What is Affiliate Marketing? A Guide For Beginners

Get started with affiliate marketing. Learn what is affiliate marketing and explore why it is so popular in today’s online marketplace.

Back when the internet was not a part of our day-to-day lives, brands would spend millions on radio, TV, and print advertisements to gain some recognition in the market. Some would succeed after spending so much, while some wouldn’t. Newer brands competing against the established brand often get hurt the most, given the enormous competition they have to face. It was incredibly difficult for small businesses and entrepreneurs to grow. The advent of the internet and digital marketing was a boon for such enterprises. 

Now, anyone with an internet connection and some in-depth knowledge about the market and their offering can grow their brand and make money by selling online with the help of affiliate marketing.

Content 

• Types of Affiliate Marketing
• Types of Affiliate Marketing Promotion Models
• Advantages of Doing an Affiliate Business
• Disadvantages of Affiliate Marketing
• How to Start Doing Affiliate Marketing
• Some Interesting Affiliate Marketing Examples

So What is Affiliate Marketing?

Affiliate marketing is when an affiliate (partner/associate) earns a commission for marketing products of another brand or person. The sales are tracked via affiliate links from one website to another. 

Related Read – Top Differences Between Digital Marketing and Affiliate Marketing That You Should Know

Types of Affiliate Marketing

Majorly, there are three types of affiliate marketing:  

1. Unattached Affiliate Marketing: In unattached affiliate marketing, the affiliate does not have any connection to the product or service they promote. They have no authority or expertise to make any claims about the product or its use. 
2. Related Affiliate Marketing: The affiliate is involved with the offering in related affiliate marketing. Usually, such a connection is between the niche audience of the affiliate niche and the offering. Related affiliate marketing is possible if the affiliate is reputed and expert enough to generate traffic and be a trusted promoter of the offering. The affiliate makes no claims about how the product or service will be used.
3. Involved Affiliate Marketing: In involved affiliate marketing, there is a deep connection between the affiliate and the product or service they offer. The affiliate has used or is using the product or service by the brand. They know that their positive review and experience will influence a customer to make a purchase. This is equivalent to product advertisements, where the affiliate serves as a trusted source of information. The only catch is that the affiliate’s reputation is at stake in involved affiliate marketing in case of any problem with the said product or service.

Types of Affiliate Marketing Promotion Models

There are various formats for Affiliate programs. The producer will decide the most suitable product to meet his business objectives.

Affiliate marketing is similar to lead generation, where both aim at Financial Return. However, affiliate marketing is focused on conversion. Let’s take a look at different affiliate marketing programs.

Must Read – What is Digital Marketing?

1. Cost per Click (CPC)

As the name suggests, the affiliate is paid per click in the cost-per-click program. The affiliates earn every time someone clicks on the banner, pop-up, or any advertisement displayed on their blog, site, or social networks. In that case, the affiliate’s remuneration will depend directly on the performance of the advertiser’s campaign.

2. Cost per Action (CPA)

In the case of cost per action, the affiliate is only paid if the users click on the ad and perform some action on the ad’s landing page, which can be registering, requesting a quote, or purchasing. 

In such cases, just publishing the advertisement won’t help. It would require the affiliate to put in some effort and use their influence to show the product’s benefits and convince people that this offer is reliable.

Also Read – What is Advertising?

3. Cost per Thousand Impressions (CPM)

In the CPM format, the affiliate gets a fixed amount from the advertiser when the advertising banner reaches a thousand views.  Whoever browses a page is already being impacted by the advertising.

Therefore, the CPM is interesting for the affiliate who has many hits, as he will be paid regularly, irrespective of the number of visitors clicking the banner.

4. Cost per Sale (CPV)

In this model, the affiliate only receives the commission when the link he shared generates sales and is the best option for the small producer.

Therefore, if you intend to become an Affiliate but are afraid somehow, you can rest easy about that.

Related Read – Inbound Marketing: All You Need To Know

There are several modalities of affiliate marketing. However, there are two that methodically will work excellently to obtain satisfactory financial results:

Direct agreements – The brands or influencers name their advertisers or brands, and they will give you a percentage for the sale you have achieved. That is, you will close this deal yourself directly with said brand.

Affiliate networks – Such platforms work with the intermediation between affiliates and advertisers, that is, between you and the brand. Affiliate networks will take control of the products you sell and how your links perform in terms of followers. These platforms will provide you with tools and all the information you need to do with successfully publish your advertisers’ products.

Advantages of Doing an Affiliate Business

Affiliate marketing generates a win-win opportunity for both brands and affiliates. Let’s take a look —

For Brands

Earn popularity – Affiliate marketing is among the easiest ways to get brand popularity in digital media. You can attract those interested in your products, making visitors visit your website and social networks. You will gain followers and a greater spread on the networks.

Generate leads – You will get customers, so sales should increase. You will gain links to your website and this will help to strengthen the SEO of your website.

Related: On-Page SEO

For Affiliates 

No bosses – You will be your boss. You will get your earnings and occupation online without depending on a company to hire you and make a nominal payment.

Low investments – Most brands do not charge you for affiliate membership because they are interested in vendors recommending their products and joining their affiliate system. That way, they get their benefits. However, there are many that may ask you for certain conditions to enter their affiliation system.

Sale of products without stock – You do not have to be the manufacturer or designer of any product or service. You will sell products or services that are already there in the market.

Quick and straightforward – Registering in an affiliate system is simple; one day, you can join several affiliate systems.

Fewer efforts – The effort to be made with this work is very low since you are not providing the service or selling to customers. You will only have to refer your followers to the advertisers’ platforms.

No formal education required – You are not expected to have an MBA or have worked before to create a business model.

No technical knowledge necessary – It is not mandatory to be a web programmer or a graphic designer to venture into this kind of business on the Internet.

Multiple suppliers of the same product – You will always have multiple options to recommend a product from the same site.

Minimal client interaction – When you set up a business, the most significant setback is satisfying your customers. Thanks to the model with affiliation systems, you will not have this inconvenience.

Related: What is Brand Management?

Disadvantages of Affiliate Marketing

It would help if you kept in mind not to abuse affiliate marketing. If you push too hard to sell your products, then your followers can leave you if they think you only want to sell them products.

Another aspect you must take care of is always being aware that you cannot relax. You have to put the same effort as if you were offering a product of yours since your goal is to encourage your followers to buy the product you publish about. We will show you a small list of the inconveniences you can give when doing affiliate marketing.

For Brands

• Need to create a defined affiliation system for accounting for sales, commissions, etc.
• Time investment is required to create banners, information, training videos, etc.
• Maintenance of the affiliate system is sometimes a big issue. You will always have to be answerable or available for affiliates who will be busy making inquiries, requesting help, etc.

Related: Traditional Marketing vs. Digital Marketing. 

For Affiliates 

Dependency on merchants – Since you do not own affiliate marketing programs, you will be utterly dependent on the merchant’s rules and have to abide by their conditions.

Stiff competition – Many people like you associate with the brands, and hence you will face fierce competition, so the key is to stay innovative and competitive.

No returning customers – Once a consumer buys from you, they will go to the original merchant site to purchase, so every time, you would need to look out for new customers unless you provide any special discounts or other benefits.

No income guarantee – Affiliate marketing comes with risks, and you should not expect to start earning immediately. It is challenging to establish yourself among the competition.

Possible payment delays. The affiliate must be aware that affiliate commissions can be difficult to achieve. This depends on the brand. This is not very common but dangerous. For brands, paying affiliates may be one of their most minor worries.

Billing issues – Many brands require an invoice to pay the affiliate. It is reasonable, but this is complicated for newbie bloggers or entrepreneurs. Some brands ask you for self-employment registration. Others take away a percentage of your payment.

How to Start Doing Affiliate Marketing 

Compared to other online businesses, starting with affiliate marketing is relatively simple as you don’t need much. While it is recommended to have at least one blog or website is recommended, it is not mandatory. To start your affiliate marketing journey, you must:

1. Establish yourself in a niche market. You have a better chance of success if you focus on a specific topic.
2. Look for affiliate products and services related to your niche – research the program’s reputation and if they take care of their customers and affiliates.
3. Find out how you will promote products or services as an affiliate. You can do this through a blog or website. However, you can use other methods, such as email lists and promoting affiliate products to your subscribers.
4. Another way would be to use social media platforms like Facebook, Twitter, or Instagram.
5. Research and learn internet marketing strategies to find effective ways to share your website, blog, or affiliate links.
6. Since you will be making money from home, it may be a good idea to study business licenses and laws in your country to ensure your business is legal.

Some Interesting Affiliate Marketing Examples

Amazon Associates

This is one of the giants when it comes to e-commerce and is perhaps the most famous affiliate network globally. Affiliate marketing for Amazon is a pretty big deal. Amazon hosts millions of products, so affiliates can use easy link-building tools to direct their audience to their recommendations and earn. 

To find out which products are the bestsellers is straightforward. You just have to click on the “all departments” option and click “the bestsellers.”

Flipkart Affiliate Program

Flipkart Affiliate Program differs for desktop/mobile websites/mobile apps. It offers access to affiliate tools like banners, widgets, and APIs if you list Flipkart deals or products on your site/app. There are real-time reports to track the performance of referral links and conversions.

GoDaddy Affiliate

GoDaddy is another popular affiliate platform that offers competitive affiliate programs in India. After creating your account, you can choose from over 100 banner ads and text links to place anywhere on your site.