market you can fill or areas where there is not a lot of competition. That means looking at what exists now in the market and seeing if you can provide a better service.
Physical products may be the easiest choice and can include anything from running shoes to cosmetics. One major advantage of choosing physical products is that there are already huge affiliate networks such as Amazon or smaller ones such as ShareASale or Clickbank out there, making it easy to start selling in a matter of minutes.
As with other types of products, ensure you identify appropriate products for the channels you will market on. It is worth noting that affiliate commissions can vary greatly (from 5-30%) and you will earn more per unit on higher value items but will likely sell less of them. Physical products can be a good choice if your talents lie in photography or videos – having something interesting to show off makes great content.
Information, or digital, products can be a good choice as they tend to offer higher commission rates (up to 75%). As well as higher commissions, this type of product is usually delivered instantly, thus removing shipping costs.
However, you need to have established some level of authority in your chosen subject, as trust is required to persuade people to follow your recommendations. Digital products also tend to have lower conversion rates so if this is an area you are thinking about, choose your partners carefully and research the market thoroughly.
Some possible digital products include:
“As a service” provision is a growing market that offers great opportunities when it comes to partner marketing. As with other products, success in this area can depend on how well you have researched your market and how well you market the product. It can be an ideal choice if you write a tech blog or have an existing site selling complementary products.
Commission rates can vary on SaaS products. Again, higher end products will pay more per sale but will be more difficult to produce a high volume of sales. Many providers will also offer recurring commissions on monthly and annual plans which can provide a regular revenue stream with little or no effort.
Now we know that affiliate marketing is, it’s time to look at how you would go about it with this step-by-step guide.
In theory, every platform out there could be used as an affiliate platform. In practice, the level of success will depend on what you are promoting and where your target audience is likely to engage. This is less about the total number of users, but more about where a particular demographic is.
For example, almost 50% of Tik Tok users are under the age of 29, while only 11% are over the age of 50. That means that if your products are likely to appeal to the over 50s, you should probably look elsewhere. The same applies for other demographic information too – for instance, a platform such as LinkedIn is more likely to be viewed by the C-suite so can be useful for high-end tech products.
Perhaps the two easiest platforms with the widest appeal are YouTube and online blogs. You can start a blog easily and cheaply, then optimize it for SEO so that it has a decent SERP ranking. With enough time (and the right content!) more people will visit it and then – ideally – recognize you as an authority and follow your recommended links.
The beauty of YouTube is that it is free to upload videos and share them across different social media platforms. Having a YouTube channel also allows you a range of options; you can have longer webcasts, tutorials, or webinars that you share with subscribers, or you can have short snappy videos that will sit well on social media. Plus, you can talk about the products you’re promoting in the videos themselves, as well as including links in the descriptions below.
Finding a niche is key – if you try to cover every interesting product that comes your way, you’ll struggle to retain a core audience. Instead, pick one main area (for instance, fashion, tech, home decor, and so on) and then narrow down within that.
Researching the area you are working in can help identify gaps, and you can then look to fill those gaps. For example, you may have an interest in fashion, but that is a huge and saturated area. By focusing on a smaller subsection – for instance, 60s vintage fashion – you can specialise and attract a more dedicated audience. You’ll have less competition, and most importantly, be able to establish yourself as a unique voice.
As well as researching your actual subjects, look closely at any competitors or parallel sites to see what works for them. That covers content (both visual and written) as well as the keywords and phrases they use in their SEO.
Your niche does not need to be static, either. As your expertise increases and as you see increased traffic, you can consider expanding your chosen niche and also expanding your affiliate links. To stay with the 60s fashion example, maybe you will find that many of your readers also have an interest in vintage home decor, classic makeup brands, or other decades of fashion. This will allow you to expand your content (and your partners), retain your current audience, and attract new people.
The next step is to identify and join a suitable affiliate program. Many programs are sector-centric, for example, related to travel or fashion or tech. Others are wide-ranging and cover a diverse variety of products and services. Choosing the right one for you is an important step in your affiliate career. Broadly speaking, there are three main types:
These are programs that offer high commission rates or payments on products that usually sell in low volumes. These are often niche products and the program may in some cases offer higher levels of support such as offering automation tools (CRM, email marketing, etc.) to help you sell. Of course, many people want to make high commissions so this type can be very competitive.
At the opposite end of the spectrum lies the programs where you can sell a high volume of products but where commission rates tend to be fairly low. Amazon associates can be a great choice in this area as they have so many products at the lower end of the price scale that you can promote and sell. These are a great method of passive income, but require a pretty large audience to see decent revenue.
The Holy Grail of affiliate programs and thus, of course, the most competitive. A good example of this type of program is Shopify, who can pay out a huge $2000 for every successful referral to their Plus affiliate program. Why so high? Because Shopify recognizes that people on that program will have a high CLV (customer lifetime value).
So, how do you find these programs? A good starting point is Google, especially if you already know your niche and what products you may want to specialize in. You may also find that, having established yourself as an excellent partner to other brands, some businesses start reaching out to you.
If you’re going to be successful, you need customers to engage with you. In order for them to do so, you need to create great content. You could be promoting the best products on the market but without interesting, relevant content, you will get nowhere.
Don’t just replicate content you see elsewhere; create fresh and original content that, where possible, offers something different. This can help build trust and make you a go-to source of recommendations. Of course, your actual format may be the same as other blogs or sites, for example, writing reviews of products, but try and find a fresh angle or do things a little differently.
If you plan on a larger performance marketing model, you may decide to outsource your content creation. If so, what you get will depend very much on your budget. Look for creators with know-how in your area (or areas) of expertise. Someone who writes almost exclusively about fashion will struggle to write engaging content about tech products and services, for instance.
You have great products, you have great content, so the next step is to get people reading that content and clicking on those links to make a purchase. There are three main ways of increasing your traffic and getting more visitors:
If you have a decent budget, this can be a great initial strategy to drive those first waves of traffic. The most common way of doing this is with Pay Per Click (PPC) ads. These usually offer instant results, but the downside is that it will cost you.
Search engines remain one of the most common ways for people to find information. Google has more than a 60% share of the US search engine market, so getting your SEO right is crucial.
Good SEO means a good ranking so this is an area you should not neglect. Some tips to ensuring good SEO includes:
Emails remain a great way of communicating and engaging with an audience. Newsletters are a great way of advising people of new products or special offers and, as you move forward, they can also be fantastic for segmentation and email retargeting.
Try and find something to offer people that encourages them to sign up to your email list. That could be exclusive content, subscriber-only discounts, or sneak previews. Remember, it should be something that acts as a bonus to your website – not something that replaces visiting it, but something that adds to it.
You now have people reading your content, but how do you get them to click on all those wonderful affiliate links that can drive your earnings?
There are two main actions you want to happen as a result of your affiliate marketing efforts. The first of those is for people to click your links and visit your performance marketing partner’s landing page. The second is for them to then make a purchase on the back of that click, thus leading to a commission payment for you.
While the first of those actions is mostly in your control; especially how good your content is, and how well-placed any links are, the second action isn’t. While you can provide tempting product reviews, most of the decision to purchase is between the vendor and the potential customer. This is why you should be cautious when choosing a program; research the merchant and see how well their products are viewed and how good their conversion rates are.
Before you sign up to a program, spend some time looking into how well both they and existing affiliates are performing. Many bloggers will blog about how well (or not) their partner marketing is doing. Be aware, however, that many of the reports you will see come from those operating at the higher end of performance marketing, so don’t set your goals too high!
A quick Google search for “income report amazon affiliates” will give you a number of results but again, the caveat here is that people tend to talk about when they are doing well rather than when they struggle. The point of this research is not to see how much people are earning but rather which programs perform well and are likely to see high conversion rates.
One thing to emphasize is not to be drawn in by clickbait articles with headlines such as “Make a million by affiliate marketing”. Yes, it is a huge and potentially lucrative sector, estimated to reach some $8.2 billion in the US alone by the end of 2022. But it is also a pie that more and more people want a slice of and is thus also increasingly competitive.
One major factor that will affect potential earnings is whether you are focusing on this as a full time job or whether it is a part time occupation. Other factors include how many programs you join, the area you focus on, and how many readers or subscribers you have. There is no exact figure as to how much you can earn nor an exact guide, but this list can give you an approximate idea:
Not all payment schemes are created equal, and this is something you should consider when choosing an affiliate program. There are three main models of payment scheme, though you may find some programs adopt a hybrid model that can use more than one of these.
This is the mainstay of performance marketing and the most common payment model. With pay per sale, a merchant only pays when actions by the affiliate leads to an actual sale. In some cases, merchants may offer a flat rate per sale but in most cases, they will offer a commission rate that is usually related to the value of the product.
That means that if you are marketing high value products, you may see commission rates as high as 30% of the products value. For lower value items, you will more likely see a rate of around 10%. While that may not seem overly attractive, the sheer size of larger programs such as Amazon means that being an Amazon affiliate lets you sell in volume and still make good revenue.
“Leads” can be a wide-ranging term but can include email sign-ups, free trial sign-ups, or consultation and appointment calls. The advantage of an organization in paying for leads is that your affiliate does all the groundwork and then experienced salespersons or consultants can focus on closing the sale and getting a new customer.
The value of leads will depend on the product or service offered by the merchant but getting an individual into an organization’s sales funnel means they can be nurtured towards a sale. Generating leads can take more effort on the part of the affiliate so you will often find that providers offer good rates for any leads that are generated.
The pay per click model is especially attractive to bloggers with high volumes of traffic reading their content. From the perspective of the merchant, this is a speculative model as they are merely paying for every instance where a reader clicks on a link and visits their website with no guarantee of that visit leading to a conversion.
This is generally a low-paying model but requires little effort other than careful placement of links and creation of engaging content. Payments can range from around $0.30 per click up to $5 per click and some affiliate programs will offer different levels of remuneration. PPC can be a simple way of earning revenue for an affiliate and can be a good choice for entry level individuals.
Once a performance marketer has everything in place, they can start on their new career. However, how do they know whether they are doing well or not? What are the benchmarks that say they are successful?
If you want to do well in partner marketing, then you need to have an idea of what metrics and KPIs matter the most. Tracking these crucial measurements can not only help you increase your revenue stream, it helps you improve your reputation and provide a better customer experience, something that reflects well both on the brand and the affiliate.
Analytics should be a major consideration when you look at programs or platforms. Look for solutions that specifically offer analytics for partner marketing, like Affise, as they can be of major benefit to all affiliates, from beginners to seasoned professionals.
You have to put your immediate ROI and even the success of single campaigns to one side and look at the overall effectiveness of your efforts. It’s easy to get distracted by easy short term successes, but you need to consider long term growth to really succeed.
Much of this also applies to brands as well. They want to measure how successful their affiliate programs are, and how individual affiliates within that program perform. Being able to track how both programs and individuals are performing is an important and actionable factor when overseeing any performance marketing program.
For affiliates: Clicks can be one of the most basic indicators of how your program is performing and how it is growing. Comparing clicks over different time periods, such as annually or quarterly, can show you how effective your own campaigns are. It can give you actionable data on whether anything needs tweaked or changed.
For brands: As far as your partners are concerned, clicks can show you which affiliates are high or low performing. You can also see which channels are most profitable, helping you figure out spending on future affiliates. Automating data transfer with CPAPI can be a major timesaving tool.
For brands: If you are adding new affiliates to your performance marketing program, it can be an indicator of how much that program is in demand. Rapid growth in this area means that you have put together a program that is appealing to potential new partners. You may also spot people who are currently sending traffic to your site but are not yet part of your program and you can then invite them.
By customizing your URLs, you may not only be able to see what referral traffic comes from your existing partners, but also identify creators and bloggers who are both discussing your products or services and driving traffic. This can be a great source of new partners for your program and is also a further reflection of the overall appeal and success of your program.
For brands: You want to not only identify and recognize your best performing affiliates, but also ensure that in some circumstances, you reward them further. This is no different to a customer loyalty program; you want to nurture the relationships you have with these high performers so that they are happy to be part of your program.
It’s relatively easy to do this by assigning each partner their own UTM code and then creating a template for specific programs. This will give you a well-rounded overview of how well your partners perform. It is also a useful KPI in identifying when partners’ performances dip for some reason and you can look closer to see what the reasons for this are.
For affiliates: Conversion rates will always be a crucial metric within ecommerce of any type. Within performance marketing, it is a great way to see how well clicks are working in relation to actual sales and how many clicks it takes to get a single conversion. If your conversion rate is low, then you can look at different aspects of how you’re promoting products.
For brands: Focusing on specific campaigns can also help direct future efforts. If you run a special offer, then look closely at how it performs. A campaign with a high conversion rate can act as a benchmark for any future special offers. You can also use this KPI to measure the above (who your best affiliates are).
For affiliates: While you always want a good retention rate, you also want to be attracting a new audience to fuel expansion and growth. Without this growth, any affiliate income you have will stagnate, as you exhaust your original audience. Having a steady growth of new engagement means your older affiliate links will still earn you money, as well as allowing you to expand your niche.
For brands: Many programs will produce new customers for years after launch, while others may be a short term tactic. If there is a low, or even zero, percentage of new customers, then you may want to consider terminating that program or changing it. You might also want to see which of your affiliates are no longer bringing in new customers, so that you can focus your efforts elsewhere.
For brands and affiliates: At the end of the day, both partners and brands want to see significant revenue. High value items are great sources of this, but often sell in lower volumes. Rather than focusing on the amount of sales, you might want to focus on AOV.
AOV gives you a clearer picture than simply looking at conversion rates. For example, your conversion rate could be lower this year than last, but a higher AOV means that you have a bigger revenue total than that of last year. For brands, this can apply to affiliates too; a partner may not be driving a large number of conversions but the ones they do drive could be spending more.
For affiliates: Tracking how certain categories are doing can help you adjust your content to maximize engagement and conversions. There’s no point in spending time creating content for an area that isn’t making you money, so tracking by category ensures you focus your efforts appropriately.
For brands: Most affiliate programs have different categories, both of products on offer and the partners involved in marketing them. How different categories perform can tie in with what your defined goals are. If your primary goal is purely sales and high conversion rates, then you want to see good performance from categories such as coupon and discount channels.
If however, you are looking to grow brand awareness and reach, then you will be looking for efficient performances from categories such as content partners who are producing high-quality content that informs readers about your products and your company as a whole.
For affiliates: A steady growth is key to developing a passive income stream. It’s important to track both the growth of your audience and of the campaigns you’re involved in. Balancing the two can be tricky – you don’t want to bring in so many brands that you overwhelm your audience, but you also don’t want to squander a large audience with just a few links. Accurately tracking this can ensure you walk that line.
For brands: Tracking your growth is always going to be an important KPI. While it may be the norm to track this year on year, companies looking to expand quickly may look at quarterly growth too (while allowing for seasonal fluctuations if they apply). Tracking growth gives you accurate snapshots that encompass factors beyond monthly, quarterly, or annual sales.
Year on year growth figures remove any seasonal fluctuations and give you a view of your overall performance between two years. This can be useful for businesses who see dramatic differences in sales figures over a financial year. For example, a company that mainly sells cold-weather clothing will see leaner figures in summertime.
Successful affiliate marketing and a good affiliate income are both achievable with some careful thought and cautious progress. Having a good affiliate website means that you can drive traffic to your partner’s site and, eventually, even consider setting up your own affiliate network to increase your revenue streams.
Performance marketing can utilize a wide range of marketing tools, especially when you partner with a market leader such as Affise. It is also worth noting that if you are an existing affiliate marketer, then platform migration is simple with Affise. Making the right choice at the beginning of an affiliate marketing journey can mean success further down the line.
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