Affiliate Marketing is essentially the practice of using one website to drive traffic to another. In other words, it’s a way for Advertisers to outsource a portion of their marketing activity. Affiliates (or publishers) will choose Affiliate offers that they feel will work best for their audience and their marketing preferences. They can promote the offers as they see fit and will be then be compensated for each customer or site visitor they bring to the Advertiser through their own marketing efforts.
There are no complicated set-up processes or initial requirements to get started with Affiliate Marketing. An advertiser that chooses to run an affiliate program simply needs to provide the proper marketing materials for each type of promotion they are willing to accept. For example, if they only want banner or display traffic, they will only make banner images and ad copy available to publishers. However, if they are also willing to accept email traffic/leads they would need to provide several email creatives (both html and text versions). The Advertiser also needs to decide on their ultimate goal for participating in an Affiliate Program and how much they are willing to pay out for each completed action (sale, click, site visit, etc). Below is a fictional example of basic affiliate marketing.
The owner of a custom camera bag business would like to increase the daily volume of traffic to her website as well as her general site conversions (volume of purchases). She decides to work with a trusted Affiliate Network to help her better reach the right audience. She provides her account manager with 5 banners of various sizes that highlight and promote her business. Once the campaign is live in the network, an Affiliate that owns a camera review site decides to test out the campaign. They can log into the network and download the banners and their own unique link so that all Impressions, Clicks and/or Conversions will be credited to them. They simply place the Advertiser’s banner on their site to start promoting the offer. Every time a visitor clicks on the banner and is directed to the camera bag site, the Affiliate will be compensated. All campaign activity is tracked and reported and the Affiliates are typically paid out monthly on their earnings.
Once an Affiliate Offer has been set-up and the tracking tested and confirmed, it is ready for Affiliate promotion. At this point the Advertiser basically has an Automated Ad Campaign running! There are several well-known companies that have been taking full advantage of the Affiliate Marketing space for years now. Both Blockbuster and Netflix run extensive Affiliate Programs (and have been for years) to increase the number consumers that opt-in for Free 1-Month Trials. They have been incredibly successful at creating an “ideal” affiliate opportunity. The offer costs nothing for the consumer, can be targeted to just about ANY demographic and the Affiliate gets paid for each and every “free” sign-up. Everyone wins! Dating, Gambling/gaming and Coupons/deals are also among the top industries utilizing Affiliate programs today.
What are the benefits for Advertisers?
While the affiliate model may not make sense for every company that is seeking site traffic, leads or conversions, there are certainly plenty of benefits for those that choose to give it a try.
- Risk-Free – Pay for performance model. The Advertiser only pays for a pre-determined action.
- Better reach – Affiliates will promote your offer to audience groups that would not have been exposed to your ad otherwise.
- Free Branding – While your ad is continuously displayed to online viewers, you only pay for specific actions those viewers take. You will leverage awareness for your product or services.
- No up-front fees!
- Unlimited growth potential. Some Affiliates marketing models allow for individual affiliates to build their own teams of affiliates, further increasing your reach.
- Choice of Compensation Methods – Rev Share (payout a pre-determined % of revenue earned), Cost per Click (CPC), Cost per Action (CPA), Cost per Lead (CPL), etc.
Author: Jacoba Deming