What Is Affiliate Marketing? Definition And Examples

If you’re looking to become an internet entrepreneur, it’s important that you understand the concept of affiliate marketing and how it works. In this blog, we will uncover affiliate marketing definition and examples, and answer the question – what is affiliate marketing?

An illustration depicting affiliate marketing

Affiliate marketing definition

Affiliate marketing is the practice of earning commissions by promoting a product or service online. It is also known as referral marketing. An affiliate marketer promotes a product, service, website, or brand using their own website or blog or an affiliate-generated website.

How does affiliate marketing work?

Affiliate marketing works in four simple steps.

1. The affiliate promotes the merchant: The affiliate partner advertises the brand’s products or services on his website. This can also be done through an email newsletter or by sharing direct links to generate sales via social media.

2. The customer clicks on the ad: The customer clicks your referral link and visits the website or page you are promoting. If you select an affiliate program that pays based on web traffic, you do not need your followers or friends to complete a purchase in order for the affiliate program to remain beneficial to you.

3. The customer makes a purchase: The customer completes the purchase process by making the payment to the merchant.

4. The affiliate commission is paid out: The affiliate commission is automatically released by the affiliate network/platform for driving traffic and sales to the website.

If you only qualify to receive earnings and revenue for each successful sign-up, sale, or subscription you generate, you may need to craft a marketing strategy that is most likely to work with the type of followers you have online and with various social media platforms.

Why become an affiliate marketer

Becoming an affiliate marketer may not be right for everyone, but it does provide individuals with an opportunity to generate an income right from the comfort of their own home. The key benefits of becoming an affiliate marketer are:

Unlimited opportunities: With an affiliate program, you can dive into the world of online marketing, sales, and social media even if you have never earned a dollar using the internet. Affiliate-based marketing programs are optimal for those who have an interest in earning money online but are unsure of where to start on their own.

Generate a passive income: A major draw of affiliate-based marketing programs is the ability for just about anyone to create a secondary source of income with enough research and persistence. Because affiliate programs are typically free to join and do not require capital or investments that traditional online businesses require, individuals who are looking for ways to get ahead or add to their current income stream can benefit immediately.

No entry barrier/easy to start: Joining a marketing program as an affiliate is also simple and does not require an extensive application, background check, or waiting period. Once you have applied for the position as an online marketer, you will often have the ability to get started with your promotions and affiliate sales right away.

Flexibility: Affiliate marketing lets you work on your own terms, at your pace. You’re free to decide your working schedule and work in an environment of your own choosing. In addition, you don’t need to worry about after-sales customer concerns and can pass on the concerns directly to the merchant’s teams.

Affiliate marketing best practices

Affiliate marketing is a vast field, and there’s no one-size-fits-all formula that works for every affiliate marketer. However, whatever your niche, there are a few strategies to keep in mind to maximize your chances of success. 

Build trust and authority 

Customer trust is directly linked to your credibility, and your credibility is an outcome of your domain expertise. To succeed as an affiliate marketer, make sure you build yourself as an expert in your field. This will position you as an authority in your domain and help you drive more sales and revenue. 

Choose the right product 

Make sure to study the demand for a product before promoting it. And don’t get fixated on profitability alone. Your goal should be to endorse a product that the seller believes in. Remember that no matter how good your marketing skills, you will not achieve long-term success with a substandard product. 

Provide proof of benefits 

Demonstrating the benefits of the products you promote is one of the most effective ways to drive affiliate sales. Show people what you’ve gained as a result of using the product you endorse. This will help your audience gauge the value of the product before they purchase it. 

Be transparent 

Affiliate disclosures are not only mandatory, they are also a great way to build trust and transparency with your audience. Include an affiliate disclosure on your website and let your audience know that you are making profits from affiliate commissions. This can increase clicks on your affiliate links and also show that you’re an honest site owner. 

Create great content 

Most beginners make the mistake of publishing random content and inserting affiliate links within the article. This strategy is ineffective. To boost your affiliate revenue, you need to publish high-quality content and ensure your content reaches the target audience. Make sure your content is well researched, targeted, and guided by an overarching content marketing strategy.

Branding

There are thousands of affiliate marketers vying for audience attention. The ones that succeed most often have an easily recognizable brand. Establish your unique brand identity, make it recognizable to your audience, and brand your web properties to reflect your brand wherever possible. 

Make data your friend 

A data-driven approach to affiliate marketing is the best strategy for success. Use audience data to identify affiliate programs that are profitable in your niche, suited to your preferred methods of marketing, and cater to you your online audience.

Trend Tracking

Use Google Trends to keep a watch of current trends and learn what audiences are currently searching for. Use Google Analytics and Google Adwords Track to understand traffic trends and choose an affiliate marketing program accordingly.

Be patient 

Affiliate marketing is a long-term game. No matter how quickly you think you can make money online, realize that it will take time. You can launch your website today, but to make an impact, you’re going to need to build relationships with your audience. Learn to be patient. With time, your website will get traffic, drive conversions, and generate affiliate commissions. 

Top 10 affiliate marketing networks

While there are thousands of affiliate programs available to choose from, it is important to learn about the top-performing affiliate marketing networks before choosing an affiliate pay and revenue model that is right for you. The top-performing and most well-known affiliate marketing networks as of 2020 include:

  1. Amazon associates
  2. Shopify affiliate program
  3. ShareASale
  4. Clickbank
  5. Bluehost
  6. NerdWallet
  7. AliExpress
  8. Rakuten marketing
  9. Studio press affiliate program
  10. CJ Affiliate

Amazon associates 

Amazon’s affiliate program offers individuals the ability to promote and sell products while gaining customer trust using Amazon’s vast marketplace. Amazon has become the top-selling retail conglomerate globally, especially with its infamous 2-day Prime shipping options.

Shopify

Shopify is one of the most popular ecommerce platforms n the world and has a great affiliate program. Affiliate commissions are great – you earn the first two months of your referral’s subscription fee, up to $598 on standard plans. Plus you earn 100% bounty on the enterprise plan which pays $2,000. Very few other eCommerce platforms come close to Shopify’s payout.

ShareASale 

ShareASale has a plentiful marketplace, which provides a wide product selection with a huge library of products to choose from. It provides flexible payout options both digital and standard. Since digital payment options are quite rare among the affiliate websites, this earns major points for them! 

Clickbank

Clickbank is a diverse marketplace with merchants that you can pick-and-choose to promote products based on your audience’s interests. They have an easy-to-navigate product database, which makes finding something to promote really easy. 

Bluehost 

Bluehost is one of the most highly recommended WordPress hosts. It is known for its affordable prices, flexible packages, and great customer support team. The Bluehost affiliate program has an easy, straightforward signup and referral process. 

NerdWallet 

NerdWallet is a great example of affiliate-based marketing done right. The website itself is hyper-focused on delivering a great user experience, even for first-time visitors who are unsure of what to expect. The website itself reviews and recommends financial products and services, but does so in a branded manner that is sure to impress even the most seasoned affiliate marketers.

AliExpress

The rise of websites such as Alibaba and AliExpress has prompted the development and launch of new affiliate programs. Becoming an affiliate marketer for AliExpress is a way to earn up to a 50% commission rate for each product you are able to successfully refer users to and sell online.

Rakuten marketing 

Rakuten is a leading online store that offers a huge collection of products from high-end electronic gadgets to pet supplies. It offers a great affiliate program that promises good commission rates. Rakuten is a trusted name and you can confidently promote the products they sell.

Studio press

The studio press affiliate program offers generous payouts, which start at a minimum of $75 per site sale. For theme sales, you can easily make 35%. The biggest benefit of this program is that Studio press offers great products (WordPress hosting and themes) that need no selling.

CJ Affiliate

CJ Affiliate has over 300 brands, including many of the top global brands. Also, the program boasts of a 43% year-on-year growth in commissions. Signing up for the CJ affiliate program is not east; you need a good amount of traffic to get accepted, and there are strict conditions for staying on as a publisher. 

How to start affiliate marketing 

By now, you’re probably thinking about how you can get started with your affiliate marketing venture, and launch an affiliate site of your own. Just follow the steps below to get started on your path to becoming a successful affiliate.

Choose your niche 

According to Statista, there will be more than 30 million bloggers in the U.S. alone by the end of 2020. To stand out in this highly competitive world of blogging, your best chance is to select the right niche. Make sure you choose a topic that focuses on a specific category. For example, the topic of “fitness” can be highly diverse. Rather than focusing on such a broad topic, you should find something more specific, like “morning workout routines”. Keeping your topics focused on your niche can help you build a more focused audience and yield better results.

Join an affiliate program

Choose the right affiliate program for your product and niche. As you go about selecting an affiliate program, ask yourself – Is the product a high-volume item? Does the product have a wide appeal across age groups and demographies? Based on your answers to these questions, you can select an affiliate program. Note that sometimes low volume products can deliver high profits and other times, high volume products can deliver low profits. So choose carefully.

Create content 

There is no substitute for high-quality content. If your competitors are creating better content than you, they will most certainly rank above you and get a larger audience. So make sure your content addresses the audience’s search intent, answers their questions, and compels them to try the item you are promoting. Be authentic and try to build a personal connection with your audience. If your content is good, success will come to you, sooner or later.

Drive traffic to your website 

The next step is to get a wide audience to read your content, so you can get clickthroughs and generate affiliate commissions. You can choose to drive traffic to your website through paid traffic or SEO. Paid traffic may yield short term results and drive traffic to your website. You can do this by investing in PPC campaigns. However, in the long run, SEO is more effective.

Convert your traffic 

At the end of the day, affiliate marketing is all about conversions. The higher your conversion rate, the more money you make. There are different layers of conversion. The first layer of conversion is the click to the product page. Since you are completely in control of this action, you should aim to maximize your chances of this initial clickthrough. The second conversion is the click that leads to the product purchase. This transaction happens on the merchant’s website and you have no control over it.

How are affiliate marketers paid? 

If you think an affiliate marketer is paid only when the product is sold, you are mistaken. There are multiple payout models in affiliate marketing, based on the transaction that needs to be completed. The affiliate may get paid in one of the following ways:

Pay per lead

A pay per lead affiliate program pays the affiliate based on the conversion of leads. In this payout structure, the affiliate must convince the consumer to visit the merchant’s website and complete the desired action — whether it’s signing up for a product trial, filling out a contact form, or downloading software or files.

Pay per sale 

Pay per sale is the standard affiliate marketing structure. In this program, the merchant pays the affiliate a commission, which is a percentage of the sale price of the product that has been purchased by the consumer.

Pay per click 

This program incentivizes the affiliate to redirect consumers from their marketing platform to the merchant’s website. This means the affiliate must engage the consumer to the extent that they will move from the affiliate’s site to the merchant’s site. The affiliate is paid based on the increase in web traffic.

Frequently Asked Questions (FAQs)

Once you understand what is affiliate marketing, you may begin to want to know more about the process of choosing an affiliate program, becoming an affiliate marketer, and generating sales. Some of the most common questions about affiliate-based programs are listed below.

1. What is affiliate marketing?


Affiliate marketing is the process of making money online through referral-based commissions. Affiliate marketers get paid for promoting a product or service to their audience. 


2. Who are the key players in the affiliate marketing model?


Affiliate marketing involves four players – the merchant (i.e. the advertiser/retailer), the network (the provider of the affiliate marketing opportunity) the publisher (also known as the affiliate), and the customer.


3. How do you become an affiliate marketer?


According to Oberlo, there are five steps to becoming an affiliate marketer. These are:
Identify your niche: decide which affiliate products or services you want to sell
Select an affiliate program: choose the affiliate program that fits your needs
Build your platform: create a website where you will advertise the product
Create and publish the ad: create compelling content that drives action
Set up your ad account: sign up and configure your Google ads account


4. Are affiliate marketing programs free?


Most affiliate programs are 100% free to join and require minimal work from an affiliate to start generating revenue.


5. Do all affiliate programs operate in the same manner?


No. Affiliate programs may vary based on the type of product, service, or brand that is being promoted as well as by the amount an individual receives for referring the said product or service.


6. How long does it take to make money as an affiliate marketer?


Some affiliate marketers may generate a sale within their first day of registering as an affiliate for a new program, while others may require more time. The amount of revenue you generate is solely dependent on your ability to attract buyers and appeal to your current online following.


7. Can I earn a full-time income as an affiliate marketer? 


In some cases, yes. With the right affiliate-based marketing programs, sales funnels, and engaged audience, you can generate as much revenue as you desire.

Conclusion

A good understanding of affiliate-based programs is highly advisable for anyone in the internet marketing business. Once you understand how affiliate programs work, and how to increase your ROI, choosing the right affiliate program will become profitable and rewarding.

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