Affiliate marketing has taken the world of online advertising by storm. Indeed, many online shoppers now begin their research for products or services by reading blog posts. But did you know that these posts are most likely written by affiliate marketers who advertise for various companies?
These marketers could be you in the future.
Affiliate marketing has earned a reputation as an accessible way to earn passive income, even if you personally have no marketing experience. And that's true!
Affiliate Marketing peut be a great way to earn passive income over time. However, you need to know how affiliate marketing works to get the most bang for your buck. Today, let's break down what affiliate marketing is and how you can start marketing in 2023.
What is Affiliate Marketing?
Affiliate marketing is an advertising method by which content publishers earn commissions (percentages of product sales) by promoting products or services on behalf of others. Affiliate marketers advertise or promote products for other businesses.
They receive a commission if these promotional efforts result in sales, conversions, or other desirable metrics. Simple, no?
Consider an example: Suppose an affiliate marketer partners with a company that produces cleaning products. The affiliate marketer then creates a blog post detailing the cleanup strategies. In the post, the affiliate marketer refers to one of their partner cleaning company's products.
If a blog reader clicks on a linked cleaner and makes a purchase as a result of reading the blog, the affiliate earns a commission. Pretty easy, right?
But it gets even better for you, the aspiring affiliate marketer. Affiliate marketing programs are either free or very inexpensive. They can be very profitable and beneficial for content creators, bloggers, and other online business owners. What's not to like?
Affiliate Marketing Definitions
Here is a breakdown of some of the most important affiliate marketing definitions:
- Affiliate link – An affiliate marketer's website links to a product, service or page for one of their partners. Affiliate links inform the affiliate's partner that a customer is coming from the affiliate's blog/website.
- Affiliate Program – A program in which an advertiser or business owner pays commissions to affiliates in exchange for promotions on that affiliate's blog, content network, or other mediums.
- EPC – Earnings Per Click. EPC is the average amount of money earned each time someone clicks on an affiliate link
- CPA – Cost per acquisition/action. It is a metric that measures the conversion rate in relation to the money spent on advertising
- RPM – Revenue per thousand. Mille is another word for thousand. This metric breaks down revenue per 1000 page views for a webpage and can be used to determine the effectiveness of content or affiliate marketing programs.
- ROI – Return on Investment. Measures the share of a profitable return that an affiliate merchant, advertiser, or other party receives in exchange for their investments
How does affiliate marketing work?
Affiliate marketing works a little differently for each party involved.
But the basic process is ultimately the same:
- An advertiser or business hires an affiliate marketer to promote their products or services
- The affiliate marketer creates content. Then they directly advertise the advertiser/company in that content or embed subtle promotions in the content depending on the strategy.
- A consumer views affiliate content, such as a blog post or YouTube video, and clicks on an affiliate link.
- If the click on the affiliate link leads to a desirable result – like a page view or a purchase – the affiliate receives a commission or a percentage of the resulting sale
Let's take a closer look at how affiliate marketing works for each party involved in the affiliate marketing process.
How It Works for Product Owners
Product owners, product creators or sellers start the process of affiliate marketing. After all, they are necessary to enlist the help of affiliate marketers in the first place. Product owners are looking for affiliate marketers to perform a specific type of advertising or product promotion.
For example, a graphic design company might hire an affiliate marketer to create web copy, like blog posts. They hope that the affiliate content will attract visitors to their site and convert them into paying customers/customers.
How it works for publishers and affiliates
Affiliates or content publishers may include companies or individuals, depending on the size of their organizations. Either way, affiliates and publishers join affiliate programs run by product owners or businesses. Once they join an affiliate program, they create content to appeal to their partners' target audiences.
For example, if an affiliate marketer promotes a cleaning business, they create blog posts breaking down cleaning tips, great cleaning products to buy, and more…
The affiliate marketer only receives a commission or a portion of the revenue made if their efforts result in conversions, impressions, or sales. It all depends on the specifics of the affiliate program in question. So while affiliate marketing peut be easy money, it can also ne to bring in money.
This is far from a guaranteed salary!
How it works for consumers
Consumers are also necessary for the affiliate marketing process to work. Consumers read or consume content from the affiliate marketer and then either click on affiliate links or choose not to. If they click on affiliate links, they count as impressions or leads generated by the affiliate.
In particular, consumers should be aware that affiliates receive commissions for products advertised or listed in their content. Legally, all affiliate marketers must disclose their relationships with retailers or product manufacturers.
This allows consumers to make informed decisions about the reliability of an affiliate marketer's content. Read our guide on: Everything You Need to Know About Affiliate Disclosures
How It Works For Affiliate Networks
Affiliate networks are groups of loosely associated companies that produce complementary or compatible products. They team up and share leads to improve each other's success.
For example, an auto repair shop may join an affiliate network with an auto cleaning supply company. Both companies create content that drives traffic between them.
In theory, this leads to increased sales and an increase in traffic for both companies at all levels.
Types of Affiliate Marketing
As affiliate marketing has become more popular and profitable, the distinct affiliate strategies are better understood. There are three main types of affiliate marketing that you can pursue.
Independent Affiliate Marketing
Independent affiliate marketing means that affiliate marketers have little or no authority in the niche or specialization in which they are advertising. There is no connection between affiliate marketers and their customers. In many ways, this is the easiest way to enter the affiliate market, but it may not be profitable.
Since independent affiliate marketers do not build connections between themselves and their viewers or consumers, they mostly rely on pay-per-click advertising campaigns…
They create a lot of content and hope that consumers will click on the affiliate link, which will earn them a small commission. On the other hand, there is no public confidence. So getting those clicks can be harder than you think, especially if the target audience is relying on trust before buying something.
Related Affiliate Marketing
Related affiliate marketing involves affiliate marketers who promote services or products that they do not personally use and are nonetheless related to their niches. Related Affiliate Marketers have target audiences in industries or niches and often have dedicated audiences who regularly consume their content.
In other words, they establish a relationship of trust with their readers/consumers. This makes them very valuable for businesses that want effective affiliate marketing services.
For example, a bakery business may rely on a recipe website's affiliate marketing. The recipe website may not have personally tried the bakery company's foods. But since they have expertise in cooking in general, their audience is still likely to trust their opinion (in theory).
Affiliate marketing involved
Affiliate marketing only involves recommending or promoting products and services that you have personally used and believe in. This is the exact opposite of independent affiliate marketing, and it takes the longest to become profitable.
That said, it can be very advantageous.
The affiliate marketers involved establish a lot of public trust and have dedicated audiences that they regularly advertise to. Since they personally use the products and services they promote, they offer trusted recommendations and opinions that their audience members are likely to take to heart.
This kind of affiliate marketing takes longer, but it just might lead to a very sustainable business model…and lots of passive income for you.
Types of Affiliate Marketing Programs
The nature of an affiliate marketing program – and the consumer actions it wishes to generate – can strongly affect whether one or the other is right for your goals. Let's take a look at the four common types of affiliate marketing programs.
Pay per sale
Pay-per-sale affiliate marketing programs are the simplest and most common type. In short, you (the affiliate) receive a commission for every sale made by a customer, provided the customer came to the product creator's site through your affiliate link.
Pay per lead
Affiliate Marketing Programs pay-per-lead instead reward affiliate marketers every time a consumer signs up for something, like a newsletter via email, website membership group, subscription, etc.
Businesses can use paid affiliate marketing programs for lottery offers, lead generation, etc.
Many newbie affiliate marketers enter paid affiliate programs because it is easier to generate leads than to sell products. The reverse is true after an affiliate marketer has built up an audience. Once a marketer has gained enough trust with the public, it may be easier for them to sell products directly.
pay per click
Pay-per-click affiliate programs provide marketers with commissions each time a consumer clicks on an affiliate link. These are rare affiliate programs as they reward affiliate marketers for the least amount of consumer activity.
Typically, large merchants who want to build or boost their brand awareness use pay-per-click programs.
Pay per install
Paid affiliate programs pay marketers each time a consumer clicks on an affiliate link and installs software or mobile apps. This is a distinct affiliate marketing model since the consumer does not necessarily have to pay for the software or mobile app if it is free.
Technically, there is a fifth type of affiliate marketing program: pay per action.
However, this generalized affiliate marketing program can include each of the above types. Pay-per-action programs provide commissions to affiliate marketers each time a consumer takes a certain action. This may include submitting a online form, subscribing to a newsletter, making a sale, etc.
Types of products to promote
Affiliate marketers can promote a wide range of different products. Typically, the most successful affiliate marketers stick to one industry or niche and exclusively advertise products or services in that area.
For example, a garden supply affiliate marketer may exclusively advertise physical products that garden owners should find useful when maintaining their properties.
Such a marketer is unlikely to advertise digital products such as software (with very few exceptions).
Digital products
Digital products are among the most common for affiliate marketers to promote. Digital products include:
- Software
- Mobile app
- Cloud software (shared/hosted by cloud servers)
Naturally, affiliate marketing of digital products is more common in the IT industry, B2B marketers, and similar situations.
physical products
Affiliate marketers promote physical products even more than digital products. Indeed, companies manufacture physical products for virtually every conceivable need and purpose. Affiliate marketers promote physical products in industries such as, but not limited to:
- Maintenance of the car
- Gardening work
- Cleaning supplies
- Construction materials
- Toys
- Outdoor equipment
- Household appliances
- Computers and computer accessories
Since physical products are available in such a variety, most affiliate marketers in this field follow independent or related affiliate marketing strategies. They do not necessarily use the products they promote or advertise.
Depending on their audience, however, they may be more or less experienced/trustworthy with the quality of these products.
Services
Other affiliate marketers promote services. These services include:
- Servicesaccommodation in cloud
- Consulting services
- Advertising services
- Digital design services
- And more
Technically, affiliate marketers who advertise local businesses are also promoting services. Service-based affiliate marketing can follow any of the strategies mentioned above.
However, involved affiliate marketers are often more successful than independent marketers in this area. Consumers are more likely to trust a service recommendation from someone who has actively used it versus someone who has not.
Consultant
Finally, affiliate marketers can promote consultants or consulting services. These include life coaches, marketing consultants and other types of business consultants.
Again, the most successful affiliate marketers in this area tend to be involved rather than independent. People are more likely to try their luck with an affiliate marketer for a physical product than for a service, experience, or consultant referral.
Advantages and Disadvantages of Affiliate Marketing
Affiliate marketing is becoming increasingly popular on the internet, but it has its pros and cons. Aspiring affiliate marketers should fully grasp these before starting their own affiliate marketing businesses.
Benefits of Affiliate Marketing
Many online business owners think affiliate marketing is worth it, especially since it has become more profitable in recent years. According to statistics recent, affiliate marketing industry worth over $8 billion today, compared to more than 5 billion dollars in 2017.
The many benefits of affiliate marketing include:
- It's incredibly easy to perform. Affiliate marketers don't need to design and create products, or fulfill orders or ship products to customers. They just have to advertise it
- It is a very low risk. Affiliate marketing programs are usually free, so affiliate marketers can start making money without much initial investment.
Once successful, many affiliate marketers generate a fair amount of passive income through commissions. - Affiliate marketing is easy to scale. Many affiliate marketers run multiple blogs, influencing consumers or advertising products in different industries/niches.
Commission income can be funneled back into his business for further expansion and greater long-term profits
Disadvantages of Affiliate Marketing
Even with these benefits, it's important to be aware of the potential drawbacks and challenges of affiliate marketing.
These include:
- Affiliate marketing often requires patience. Most successful affiliate marketers need to work at it for several years before building the sustainable blogging infrastructure and public trust needed to generate consistent passive income.
- Affiliate marketing profits are always based on commissions. Thus, a person's profits depend on the success of his efforts and general market trends.
- No control over affiliate marketing programs. All affiliates must obey the rules established by the program supervisors, such as the company offering the products. Therefore, many affiliate marketers don't have as much freedom as they would like.
Popular Affiliate Marketing Channels
To be successful in affiliate marketing, you need to choose the right affiliate marketing channels to grow and maintain. Affiliate marketing is not limited to blogging (although creating a blog could be a smart way to get straight into this business model).
It can also take place on a variety of different channels and types of content. Here are some examples.
Niche websites
Niche websites include the blogs mentioned above: the most common affiliate marketing channels.
For example, an affiliate marketer creates a blog post showcasing the best products in their industry. They include a few affiliate products in the product overview.
However, micro sites or corporate blogs are also considered niche websites for affiliate marketers. These are usually advertised on partner sites or sponsored listings for search engines.
Niche websites cater directly to target audiences very specific, like a single profession at a certain level in an industry. Many niche website affiliate marketing efforts focus on B2B consumers (i.e. middle managers who buy things for the organizations that employ them).
Social media
However, affiliate marketers can also advertise effectively on social media platforms. Instagram, by far, is the simplest example of this marketing in action.
Influencers on Instagram and other platforms associate themselves with brands and then take photos or videos wearing those brands' products or using their stuff. This type of advertising can be more passive or more aggressive depending on the influencer's audience, goals and personal strategy.
Email advertising
Email marketing can also be beneficial when trying to build an affiliate marketing audience or presence. Many affiliates use mailing lists to promote their partners' products or services. They weave hyperlinks in email newsletters, which work like traditional affiliate links.
Alternatively, affiliate marketers can build affiliate mailing lists over time. They can use different campaigns to collect email addresses and then send those emails for new products they choose to promote in the future.
Popular Affiliate Programs
There are dozens of high quality and very popular affiliate programs you can join. However, some of them are more effective (and potentially profitable) than others. Here are three of the most popular affiliate programs to consider.
Amazon Partners
The Amazon Associates Affiliate Marketing Program is accessible and, more importantly, provides affiliate marketers with sales potential for all products contained on the Amazon Marketplace. As a member of the Amazon Associates program, Affiliate Marketers bring customers through external traffic sources to Amazon.
Since Amazon offers millions of different products, affiliate marketers have a choice of which products they want to promote or feature. Many beginner affiliate marketers find the Amazon Associates program to be the best for developing their skills in building an audience.
YouTube Partner Program
The YouTube Partner Program allows YouTube content creators to monetize their videos by partnering with different advertisers (who are also program partners). YouTube content creators can become affiliate marketers by:
- Allowing ads from partner advertisers to appear on their videos
- Advertising directly to these partner advertisers during their content, such as an advertisement
The YouTube Partner Program is a great way for regular YouTube content creators to earn revenue from their videos. It's also a good way to become an affiliate marketer while focusing primarily on your YouTube content and high-quality videos.
ClickBank
Then there is ClickBank. ClickBank offers 6 million distinct digital products and reaches over 200 million people each year. It is therefore an excellent choice for affiliate marketers who want to focus on advertising/promoting digital products rather than physical ones.
More importantly, affiliate marketers enjoy a potentially high commission rate (sometimes up to 75% per click or sale). This way, affiliate marketers can enjoy a consistent source of recurring income if they build an audience and marketing network for this program.
How Much Do Affiliate Marketers Earn?
Average affiliate marketer salaries are very difficult to determine due to the nature of the industry and its inherent variability. According to Payscale, the average affiliate marketer earns approximately $53 per year. However, the highest paid and most successful affiliate marketers earn over $70 per year.
Superstar (and very successful/lucky) affiliate marketers earn over six figures, but this is the exception rather than the norm. Therefore, aspiring affiliate marketers should keep this in mind if they hope to get rich quick or make a quick buck with mass produced listings or product roundups.
Examples of Successful Affiliate Marketers
Wirecutter is one of the most successful affiliate marketing companies of all time. As a quasi-journalistic site, it regularly lists the best gear, gadgets, and tech products for its target audience.
Among its many partners are Office Depot, Home Depot and Amazon.
Consumer Search is another great example. This affiliate review website is all about breaking down home products for potential buyers. It's a very reliable affiliate marketer overall, with around 1,2 million visitors per month.
Then there is Money Saving Expert : a UK-based consumer site focused on affiliate marketing independent of direct company fees. This means that the site reviews products and makes recommendations based on what it truly believes, earning it a significant amount of trust and goodwill from readers in the process.
How to become an affiliate marketer
Anyone can become an affiliate marketer with the right plan and dedication. But if you really want to be successful, you'll need to take some steps to ensure you build an audience that trusts you and generates consistent passive income.
Define your target audience
First, budding affiliate marketers need to define their target audiences. A target audience is a single demographic or set of people most likely to buy what you're selling. For example, the target audience for an auto repair shop includes car owners.
By defining a target audience, you'll be better able to create content that resonates with them and converts them into customers for your partner advertisers.
Find a product to promote
Next, you'll need to find a product or service to promote consistently. It should be related to your target audience.
For example, if your target audience includes parents between the ages of 25 and 45, ideal products for your affiliate marketing campaigns include toys, children's clothing, etc.
Test your idea
Once you have considered and defined a target audience and product category to promote, test your idea by starting with soft affiliate campaigns. Join an affiliate program or two, then write a few blog posts for those campaigns.
See where you are after a few months and be ready to adjust your idea.
Scale your idea and promote the affiliate offer you found
If your initial efforts are successful, begin to evolve by writing more blog posts, growing on social media or creating video content. Keep promoting the affiliate offers you find, keeping track of what works and what doesn't.
For example, if your audience reacts more to video content on YouTube than to written blog posts, it's a good idea to lean more towards creating video content.
Reinvest in other websites and grow
When you make money, don't rest on your laurels. Instead, reinvest that money into your websites and affiliate marketing business. Plan to grow for future success and consistent passive income generation.
Tips for Successful Affiliate Marketing
While anyone can become an affiliate marketer, only some are good enough to truly succeed in this industry. Fortunately, there are many ways to succeed in affiliate marketing. Here are some tips to keep in mind when launching your first campaigns.
Create great content
First of all, never compromise on the quality of the content. Creating quality content is the number one way to attract people to your affiliate marketing brand and convince them to click on your affiliate links. Great content includes:
- High-quality, well-written blog posts (that don't appear to be direct advertisements for your partners)
- Great video content
- Engage social media posts that provide real value to those who view them
Find your target audience
Second, strive to fully understand your target audience. This allows you to advertise to people most likely to buy from your partners in the first place. If you don't target your target audience correctly from the start, you'll be advertising to the wrong people throughout your affiliate marketing campaigns and wasting your time and money.
Go beyond product reviews
Although most affiliate marketing focuses on product reviews or recommendations, you don't have to stick with this basic system. Instead, you can benefit from going beyond product reviews and offering additional value to your consumers, such as:
- The breakdown of complex topics in your industry
- Service Notice
- Discussion posts about products and how they work
- In-depth articles on key industry insights
- And more
Network with others at Affiliate Summits
Finally, feel free to get out there and network with other affiliate marketers at affiliate summits. As mentioned above, these business-focused meetings allow you to connect with other affiliate marketers and form affiliate networks.
Frequently Asked Questions
Can beginners do affiliate marketing?
Absolutely.
One of the main advantages of affiliate marketing is that it is very accessible. Beginners can start affiliate marketing and earn a modest passive income within months. However, if you want to make affiliate marketing your main source of income, you will need to develop your skills and the quality of your marketing campaigns over time.
Is Affiliate Marketing a Good Job?
It can be. But it depends on what you are looking for and if you maintain your expectations and verify. Affiliate marketing can be a great job if you want to earn extra passive income while building an online business empire.
It's not a good job if you need to make a lot of money quickly.
Is it hard to get into affiliate marketing?
No. But it can be difficult to be successful in affiliate marketing in the long run. As mentioned, anyone can get into affiliate marketing. But it will take you months, if not years, to fully understand your target audience and learn how to develop content that resonates with them and converts them for your advertising partners.
Conclusion
Affiliate marketing is an engaging and accessible online business model. Through affiliate marketing, you advertise or promote products on behalf of other companies. When done right, affiliate marketing can generate a lot of passive income and give you true financial freedom.
Do you have more questions, want to learn more about how affiliate marketing works, or need some advice? monetize your existing blog ?
Leave a comment and ask us to show you how you can maximize affiliate marketing for your personal goals!
