Affiliate marketing is earning a commission by promoting other companies or peoples products. You find a product you like, promote it to others and earn a piece of the profit for each sale that you make.
Affiliate marketing overlaps with other Internet marketing methods to certain extent, because affiliates use regular advertising methods. Those methods include organic search engine optimization (SEO), paid search engine marketing (PPC – Pay Per Click), e-mail marketing, content marketing and in some sense display advertising. On the other hand, affiliates sometimes use less orthodox techniques, such as publishing reviews of products or services offered by a partner.
there is difference between Affiliate marketing and referral marketing, as both forms of marketing use third parties to drive sales to the retailer. However, both are distinct forms of marketing and the main difference between them is that affiliate marketing relies purely on financial motivations to drive sales while referral marketing relies on trust and personal relationships to drive sales.
Whether you’re the brand manager at a Fortune 100 brand or the marketing director/everything else at a startup, setting up a solid affiliate program can open a revenue avenue without much of the hassle usually associated with setting up new marketing initiatives.
Affiliate Marketing systems are quick and easy to manage
An affiliate marketing program is a lot of work, and in most situations there’s a lot of competition so you’re not going to be bringing in money immediately. Business owners and entrepreneurs suppose that all you need do is setup a site and choose an affiliate to associate with and then just let it run its course.
The affiliate marketing business relies on fostering relationships. You foster these relationships by:
- Bringing the right partners into your program
- Seeking out better and more efficient partnerships
- Updating your content regularly to keep things new and fresh.
An affiliate program is only going to help bring traffic to your website or business; you are in charge of turning that traffic into Conversion.
But, when it comes down to the actual marketing, there are 2 sides of an affiliate equation: the product creator and seller and the marketer.
there are basically two sides of the affiliate marketing equation that you can choose from.
You can become a merchant and have others promote your product, in exchange for giving them a commission from the sales that they make.
Or, you can become an affiliate for one or several products that you’d like to promote and market those to consumers, in order to make money.
While most people start by taking the affiliate route and it definitely is the easier path to take, building enough traffic to make a meaningful income just from affiliate sales isn’t quick or easy.
Also, once your product is created and released, you still need to find affiliates to promote your product.
Therefore, affiliate marketing can be seen as the process of spreading product creation and product marketing across different parties, where each party receives a share of the revenue, according to their contribution.
It’s not just the promotion or just the product creation.
You can be both, the creator or the marketer and still profit from the underlying idea of sharing revenue.
The Merchant: Sometimes also known as the creator, the seller, the brand, the retailer or the vendor. This is the party that creates the product.
From solo entrepreneurs to startups to massive Fortune 500 companies, anyone could be the merchant behind an affiliate marketing system. They don’t even have to be actively involved, they just have to have a product to sell.
The Affiliate: This party is sometimes also known as the publisher. Affiliates can also range from single individuals to entire companies.
It’s where the marketing happens. An affiliate promotes one or multiple products and tries to attract and convince potential customers of the value of the merchant’s product, so that they actually end up buying it.
The Consumer: The customer or consumer makes the affiliate system go round. Without sales, there aren’t any commissions to hand out and no revenue to be shared.
The affiliate will try to market to the consumer on whatever channel they see fit, whether that’s a social network, digital billboards or through content marketing on a blog.
Whether the consumer knows that they are part of an affiliate marketing system or not is mostly up to the affiliate.
Some choose to let their consumers know and more and more affiliates tend to be transparent about their marketing being incentivized financially, but others don’t.
They let the tracking system work in the background, where the customer can follow the purchase process just as usual and the affiliate still ends up being paid a commission.
The Network: Only some definitions consider this part of the affiliate marketing equation. But, in many cases, a network works as an intermediary between affiliate and merchant.
While you could technically promote an online course someone has created and just arrange a direct revenue share with them, letting a network handle the payment and product delivery puts a more serious note on your affiliate marketing.
Sometimes, affiliates have to go through a network to even be able to promote the product. For example, this happens if the merchant only released their product on the network.
The network then also serves as a database of lots of products, out of which the affiliate can choose which to promote.