Affiliate marketing is an effective channel for increasing sales for companies from various fields. For example, in the USA, according to statistics, an e-commerce business receives as many sales through affiliate programs as it does via email marketing. Both channels bring in 16% of sales – this is more than what gives work with social networks and display advertising. In 2015, Amazon’s revenue exceeded $100 billion, and, according to various estimates, affiliate marketing brought at least $10 billion.
Key Features of Affiliate Marketing
This type of marketing is specific, involving a large number of unscrupulous customers and partners. A marketer who is just beginning to master affiliate methods of promotion must carefully choose partners, learn how to build and run affiliate programs – otherwise, there is a high risk of becoming a victim of scammers.
On the other hand, collaboration is extremely beneficial to both partners and customers. While some receive almost effortless income, others optimize the effectiveness of marketing campaigns, spending the budget on specific targeted actions.
Pros of Affiliate Marketing
- For the advertiser – audience growth, a large reach of potential customers.
- For partners – “easy money”, quick profit without investments and big efforts.
- For customers (buyers) – “energy saving”. If the partner’s site is relevant to your offer, then visitors are potentially interested in the offer.
Cons of Affiliate marketing
- The advertiser needs minimal skills in finding sites and building programs. There is always a risk of becoming a scammer.
- The partner also runs the risk of encountering problematic advertisers who, at the last moment, break off relationships, depriving a person of earned money.
- Despite all the risks, many marketers believe that without an affiliate program it is impossible to build a viable online business.
Types of Affiliate Programs
Affiliate programs are mainly built on the CPA model (cost per action) in its various variations. Targeted actions here may be display, purchase, download, lead, etc.
- CPS, or payment for the sale, refers to complex programs – the partner receives money (% of the cost) when the visitor goes to the customer and purchases the product.
- The CPV model, by contrast, is one of the most liberal for the affiliate. The partner is only required to place a certain element on himself (banner, text ad, etc.), and he can receive a reward only for advertising impressions. In turn,
- PPC (pay per click) is similar to CPV, but the action is already required from the visitor – switching to the customer’s resource by clicking on the link in the ad. By the way, the PPC model is the most popular in contextual advertising platforms (Google AdWords, Yandex.Direct, etc.).
Types of interaction sites with affiliate programs also vary:
- the resource can work with the program without intermediaries,
- may participate in affiliate networks,
- can search for advertisers on their own.
Such efficiency makes affiliate marketing an attractive channel for increasing revenue, but building a real working affiliate program is not so simple. We have analyzed many successful projects and collected the necessary knowledge. Based on this experience, we made several tips that will help increase the effectiveness of the program and increase revenue.
Learn Experience of Other Projects
In affiliate marketing, one of the most important success factors is the study of competitor activity. If the company’s competitors launch their affiliate programs, this can serve as a signal to build up their activity in this direction. You can find affiliate programs for competitors in a specific industry on special sites.
Also, an analysis of competitors can not only suggest that it is time to launch your affiliate program, but also become a source of tips on how to make it more effective. Affiliates actively publish information on the Internet about their experience working with a particular company, from which you can learn a lot of interesting things.
For example, one project tells that to join the program he had to go through an entire interview by email – not everyone was accepted into it. And during another campaign on Quora, users found out which of the hosting providers pays their partners higher commissions – thus, very important information can easily be found in the public domain. Also, it is worth exploring the resources on which competitors promote their affiliate programs.
Analyze Extra Costs
In addition to paying commissions to partners in an affiliate program, resources are also required to launch and support it. It’s better to know in advance what costs a business may face. There are two main types of costs – this is the payment for the work of the staff managing the program and investment in the technology platform.
The company will need someone who will be responsible for working with partners, informing them of news and innovations, answering questions, and posting information about the program on thematic sites. You can either hire such an employee in the state or look for agencies involved in outsourcing affiliate programs. Of course, it is better to have a full-time employee – this will allow you to control the work and be confident in the quality. However, if you hire an employee through outsourcing, this will also save you money.
Technology costs will not be avoided. There are two options: use affiliate networks or buy specialized software for in-house work. Networks act as intermediaries between business (“merchants”) and partners (“affiliates”) and take on the work of monitoring and collecting statistics. Here are some popular overseas affiliate networks:
Among the advantages of this option is the presence of a network of affiliates and streamlined financial settlement processes. There are also disadvantages: partners of inadequate “quality” often live in networks. So if a business cares about its reputation, it will have to actively filter applications from potential program participants. Besides, affiliate network software may have limited functionality, which may not be suitable for those who want to use various mechanisms to attract customers and evaluate the performance of partners.
On the other hand, specialized software (GetCake marketing system, for example) gives businesses more freedom and customization options. The biggest minus, in this case, is the lack of access to the network of affiliates, which can complicate the promotion of the program. Besides, it will be necessary to independently organize the processing of payments, which with the growth of the program may require more and more resources.
However, when using purchased software, the need to deduct fees from payments disappears, as in the case of affiliate networks, and it becomes possible to integrate the system with third-party applications (for example, for call tracking).
Affiliate Marketing Features
- When a company has an affiliate program, marketers most often strive to do everything for the client to make a quick payment for the goods in the online store, filling the pages with triggers “Buy Now.” Do not forget to prepare a fertile ground for buyers. Write product reviews, under which people will leave their reviews and discuss them – this will give them confidence and is more likely to encourage buying.
- Do not use too many affiliate programs at the same time, otherwise, it will be very difficult to track them. And do not chase new little-known offers – in the end, they may not be very profitable. It should be borne in mind that not every program can suit you, and not everyone will immediately bring you high income. It is better to have one or two that will work stably. Before choosing favor of a certain affiliate program, test it yourself, stand in the user’s place, check it in action.
- Track where the client came from to know how to build a strategy to increase earnings. Income from affiliate programs is very difficult to predict, and the cycle for obtaining a return on investment in them can reach two months.
- When choosing an affiliate program, focus not on high-interest rates, but on the relevance of the product or service to the theme of the site.
- Please note that B2B products do not sell well through affiliate programs. For an affiliate marketing model, a simple product demanded by a retail buyer is preferable. The most common advertisers in it are banks, e-commerce, FMCG (fast-moving consumer goods – goods of daily demand), education, construction, Forex, the tourism sector, insurance, cosmetics, weight loss products, employment, the automotive industry.
How to Increase the Value of the Advertised Product?
The Effect is More Expensive than the Product
Any product or service does not receive value on its own, but thanks to a unique selling proposition, which is created by describing the characteristics and advantages of the product made to the expectations of a certain audience. Any offer should have an emotional hook that will help you make a purchase – after all, most of the things we acquire are based on emotions, and not on logic.
To paraphrase an old saying, one should not sell a hat, but the head in warmth. It’s all the easier to sell, because a freezing head is already a problem, and a warm head is associated with comfort and a sense of happiness.
Also selling, for example, an eBook, you are selling not a book, but fitness, self-confidence, love of life. Need to sell a book on how to make money online? The reader should sell financial freedom, getting rid of debts and problems with money. You can earn much more by selling freedom and a new beautiful life than by offering a document in PDF.
It is important that your readers themselves want your product, and not just become interested in it. The desire to change your life gives rise to an emotion, which logically follows the desire to buy – and then it all depends on the characteristics of the landing page and the presence of various CTA-buttons (Call To Action) on the selling page.
Urgency as a Factor
When you make people read your selling text, you create a neurochemical cocktail in their brain. You want to focus their attention with the help of paradoxical statements, build the composition of the story from the description of the problem to the search for a solution, then pay attention to the offer and draw readers pictures of new life along with the qualities acquired through the product. At this point, the reader wants to purchase the advertised product.
The next step is creating anxiety. It must be made clear that this proposal will not wait forever for a purchase decision, that the price will change or the product itself will be discontinued. This creates the effect of “urgency”, pushing for a final decision. Besides, time limits will prevent the reader from closing the site window and leaving to “think, consult”.
There are two main ways to create a time frame for a proposal: a limited amount of goods in stock or a time limit for the discount. Thus, it is possible to achieve the desired trembling in the knees when you urgently want to buy a product that it is impossible to resist.
Instead of Conclusion: Three More Tips
In conclusion, we will give three more useful tips for those who are developing their affiliate program:
- You need to constantly work with affiliates — it’s not enough just to launch the program and wait until the partners come to see its advertising, you need to independently search for those who could benefit the business and not lose contact with those who joined the program. It’s worth even starting a separate email newsletter with program news and useful information.
- In some cases, it is worth paying attention to “mobile” – more than 30% of sales generated by partners of affiliate programs take place on mobile devices. Therefore, an increasing number of companies are adapting their resources – from affiliate program sites to user interfaces – to work in the “mobile” and use specific tools, such as push notifications.
- You do not need to wait for quick results – according to statistics, in most affiliate programs 90% of the traffic and conversions are generated by 10% of partners, to attract a significant number of such participants, it takes time.
Remember that in an era of total globalization, it is almost impossible to control business and build an affiliate strategy alone. We need specialists who will protect you from scammers and create a stable source of the traffic to the resource. When looking for an affiliate program, use lists or huge affiliate networks where you can find an “affiliate program” for any offer. This will help make the marketing as effective and high-quality as possible.
About the Author
Cheryl Hearts is a writer and journalist from Boston, Massachusetts. Her passion for writing started at an early age and evolved during the high school years. She enjoyed creating her own stories, so she decided to make writing her career. After earning a degree in Journalism, Cheryl started running her own blog CherylHearts.com where she’s covering topics of great interest to society.
