AFFILIATE MARKETING – WHAT IS IT AND WHERE DO I START
For those who work with digital marketing, you’ve probably heard of affiliate marketing . However, few still know what affiliate marketing means and what it is possible to do with it in practice. Although this is a market that has grown more than 100% a year in Brazil in the last five years, it remains a small market when compared to other niches, such as marketing agencies, content producers, freelance services, etc. Still, the forecast is that the affiliate market will continue to expand at an extremely rapid pace over the next few years. These numbers are the result of our work with the Affiliates event .
The affiliate marketing market is actually a tremendous opportunity to make money on the internet and will continue to be for many, many years. However, as in other markets, there are professionals who do things the right way and professionals who do things the wrong way. You will need to first understand how all this works and what your possibilities are, so try to extract the maximum potential from your projects. Another important thing is that affiliate marketing has nothing to do with multilevel marketing ; are two totally different markets.Business on Google
What is affiliate marketing?
Affiliate marketing is a way for you to generate income through a job of sharing, recommending and promoting the products or services of other people or companies. Basically, when you help another company succeed in selling a product, you get a commission for that work. There are several forms of commissioning, but the concept is similar in all of them, that is, you promote something in exchange for a slice of the value of that sale generated.
Affiliate marketing is not something new. For hundreds of years people have been working on similar commission models, and so-called commissioners have been around for hundreds of years. A good example of this type of work would be real estate brokers. They advertise real estate on and off the internet, receiving a commission on the sale of that property.
On the internet, this commission model on sales is called affiliate marketing or affiliate marketing (in English). The first affiliate program on the internet was created in 1996 by Amazon and was called Amazon Associates . The program continues to exist today and was one of Amazon’s key growth drivers as thousands of affiliates promoted the company’s products in the United States, receiving a share of sales. If they did not generate sales, Amazon would also not be investing any money with this advertising, since it would pay a commission only for realized sales.
The affiliate market is as extensive as your imagination. There are affiliate programsand offers to promote in virtually every business area you can imagine being able to work via the internet. This means that, through the internet, you can promote offers from other people and companies on your websites and blogs, and use this as a way to monetize your content and traffic.
Advantages of working with affiliate marketing
There are numerous advantages to working with affiliate marketing, but the main thing is that you do not have to worry about creating a product to sell on the internet. Already someone has created this product and you can become affiliate of this product by promoting it through affiliate links and sending traffic through those links to that same product. From then on, your responsibility ends. The producer, or owner of the product, becomes the person responsible for sending the goods to the buyer and keeping that customer satisfied. You will receive a commission for generating this sale, but you are not responsible for anything else.
Among the various advantages of working with affiliate marketing, I would say that the most interesting is the potential of monetization of this market. There are products that pay for commissions that are very high, recurring, per click, per sale, per print, etc. There are also affiliates who work on advertising these products through advertising platforms and others who take advantage of affiliate programs as a way to monetize the traffic of their websites and blogs. Both models are perfectly feasible and yield results.
The good thing about affiliate marketing is that you do not need to create anything at all. If you want, you can make a lot of money by working with this market, promoting product offerings, without actually having to create a blog , website or anything else. There are affiliates making lots of money and the only thing they do is advertise on Facebook , Google AdWords and native ads. There are also those who prefer to use more advanced strategies such as buying traffic to promote affiliate programs .
In summary, you have two possible ways to work with affiliate marketing: creating websites and blogs, working with content and monetizing your traffic through affiliate programs, or directly advertising affiliate offers through advertising platforms like Facebook, Google , native ads or buying traffic.
Regardless of the model you choose, the important thing is that your results are positive. There are no better or worse models. There are lots of professionals making lots of money on both models, so you should opt for the one that makes the most sense for you and your digital marketing strategy.
Affiliate marketing commission templates
In the affiliate marketing market, there are different commission models, which vary depending on the marketing objective of the company or producer. Contrary to what is often thought and spoken, there are affiliate programs not only for physical or digital products, but also for actions and contacts. If a company’s marketing goal is to generate leads of potential buyers to buy a product, for example, that company can launch an affiliate program that pays a fixed amount for each registration made. The company would not be promoting a product, but rather a specific action, which in case the user would fill out the registration form.
There are also differences in an affiliate’s outreach strategies,what are backlink when they are actions or conversions. Each marketing objective and commission model automatically requires the adoption of a different disclosure strategy. When entering this market, you should look for commission models that make the most sense for you and your digital marketing strategy.
The commission model in CPC (cost-per-click) is one of the oldest on the internet as well. When on October 23, 2000, Google decided to launch Google AdWords, this model of commission became widely used in the world. Along with Google AdWords, Google has launched the Google Adsense program, which is nothing more, nothing less, than an affiliate program that pays per click on text or image ads.
In this CPC commission template, the affiliate receives a fixed or variable value for each time the banner or text link receives a click from a user. This model has the advantage that the affiliate is not dependent on the end result, ie the user buying the product, but has the disadvantage of being a difficult model to climb, since to make lots of money would take hundreds of thousands of clicks.
CPM (cost per thousand impressions)
The commission per thousand impressions model was widely disseminated when the internet reached the general public. In this commission model, the affiliate received a fixed amount for every thousand impressions of an advertising banner, regardless of whether the user clicked on the banner or not. Of course, in the 80s and 90s, the number of clicks on banner ads was sky-high, with clickthrough rates approaching 96%, which invariably made the majority of users click on the ads.
This model was used in virtually all major portals and media outlets, which sold their advertising space in the CPM model to their advertisers because they felt that the user browsing their sites was already being impacted by these ads, simply by view them, even if you did not click. Even today, the CPM value is used on ad platforms such as Facebook and Google AdWords and is an extremely important metric of performance and cost analysis. What’s more, it’s impossible to set an ad’s clickthrough rate (CTR) without taking into account its number of impressions.
CPA (cost per share)
The commission-for-share model, commonly known as the CPA commission model, is one of the most popular and effective commission models in affiliate marketing. In this model, the affiliate only receives their commission when the user clicks on the banner or the link and performs a specific action, which may be completing a form, buying a product or any other action whatsoever.
As a rule, the CPA model is associated with the purchase of products, where the producer shares a fixed commission amount for the sales generation of his product. This template is one that pays better, and there are several affiliate programs offering very high CPA values, with commissions reaching $ 800 commission in CPA.
CPV (cost per sale)
The commission model on sales is extremely used in e-commerce affiliate programs. Amazon’s affiliate program, for example, works on a CPV commission template, where the affiliate earns a 3% and 7% commission on sales generated on Amazon’s e-commerce. This model is extremely interesting to work with because by directing a user to buy from Amazon, you receive a commission on all purchases made by that user, and it does not matter if he bought the shoes you suggested or not.
For those who work with affiliate marketing, this commission template is quite interesting because you get over all the purchases that the user performs during your session after clicking on your advertising banner or your affiliate link.
CPL (Cost Per Lead)
The CPL model is widely used in B2B businesses, where the purpose is to capture contacts of potential new customers. In this commission template, as a rule, the affiliate receives a fixed amount for each lead generated. This model is also widely used in mobile applications, such as Uber, which pays a fixed commission to each register generated in your application.
Other examples for a lead commission model would be recruiting companies that are looking for professionals to fill a particular job vacancy, companies looking to get more budget requests, companies that want to generate more registrations in the Trial version of their software, etc. In all these cases, the affiliate receives a fixed commission for generating that lead, regardless of whether that lead becomes a customer or not.
CPI (cost per installation)
The CPI commission model only appeared when smartphones and mobile applications began to emerge. It is a commission model geared towards mobile traffic, in which the affiliate receives a fixed commission for generating installations of a certain application. There are several companies dedicated to this niche market, with dozens of different application offerings and in different areas that the affiliate can promote in their mobile traffic.
The purpose of this type of commission model is to generate the installation of the application on the user’s smartphone, whether or not the user will use the application. The affiliate receives their commission for the installation and not for the use of the application.
RVS (revenue share)
The Revenue Share model, better known as Revenue Share, is a commission model where the affiliate receives a percentage commission on the purchases made by users. This model is extremely used in sports betting sites, porn sites, relationships, stock investments, forex, etc.
This commission template is extremely interesting because it is recurring, that is, when the affiliate generates a user for a relationship site and that user buys a subscription. Whenever he renews his signature, the affiliate receives his commission. When the user cancels the subscription, the affiliate stops receiving their commissions.
Frequently Asked Questions on Affiliate Marketing
For those who are starting to work with affiliate marketing, you may have some of the following questions. These are frequently asked questions that many new affiliates make in order to understand how this market works and what the real possibilities are. Working with affiliation is extremely interesting, but you need to understand how it all works.
To help you find a way and not waste time searching for information that answers your questions, I’ve compiled some of the top questions that new affiliates often have and probably have too. Look:
- Is working with affiliate marketing illegal?
Although there is no specific legislation for affiliate marketing, it is not illegal. Working with affiliates is not illegal, much less you are cheating people (as many think). You simply have to declare the proceeds from your work, as you do with any other type of business.
- Can I use affiliate programs and Google Adsense ads at the same time?
Yes you can. According to the terms of the Google Adsense program conditions, you can use affiliate programs on your websites and blogs, along with submitting Google Adsense ads. Although affiliate programs pay much better than Adsense, it is common for you to see websites and blogs that use both forms of monetization.
- How do I find affiliate programs to promote?
There are several affiliate platforms that include affiliate programs from various companies for you to promote. I published a list of these affiliate programs in my article Affiliate Programs – How to make money from them? Another possibility is you conduct a Google search by company name, followed by affiliate program or “affiliate program”. Although not all companies offer an affiliate program; the vast majority already work with this market.
- Do I Need a Blog to Work with Affiliate Marketing?
Not necessarily. You can work on spreading your affiliate links in ad campaigns on Facebook, Instagram, Google AdWords, Taboola, Outbrain and other ad platforms. You can also buy traffic to promote your affiliate programs, for example. There are many affiliates who do not work with blogs, let alone content or SEO.
- How much do I need to pay to be a business affiliate?
You will not have to pay anything. I would say that 100% of the companies that offer an affiliate program charge absolutely nothing to get you started and start promoting your products. However, it may happen that you will not be accepted into a particular affiliate program because that company considers that you do not fit into the type of affiliate that it seeks.
- Is it possible to earn money by promoting affiliate programs?
Of course. There are affiliate professionals who work with affiliate programs for many years, earning more than $ 20,000 a month in commissions. Of course, the vast majority of the market earns a fraction of that. However, just like in any other type of business, you need to work hard to stand out and actually make lots of money.
- Is affiliate marketing the same as watching ads or clicking ads?
Not! Please do not confuse affiliate marketing with this type of offer. I would say that 100% of the offers that exist on the internet for you to stay watching ads or clicking advertising are fraud. This is not affiliate marketing. Stay away from such deals.
Advantages and disadvantages of working with affiliate marketing
Contrary to what might seem, the affiliate marketing market is not only advantages. There are also some disadvantages to other niche markets. Understanding these differences is critical for you not to enter this market with expectations out of alignment with reality and do not get frustrated up there.
The great advantages of working with affiliate marketing are:
- Reduced cost to start. Virtually all affiliate programs are free, which means you can subscribe and start to advertise today the offers of these companies. Since you work as an affiliate, you do not have to worry about your relationship with these customers. Whoever deals with this is the company from which you are affiliated, so you will have plenty of time to work on your strategies.
- You do not need to create your product. Another great advantage of affiliate marketing is that you do not need to create your own products, set up your e-commerce, etc. You simply get something that someone else has already created and comes out with your affiliate link. You get commissions on the sales you generate without having to create anything.
- No specialized training is required. All the knowledge you need to work as an affiliate is available on the internet. You do not need to go to college or any specialized training unless you really want to learn how some professionals do.
- It is not necessary to relate to customers. Since you are not the owner of the product or the company, your goal is only to generate sales or leads, which means that all retention and conversion work is the responsibility of the company or the producer. Your job is different and you do not have to worry about it.
- It is possible to track everything in real time. In affiliate marketing it is possible to keep track of everything in real time, be it clicks, sales, leads, etc. All of your outreach initiatives can be tracked in real time on the affiliate platforms you use, which will certainly help you make decisions faster.
The major disadvantages of working with affiliate marketing are:
- It takes time to generate results. As I said earlier, working as an affiliate is time-consuming. In many affiliate programs, you will need to generate a lot of sales to make some money.
- You need to understand traffic. If you do not understand anything about digital marketing and traffic generation, you will probably have great difficulties to do well as an affiliate. A good part of success with affiliate marketing is in the ability to generate quality traffic, be it organic or paid.
- You need to understand advertising. Regardless of whether you generate affiliate commissions with your website or blog, you always need to understand advertising and how to make ads on social media, AdWords or native ads platforms. If you do not understand any of this, you may have difficulty working with affiliate marketing.
- You need to understand blogs. You do not need to know about programming, but it will be important for you to know how to use your affiliate links, what are nofollow links, how to publish banner ads on your blog, etc. All of these things will be important to working with affiliate marketing.
- You need to adapt fast. Many affiliate programs have great restrictions on disclosure. Many do not allow you to advertise on social networks, others do not allow email marketing campaigns , etc. Advertising networks themselves are constantly changing their rules, which means you’ll have to adapt quickly and look for new solutions to keep generating results.
- Objective surveys. A good part of affiliate programs only allows you to pay your commissions after reaching a certain amount. Google, for example, only issues Google Adsense payments from $ 70 commission dollars. For those who are starting, this can be a problem.
Now that you have understood the advantages and disadvantages of working as an affiliate, let’s look at some important rules and strategies to take into consideration before you start working in this area.
Rules and strategies for working with affiliate marketing
If you are starting or already working with affiliate marketing, it is important to understand that there is a set of rules and strategies that we usually call good practices. Understanding this market is critical to succeed working with it. Regardless of whether you have websites and blogs or prefer to work with affiliate program advertising, understanding good practices will make you avoid unnecessary mistakes.
1. Choose the best strategy first
To work with affiliate marketing, there are only two possible strategies: either you work the disclosure on your websites and blogs or you do the disclosure directly on ad platforms. There is no other way to work with affiliation beyond these two. So the most important thing is you decide in advance if you want to develop websites and blogs that will require content and a good SEO job, or if you plan to go for advertising through Facebook ads, Google AdWords or native ads platforms.
2. Choose the right product to promote
Not all products are good. This is a fact. If you plan to disclose a product that is considered by the public to be a hoax or fraud, be careful. Before you start promoting any product, do a Google search and look for customer testimonials. See the Facebook page of the product, look at the complaints in the Claim Here, etc. Choosing the right product that you promote will make all the difference in the results of your affiliate marketing actions. What’s more, a good product tends to perpetuate for longer.
3. Understand your audience first
If you have a blog about cars and go out advertising affiliate programs on how to lose weight because you think that everyone needs to lose weight, it is very likely that it will not work. Understanding your audience and how it behaves within your website or blog is critical to the success of your affiliate marketing campaigns. The more relevant your ads are to your audience, the greater your chances of succeeding. If you imagine that even Google made your ads contextualized with content from websites and blogs, you understand the importance of being relevant.
If you have not started working with affiliate marketing and are not quite sure where to start.
4. Create relevant product content
If you think you just put a banner ad on the sidebar of your blog to start making money from affiliate marketing, you’re flatly mistaken. Your audience is a lot more demanding than that and you will be simply belittling your own authority. Remember that one of the most powerful weapons on the internet is the power of recommendation. If your readers like your content and like you as a professional, your recommendations will have a far greater power than anything else you do.
In this regard, it is recommended to produce relevant content on the products you are promoting on your website or blog. That means writing detailed reviews about these products, stating the pros and cons of the products, the benefits of using them and why you recommend these products to your audience. This kind of recommendation has incredible power with a heavily engaged audience.
5. Ads also need to be relevant
Contrary to what many affiliates think, ads also need to be relevant to their target audience. There are huge affiliates who promote products through Facebook ads, Google AdWords and native ads, without even bothering with the relevance of the product to the target audience. Many of them even use copywriting strategies to deceive this audience and get them to click on the ads.
While this may work in a short-term strategy, the reality is that in the long run it will be difficult to keep your business running, for the simple reason that this affiliate will constantly need to create new pages, new ad accounts, and new ways to advertise those products . In the end, he will have absolutely nothing and will be dependent on these products. I do not recommend that you do this. Think of a long-term, sustainable and communication strategy that is simple, objective, and relevant to your target audience.
6. Test different offers and programs
If a certain affiliate program is yielding good money, this does not mean that you can not test other offers. In fact, testing is very important in everything that has to do with digital marketing; and affiliate marketing is no different. Try to choose between three and four affiliate programs to promote, always doing conversion tests with each of them.
Affiliate programs are not all the same, and their conversion level is not the same either. Just a different product sales page so the conversion volume is much larger, or vice versa. There are also affiliate programs that pay commissions every week, others that only pay monthly, etc. There are also programs with commission assignment templates on the first click, last click, 30-day cookie, 7-day cookie, 24-hour cookie, and so on. All of these things make a tremendous difference in the results you will generate with your strategies, more than enough reason for you to test several and compare your results.
7. Be patient.
When we talk about affiliate marketing, patience is an important term, especially if your strategy goes through writing relevant content and working with affiliate programs on your websites and blogs. When I first started, I remember the first commission I managed on an affiliate program, and the feeling was spectacular. However, it took me a few years to start making money significantly with my websites and blogs.
The same thing happens when you start working with advertising, announcing the offers directly. You’re likely to spend lots of money initially until you find the right way to convert your ads into sales. This is perfectly normal and very common in this market, so consider learning the most about affiliate marketing, conversion, advertising, etc., and go testing as much as you can until you find the perfect formula for the type of product you are advertising.
8. Use different sources of traffic to promote your products
It is common for the vast majority of affiliate professionals stay stuck to strategies that work. When you find a strategy that works, the tendency is to use only this strategy to the point of exhaustion. However, keep in mind that there are different ways to promote affiliate programs, it is highly recommended that you diversify your sources of traffic and especially the way you promote affiliate programs.
Just like in other markets, affiliate marketing in diversification can be crucial in making your business survive and grow. Never make your strategy dependent on a single source of traffic and / or a unique outreach strategy, otherwise it is likely that you will end up hurting yourself in the future. Use different traffic sources to promote your products and compare each of your strategies.
Types of Approaches to Affiliate Marketing
Affiliate marketing has different ramifications, which means that there are professional affiliates, be they people or companies, working in totally different ways and generating excellent results. This market allows the creation of fully differentiated digital businesses and you should opt for those in which you feel most comfortable. Let’s look at the different approaches to affiliate marketing:
Content and organic traffic sites
There are many companies dedicated to creating content sites, which are monetized with affiliate programs. Imagine a large media company with dozens of sites in several countries, all of them with millions of hits every month. There are also professional affiliates who do this on a smaller scale, but still extremely profitable. These sites are essentially powered by organic traffic and traffic coming from social media.
Product comparison and comparison sites
This type of website is also extremely popular in the affiliate marketing market, especially the coupon sites, which compare the prices of thousands of products in dozens of different stores and lead the user to buy the product in a particular store through links of affiliate. Other examples would be websites that do reviews of cell phones, notebooks, etc. The same applies to smaller websites and blogs, which compare different types of products.
Mobile app sites
Mobile has grown at a blistering pace, and with it, different types of websites and blogs that compare mobile apps and reviews of these apps have started to emerge. All of these sites are monetized with affiliate programs, which pay commission on the installations or downloads of those applications.
Small niche markets are also extremely interesting to monetize through affiliate marketing. Imagine a blog about travel, about recipes, about fashion, etc. All of these niche projects can and should be monetized with affiliate programs. There are huge professional affiliates using websites and blogs in nicely small niche markets, but by earning a lot of money on commissions.
Disclosure of infoproducts
So-called infoproducts, or digital products, are also a great way to work with affiliate marketing. There are several platforms that offer this type of products and also many affiliates working in the disclosure, receiving extremely high commissions for the sales generated. This is a market that is growing immensely in Brazil.
As we’ve seen before, another way for you to work as an affiliate is to advertise directly through paid advertising, whether on Facebook, AdWords, Taboola, Outbrain, or other ad platforms. Many professional affiliates around the world work only with paid advertising. They create absolutely nothing, except the ads to advertise the affiliate offers.
How to Start Working with Affiliate Marketing
If your goal is to start working with affiliate marketing, but you have no idea where to start, it’s best to read the points I put right below. However, do not forget that to succeed as an affiliate, you will need a great deal of dedication and discipline. Good planning and a good strategy will do everything else.
- Develop a solid strategy. Start by creating a strategy based on questioning. What problems do you intend to solve? In which niche market do you plan to work? What kind of approach do you intend to make to this target audience? Answer these questions and, with them, define your initial strategy. Start by planning your actions before you run any of them. This will make a big difference in the bottom line.
- Look for affiliate offers. Once you choose your niche, you need to look for existing affiliate programs in that niche. Identify the most profitable products and sign up as an affiliate of these products. Do not forget to do a first evaluation of the products and understand if they have quality and match the expectations of the public.
- Define your role model. Do you want to create a website, blog or work as an advertiser? Do you want to create a niche blog or a product comparator site? Depending on the strategy you set, your next steps will be totally different.
- Build a brand. Regardless of whether you create a small blog in a specific niche or a large site to publicize thousands of offers, it is important that you build your brand. A strong, consistent, and easily identifiable brand by your audience is more likely to perpetuate over time compared to sites created just for the purpose of generating clicks. Adding value to your audience will make your conversions a lot better.
- Study more about SEO and traffic. You will need to master the art of search engine optimization and traffic generation. By mastering organic traffic and paid traffic, you will have a very large competitive advantage over the vast majority of affiliates working in that market.
- Learn more about paid advertising. Understanding how paid advertising works could be a big advantage in your affiliate marketing strategy. Mastering tools like Facebook’s ad manager, Google AdWords platform or buying paid traffic will be a deciding factor the moment you decide to scale your business.
- Be creative. Do your homework first. Analyzing your competitors and understanding how they work will make you better able to anticipate and get a good share of those markets. Keep track of what others are doing and be creative when writing your content, recording your videos, or creating your ads. Different approaches almost always yield better results.
- Test, test and test. In marketing there are no absolute truths. What works for me, possibly will not work for you. Question everything you read and hear … and test. Always try. The more you test, the greater your chances of being successful as an affiliate will be. The best product, it is not necessarily the one that generates more sales. The best affiliate platform is not necessarily the one everyone talks about. This market is very large and the opportunities are numerous. Test everything!
- Measure, measure and measure. It’s no use having a fantastic strategy and extremely solid planning if you do not measure your results. Looking at the metrics is critical to understanding the behavior of your audience in relation to your marketing actions. Analyze each of your actions to understand what you can do to improve your conversions.
- Climb, climb and climb. Once you find an effective affiliate program model that generates a positive ROI for your business, you should scale that model to the maximum. This may mean increasing traffic, budgeting for advertising, or internationalizing your model to other countries. It does not matter how you’re going to do it, what’s important is to do it.