Affiliate marketing is the process of earning a commission by promoting other companies’ products. You find a product that you like, promote it to others, and get paid when sales are made, leads are confirmed, or any qualified action takes place.
Your marketing strategy will be crucial to your success.
Both affiliate and network marketing involve getting paid for recommending other companies’ products, but unlike network marketers, affiliates don’t have teams and only make money from their own efforts. Affiliates don’t have to purchase products to qualify and most affiliate programmes are free to join.
This blog post explores whether affiliate marketing is a viable option for people who want to supplement their income or start their own business. I am not an affiliate but have written this post to be able to help people who ask me about it.
THE MARKET IS GROWING
In the UK
Affiliate marketing spend in the UK grew 15.1% in 2017 from £482 million to £554 million, according to the Internet Advertising Bureau (IAB) and PwC’s Affiliate Marketing Study. This growth generated £8.9 billion in sales, a 9.2% year-on-year increase from £8.1 billion, demonstrating an estimated return of £16 per £1 spent. The study found that affiliate spend on smartphones grew 49% year-on-year, while sector-wise, retail held the largest share of revenue at 43%. Behind retail, other sectors seeing sizeable chunks of revenue share included Telecoms & Media (24%), Travel & Leisure (16%) and Finance (9%), while B2B (2%), Auto (1%) and Other (5%) accounted for the remainder.
In the USA
In the USA, a study published by Forrester and Rakuten projected a 60% growth for the affiliate industry from 2015 through 2020, with the industry spend on affiliate marketing expected to rise to $6.82 billion in 2020. The study also predicted total affiliate marketing spend to grow by a robust 10.1% annually through to 2020.
HOW DOES IT WORK?
Affiliate marketing spreads the responsibilities of product marketing and creation across four main parties, including:
The merchant: Whether a solo entrepreneur or large enterprise, the merchant is a vendor, seller, brand, product creator, or retailer with a product to market. The product can be a physical object or a service.
The affiliate: Also known as a publisher, the affiliate can be either an individual or a company that markets the merchant’s product to potential customers.
The customer: When the customer buys the product, the merchant and affiliate share the profits. Affiliates are required by law to include affiliate disclaimers on their websites.
The network: The network is a platform that allows you to join affiliate programmes from many merchants. Although using an affiliate network isn’t always required, it serves as the third party between you (the affiliate), and the affiliate programmes. The network contains offers for the affiliate to choose from and also takes care of payment processing, tracking technology and reporting solutions.
How it works (example of the pay per sale process)
You show an ad or link for the merchant on your website, blog or social network
Customer clicks the ad or link
Customer is sent to the merchant’s shop through tracking link
Customer makes a purchase in the shop
The affiliate network records the purchase and details of the transaction
The purchase is confirmed by the merchant as a valid sale
The transaction is credited to you
You get paid your commission
Customer receives item.
How you earn
As an affiliate, you work out with the merchant exactly how you will determine your earnings, for example, you may be paid per sale, per click, per lead, or per call. You won’t need to invest in the success of the product, the upkeep or production of goods or physical premises, but you will need to maintain your website or social media pages and pay for a domain name and web hosting.
THE PROS AND CONS OF AFFILIATE MARKETING
Pros
Minimal startup costs, as most programmes are free to join.
No need to create a product or service.
No need to stock or ship products.
Little to no experience required. You just need to be familiar with a particular subject (ie your niche) and be able to find an affiliate programme for it.
There is the potential to earn a passive income, provided you continue to maintain your website or blog.
You can work anytime and from anywhere, provided you have Internet access.
You get to choose which brands you work with and what products you promote. You can sell products you’ve used, products you believe in, or products that interest you.
Affiliate links can be added on to your current home business to create an additional income stream.
Cons
It takes time to generate the amount of traffic needed to result in income.
It’s difficult to predict how much money you will make.
You must choose quality sellers to work with because a bad affiliate referral can ruin your credibility.
You have no control over the seller's product, service, or how it does business.
Some companies have been known not to pay, so you must do your research carefully before choosing an affiliate programme.
Affiliate marketing can be highly competitive as there may be many capable affiliate marketers vying for business in your niche.
You aren’t given information about customers because they belong to the seller. This makes it difficult to target them for re-sales.
CAN YOU MAKE MONEY?
Yes, you can.
According to a survey from Viglink, 9% of affiliate marketers generated more than $50,000 in affiliate income in 2016. The majority, 65%, said they were making between 5% and 20% of their annual revenue from affiliate programs. The survey also showed a link between timeframe and revenues. Among the publishers with the largest revenues, 60% had been using affiliate-marketing strategies for five years or more.
HOW TO BE SUCCESSFUL AT AFFILIATE MARKETING
What you need to do:
Research: research and choose your niche (see below) and the products you want to sell; identify competitors and what they do to succeed; learn about your audience; research and select an affiliate marketing programme.
Strategy: With the knowledge you have gained from your research, devise a strategy to enter and establish yourself in your niche, so that you can compete successfully.
Action: Create your online presence; set up your website; create content and sales copy that attracts visitors, entices them to click through and convert into a sale; bring traffic to your site.
You clearly need lots of skills, as well as persistence and patience! There are a vast number of websites and online resources that can help you learn everything you need to know in order to be successful. I have listed some of these below and to learn more, just click on the links:
CHOOSING A NICHE
You won’t be able to sell everything to everyone, so you will need to decide what you want to sell.
Extracted from Picking a Profitable Niche for Your Online Business : ”One of your very first steps to becoming a successful Internet entrepreneur with a profitable online business is to pick a niche. Essentially, a niche is the industry you will be in and the types of products you will sell; it’s what you specialize in”.
Extracted from Affiliate Marketing Within Your Niche Fact Or Fiction : “Very simply, unless your niche interest happens to be in products or subject areas that coincide with what people are ready to buy, it does not come with the most essential element of affiliate marketing success-built-in customers.”
Extracted from How to Find a Profitable Niche in Affiliate Marketing : “Less than 10% of affiliates drive more than 90% of the conversions. This means making a profit-booming living off of affiliate marketing can be a little tricky. Thankfully, you can find niches that will boost your revenue…Find and develop your affiliate niche to find real success in affiliate marketing.”
UNDERSTANDING YOUR AUDIENCE
Before you can successfully attract customers, you need to find out as much as you can about them.
Extracted from What is Affiliate Marketing in 2019: A Beginner's Guide : “When you become an affiliate marketer, you are hoping to establish yourself as a voice of authority in that specific industry or niche. In order to do so, you need to understand who your audience is. Who are you trying to sell these products to? What kinds of copy or advertisements do they respond to? Do they prefer email marketing over social media marketing, or vice versa? Market research is a part of any advertising strategy.”
Extracted from Top 10 Commandments of Affiliate Marketing 1. Know Your Audience : “The most successful way to use affiliate programmes is to only promote products, services, and offers that match the needs and wants of your audience. Consider why they are coming to your site, joining your email marketing list, or following you on social media. What are you providing that they are looking for? Make sure the affiliate products you are promoting provide a solution to your audience's problems.”
FINDING AN AFFILIATE PROGRAMME
Affiliate programmes are arrangements in which an online merchant website pays affiliate websites a commission to send it traffic. These affiliate websites post links to the merchant site and are paid according to a particular agreement. Like affiliate marketing, affiliate programmes also benefit from using an affiliate network.
Extracted from What is Affiliate Marketing in 2019: A Beginner's Guide :“Before choosing an affiliate programme, see if there is a clear breakdown of how money is dispersed after a sale. Because the network tracks and pays affiliates, you want to ensure it has good rates and pays affiliates fairly… equally as important is trusting the integrity of your products. It’s fair that not every tool you sell will be something you know forward and backward. However, you should be familiar enough with the solution that you know what you’re selling, can answer questions about it, and can defend its integrity if it comes into question.”
Extracted from Best Affiliate Marketing Platforms – NEW 2020 EDITION : “Though these affiliate platforms will take a small cut of any fees generated, they do serve a valuable purpose in the affiliate marketing climate.” Note: This website gives a comprehensive coverage of affiliate networks and programmes.
CREATING AN ONLINE PRESENCE
To bring traffic to your site or blog, you need to become known to your audience.
Extracted from What is Affiliate Marketing in 2019: A Beginner's Guide: “A major step in becoming an affiliate marketer is having your online presence up and running. This includes learning how to start a blog and any social media profiles you deem necessary to the promotion of these products….In addition to a website, you’ll also need to create content. Content such as blogs, forums, FAQs, videos, and images all help your website rank better on the internet.”
Extracted from Steps to Building an Online Presence Through Affiliate Marketing : “Providing relevant content is essential in the construction of a trusting relationship with consumers. If it doesn’t appear that the marketer knows what they are talking about when it comes to the products they are promoting, then people lose the trust they might have once had.”
PROMOTING YOUR AFFILIATE LINKS
An affiliate link is a specific URL that contains the affiliate's ID or username. In affiliate programmes, merchants use affiliate links to record the traffic that is sent to their website. Affiliate agreements commonly state that the affiliate is responsible for arranging its own affiliate link and making sure that it connects to the merchant’s website.
There are many websites with advice on how to promote your affiliate links, for example in 11+ Newest Ways to Promote Affiliate Links & Monetize Your Blog Adam Enfoy recommends promoting your affiliate links through:
Blog content and reviews
Product tutorials
YouTube videos
Banner ad.
Social media posts
Email marketing messages
Digital products (i.e. eBooks, online courses)
AFFILIATE MARKETING TRAINING COURSES
There are many websites offering training courses, such as Wealthy Affiliate, Udemy , LinkedIn Learning and Affilorama.
SO, SHOULD YOU BECOME AN AFFILIATE MARKETER?
If you can learn and apply the skills covered in this post, such as market research and marketing strategy, website design, blogging, digital marketing including search engine, social media, content and email marketing; if you can make informed decisions about your niche, products and programmes, and respond quickly to the wants and needs of your target audience; if you are self-motivated, persistent, and keep your skills up to date, then…
GO FOR IT!
PS Whatever happens, you will gain invaluable skills that will serve you well in business.
Best wishes
Viv