July 4, 2022

The Fundamentals of Affiliate Marketing

The Ultimate Glossary of Term :Affiliate Marketing

The story of Affiliate Marketing

Affiliate marketing is a system which refers customers to business and earns the commissions from it. This system was established 1000 years back. But there was no technology to track the referrals. Online affiliate marketing is easy to track, is more transparent and faster. Technology made the old referral system. Some of the offline model that exists which includes: LIC Agents, Matrimonial Agents , Real estate brokers,  Transport drivers etc. Online affiliate marketing enables the same system for the same micro transaction. 

Producers of the Goods and services would get better ROI focusing on their competitive advantage -production.

A lot of people think -Why can’t marketers do  the promotions themselves because getting customer is difficult

Image1. What is affiliate Marketing
  • The general chain in the offline world is: Manufacturer- Distributor- Wholesaler- Retailers. Generally Retails earns more profit. Retailers make more profit because they are close to the customer.
  • Anyone who can bring the business is rewarded with a huge margin because marketing and acquiring customers is the biggest cost in any business. 
  • In the online world; Manufacturer can set up an e-Commerce store and have affiliates promote their links directly to the end customer.

The benefits of online affiliate marketing :

  • With online affiliate marketing, Recurring affiliates is easy because a lot of people can not make goods and services. Instead they want to do promotions and earn commissions without having the headache of production and support. 
  • The affiliate marketing industry is very much mature now. Because of that, manufacturers set up affiliate programs easily. 
  • There is a lot more transparency in online affiliate marketing because commissions are tracked easily. This makes people feel secure about investing money and effort. The barrier of entry is low. Even a student can join an affiliate network and even if he makes one small sale in a month , he can still get paid up to 50 $ to 100 $. 
  • Online affiliate marketing is international. You can promote US products to US customers from India and you can start with your free organic methods of promotion like content writing.
  • Content creators can create more revenue with their visitors through affiliate promotions than display advertising. 
  • For bloggers, Google Adsense is not viable source of income more because of the extremely low EPM i.e. Earning per thousands impressions 
  • Youtubers are also depending more on affiliate earnings for sustaining their channels than brand sponsorship on youtube channels. Youtube ads pay only $1 to $1.5 per thousand views. If you have videos which get a million views , You can make only $ 1000 to $1500 .
  • If you have a million views on a YouTube video, you can expect at least 10000 clicks on your affiliate link on the description and from that click 1% buy a product for $100 that’s 100 sales out of 10,000 Clicks. This is consertive estimate. 

The size of the affiliate marketing industry

The affiliate marketing spend in the US alone will be $8.2 Billion by 2022. A 3 X growth in the last 10 years. 

Image2. Affiliate marketing spending forecast in USA

If we see the data from statista; its 4X growth from 2010 to 2022.

Image3: Google trends in between Digital Freelancer and Affiliate marketer

The interest in affiliate marketing is more than digital freelancing in India. People use their marketing skills to promote others products directly rather than work with the clients.

Interesting stats on affiliate marketing :

  • 81 % of advertisers and 84 % of content publishers in the US use affiliate marketing as one of the revenue generation resources. (Forrester report)
  • Advertisers depend on the affiliates on only for the sales but also for awareness.
  • Amazon associates have 1 BN  i.e. 1000000 affiliates on its platform
  • ShareASale has 700,000 affiliates on its platform. 
  • 85 % of the shoppers check for reviews before making an online purchase. This is a great opportunity for content publishers to get traffic that is in the buying stage.
  • More than 80% of the affiliates are focused on promoting B2C products and services
  • Content marketing and blogging is responsible for more than 40% od affiliate sales generated (Awin report)
  • 35% of affiliate marketers make at least $ 20,000 in annual revenue from affiliate marketing. 

Why do businesses and individuals choose affiliate marketing ?

  • Every business needs traffic , leads and sales. Internal marketing teams are very insufficient in achieving their goal because there are so many sources of traffic out there and marketing teams can not tap it all the channels.
  • Marketers working in companies are not that great with their work – because very intelligent marketers become affiliate marketers. In affiliate marketing there is no cap in the income they can make- but with the job, there is a limit. 
  • Different affiliates will tap into the different channels and this gives a wide net to be cast on the market for the business. The affiliate links will reach places that the marketing team never reach.
  • Businesses are paying only for performance. They don’t need to pay affiliates who sign up but don’t bring in leads. However they have to fire weak marketers in the team.
  • Affiliates networks have made it very easy for businesses to grow up and running with an affiliate marketing system. 
  • For businesses who doesn’t want to sign up for third party affiliate network, they can use tool like HasOffers to host their own affiliate system
  • When sales go down, Their marketing cost also go down as they are only paying for performance
  • Businesses have complete freedom to stop an affiliate program after getting a critical level of branding through the affiliates. 

Why do people prefer Affiliate marketing instead of working as a marketer?

  • If you know how to drive traffic ; you know how to earn your freedom. A good marketer never needs to work on a fixed salary. He will always charge for performance. 
  • If a business is not giving you a good deal, you can stop promoting them and start promoting their competition with just clicking on the button, no need to go through the lengthy procedure of changing jobs.
  • The hand that gives the hand that takes. Affiliates give customers business . They do not take commission. Commission is a side effect of giving. 
  • Being an affiliate means that you own your own web Properties , Your Email List, Your community and your own brand. You can eventually start your products and services as you understand the economics of the niche. 

Why do people prefer Affiliate Marketing?

  • When you are getting started you only need to invest your time, not capital. There is no risk apart from investing your time.
  • Once you have created the right kind of content for affiliate marketing, You will be able to drive traffic to your content using freehand organic methods without having to spend money on paid ads. 
  • Once you have made $1000 , be ready to invest $500 back into the ads. Even if you make $500 back – You will know what is working and what island that experience is enough to get you comfortable to spend on ads in the future . With efficiency you can improve ROI.
  •  You will end up becoming an influencer in your niche by boosting your followers through paid ads – funded by affiliate commissions . You don’t need to rely on organic growth.

The top Affiliates networks in the world:

  • CJ.com
  • Impact.com
  • clickBank.com
  • JVZoo
  • ShareASale
  • vCommission

Top Self Hosted Affiliate Programs:

  • Amazon
  • WPX Hosting
  • A2Hosting
  • ClickFunnels
  • Hostinger
  • ConvertKit
  • Shopify

An Affiliate marketers mindset:

  • Do not treat affiliate marketing as a job. Trat its an investment. Time , Energy and money.
  • An investor doesn’t expect all his investment to produce returns. Similarly, all your articles might  not produce good returns. 20 % of the content you create will give you 80% of the income. If you do not have money to invest,  Invest your time.
  • If you want guaranteed income then find a job or do digital freelancing when you are getting started . Start investing some extra income into affiliate marketing . You can also get a freelance content writer and start investing on the side. 
  • Affiliate marketing helps you to understand your target market. This will help you launch your own products and services in the future to the same niche. 
  • Don’t just be a promoter of a product; build your web properties. Your asset is your list and your community build around the content. Your asset should be able to promote any affiliate product in the niche. 
  • Have a genuine desire to help people with their problems. Give them product recommendations. Promote only the products that you might buy yourself.
  • Though reviews are the best way to promote , You can build a list, Create community, share links on your group, Do webinars and share those links on the chatbox. You just need to reach people, how you them doesn’t matter. 
  • Once you make mony do not use it for personal expenses. Reinvest it into growth. Spend money on design, content and traffic. It will create a compounding effect. 

Affiliate marketing Models:

CPC: Cost per click- The advertisers pay you for every click. Not very likely because of the fraud and lack of performance tracking.

CPL:Cost per lead- The advertisers pay you for every lead that you generate . Also less likely because of the possibilities of the fraud and advertiser doesn’t make revenue from the lead

CPI: Cost per install- You get a commission whenever you get the advertisers app installed. 

CPA/CPS: Cost per action /Sale– The advertisers pay you every time when a sale  happens that generates revenue for the advertisers. 

Recurring Commission: You Sell the product once whenever the customer receives the product, You get commission. This is one of the best models but most of the people don’t take it seriously because there is no instant commission . This is long term. 

The technology behind the affiliate marketing:

  • Each affiliate link looks like website URl+Affiliate ID
  • When visitors click on the link and land on the page, there might be a lead form or purchase link.
  • Once the visitor fills the form or makes the payment, and then goes to the thank you page , A “Pixel” is fired on the thank you page – Which lets the advertisers or the affiliate network know that the action has been completed. 
  • A pixel is a “1×1” invisible image that loads . The loading of the pixel confirms the action
  • The technology tracks the IP address, browser and sometimes the device of the user. It also install cookies on the user’s browser. This help tracking if the action has completed
  • Many affiliate networks give a 30 day referral period for the action to be completed. 

The tools required for affiliate marketing:

  • Community tools:Facebook groups, Telegram Groups, 
  • Keyword research : Aherefs/ SEMrush 
  • Link tracking and Link Shortening tools: Shorten /Tiny
  • A WordPress blog with web hosting ,Themes, Plugins.
  • A landing page to collect emails with lead magnet
  • Email list with email marketing tools
  • Content creation tools and resources 

Blogging for Affiliate Marketing:

  • Choose a niche and register a domain. You don’t need to think much about it when you are getting started . It’s more important to be getting started than doing it perfectly. 
  • If you have absolutely no idea what niche to choose , Start a generic review website like reviewtoday.com – Writing reviews  of the product is the best way to generate affiliate sales 
  • Get a hosting account with hostinger, WPX hosting or blue host. Install wordpress blog and publish your review article.
  • Drive traffic to this page via social media and small paid ads campaigns. Do not hesitate to invest a small amount of money in ads . Even if the first campaign is going to loss it is fine because you need to see affiliate commission to build confidence. 
  • Publish the first article and make the first commission before you do anything. 
  • You can write review articles based on the online research that you do. It’s not required that you have to have used or tried the product yourself. The research that you do is of the same value in itself. 
  • Embed customers testimonials and help readers to make the decision to buy the same. Drop affiliate link throughout the article. Link images with affiliate links as well. 
  • Compare the product with other products and write pros and cons of the product in comparison to the competing product. Do the same review of the competing product. Repurpose your content as much as possible.
  • Create the articles in the form of videos using slideshows, upload them on youtube and also embed it back to the blogpost. This will help to  blog rank better.  

Creating the right content for affiliate websites: 

  • Do not publish the content that will attract people who have no interest in buying 
  • Always ask the question; “ will this be read by people who are planning to buy ?”
  • Top 3 major types of content for affiliate marketing : Top 10 Posts, Review Posts, and product comparison Posts.
  • The brands are not using your help to get branding and sales, You are using brands’ efforts to attract buyers and make final decisions before they buy the product. 
  • Use google auto suggest to find out the alternative for each product. Just type in “Product name vs ……..” and you will get to know the top alternatives for the product. 

Driving traffic to Blog:

  • When you are getting started , You can drive the initial traffic through social media and back linking through blog commenting and manual invitation. This will work until you get the 5-10 sales.
  • Optimise blog for Search traffic, SEO will always be one of the major sources of traffic of blog.
  • Drive traffic to your blog through your blog pages via paid ads and google Dynamic search ads.
  • Build an email list using lead magnet and drive traffic back to your blog.
  • Publish video reviews of the product. Get youtube traffic.   

URL management for affiliate links:

  • When you are just getting started , It’s easy to manage the affiliate links as there are not many links to be managed at the same time.
  • Within a few weeks it can become confusing to manage 100s of links.
  • Never promote the affiliate links URLs directly. The link looks ugly  and it’s not recommended to show it to your audience. Mask it with a URL shorten.

You may read similar blogs on my Blog Site and if your are looking for professional Affiliate Marketing Services then please visit Avis Pixel.

To know more about Affiliate Marketing and How to become affiliate Marketer; You may contact me on +91 9422336455 or write to vitthal.jagtap@avispixel.com.