Affiliate marketing is a simplified approach to driving sales and generating substantial online revenues. 

The new push towards less traditional marketing tactics has paid off, which is hugely beneficial for both brands and affiliate marketers. 

  • 81 percent of brands and 84 percent of editors leverage their power of affiliate marketing. It is a statistic that is expected to continually rise with affiliate spending increasing each year in the USA.
  • There is an increase of 10.1% in the United States’ annual partner marketing expenses, which means it will hit 6.8 billion dollars by 2020.
  • In 2018, the cost of digital marketing was measured at 62 percent of traditional marketing schemes, while at the same time generating three times the value of conventional marketing. 16% of all orders made online can be attributed to the impact of affiliate marketing.
  • In March 2017, Amazon’s affiliate structure changed, offering a rate of 1-10 percent of product revenue to creators. It provided an opportunity for affiliates to increase their passive income based on vertical sales dramatically.
  • The marketing affiliate of Jason Stone, otherwise known as Millionaire Mentor, was responsible for up to $7 million in retail sales in June and July 2017.

What is Affiliate Marketing?

People standing on Affiliate Target

Affiliate marketing is the process by which an affiliate earns a commission on the marketing of the products of another person or company. 

The affiliate simply searches for the product they love, then promotes the product and receives a share of the profits from each sale they make. Transactions are monitored through affiliate links from one website to another.

How does Affiliate Marketing work?

As affiliate marketing works by disseminating the responsibilities of product marketing and creation across parties, it manages to leverage a variety of individuals for a more effective marketing strategy while also providing a share of profits for contributors.

 To do this work, three different parties must be involved:

  1. Seller and product creators.
  2. The affiliate or advertiser.
  3. The consumer.

Let’s explore the complicated relationship that these three parties share to ensure that affiliate marketing is a success.

Seller and product creators

The vendor, whether a solo entrepreneur or a large company, is a merchant, a producer of a product, or a retailer with a product on the market. 

The product can be a physical object, like household goods, or a service, like make-up tutorials.

Often known as a brand, the retailer does not need to be directly involved in marketing. It may also be an advertiser and benefit from the revenue sharing associated with affiliate marketing.

For example, the seller could be an e-commerce merchant who started a drop-off business and wants to reach a new audience by paying affiliate websites to promote their products.

Or the vendor could be a SaaS company that leverages affiliates to help sell their marketing software.

The affiliate or publisher

Also known as a publisher, an affiliate may be either an individual or a company that markets the seller’s productively to potential consumers. 

In other words, the affiliate promotes the product to convince consumers that it is valuable or beneficial to them and to convince them to purchase the product. If the consumer ends up buying the product, the affiliate will receive a portion of the revenue.

Affiliates often have a particular audience that they market, generally adhering to the interests of that audience. This creates a defined niche or personal brand that helps the affiliate attract consumers who are most likely to participate in the promotion.

The consumer

Whether or not the consumer knows it, they (and their purchases) are the drivers of affiliate marketing. Affiliates share these products with them through social media, blogs, and websites.

When consumers purchase the product, the seller and the affiliate share the profits. Sometimes the member will choose to be in front of the consumer by disclosing that they are receiving a commission for the sales they make. 

Other times, the consumer may be completely unaware of the affiliate marketing infrastructure behind their purchase.

Either way, they rarely pay more for the product purchased through affiliate marketing; the share of profits of the affiliate is included in the retail price. 

The consumer will complete the purchase process and receive the product as usual, not affected by the affiliate marketing system in which it is a significant part.

How are Affiliate Marketers paid?

Employee being paid from online

A quick and inexpensive method of making money without the difficulty of actually selling a product, affiliate marketing has an undeniable advantage for those looking to increase their revenue online. 

But how does an affiliate get paid by linking the seller to the consumer?

The answer may be complicated.

The consumer does not always have to buy a product to get a kickback from the affiliate. Depending on the program, the contribution of the affiliate to the sales of the seller will be measured differently.

Pay per sale

This is the traditional marketing framework of the affiliate. Under this scheme, the retailer shall pay the affiliate a portion of the selling price of the commodity after the purchase of the product by the customer as a result of the marketing campaign of the affiliate.

 In other words, the affiliate must actually get the investor to invest in the product before it is compensated.

Pay Per lead

A more complex system, pay per lead affiliate programs, compensates the affiliate on the basis of lead conversion.

The affiliate must persuade the consumer to visit the merchant ‘s website and complete the requested action — whether it is filling out a contact form, signing up for a product trial, subscribing to a newsletter, or downloading software or files.

Pay per click

The aim of this program is to encourage affiliates to redirect consumers from their marketing platform to the merchant’s website. 

This means that the affiliate must engage the consumer to the extent that they move from the affiliate site to the merchant site. The affiliate is paid on the basis of an increase in web traffic.

Why Be An Affiliate Marketer?

What are the reasons for becoming an affiliate marketer?

Passive revenue

While any “regular” job requires you to be at work to make money, affiliate marketing gives you the ability to make money while you’re asleep. By investing an initial amount of time in a campaign, you will see a continuous return on that time as consumers purchase it over the next few days and weeks.

 You will receive money for your work long after you’ve finished it. Even if you’re not in front of your computer, your marketing skills will give you a steady revenue flow.

No customer support at all

Individual sellers and companies offering products or services must deal with their consumers and ensure that they are satisfied with what they have purchased.

Thanks to the affiliate marketing structure, you will never have to be concerned with customer support or customer satisfaction. The whole job of the affiliate marketer is to link the seller to the consumer. 

After receiving your commission from the sale, the seller will deal with any consumer complaints.

Work at home

If you hate going to the office, affiliate marketing is the perfect solution. You will be able to launch campaigns and receive revenue from the products that sellers create while working from the comfort of your own home. This is a job that you can do without ever getting out of your pajamas.

It’s cost-effective

Most businesses require start-up fees as well as a cash flow to finance the products sold. However, affiliate marketing can be done at a low cost, which means that you can get started quickly and without much trouble. 

There are no affiliate program fees to worry about, and there is no need to create a product. The start of this line of work is relatively straightforward.

Flexible and convenient

Since you are essentially becoming a freelancer, you have the ultimate independence to set your own goals, redirect your path when you feel inclined, choose the products that interest you, and even determine your hours. 

This convenience means that you can diversify your portfolio if you like it or focus solely on simple and straightforward campaigns. You will also be free from company restrictions and regulations, as well as out-of-performing teams.

Performance-Based rewards for this

With other jobs, you could work 80 hours a week and still earn the same salary. Affiliate marketing is based solely on your performance. You ‘re going to get what you put in it. 

Honing your review skills and writing, engaging search engine campaigns, or social media campaigns will result in direct improvements to your revenue. You ‘re finally going to get paid for the outstanding work you ‘re doing!

Do not underestimate SEO ‘s power

There’s a lot of organic traffic you can get from search engines if you do SEO properly. The days when Search Engine Optimization was about cheating on Google are gone. 

It’s about making your website better for visitors today. People are looking for information online, of course. 

That’s why you should learn the basics of SEO; on-page, keyword research, and link building to be the source of information they first find. Who wouldn’t want to rank # 1 for terms like “best product” or “product review” in Google?

Common Affiliate Marketing Channel Types

Most affiliates share standard practices to ensure that their audience is engaged and receptive to the purchase of promoted products. However, not all affiliates advertise the products in the same way. There are several different marketing channels that they can leverage.

Influencer

An influencer is an individual who has the power to influence the purchasing decisions of a large segment of the population. This person is in a high position to benefit from the marketing of affiliates. 

They already boast an impressive follow-up, so it’s easy for them to direct consumers to their products through social media posts, blogs, and other interactions with their followers. The influencers then receive a share of the profits they helped to make.

Bloggers

With the ability to rank organically in search engine queries, bloggers excel in increasing sales conversions. The blogger samples the product or service and then publishes a thorough review that supports the brand in a convincing way, driving traffic back to the vendor ‘s site.

The blogger is awarded for his or her influence in spreading the word about the value of the product, helping to improve the sales of the seller. For example, my article on the tips of Affiliate marketing includes product reviews and affiliate links across the board.

Paid search of focused microsites

Developing and monetizing microsites can also generate a significant amount of sales. These sites are advertised on the partner site or the sponsored search engine listings. 

They are from the leading site of the organization. By offering more focused, relevant content to specific audiences, microsites lead to increased conversions due to their simple and straightforward call to action.

Email list

Despite its older origins, email marketing is still a viable source of affiliate marketing revenue. Some affiliates have email lists that they can use to promote the products of the seller. 

Others may leverage email newsletters that include hyperlinks to products commissioned after the consumer purchases the product.

Another method is for the affiliate to compile an email list over time. They use various campaigns to collect emails en masse, and then send out emails about the products they are promoting.

Large media websites 

These sites focus on building millions of audiences. These websites promote products to their large audiences through the use of banners and contextual affiliate links. 

This method offers higher exposure and improves conversion rates, resulting in a top-notch revenue for both the seller and the affiliate.

Tips To Help You Become An Effective Affiliate Marketer

Helpful Tips written in bulb

Build a Relationship with Customer

When you start your affiliate marketing career, you ‘re going to want to cultivate an audience with particular interests. It allows you to tailor your affiliate campaigns to that niche, increasing the likelihood you convert. 

By setting yourself up as an expert in one area instead of promoting a wide range of products, you will be able to market the most likely people to buy the product.

Make it a personal

There is no shortage of products that you will be able to promote. You will have the ability to choose products that you believe in, so make sure your campaign focuses on the precious commodities that consumers will enjoy.

You will achieve an impressive conversion rate while at the same time, establishing the reliability of your brand.

You ‘re also going to want to get outstanding email outreach to work with other bloggers and influencers. Use a tool like ContactOut or Voila Norbert to gather people’s contact information and send personalized emails to pick up guest blogging and affiliate opportunities.

Start the review of products and services

Focus on reviewing products and services that are part of your niche. Then, take advantage of your relationship with your audience and your position as an expert. Tell your readers why they would benefit from buying the product or service you are promoting. 

Almost anything sold online can be reviewed if there is an affiliate program – you can review physical products, digital software, or even online booking services, such as ride-sharing or travel resort bookings. It is particularly useful to compare this product to others in the same category. 

Most importantly, make sure that you generate detailed, articulate content to improve conversions.

Use several sources

Instead of just focusing on an email campaign, spend time making money on a blog, reaching out to your social media audiences, and even looking at cross-channel promotions.

Test a variety of marketing strategies to see which one of your audiences responds the most. Use this technique frequently.

For more information, check out this article on how to track Blog traffic in Google Analytics

Choose your campaigns with care

No matter how excellent your digital marketing skills are, you’re going to make less money on a wrong product than you do on a valuable one. Take the time to study the demand for a product before it is promoted. 

Before teaming up, make sure you research the vendor with care. Your time is worth a lot, and you want to be sure that you spend it on a profitable product and a seller you can trust.

Stay up to date with trends

There is serious competition in the marketing sphere of affiliates. You ‘re going to want to make sure you stay on top of any new trends to remain competitive. Also, you are likely to benefit from at least a few of the new marketing techniques that are continually being developed. 

Be sure to keep up-to-date on all these new strategies to ensure that your conversion rates, and therefore your revenue, are as high as possible.

Top Affiliate Marketing Trends of 2020?

Data Trend seeing by person

Improved affiliate reporting and attribution

Many affiliate programs run with the last-click assignment, where the affiliate receiving the last click before the sale receives 100% of the conversion credit. This is going to change.

With affiliate platforms providing new attribution and reporting features, you can see a full-funnel, cross-channel view of how individual marketing tactics work together.

For example, you could see that the paid social campaign created the first click, Affiliate X clicked 2, and Affiliate Y clicked the last click. 

With this full picture, you can structure your affiliate commissions so that Affiliate X gets a percentage of the sale credit even though they didn’t get the last click.

Influencer niches are being over-targeted

Over the past, large affiliates have been the mainstay, as catch-all coupons and media platforms have provided access to hundreds or thousands of advertisers. 

It is no longer so much the case. With customers using long-tail keywords and searching for unique goods and services, influencers can exploit their hyper-focused niche for effective affiliate marketing. Influencers can not send massive amounts of traffic to advertisers, but the audience they send is legitimate, focused, and has higher conversion rates.

GDPR is changing how personal data is collected

The General Data Protection Regulation ( GDPR), which entered into force on 25 May 2018, is a set of regulations governing personal data across the EU. 

It forces some affiliates to collect user data by opt-in consent (updated privacy policy and cookie notifications), even though they are not located in the European Union. 

The new legislation will also advise you to obey the FTC guidelines and to make it clear that you are earning partner fees from your recommendations.

Affiliate marketers are getting smarter

Merchants receiving a large percentage of their revenue from the affiliate channel may become dependent on their affiliate partners. 

It may lead affiliate marketers to leverage their important status to receive higher commissions and better deals with their advertisers. 

Whether it’s CPA, CPL, or CPC commission structures, there are many high-paying affiliate programs and affiliate marketers in the driver’s seat.

Affiliate Marketing Strategies You Should Employ in 2020

Recommend products that you are incredibly familiar with

Building trust with your audience is paramount in affiliate marketing, and the quickest way to lose faith is to recommend products that you haven’t used before or that aren’t fit for your audience. 

Make sure you never tell anyone to buy a product directly, you ‘re just recommending the product. The more helpful you are, and the more quality recommendations you make, the more likely your web visitors will be to come back for your expertise.

Promote the products of many different traders

Don’t put all your eggs in a basket. If you’re only promoting one of the merchant ‘s products, you ‘re stuck with their commissions, landing pages, and ultimately their conversion rates. It is essential to work with many different traders in your niche and to promote a wide range of products.

This affiliate marketing strategy will diversify the number of commissions you make and create a steady stream of revenue when you build an affiliate website. Examples of affiliate traders include brands such as BigCommerce, Bluehost, and SimplyBook.me.

Test and optimize your conversion rates continuously

Let’s say you’ve got a promotions page where you’re promoting a product through affiliate links. If you are currently receiving 5,000 visits per month at a 2% conversion rate, you have 100 referrals.

You can either focus on getting 5,000 more visitors or simply increase the conversion rate to 4 percent to reach 200 referrals.

Which sounds more comfortable than that? Instead of spending months building Domain Authority with blogging and guest posts to get more organic traffic, you just need to increase the conversion rate by 2%. 

It may include landing page optimization, testing your call-to-action, and implementing a conversion rate optimization strategy. By testing and optimizing your site, you’ll get much better results with less effort.

Focus on the traffic sources of your affiliates

It’s important to know where your traffic comes from and the demographics of your audience. It will allow you to customize your message to make the most of your affiliate product recommendations. 

You’re not just supposed to focus on the vertical you ‘re in, but on the traffic sources and audiences that visit your site. Traffic sources may include, but are not limited to, organic, paid, social media, referral, display, email, or direct traffic.

You can view traffic source data in Google Analytics to see things like page time, bounce rate, geolocation, age, gender, time of day, devices (mobile vs. desktop), and more so that you can focus your effort on the highest conversion rate. 

This data analysis is crucial for making informed decisions, increasing your conversion rates, and making more affiliate sales.

Executive Summary

Affiliate marketing is the ideal solution for those seeking to control their income by focusing on performance-based revenue options. 

A motivated affiliate marketer will obtain a passive income from the comfort of his home without worrying about producing his product or service.

Although the success of a job depends on your affiliate’s marketing skills, it can prove to be an effective way to meet your income goals as either a primary career or a profitable second job.

Mountainise Inc. is here to help you in these challenging times. We are a creative digital marketing agency that integrates the latest AI-based marketing technologies to deliver the most effective results from all facets of your marketing strategy.

We’ve mentioned just a few of the approaches that can help, but if you have any further questions or need assistance, feel free to contact us!