“Affiliate marketing has made businesses millions and ordinary people millionaires.”
So wrote Bo Bennett, the founder, and CEO of eBookIt.com and president of Archieboy Holdings. He created one of the first web-based affiliate programs. The way affiliate marketing works is simple: it’s a performance-based advertising channel in which a business pays a commission for conversion to one or more affiliates. The sales are tracked via affiliate links from one website to another.
Source:JustLearnWP.com
81% of advertisers and 84% of publishers in the U.S. have turned to affiliate marketing
According to aForrester reportcommissioned by Rakuten, 81% of advertisers and 84% of publishers use affiliate marketing. And over half of the affiliate publishers surveyed in the same report stated that affiliate marketing accounted for more than 20% of their annual revenue.
- The affiliate marketing industry is worth $12 billion (as of 2020).
- According toStatista, affiliate marketing spending in the U.S. alone is expected to reach $8.2 billion by 2022, more than triple what it was 10 years earlier.
- Affiliate marketing in the US has reached $6.8 billion in 2020 (Source:Statista)
- The interest in the search term “affiliate marketing” is consistently increasing for the past five years. (Source:Google Trends)
- Digital products usually offer 50% affiliate commissions because they can be replicated at zero expense. (Source:Neil Patel)
- 48% of affiliate marketers globally earn $20k a year (which is $1660 a month).
Get Inspired from famous super-affiliates:
- Well-known affiliate marketer Pat Flynn grew his affiliate business from $8000 to $100.000 per month
- Tom from Onlinemediamasters went from $20k to $150k of annual income over two years
- Doug Cunnington made $70k in 2017 from just one niche website.
- Ryan Robinson, another affiliate marketer, reported over $19,000 in affiliate revenue inOctober 2019. Another successful affiliate website—The Wirecutter—made anestimated $10 million in revenue, and was eventuallysold to the New York Times for $30 million.
The best thing about affiliate marketing is that you can do it at scale. A typical salesperson only sells products from one company. As an affiliate marketer, you can promote products from many different companies and earn commissions from all of them.
What is affiliate marketing? A simple guide
Affiliate marketing is a passive way of earning commissions by marketing another brand’s products or services. An affiliate is a person acting as both marketing and salesman for the merchant to benefit from selling a product or service a certain commission. In this case, the affiliate looks for a product they love and promotes it to their audience. They earn some money each time they make a sale.
It’s based on revenue sharing. If you have a product and want to sell more, you can offer promoters a financial incentive through an affiliate program. If you have no product and want to make money, then you can promote a product that you feel has value and earn an income from it as an affiliate marketer.
There are typically four parties involved in affiliate marketing:
- Affiliates:The promoters of the product
- Product creators:The creators of the product
- Networks:The networks managing the affiliates
- Consumers:The end-users of the product
You don’t always need a network to become an affiliate, but the other three parties (the affiliates, the product creators, and the consumers) form the core of an affiliate program.
The affiliates
An affiliate, also known as a publisher, can be an individual or a company. Typically, these are other bloggers or content creators operating in the industry of the product they are creating.
They help promote the product or service by creating content like blog posts, videos, or other media.
They can also promote their content to get transactions by putting up ads, capturing search traffic from SEO, or building an email list.
When one of their visitors creates a transaction, which could be a purchase or submitting a lead form, the affiliate gets a commission. How much commission is structured depends on the affiliate program terms.
The merchants
A merchant, also known as the product creator or advertiser, is typically the creator of the product or services. They offer revenue sharing and commissions to people or other companies (affiliates), which have a significant following on their brand.
The merchant can be a company like HubSpot, which offers a commission to every affiliate who’s able to get their visitors to make a purchase.
Or it can be an individual like Pat Flynn, who offers an affiliate program with his podcasts.
The merchants can be anyone from a solopreneur to a big company, as long as they are willing to pay their affiliates to help them gain a transaction.
Sometimes the merchant does not even have to be the product creator, as in the case of theAmazon Associates Program.
The affiliate networks
An affiliate network acts as an intermediary between the merchants and their affiliates. In some cases, a network is not necessary, but some companies choose to work with a network to add a layer of trust.
The network manages the relationship and provides third-party checks and balances. Third-party checks can be important because they bring down fraud rates.
The largest affiliate networks include:
- Amazon Associates: 900,000+
- ShareASale: 700,000+
- Awin: 205,000+
- ClickBank: 100,000+
Some merchants choose to work with an affiliate network because they lack the time or resources to track, report, and manage payments to the affiliates. They might also choose to work with multiple affiliates or publishers within the affiliate network.
The consumers
The consumers or customers are the ones who make the transaction. They are the ones who purchase the product or submit the lead form in order for the affiliate to gain the commission.
How to Start Affiliate Marketing
- Choose a platform and niche.
- Build an audience.
- Sign up for an affiliate program.
- Choose products to promote.
- Create remarkable content that promotes your affiliate products.
- Optimize and track.
- Get paid.
To be an affiliate, you need to have influence. Establishing a website or blog that specializes in a niche is the best way to establish influence. Whether you focus on finance, personal health, business, or even cats, a niched blog or website will help you gain influence and build an audience.
#1. Choose a platform and niche
To be an affiliate, you need to have influence. Establishing a website or blog that specializes in a niche is the best way to establish influence. Whether you focus on finance, personal health, business, or even cats, a niched blog or website will help you gain influence and build an audience.
Affiliate marketers build audiences through blogs (on WordPress or HubSpot), via newsletters, or even on YouTube or other social media channels.
#2. Build an audience
A large, engaged audience is a highly valuable asset for any blog or website. Having people who read, view, and engage with your content can help you make affiliate income.
The best way to build an audience is to first establish who your target audience is, and you can find your target audience by researching competitors, monitoring your traffic, and conducting first-hand research by talking to subscribers and customers.
Once you establish this group, grow and cultivate your loyal online audience through targeted content and emails. Give your audience a reason to read and engage with your content, and they’ll find a reason to purchase your recommended products, too.
#3. Sign up for an affiliate program
The best way to get started with affiliate marketing is by signing up for an affiliate program like the Amazon Associates or HubSpot Affiliate Program. After signing up, you will get an affiliate link that contains a unique ID. You can then use this link in your content.
There are typically no upfront costs when it comes to joining an affiliate program, but your variable ongoing costs will depend on how you want to promote the products. If you choose to outsource content or run ads, those are costs that will come out of your pocket.
#4. Choose which products to promote
Choosing the right product to promote, working with the right company, fostering relationships, and updating content are all core essentials of excelling at affiliate marketing.
According to Pat Flynn, one of the pioneers of creating passive income through providing value to his audience, there are two important rules when it comes to affiliate marketing:
Only recommend products as an affiliate that you’re extremely very familiar with. If you are not confident in the product and do not feel it will help people, do not promote it.
Never tell anyone to directly buy a product. Always recommend products based on your experience and in the context of what you’ve done.
When it comes to choosing the right products, David Gonzalez — founder of an affiliate management agency, suggests that you should think about these three components when choosing a product to promote:
- Your audience: Will the product resonate with them and make them grateful you promoted it?
- Product quality & value: Would you advocate your best friend buying it?
- Profitability: Does the offer have highly competitive conversions & payouts?
#5. Create remarkable content that promotes your affiliate products
To see the best success with affiliate marketing, you need to create genuine and remarkable content that promotes your chosen products. Write a round-up blog post of your favorite products. Create comparison charts that discuss the merits of similar products. Interview other users and fans of the products to showcase different opinions.
Regardless of what kind of content you create, ensure it features authentic reviews and mentions of your affiliate products. Avoid discussing and promoting products you haven’t used yourself.
#6. Optimize and track
Whenever your visitor clicks on your unique affiliate link, a cookie is inserted in their browser to track actions.
When they make a transaction that is a qualified action (could be a sale or lead form submission, depending on the terms of the program), the merchant is able to record this action and attribute it to you as an affiliate so they can make a payout.
You should track your own affiliate content, too, to see what has performed well and what you can improve and promote. Understanding what content resonates best with your audience will show you what to focus on for future affiliate marketing opportunities.
#7. Get paid
There are different structures when it comes to payout, which varies based on affiliate program terms.
Commission payouts by the company are usually given on a monthly basis, but this varies depending on the affiliate program terms.
It could be a weekly payout or a monthly payment for all the leads or sales you’ve made.
You’ll want to pay attention to the payout structure when choosing an affiliate program to join, which ultimately depends on the goals you have.
How much can you make from affiliate programs?
The affiliate may get paid in various ways:
· Pay per sale
This is the standard affiliate marketing structure. In this program, the merchant pays the affiliate a percentage of the sale price of the product after the consumer purchases the product as a result of the affiliate’s marketing strategies. In other words, the affiliate must actually get the investor to invest in the product before they are compensated.
· Pay per lead
A more complex system,pay per lead affiliate programscompensates the affiliate based on the conversion of leads. The affiliate must persuade the consumer to visit the merchant’s website and complete the desired action — whether it’s filling out a contact form, signing up for a trial of a product, subscribing to a newsletter, or downloading software or files.
· Pay per click
This program focuses on incentivizing 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.
The conclusion
Making money from an affiliate program is more about the profits than the revenue you’re getting.
An affiliate making $5000/day might be worse off than another affiliate making $500/day with no cash outflow because the former might be spending most of his revenue on paid acquisition.
At the end of the day, before becoming an affiliate, you have to align your expectations to your earning potential. What kind of industry or niche you operate in, and what kind of work you do depends a lot on how much you want to make.
A quick and inexpensive method of making money without the hassle of actually selling a product, affiliate marketing has an undeniable draw for those looking to increase their income online.
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