What Is Affiliate Marketing Really About?

Author: Stathis Carapanos

Hi! I'm Stathis and I became an entrepreneur when I decided to escape the stressful corporate rat race. Instead of a risky and expensive franchise, I chose to invest in my own personal development which led me to now own multiple businesses while enjoying financial, time and geographical freedom.

Have you ever noticed or heard about people that work from coffee shops around the world using only their laptops or simply while sitting on their couch at home? Well, some of them are affiliate marketers. You have probably read many posts, seen many videos and bought many products on the internet through an affiliate marketing process.

Defining Affiliate Marketing

The concept of affiliate marketing applied to mainstream e-commerce was conceived and put into practice for the first time in 1994 by William J. Tobin, the founder of PC Flowers & Gifts.

Let’s first see what affiliate marketing technically is.

In its simplest definition, affiliate marketing is a scheme of profit sharing. It involves a company paying a commission to a person (the affiliate marketer) for promoting a physical product or digital service to a third person who then becomes a new customer of that company.

The three key players in an affiliate marketing program are:

The merchant/seller (the person or company selling a product)
The affiliate marketer (the person promoting the product)
The customer (the person buying the product based on the affiliate’s recommendation)

Everyone is gaining something in this process! The customer is happy because they have discovered and probably bought a product or service they didn’t know about before, which is covering a need or solving a problem they have. The affiliate is happy because they have earned a commission. And the merchant is happy because they have increased sales without investing any money that is not directly connected to tangible results.

The affiliate is not a cold-caller trying to convince someone to buy stuff. This is the old way of marketing things and is pretty much antiquated in the current digital era. Some companies keep cold-calling people which I honestly find terribly annoying. There are many automated and genuine ways to promote products and services that are really useful to others. I am right about to explain what this means in detail.

How Does It Work?

The affiliate introduces the merchant website (through an ad or a link)
The Customer clicks on the link
The customer is sent to the merchant site through a tracking link
The customer makes a purchase on the merchant website
The affiliate network or program records the purchase and details of the transaction
The transaction is credited to the affiliate (via email or another reporting system)
The affiliate gets paid a commission on the sale, lead or click

Affiliates get paid most often based on sales that they have generated for the seller but sometimes also based on leads or clicks even if the customer doesn’t buy the product (explained in detail later). They genuinely persuade consumers to click on a link, and then once they do so, the affiliate receives a payment for any sales, leads or simply clicks on the link itself.

This system works because affiliates use special types of links called “affiliate links”. An affiliate link is a link to the seller’s page that contains a special code that allows the seller to see who referred the consumer to their site. This means that the seller knows that the sale (or lead or click) was generated by that affiliate and will pay them accordingly.

What Are The Possible Affiliate Marketing Arrangements?

If you’re thinking about becoming an affiliate, you need to be aware of the fact that there are a few different ways that affiliate marketers can receive payment from their partners, and it is important to understand the difference.

PAY PER SALE

Under this arrangement, every time an affiliate promotes the seller’s product to the consumer and the consumer actually buys the product, the affiliate earns a commission. If the consumer looks at the product and thinks about it but doesn’t actually buy it, the affiliate earns nothing. This means that the seller is never out of pocket because they only pay the affiliate a percentage of actual, guaranteed sales.

PAY PER LEAD

There are also alternative models, where the consumer doesn’t necessarily have to buy the product for the affiliate to receive a commission. One of these models is a “pay per lead” arrangement. This means that the seller pays the affiliate every time they generate a lead for the seller. This can be a more complex set-up, but a lead is generally defined as the consumer completing some pre-determined action that the seller wants them to do. This could be getting a quote, signing up for a mailing list or a trial, or filling out a contact form. This is more of an uncertain investment on the seller’s behalf, but most often the investment pays off.

PAY PER CLICK

“Pay per click” is another arrangement under which the seller rewards the affiliate for simply getting consumers to visit their website page. In this situation, the affiliate receives a payment every time a consumer clicks on the seller’s link. Like the “pay per lead” model, the seller is paying for the potential sales they may get, in this case, from the increase in web traffic.

Types Of Affiliate Marketing Programs

Before you get started as an affiliate marketer, you must get familiar with the terminology of the main affiliate marketing programs:

Regular - paid per sale - percentage or fixed amount
High Ticket - paid a large 1k+ commission per sale
Subscriptions - paid on monthly/quarterly/yearly subscriptions
Cost per Action - paid for a specific action, i.e. lead subscribed or survey completed
(includes both “pay per lead” and “pay per click” arrangements)

How Do Affiliate Marketers Promote Programs?

Think about the affiliate marketer as a customer telling her/his audience about a company, product, or service that she/he has actually tried or made extensive research about. If this covers the needs of the customer and generates a lead or a sale, the company then awards the affiliate marketer by providing a commission.

As an affiliate marketer, there is a range of tactics and techniques you can use to reach your audience and encourage them to click on your affiliate links. By developing your skills and mastering one or more of these techniques, you will be able to get more sales, leads or clicks for your partners, which means greater earnings for you.

BLOGGING

Bloggers make up a large proportion of affiliate marketers today, and for good reason. Blogging and affiliate marketing are made for each other. Bloggers have their own dedicated audience, and they can also organically rank in search engines. If they do one or both of these things well, bloggers can reach a large number of potential customers to drive sales for their partners.

Often bloggers already have an established blog and an audience before they decide to get involved in affiliate marketing. In some cases, they may have had an established blog for years, building up their audience and eventually adding affiliate marketing to their wheelhouse. In other cases, affiliate marketers may set up a website or blog specifically with this purpose in mind.

There are a variety of ways a blogger can promote their partners’ products to their users. They may write a blog post on a related subject, and then mention the product, directing users to it with an affiliate link. Another approach is to write a blog post specifically about the product or a set of products, such as a product review. Some of the most successful affiliate marketing sites purely review and promote affiliated products.

SOCIAL MEDIA

Social media is another very effective affiliate marketing tactic. This tactic works well because we are living in the age of the influencer. Influencers have reached great prominence in recent years, and the reason for this is rooted in basic human psychology. People are overwhelmingly more likely to buy a product based on a recommendation of a friend or a family member than in response to brand marketing or advertising.

This is because people trust their friends and family, and therefore they trust their recommendations. Influencers build up a relationship with their followers through their Instagram, Facebook or YouTube posts that invited their followers into the influencer’s life. This establishes a level of trust. When an influencer recommends a product, it’s almost like a friend’s recommendation.

Similar to blogging, most influencers don’t start with affiliate marketing in mind. However, once they have an established group of followers, they are in the ideal position to promote products and earn affiliate dollars.

It should be noted that affiliate links do not usually work the same way on social media platforms as they do on websites. Often social media platforms disable or block affiliate links. Therefore, the best affiliate marketing tactic for social media is to create a landing page or post on your website, and then link to that page on your social media posts. After directing users to your site, they will click on the affiliate link from there.

EMAIL MARKETING

Email marketing is another great tool for affiliate marketers and it’s an excellent way to drive more affiliate sales in conjunction with other tactics, such as blogging, digital marketing or social media marketing.

The first part of a successful email marketing strategy is building a great email list. To market effectively by email, you need a healthy list of subscribers to market to! Start building your email list by having a signup button on your website as a call to action. Popup windows prompting website visitors to sign up to your email list also work very well. Exit-intent popups, which appear when the visitor is about to leave the site, are particularly effective.

From there, you can use your email list to send out information about products you think they will like, containing an affiliate link, of course. Because you have niched down your site and are targeting a specific audience, you will have a fairly good idea about which products will interest them.

LIVE WEBINARS

Webinars are another great affiliate marketing tactic. These are particularly effective because they represent a way to offer real, valuable content to your audience, which also happens to contain affiliate links.

Writing a blog post or product review can be highly engaging and may persuade your users to buy a certain product. However, a live webinar showcasing the product in some way is arguably many times more engaging and more persuasive. Live webinars are also a great way to strengthen your relationship with your audience by interacting on a personal level.

There are many ways to host a live webinar and stream your content live to your audience. Some of these methods are even free, such as using Google Hangouts. The most effective way to use live webinars for affiliate marketing is to promote a particular product.

Stream live to your audience, showing them the product and talking them through the features. Remember also that live webinars should be two-way: invite your audience to ask questions and then you can answer live. Be as personal as possible, sharing your own experiences with the product. And, of course, be sure to share an affiliate link!

PPC (PAY-PER-CLICK) ADVERTISING

Even though affiliate marketing can be very effective with low-cost marketing tactics, adding paid marketing to the mix can exponentially increase your affiliate earnings. PPC or pay-per-click advertising is a tactic to consider once you are already an established affiliate marketer, to take your efforts to the next level. PPC advertising is a type of online ad where you only pay for the ad based on the number of people that click on it.

PPC advertising is most useful in supporting other affiliate marketing tactics. For example, you can advertise online to grow your email list or to promote your webinar. PPC ads are a great way to reach more people and further your affiliate marketing efforts.

What Programs Shall I Promote?

The best and most authentic way to find products is to look at the products or services you already use and love. Take the time to examine the products you use daily. Which ones can’t you live without? Which are particularly useful, ingenious or simply enjoyable? If you love these products, chances are your audience will love them too.

This is the key: the products you promote must be highly relevant to your audience. Otherwise, affiliate marketing simply won’t work. In most cases this will happen naturally: you will write or post about topics that interest you. Therefore, your audience who likes your content will be interested in the same products that you are.

Don’t try to sell to everyone. Remember what experienced salesmen always say: “Selling to everyone means selling to no one”. Make sure you find your specific niche: focus on the topics that you are passionate or knowledgeable about and target the segment of your audience that wants to hear about those topics. Explain to them how the product you recommend will solve a specific problem and then search around for other products that are relevant to the same audience. You shall try to grow this audience that will trust you when recommending a product in your area of expertise.

How Do I Become An Affiliate Marketer For Those Products?

Once you’ve identified the products you want to promote, it’s time to make partnerships with the people who sell them. These partners will be the sellers in the important seller-affiliate-consumer relationship that makes up affiliate marketing.

Sometimes, if you have an established audience relevant to their customer base, these sellers will get in touch with you to see if you’d be interested in marketing their products as an affiliate. If not, you can also get in touch with them. Introduce who you are, tell them about the audience you have, and suggest that you could become an affiliate. If the product is relevant, they will likely see that it’s a natural fit and be interested in partnering with you.

You can also sign up for an affiliate marketing program. There are a number of these around, some of the most popular programs being:

The world’s largest affiliate marketing program is undoubtedly Amazon. It is also one of the easiest programs to join and get started. All you need to do is sign up to the Amazon Affiliate Program, and they will give you an affiliate link for any product on their site. With Amazon’s huge marketplace, you will probably be able to find many relevant products there. It then works like any affiliate marketing system, where you earn a commission from sales made through your affiliate links.

Create An Affliate Network For Your Own Product Or Service

Affiliate marketing is also a great way to drive more traffic to your own website and to boost sales of your own product in case you already have one or if you are thinking of developing your own product or service.

There is an army of affiliates out there ready to help you promote and sell your product. The best way to find affiliate marketers is typically to list your product for sale with a platform like Clickbank or with one of the many Affiliate networks like the ones we mentioned above. These networks and platforms already have many thousands of affiliates that are looking for new offers to promote.

You can also look for affiliate partners yourself by identifying those individuals who are best placed to sell your product. This means finding people who have an audience similar to your target audience. Look for influencers, bloggers and websites with a following that will be interested in your project. Then approach them to propose an affiliate marketing partnership.

By setting an affiliate marketing program you will be able to create and maintain a database of your affiliates, track their unique links and pay them the appropriate commissions for sales, leads or clicks they generate for you. You will have a hungry marketing team of affiliates working for you, driving your sales in ways you hadn’t thought possible.

In Conclusion

From the perspective of the merchant/seller, having online marketers that affiliate with your brand and products is an extremely efficient way to boost your brand awareness and sales in an international trade environment that is becoming more and more digital.

As an affiliate marketer, the possibilities you have online are simply infinite. You can create your own affiliate marketing business with no risk involved, turn your interests and passions into income and ultimately live the way you define ideal. In the 21^st century, whether you want to sell your products online the proper way or you want to be an affiliate marketer promoting already existing products, the only thing you need is the necessary digital skills and online marketing system that will allow you to build and run a recession-proof business that you love.