What is Affiliate Marketing? Working, How to do, Types of Campaign, Practices

  • Post last modified:10 August 2023
  • Reading time:15 mins read
  • Post category:Digital Marketing

What is Affiliate Marketing?

Affiliate marketing is a type of performance-based marketing in which a company or advertiser pays a commission to an affiliate marketer for each sale, lead or conversion that results from the affiliate’s marketing efforts.

Have you ever noticed advertising banners on websites, whenever you are surfing the Internet? Banner ads are placed on websites to promote advertiser’s products and services. In return, the publisher gets a commission for every lead generated. Promoting products and services through affiliate networks is known as affiliate marketing.

With the evolution in the Internet advertising, affiliate marketing has become one of the major sources of lead generation for brands. It is a commission- based marketing or performance-based marketing in which banner space is offered on websites for money. Examples of affiliate networks are Amazon, Flipkart, Yatra.com, etc.

An affiliate publishes the advertising on its website to promote the product and services of other businesses. Affiliate marketing works on a commission basis. The website owners offer space on their websites for advertisement and get a reward for every visitor clicking on the ads.

Affiliate marketing aids in connecting brands to the customer. Also, it is the most effective and dynamic way to make money on the Web. PayPal is the most common payment method to receive affiliate earnings. Many companies usually have special offers for their affiliate partners who are giving them a good amount of sales. These affiliates are called super affiliates.

It is a simple money-making technique that requires no contract and no heavy budget allocation. Providing relevant and timely content is necessary for affiliate marketing. For businesses, it is the most effective way to pay only for results.

The affiliate program works on Pay-per-Performance, therefore, it acts as a revenue source for both the advertiser and the publisher. It is a win-win strategy for both marketers and affiliates. Marketers can benefit from brand awareness, increased revenues and expand the market share.

Affiliates can earn a commission or incentive amount from the promotion made. Affiliates get rewarded only when a purchaser performs some action or make a purchase. The publishers get remunerated for every sale, visit, subscription, etc.


How Does Affiliate Marketing Work?

Affiliate marketing is an income-sharing marketing practice or a channel that involves four parties, which are an affiliate website, an affiliate network, a buyer, and an advertiser. Affiliate networks promote the products and services of a brand on their websites through banner advertising.

Viewers click on that banner ad, wherein a cookie is stored on the consumer’s browser. After clicking on the ads, viewers are redirected to the brand’s website. Then, viewers take the relevant action or make a purchase from the brand.

The affiliate network would get the commission amount for driving that sale. Brands pay people who have the marketing skills to promote their products. Therefore, brands connect with affiliates to gain more leads and conversions.

An affiliate marketing publisher is an individual website owner or business entity that yields a commission for generating sales, leads, and traffic on behalf of the organisation. An affiliate marketing publisher places advertisements such as links and banners of other organisations on their websites.

With the emergence of affiliate networks, an additional layer has been added between companies and their affiliates. These intermediaries manage the relationship and payment mechanism on behalf of the affiliates.

Some popular Indian affiliate networks are as follows:

  • Impact Affiliate
  • Commission Junction
  • ClickBank
  • PayDotCom
  • ShareASale

Amazon is also used as an affiliate network for promoting products online. For the success of an affiliate program, driving traffic to the website is essential. Affiliate marketing also involves referring someone to any online product or service. In return, if that person buys that product or service, you will receive a commission.


How to Do Affiliate Marketing?

There are two primary methods to perform affiliate marketing. One is by joining an affiliate program or a network and the other is by creating your in-house affiliate network.

Let us understand these two methods in detail:

Joining an Affiliate Network

In this case, having a website or blog and collaborating with an affiliate network is a way to start affiliate marketing. To earn additional revenue, joining an affiliate program is essential.

For instance, a marketer is running an informational blog on a healthy lifestyle, and associated the blog with a largescale network of online sports shoes merchant for affiliate marketing. After joining this network, the blog will start receiving advertisements from merchants.

Therefore, product description and ads will be displayed on the blog. The marketer will also be provided with a special URL that identifies the sales record originated from the blog.

Creating an in-house Affiliate Network

In this case, you have your own Website, products to sell and want to promote your products on other websites for selling. With the help of affiliates, one can promote his/her own products on other websites. Affiliates place your products and services advertisement/link on their website. When someone visits the affiliate’s website and click on those products and services, a special affiliate link is generated that redirects the visitor to your website.

There are various affiliate marketing software available to develop your own affiliate network or to install an affiliate program on your website. Such software applications are provided by the affiliate network providers that handle the program administration and reporting payment commission.

Affiliate marketing can be one done through:

  • Content: One of the simplest and basic ways adopted by digital marketer to start affiliate marketing is to write blogs and promote them. One should opt for profitable industries and write blogs on a niche. Article marketing can be a good affiliate strategy to receive the maximum traffic.

    Then, select affiliate products that you can promote on your blog. It is important to mix and match affiliate ads with the blog content for receiving valuable traffic. Writing content on those products and services can help in achieving success in affiliate marketing.

    Quality content can help in driving traffic to the brand’s website through banner ads or affiliate posts.

  • E-mail marketing: Marketers are using E-mails to market or promote affiliate business as E-mails are cost-effective strategy. Persuade prospects on E-mail list with discounts or offers and redirect them to your affiliate product page.

    Sending monthly newsletters with affiliate posts can also help in fostering promotions of your affiliate businesses. E-mails should not be sales or conversion-centric but should have informational content relevant for the subscribers.

  • Other: Using Google AdSense is also a way to start with affiliate marketing for publishers. Pay per click (PPC) marketing can be used for affiliate marketing. Marketers also opt for social media platforms, such as Instagram, Facebook, and Twitter for affiliate marketing to promote their products and services.

Types of Campaign in Affiliate Marketing

In case of affiliate marketing, brands need to pay for performance. Commission payout can be on a monthly or weekly basis for all the leads and conversions. There are three ways in which an affiliate program can be facilitated.

These ways are as follows:

Pay-per-Click (PPC)

It is a payment mechanism wherein affiliates will be paid when a visitor clicks on the provided affiliate link. The commission amount is calculated by tracking the number of Web visitors who have clicked on the link provided on the affiliate Web page so as to arrive at your Web page.

This does not take into consideration the purchase decision or making a purchase. The only focus is on the visitors visiting your website through the affiliate link.

Pay-per-Lead

In this payment model, affiliates will get paid for every lead generated through an affiliate link. When visitors leave some information on your website, it is known as a lead. For instance, visitors fill out the query form on your website.

Then, that information will be further used for sales and communication with prospects. The key aspect of pay-per-lead is the information provided by the visitor. For the organisation, obtaining visitor information is crucial under the pay-per-lead program.

Pay-per-Sale

This is a payment model that takes into consideration every sale made through an affiliate link. Pay-per-Sale is calculated using the number of sales made by the Web visitors who are sent through an affiliate Web page or blog. The amount paid can be a fixed percentage of a purchase amount or a predetermined amount or a flat rate. This is also known as Pay-per-Acquisition.


Best Practices for an Effective Affiliate Marketing

To run a successful affiliate marketing program, one needs to follow certain practices which are as follows:

Identify the Need for the Product

It is important for a marketer to identify whether the products or services have online buyers or not. A comprehensive research on the target audience needs to be performed so as to develop a content strategy accordingly.

Transparency and Authenticity

It is important to let the audience know about the affiliations to establish transparency in your affiliate program. The organisation should be responsive to the affiliates’ queries. Being a merchant (organisation), it should also participate in the affiliate’s marketing efforts.

Create a Quality Landing Page

Landing page optimisation is essential for conversions as improvement in the elements of a website improve the user experience of a visitor. It includes a simple Web form on the landing page. Some marketers introduce contests, discounts and offers on the landing page to increase lead generation. Also, it is crucial to include shorter and nicer affiliate links on affiliate Web pages or blogs.

Establish a Trustworthy Relationship With the Publisher

Publishers should be motivated in terms of rewards and recognition via contests and coupons. Fostering payment terms that are publisher-friendly or releasing the payment on time helps in building a trustworthy relationship with publishers.

It is important to plan for affiliate marketing in the long run. It is advisable to match Web page content with the affiliate products. Therefore, selecting the affiliate products should be done carefully.

Explore the product options available for affiliate marketing. Try and write relevant and evergreen content for the blog and promote it. By following these practices, you can start effective affiliate marketing.

Article Source
  • Caroline, A., & Iuliani, F. (2018). Affiliate Marketing. Chicago: Alain Caroline.

  • NEW THRIVE LEARNING INSTITUTE. (2016). Affiliate Marketing – The Complete Affiliate Marketing Handbook.

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