Affiliate Marketing Basics

KLIK Staff

June 24, 2021

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Everything You Need to Get Started with Affiliate Marketing

Does your organization take advantage of the benefits of affiliate marketing? If your answer is “no,” there has never been a better time to start! More than 80 percent of brands leverage affiliate marketing as part of their promotional spend and the overall dollars spent increased to more than $6 billion in 2020. Below, KLIK has broken down the basics types of affiliate marketing, how they work, and the best ways to implement them within your holistic marketing strategy.

What is Affiliate Marketing?

Simply put, affiliate marketing is when an individual (or group) earns money for promoting another person’s or company’s products. The formalization of this industry has been supersized by the web, where this often takes the form of the affiliate posting about the product on their blog or via social media. In exchange for this promotion, the poster typically earns a commission for each sale they are responsible for.

How Does Affiliate Marketing Work?

The affiliate marketing ecosystem requires the participation of three entities: the seller, the affiliate, and the consumer.

  • The seller is a vendor or individual that provides the product or service they are interested in marketing.
  • The affiliate is responsible for marketing the product by demonstrating its appeals, often through their personal social channels. An attractive affiliate often courts a niche audience that aligns with the seller’s product (i.e. a technology enthusiast advertising the latest Apple gear or a fitness influencer promoting a FitBit).

One option for both sellers and affiliates is to work with an affiliate network, which offers a selection of hundreds or even thousands of products across many market segments. Sellers typically pay a yearly fee, between $20 and $200, to have their product listed and affiliates receive access to a centralized database of products to approach that matches their interests. Some of the most popular affiliate networks or platforms include ShareASale and Awin.

  • The consumers are of course the ultimate drivers of affiliate marketing and provide revenue to both the seller and affiliate when they make a purchase through an affiliate’s blog, site, or social media. Depending on the platform and terms of the deal, the affiliate may or may not be contractually or legally obligated to disclose the fact that they receive compensation for each sale.

Benefits of Affiliate Marketing

  • Generate Revenue: 15 percent of total digital marketing revenue is generated from affiliate marketing, according to Business Insider! In fact, the method is responsible for an equal percentage of revenue generation as email marketing.
  • Generate Content: Research has shown consumers put a high level of trust in recommendations from influencers and peers online. Affiliate marketing allows products to become part of a purchasing decision organically and enhances trustworthiness via the affiliate’s relationship with their audience.
  • Generate Relationships: We’ve written before about the value of establishing relationships via a unique online brand identity. With affiliate marketing, you can let your affiliates do that for you! Benefit from their existing rapport with their audience; a user visiting their favorite blog or watching their friend’s Instagram story is likely in a good mood and primed to view your product in a positive light. (For more, research the Halo Effect).
  • Gain Flexibility, Lose Costs: An affiliate marketing program can be scaled up or down quickly and doesn’t require an advertising team to start up. With a commission-based revenue model, affiliates are only paid if sales are generated, so risk remains low.

Affiliate Marketing Program Specifics

Now that we’ve covered the how and why of affiliate marketing, let’s dive into some of the specific decisions a seller has to make to enter the affiliate arena.

  • Payment Models: Merchants have a few commission-based models to choose from, including pay per sale, lead conversions or click. While pay per sale is most common, the choice here will depend on the end goal of the program
  • Backend Technical Details: Before launch, sellers and affiliates need to ensure the links they use will provide proper attribution for generated sales. If the sale comes through a blog, affiliates can use a Link Cloaking or URL Shortener Plugin like PrettyLinkPro to track the traffic to external sites.
  • Affiliate Marketing Channels: Within the previously mentioned affiliate network space, Amazon is the dominant player. Their Amazon Associate’s program encompasses more than 42 percent of the market across 50,000 websites. When working with individuals, vendors can choose from influencers, bloggers, industry-specific paid search microsites, or a combination.
  • Trends and Tips: Considering all the options listed above, sellers are not fully taking advantage of affiliate marketing if they don’t fully explore all the flexible options available to them! Test a variety of channels and use data to invest in the most promising results. Contrary to what seems like popular wisdom, the explosion of hyper-focused niches online and “micro-influencers” can actually yield better results and higher quality leads than larger catch-all sources.

Conclusion

The exciting world of affiliate marketing generates millions of clicks every day and drives sales across almost every industry imaginable. We hope this overview empowers you to jump in if you haven’t already!

Resources and Further Reading

  • https://www.bigcommerce.com/blog/affiliate-marketing/#what-are-the-top-affiliate-marketing-trends-of-2020
  • https://mediakix.com/blog/affiliate-marketing-statistics/?_ga=2.149736051.476534266.1620743721-443822680.1620743721#gs.lDcPsUI
  • http://www.justlearnwp.com/best-wordpress-plugins-for-marketing/?_ga=2.86617437.476534266.1620743721-443822680.1620743721
  • https://www.forbes.com/sites/robertadams/2017/05/25/the-definitive-guide-to-affiliate-mark
  • https://www.impactmybiz.com/blog/benefits-of-affililate-marketing/eting/?sh=6e2e386775ff
  • https://www.impactmybiz.com/blog/benefits-of-affililate-marketing/
  • https://bloggingwizard.com/affiliate-platforms-and-networks/
  • https://webmarketsupport.com/what-is-affiliate-marketing/

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