Affiliate marketing has become increasingly popular in recent years. The industry, today worth $12 billion globally, has expanded with over 80% of brands having an affiliate program. In this blog post, we will explain everything you need to know about affiliate marketing.
What is Affiliate Marketing and How Does It Work?
Affiliate marketing is a type of marketing where a merchant agrees to pay a commission to an affiliate marketer every time they drive a sale. With companies that are based online, the affiliate receives a link that tracks the traffic it directs to the site. For every click or conversion made using that unique click, the affiliate gets a percentage of the sale.
What is the Value of Affiliate Marketing?
Affiliate marketing gives businesses, both small and large, the chance to increase their exposure to newer audiences who may have not previously been familiar with them. And by working with affiliates, brands can broaden their professional connections, which can build valuable partnerships in the industry. Since affiliate marketing is performance-based where an affiliate is only compensated after the desired action has taken place, companies don’t have to worry about their budget being wasted on activities that don’t deliver results. If a brand’s goal is to boost social visibility and improve conversions through a low-cost marketing strategy, affiliate marketing is a great option to leverage.
How to Get Started
The first step before creating any program is to conduct proper research of your market and competitors. It’s important to see what strategies others are employing in their efforts with affiliate marketing, to gain an edge on the competition. This is also a great moment to determine what type of affiliates your brand should focus on doing business with.
Next, a decision must be made on the different types of payment structures to implement into the program as a way of compensating affiliates. The most common is a sale commission where affiliates are paid a fixed amount of each sale. However, another structure is pay-per-click, which would compensate affiliates for each visitor click done with their special link. Some companies, particularly those in the service industry, use the pay-per-call model, which consists of an affiliate receiving money for each call from a customer to purchase a product or service. A fourth option for commission is generating traffic to a company’s social media pages through an affiliate link.
The next crucial step entails setting up affiliate tracking through software to track metrics such as views, conversions, and traffic sources to determine the success of campaigns. The data gleaned from important analytics can bring new insight to your strategy, whether it be targeting different demographics or changing promotional offers.
Ready to start converting? Get in touch today and we will help protect your advertising investments by only paying affiliates when sales are made!