Companies may wish to partner with entities—such as publishers that are individuals or other companies—that can be beneficial to the brand. This can be a productive way for a company to expand its reach and marketing efforts.
There are two ways affiliate marketing is approached: companies offer affiliate programs directly to other companies/individuals, or they can sign up to be an affiliate through another organization. The company that is offering or controlling the affiliate program will pay a commission for every lead or sale the affiliate delivers to the company’s website.
Affiliate marketing is performance-based marketing where customers or partners are rewarded for designated actions that help market the brand. For example, a customer might mention in a Facebook post that he or she purchased a product and gain a certain number of reward points for their post.
The affiliate marketing program may be structured so that when more than ten friends like or comment on that post, the individual earns more points. The affiliate can then redeem these points against the company’s products or some partner brands.
Affiliate marketing helps widen a company’s reach exponentially using the most credible medium—existing customers. Websites offering price comparison services, coupons, shopping directories, and virtual currency platforms are the most popular affiliate marketing websites.
To look at affiliate marketing in a simple way, it is a cycle consisting of three key entities. These entities are the “merchant,” which is the brand whose product is being marketed, the “publisher” who is the affiliate, and finally the “customer.” In simple words, the advertiser pays a certain commission to the publisher for bringing new customers to the business.
Through affiliate marketing, merchants or companies gain a wider reach to sell their products or services, which is usually a key element to any marketing strategy. This approach can also allow the company to build a strong image or brand name.
One of the main advantages of affiliate marketing is that companies can gain more customers with limited dollars, since the approach is commission based or points based. However, there is the possibility that some merchants may incur high commission, maintenance, and initial setup costs, depending on the nature of the business.
Affiliate marketing is different from referral marketing in the way that it uses online marketing platforms—social media, search engine marketing, and more—to market the product while referral marketing is primarily based on word-of-mouth and relies heavily on trust and personal relationships between existing customers and prospects.
Affiliate marketing can be a powerful tool for a product brand because, in addition to helping grow the customer base, it can also aid brand presence in the market and create a buzz around the brand and its respective brand identities.
Attracting the right affiliates is very important for the affiliate program to be a success and in determining the volume that can be expected from the program. Updating content regularly and staying up-to-date with recent trends is equally important to help ensure that customers respond to the company’s offers.
A product or service does not have to cater to a niche market. Common-place brands, even fast moving consumer goods brands, can benefit greatly from affiliate marketing with the help of the right offers and efficient partners.
Getting products onto as many sites as possible is not necessarily the most important goal. Marketers must also consider the relevance, value, and traffic of the sites and platforms that one is able to reach.
There are some common mistakes affiliates tend to make, and businesses need to be aware of them. The job of the affiliate is to “market” the product, not “sell” the product. Selling is the job of the advertiser itself. Trying too hard to push customers to buy the product may only push prospective customers away.
Partnering with too many affiliates can be another mistake that brands need to carefully consider. Being everywhere can serve to dilute the customer perception about the brand and undermine its credibility. A crucial component to help ensure success with affiliate programs is to have robust analytics capabilities in place and to use them regularly. This will enable the company to understand which affiliates bring in more business, the value of that business, and where they should increase or decrease their efforts and investments in affiliate marketing.