Affiliate Marketing And How It Can Help You Build Your Brand

Affiliate Marketing Campaign

Affiliate marketing according to the Oxford dictionary is a marketing arrangement by which an online retailer pays a commission to an external website for traffic or sales generated from its referrals.

Affiliate marketing can also be looked upon as an advertising model in which a company pays others, for Instance, bloggers, to advertise their products and services and generate sales. Affiliates place ads or market the products or services on their website, app, or blog.

It can also be looked upon as an advertising model in which a company compensates third-party publishers to generate traffic or leads to the company’s products and services.

The third-party publishers are affiliates, and the commission fee incentivizes them to find ways to promote the company or their products.

It is essentially a pay-for-performance marketing program where the act of selling is outsourced across a vast network.

According to Business Insider, 15% of e-commerce revenue can be attributed to affiliate marketing.

It is also a low-cost, effective way of advertising products and services, increasing brand awareness, and expanding a consumer base.

Business spending on affiliate marketing according to Statista is projected to hit $8.2 billion in the U.S by 2022.

Affiliate marketing is a low-cost, low-risk method of starting a business.

Ordinarily starting a business will require incurring some upfront costs and overheads for products, employees, equipment, rent, and so on irrespective of the rate of sales which makes it risky and expensive.

However, with affiliate marketing, all you need is a website such that even if the business does not work out, all you will have wasted is time and a little bit of money.

Affiliate marketing is also very easy to scale because, unlike other businesses where a salesperson can only sell products from a single company, as an affiliate marketer you can promote and sell products from several companies and still earn a commission.

How Affiliate Marketing works 

An e-commerce merchant interested in reaching a wider base of internet users and shoppers hires or engages an affiliate who is usually the owner of multiple websites or email marketing lists or a large audience with a very wide reach.

The hired affiliate then communicates and promotes the products offered on the e-commerce platform to their network using banner ads, text ads, or links on its websites or by sending emails to its clientele.

Visitors to the affiliate marketer’s site who click the merchant’s ads or links are redirected to their e-commerce site. If and when they purchase the product or service, the e-commerce merchant credits the affiliate’s account with the agreed-upon commission, which could be between 5% to 10% of the sales price.

The merchant gives each affiliate a unique link associated with them such that they can track sales that they are responsible for. When someone clicks that link, a small file called a cookie gets stored on their device such that it helps the merchant attribute the sales back to the right person and holds an expiration date, such that the affiliate can get paid even if the buyer delays their purchase.

The goal of this model is to increase sales and create a win-win solution for both merchant and affiliate while acknowledging that the affiliate marketer has links and connections to people the e-commerce merchant might not be able to reach and for which he is willing to pay a commission to the affiliate marketer by facilitating contact or connection with these potential customers on his or her behalf.

There are three main types of affiliate marketing: unattached affiliate marketing, related affiliate marketing, and involved affiliate marketing.

Unattached Affiliate Marketing: This is an advertising model in which the affiliate has no connection to the product or service they are promoting.

They have no known related skills or expertise and do not serve as an authority on or make claims about its use. This is the most uninvolved form of affiliate marketing.

The lack of attachment to the potential customer and product absolves the affiliate from the duty to recommend or advise.

Related Affiliate Marketing: As the name suggests, related affiliate marketing involves the promotion of products or services by an affiliate with some type of relationship to the offering.

Generally, the connection is between the affiliate’s niche and the product or service.

The affiliate has enough influence and expertise to generate traffic, and their level of authority makes them a trusted source.

The affiliate, however, makes no claims about the use of the product or service.

Involved Affiliate Marketing: This type of marketing establishes a deeper connection between the affiliate and the product or service they’re promoting.

They have used or used the product and are confident that their positive experiences can be shared by others.

Their experiences are advertisements, and they serve as trusted sources of information. On the other hand, because they’re providing recommendations, their reputation may be compromised by any problems arising from the offering.