Affiliate marketing is pretty simple really. You point someone to someone else’s website and if they end up buying something you get paid a commission, usually a percentage of the sale. To make it down a bit further there are 8 stages.
- The affiliate (you) shows an ad for the merchant (the person selling the product) on their website
- The visitor/customer clicks on the ad or link you the affiliates website
- The visitor/customer is sent to the merchants website through a tracking link (affiliate link – a link that uniquely identifies that customer as being sent via your website)
- Visitor/customer makes a purchase on the merchants website
- Affiliate network records the purchase and details of the transaction
- The purchase is confirmed by the merchant and the customer is sent their product
- The transaction is credited to the affiliate who referred them to the merchants website
- Affiliate gets paid their commission for the sale
That’s all there is to affiliate marketing, that’s how it all works. There are many other things that go into getting that customer to your own site and getting them to click on your affiliate ads and links and we’ll start talking about that next!
Who’s Involved ? – A Closer Look
There are typically three groups involved in the process of Affiliate Marketing:
The Advertiser – This is a business who sells a product or service and wants to reach more relevant customers online. They want to see more people visiting their website and taking action, such as purchasing a product or registering for a service.
The Affiliate – This is usually a website owner, or marketer who wants to monetise the traffic or data they already have. The Publisher (Affiliate) will promote the Advertiser’s products or services through different methods, such as blog posts, social media, or email marketing and earn a commission for delivering leads or sales.
The Affiliate Network – WOW Trk is an example of an Affiliate Network, who connects Advertisers with Affiliates looking to promote their brand. WOW Trk provide high quality tracking solutions, so that when a sale or lead is generated, the network can assign the correct commission to the correct Affiliate.
Types of Affiliate Commissions
Since some businesses sell products and some deliver services, the desired goals of every Advertiser is different. Because of this, the types of offers an Affiliate can promote varies depending on the goal.
Cost Per Lead (CPL) – This type of offer typically pays an Affiliate a set amount for every lead that is generated. A lead could be generated when contact details have been submitted by a potential customer, or when a person signs up to receive a newsletter.
Cost Per Sale (CPS) – This type of Affiliate offer pays a commission based on every sale, for example, 10% of the value of any sales.
Hopefully you can now answer the question ‘What is Affiliate Marketing’? and understand exactly how you fit into the equation. If you are an Advertiser looking to expand your business, or an Affiliate hoping to generate an income online, please get in touch with one of the team at WOW Trk and we can guide you through the sign-up process.
How does Affiliate Marketing work?
Affiliate marketing offers the opportunity to earn commissions for selling other people’s products and services.
Whether you are a producer who has already manufactured products or a marketer with a natural tenacity for selling, there are affiliate campaigns which can be beneficial to you. On both sides of this relationship, there are profits to be gained.
The key to success in this area of marketing is the same as any other: knowing how to match the right products with the most qualified members of their target markets. These are the buyers who are already searching for the things you are selling. They are motivated and interested in what you have to offer.
Though many methods that build success with affiliate marketing will allow you to convert even the most skeptical of potential leads into prospects and finally customers, positioning the products and services you are selling in front of the best customers will be a constantly moving target and means for measuring your success.
To understand affiliate marketing it is important to have a thorough understanding of the key players involved.
The producer refers to any individual or company which has products or services that they would like to sell. These products could be established and proven or totally new and untested.
The producer is motivated to enter into the affiliate marketing relationship with the marketer because they are interested in driving engagement with their brand and boosting profits.
If you are an e-commerce merchant selling products or a professional of some kind offering services, affiliate campaigns could really help boost your passive income.
Because of how influential the social media landscape is, many believe affiliate marketing has already surpassed traditional marketing campaigns as the premier way to generate sales and drive engagement with brands. Affiliates generate income and help your brand to grow 24 hours a day.With affiliate campaigns, you will only pay for results. This means less cost and way more benefit over many other types of marketing efforts.
The marketer refers to any individual or company which generates specific outcomes such as generating leads or producing sales. The marketer applies a dynamic strategy for achieving success by converting leads into satisfied buyers.
The marketer is motivated to enter into the affiliate marketing relationship with the producer because they know how to match the right buyers with the products and services being offered.
If you are interested in applying digital marketing best practices to generate sustainable passive income, affiliate marketing campaigns are some of the best opportunities available.
The buyer refers to any individual or company which purchases a product or service made by the producer which was marketed by the marketer. Each time a buyer makes a purchase, the marketer earns a commission according to the payment protocol as outlined by the specific affiliate program they are a part of.
The buyer may or may not be aware they are entering into the affiliate marketing relationship. The marketer was able to position the right offer in front of them and they were motivated to take action.
It would be impossible to discuss affiliate marketing relationships without addressing the concept of the Network. Many of the top affiliate programs such as Digital Altitude, ClickBank, Amazon act as a middle point between publishers and marketers.
These networks utilize their size to be able to offer some of the best affiliate opportunities, rates, and offers. Not all affiliate marketing campaigns occur through the structure of a network but many of the best ones do.
Publishers seek out the network because they want to find the most talented marketers to sell their products. They benefit from getting access to many talented people who will champion their products and utilize their strategic digital marketing talent to boost profits.
Marketers seek out the network to leverage the versatility and options that they receive for participating. Instead of having to seek out the best products to sell they can utilize proven winners and models which are already extremely successful.
How to Attract the Right Buyers?
One of the most popular ways successful affiliate marketers earn top commissions is by utilizing various distribution channels for positioning the offers, or things they are marketing, in front of the best and most qualified members of the target markets for those products or services.
Today some of the most relevant distribution channels include:
- Social Media Pages
- Online Websites
- Digital Billboards
- Blog Articles
- Email Lists
Marketers attract the right buyers to the affiliate campaigns they are a part of by utilizing the key skills and strategies of digital marketing.
Online digital marketing strategy refers to the following areas:
- Search engine optimization (SEO)
- Search engine marketing (SEM)
- Content marketing
- Social Media Marketing (SMM)
- Pay-per-click advertising (PPC)
- Email marketing
It would be impossible to discuss affiliate marketing without considering The Amazon Effect, or the way, one online company has completely shifted the entire digital landscape.
Did you know that in 2016, Amazon accounted for 53% of all online sales growth?
How about that Amazon’s North American revenues grew by 25.2% in 2016. In 2017, the U.S. Census Bureau has reported that e-commerce sales have surged by another 15% through the first 3 quarters of this fiscal year.
These numbers paint the picture of a vibrant company which continues to grow while swallowing entire markets. There is every reason to believe that the Amazon Affiliate Campaign which was announced in 1994 and finally launched in 1996 has been an immensely important aspect of the current growth and future trajectory of this company.
With Amazon’s program, you can earn 4% of each sale if you make between 1 and 6 in a given month. If you can manage to sell 631 or more products that commission would jump up to 8%. On a per sale basis, such a commission is not small at all. By applying the best digital marketing strategy it is possible to generate tremendous profits as an Amazon affiliate.
Now it is important to note that anytime a potential buyer enters the Amazon marketplace through one of your affiliate links, you will earn commissions on any sales made within a 24 hour period. They do not have to be related in any way to the content that brought them to your website or the specific content of an online advertisement.
What this means is that you could attract prospective buyers to a blog based on producing targeted content marketing appealing to that demographic. The Amazon links included within the blog earn you income, regardless of what people actually end up buying.
Though Amazon is an extremely useful affiliate marketing producer to work with, some drawbacks to working with this system could include the relatively low cost of most items sold on Amazon. Generating an 8% commission on a $50 purchase will only earn you only $4.
Of course, if you are able to generate massive amounts of traffic and already have a substantial online presence with many engaged websites or social media viewers, this model could be very attractive.
Many affiliate marketers seek to work with higher ticket offers or products because they offer commissions which can be much higher based on the initial cost of products or services sold.
At the end of the day, it is up to you to consider which products and services are the best fit for you to market. You do not need to limit yourself to any one type of affiliate program or campaign though.
There are some clear advantages to working with such a reputable and globally recognized brand such as Amazon. Continue reading to learn more about how to generate massive revenues with affiliate marketing as either a producer or marketer.
How can I start Affiliate Marketing?
As previously discussed, there are essentially two different options for entering into the world of affiliate marketing:
The first is to become a producer and use the marketing expertise of others to help advertise your products, attract potential leads and complete sales in exchange for paying them a piece of your profit in the form of a commission.
The second is to become a marketer and apply digital marketing strategy to advertise products and services to earn commissions based on the performance of your efforts and specific affiliate links.
It is absolutely possible to earn substantial income by not limiting yourself to be either a producer or marketer. In fact, the highest possible earnings are possible if you combine both roles. Keep reading to learn more about how to get your affiliate marketing campaign off the ground!
HOW TO BECOME A PRODUCER AND BOOST PROFITS WITH AFFILIATE MARKETING
Becoming a producer is as easy as following the following roadmap:
- Develop a Product or Service
- Research Your Market
- Optimize the Design and Implementation of Your Product
- Locate and Secure Marketers to Increase Sales
Due to the immense complexity of producing physical products, this section is written with the production of digital products and services in mind.