Affiliate Marketing: Is it right for your business?

Affiliate Marketing: Is it right for your business?

Ever noticed #sponsored or ‘Affiliate link’ on a social media post or website? That means the person or company receives a commission from purchases made via that content. This is known as affiliate marketing and, globally, the affiliate marketing industry is worth over $17 billion. Anybody can be an affiliate, although you typically see influencers—of any size—taking on the job. For small businesses, affiliate marketing can be implemented into your digital marketing strategy to help boost exposure, expand your network and provide an extra income stream.

Let’s explore what affiliate marketing is and how it works.

What is Affiliate Marketing?

Put simply, affiliate marketing is when other people promote your product or service in return for a small commission for each sale or lead. It’s an advertising model that helps you make the most of your digital marketing. It rewards third parties for generating leads to your website or driving sales of your products via a unique link that they share on their online platforms.

Affiliate marketing in 4 steps:

1. You find an affiliate you want to work with, or affiliates can enquire.

2. You provide them with a unique link known as a deep link.

3. They create content and share your link on their online platforms.

4. You pay a small commission to the affiliate for each sale they generate.

What are the Pros and Cons of Affiliate Marketing?

Before you start an affiliate marketing programme for your business, it’s good to get a rundown on the pros and cons. Here’s what you should consider before you get started with affiliate marketing.

Pros

• You access a much broader market.

• It’s a cost-effective advertising method (you only pay if you make a sale).

• You can see where your leads are coming from.

• It’s easy to get started.

• Influencers might already have a fairly large online following.

• You don’t have to do it alone! Companies like Awin Access help match you with partners.

Cons

• You don’t have complete creative control over the content that’s produced.

• It can be subject to fraud if not managed properly.

• There’s a lot of competition.

• Getting it right will take patience.

Types of Affiliate Marketing

Now you have a clear picture of what affiliate marketing is, let’s look at the three main types: unattached, related and involved.

• Unattached Affiliate Marketing

This type of affiliate marketing is used when the person or company promoting your business has no attachment to what they are promoting, and the product is not related to the website, blog or social media it is linked to. It’s simply putting the link out there and hoping someone clicks on it. This pay-per-click method is low maintenance but gives minimal control.

• Related Affiliate Marketing

Related affiliate marketing is when your links are used on established online sites such as blogs, podcasts or social media that are related to your product or service. The affiliate does not necessarily use the product, but the link is there to be used by anyone who consumes that content.

• Involved Affiliate Marketing

This type of affiliate marketing is the most beneficial for small businesses as it creates a partnership between the affiliate and the product they are directly involved with. Perhaps it’s a product they love, a service they use or something they’ve had a great experience with. You can connect with people and brands who care about your product to create a beneficial affiliate marketing partnership.

Tips for Affiliate Marketing Success

Affiliate marketing can be a challenge for small businesses, as generating consistent traffic is tough. So, how can a business utilise affiliate marketing? Here are some tips for success.

• Carefully select who you work with. Consider the quality of their content, their followers and if they align with your brand's vision. You want to ensure your customers trust in your business and brand through whoever’s promoting it, so it’s important that your partnerships align with your brand initiatives and ‘speak’ to your audience.

• Focus on your niche. This will help differentiate your brand from your competitors and give you the edge. This is typically known as a USP, or unique selling point. What makes your brand different from others in your industry?

• Be strict with your terms and conditions. Make sure you’re clear about how and where your partnerships can speak about your brand. Whilst you can’t always control the content that’s produced, you can often influence it with creative direction and clear terms and conditions.

• Identify your target audience through market research and competitor analysis.

• Create a strong landing page and make sure the copy is optimised and targeted. There’s no point directing buyers to a page that’s poorly written and difficult to navigate.

• To protect your business from cybercriminals, use a link cloaking tool like Lasso that makes your links more difficult to hack.

Affiliate marketing models

So you know what affiliate marketing is, the benefits and how to utilise the channel, but it’s important to understand the different payment affiliate marketing models.

There are several ways affiliates get paid, including:

• Pay-per-click (PPC): a model where commission is earned on every click of an affiliate link.

• Pay-per-lead (PPL): with PPL, affiliates get paid for every lead they generate through their content and promotions. It’s a popular payout method and you can define what a successful lead looks like - typically it is defined by a potential customer making an action.

• Pay-per-sale (PPS): the most common payout model, commission is earned for every sale that is made.

Knowing how affiliate payment models work is an important part of your strategy so you know how to budget accordingly and maximise results.

Affiliate marketing is a dynamic and effective way of forging partnerships between brands and affiliates, harnessing the power of collaboration to drive sales and revenue. With its cost-effective nature and measurable results, affiliate marketing offers a scalable and accessible way for brands and businesses to connect with diverse audiences and elevate marketing efforts.

Find out more about digital marketing channels, like SEO and PPC in our Knowledge Centre, or get 1-2-1 advice from our V-Hub Digital Advisors to discuss how your business can get in on the affiliate action.