The incredible rise of the Internet has led to the expansion of online affiliate marketing programs as a major revenue stream for merchants, publishers and marketers. A successful affiliate marketing program offers a low-cost method of spreading the word and showcasing the right products and services to the right audience. The first online affiliate marketing program was started in the early nineties by small businesses such as PC Flowers & Gifts, AutoWeb.com, and KB Toys. Amazon was the first big online merchant to offer an affiliate program. From its rather humble beginnings, the affiliate industry has grown to a staggering $4.5 billion this year. With more customers increasingly carrying out their research and shopping online, affiliate marketing is now a popular acquisition channel for businesses, big and small. According to Forrester Research, shoppers in the US from an affiliate site are likely to spend slightly more than other online channels.
What Does Affiliate Marketing Mean?
Affiliate marketing is a performance-based marketing technique, wherein affiliates or partners are financially rewarded for driving traffic to another site for purchasing goods or services. There are 3 main players in affiliate marketing:
- The advertiser: In the world of affiliate marketing, an advertiser can be a company selling a product such as home appliances, concert tickets, shoes or web hosting services. The most important thing to remember is that if you are ready to pay other people to help you sell and promote your business, then you are an advertiser.
- The publisher: A publisher promotes an advertiser’s product or service in exchange for earning a fee. Advertisers provide the publisher with creative – in the form of links, banner or text ads or even unique phone numbers – that the publisher incorporates into their website.
- The consumer: The consumer is the one who actually sees the ad and then takes action. Typically the consumer is asked to fill out a form or click on a link. Regardless, once they take that action they are said to have converted and they leave the publisher’s site and are taken to the advertiser’s site.
Anyone with a website, blog, or other online property, can earn money through affiliate marketing. Affiliates can write a post about specific products or services, place a button or banner ad on their site, set a squeeze page to build an email list, promote affiliate products through newsletters or even write posts on social media platforms. A special affiliate link to the product or service is usually included to allow followers to check out the product or services for themselves so that they can easily make a purchasing decision.
Brands can reach new audiences and capture geographically or culturally inaccessible markets by harnessing the power of publishing affiliates. It has a much better return-on-investment than other digital channels in acquisition of new customers. The affiliate marketing channel works on a commission-based referral system, where the advertiser pays the affiliate partners based on delivered results like sales, pay-per-lead, pay-per-action or pay-per-click.
4 Strategies Your Business Should Adopt For Affiliate Marketing Success
An effective affiliate program allows businesses to improve their exposure to the market faster for little capital outlay. It is an attractive proposition for brands because money is only paid if the channel drives any business to the advertiser. Affiliate marketing programs do require time and effort to build and it comes with its own challenges; however, it can be a worthwhile financial investment. Here are 4 affiliate marketing strategies your business should implement to ensure the greatest level of value.
1. Find Large Network Of Diverse Affiliates
Getting started on setting up an affiliate program is easy but the real challenge is finding good quality affiliates or partners to drive new consumers to your business. Do your market research to find partners or sites with built-in traffic interested in your offerings or take advantage of audience engagement in top affiliates in the cashback and voucher space such as Retailmenot or Ebates. Many brands make the mistake of being reliant on only a few affiliates. This is a risky strategy because traffic is likely to be limited and advertisers will see steadily lower response rates from the same traffic. Brands will not gain any real competitive edge by aligning with only a few super affiliates because they are likely to be promoting your competitor’s products or services as well. Sticking to a few key partners can also put your sales at risk. It’s not uncommon for top affiliates have to suddenly stop promoting your product/service due to an exclusive deal with a competitor or change in industry regulations.
Brands should instead look to work with a large network of quality and reliable affiliates for an increasing level of sales. It is wise to spend time and resources on continually recruiting and optimizing affiliates based on performance. Follow a clear planning strategy in detecting gaps within the type of affiliates needed (bloggers, content, cashback) or generic content areas (sports, Christmas, Presidential election) and preferred verticals.
2. Commit To Effective Communication
To run a successful affiliate program, you have to communicate clearly and consistently with affiliates. Affiliates sort through hundreds of emails each day from different affiliate programs. In order to get noticed, you must make sure your communications are direct, targeted and personalized. Instead of blanket-emails, you must tailor your communications by segmenting and profiling your affiliates. You will get the best responses by using multiple communication channels, including email, chat, and forums. To keep growing the channel, you need to effectively answer any questions your current affiliates may have and also look at ways of recruiting new affiliates. Remember, the affiliates have direct access to your target audience; take advantage of this by asking them questions in order to get more accurate feedback about your business.
3. Provide Tools and Resources
Affiliates may be skilled at marketing your products, but they are bound to fail if they do not have the necessary tools and resources needed to be successful. Affiliates are actively looking to promote your product in an attractive and appealing way for your customers in order to improve the conversion rate. To do this well they need access to media and information. You must support your affiliates in promoting your brand better by providing them with relevant and quality materials including video, content, press releases, product feeds, and more. Keep updating fresh and new creative content for your affiliates and make sure it aligns with your overall digital marketing campaigns. Also offer your affiliates regular tips and advice on how to successfully market your products so that they can increase conversions and further benefit everyone involved. We’re all in this to be profitable. Affiliates are more likely to promote your products or services if they can earn more from your site.
4. Invest In The Right Affiliate Management Technology
All affiliate management solutions are not made equal in capabilities so your business has to choose the right technology depending on your specific needs. Solutions should ideally address potential pain points and also be intuitive and easy to use. Even basic affiliate programs need advanced and robust solutions to track sales accurately and to deliver a cost-effective ROI. Good program management solutions should automate core processes like tracking, reporting, and payment of affiliates. It will also provide vital data insights into what seems to be working well and what needs to be optimized. Analytics is incredibly important in estimating the true value of an affiliate. Even though the last click may be driven by a different channel, there is value in affiliates that help push customers higher up the sales funnel. It is important to recognize and work with such partners for affiliate marketing success.
Convert With Affiliate Marketing
An effective affiliate marketing channel acts as part of the path to conversion. While there is no plug-and-play solution for affiliate marketing success, following the above mentioned principles will help advertisers find value in the right affiliates. Remember that persistence, patience, and knowledge pays well in the long road to creating a market-leading affiliate program.