WHAT IS AFFILIATE MARKETING?

What is affiliate marketing? Find out its meaning and definition and how marketers and business owners use affiliate marketing to increase sales. Do you need help setting up a successful affiliate marketing program? contact us 🙂

AFFILIATE MARKETING DEFINITION

WHAT DOES AFFILIATE MARKETING MEAN?

Affiliate marketing is a performance-based marketing technique that encourages affiliates to promote an advertiser/vendor’s products in exchange for a monetary commission. Equally used both in business-to-consumer (B2C) and business-to-business (B2B), the whole process is tracked, managed and optimised generally by an Affiliate network/platform.

Who is the vendor (aka the advertiser) in the affiliate marketing relationship?

A vendor/advertiser/merchant is any business, company or organisation who are looking for other individuals, companies or organisations to help them promote their products and services and are happy to pay a monetary incentive (commission) for quality leads that convert into sales.

In the world of affiliate marketing, an advertiser or vendor can be a company selling a product like electronics, airline tickets, clothing or car parts, or an advertiser could also be an insurance company selling policies. You are a vendor/advertiser if you are ready to pay other people to help you sell and promote your business.

Through an Affiliate Program, a vendor/advertiser contractually agrees to work with an affiliate, and then provide the affiliate with creative – in the form of links, banner or text ads or even unique phone numbers – that the affiliate can incorporate into their digital platforms: website, blog, social media posts. etc.

? Trending > The best online affiliate software

WHO IS AN AFFILIATE?

An affiliate can be anyone who has a strong desire and hopefully an affinity to promote and encourage others to buy and use a specific product or service. Successful affiliates generally are great content producers who know the best way to promote a vendor/advertiser’s product or service in exchange for earning a commission. An affiliate can be:

  • A customer: think of that referral link Uber or Airbnb has given you to pass to your friends to earn credits.
  • A blogger or an influencer or content creator (Youtuber, Instagrammer, Tiktok video creator, etc)
  • A retailer (who wants to promote other products they may not stock in their shop)
  • A publisher website
  • Anyone who simply has a captivated audience to promote products to.

In order for a successful affiliate to earn great commissions from a vendor, an affiliate should:

  • Understands extremely well the vendor’s offering.
  • Creates and publishes exceptionally well-crafted content that makes people click on their referral link
  • Have time to update their content as their own content at the same pace the vendor evolves/changes and/or updates their offering.
  • Partner only with vendors that offer the best quality products and services. It is far better to partner with only 10 affiliate programs with the best well-known vendors than with 100 average vendors.
  • Check regularly the vendor’s affiliate platform supplies transparent payments.

WHAT IS AN AFFILIATE MARKETING PLATFORM?

Affiliate programs can be easily run by affiliate platforms that manage, optimise and make affiliate payments on the vendor’s behalf. The vendor will pay a management fee to the platform and pay a flat dollar amount or a percentage of the total sale to affiliates.

To make affiliate programs work more effectively, vendors can also offer exclusive promo codes (discount codes) to affiliates so they, in turn, promote these offers and deals on their own websites, apps or platforms so it is easier for affiliates to earn commissions as a final user has an incentive to click on a specific vendor’s offer.

Affiliate networks are cloud-based software platforms that allow a vendor/advertiser to connect to relevant affiliates and manage all the processes of generating trackable links, managing first-party cookies ( read below what a cookie is) and offering creative and payments.

This way, an affiliate network or referral software is a platform that serves as an intermediary between an affiliate and a vendor/advertiser.

Check out some of these best Affiliate Marketing software and start generating affiliate sales for your business.

Who is the user/consumer?

The final component that completes the affiliate relationship is the consumer.

The user or consumer is the  (either by clicking a link or by submitting their information via a form) that takes them from the publisher’s website to the advertiser’s to complete the action, which is normally called: “a conversion”.

What is a cookie?

A cookie is a technology that works with web browsers to store information like user preferences, login or registration information and shopping cart contents. Have you ever opted-in to have a website “remember” your password and username for one of your online accounts? That’s a cookie. Ever notice while searching the web for “travel deals” that you suddenly start seeing travel display banners on other websites? Those ads are appearing for you because you’ve been “cookied“.

A Cookie remembers the link or ad the visitor to a website clicks on. Cookies can also store the date and time of the click, they can even be used to remember what kind of websites or content you like most. There are many different types of web cookies and uses, but the kind of cookie affiliate marketing relies on is called a first-party cookie.

When a user clicks on an affiliate link ( ie. text link, banner ad, etc) the visitor’s browser receives the specific affiliate network tracking cookie that identifies the advertiser, the affiliate, the specific creative and the commission amount. This data is stored within the link information in what are called “parameters” and can include even more anonymous data used for attribution.

??‍? Marketers are using > The best Affiliate Guidelines Template

BENEFITS OF AFFILIATE MARKETING

  • Increase reach and sales. Business Insider 2016 Affiliate Research confirmed affiliate marketing is responsible for driving up to 16% of all U.S. e-comm sales. The Wirecutter (a The New York Times business) – for example – generated $150 million in online sales in 2015 alone by using referral links for the various products they feature.
  • Get customers to earn credit for future purchases. As noted in the example below, Canva online design tool rewards customers who refer the tool to others by earning credits they can use for future purchases.
referral confirmation email - earn canva credit

referral confirmation email – earn Canva credit

⚡️ Popular read > How to best promote your affiliate links

CONCLUSION

Affiliate marketing offers a cost-effective way for marketers to promote their brands. Instead of investing in traditional marketing or advertising channels with upfront costs, marketers only pay commissions when desired actions, such as sales or leads are reached. 

Need training on how to boost your leads and sales online and increase conversions? Contact us today! 

Hundreds of marketers have supported us with their generous donations. Donate today! or join 5k+ marketers receiving our e-newsletter.

Final note: Want to reduce customer acquisition costs and dependency on paid media? eDigital’s marketing strategy training will unmercifully review your marketing campaigns and help you build a marketing engine with channels and assets you fully own. The training will stir up your team’s thinking and bring new ideas to activate new conversion paths and effectively boost customer lifetime value.

WHAT IS AFFILIATE MARKETING?

was brought to you by Mau
cat laptop rug book red glasses illustration

Mau is one of the most popular marketing consultants helping marketers like you lower customer acquisition costs and paid media dependency through custom training and strategy sessions. Mau‘s popular Digital Marketing Plan & Social Media Plan templates are used by thousands of marketers.

Book Mau for your next training day or join 5k+ marketers receiving Mau’s e-newsletter

Best online affiliate software list

Best online affiliate software list