Affiliate Marketing – Why is it Important for your Business?
Affiliate marketing has been with us for more than 20 years, and it looks like it will continue to be an essential tool for the digital marketer for many more. So that this type of marketing has no secrets for you. Today I want to offer you the best affiliate marketing guide to know what it is, how it works, the different types that exist and the principles you need to apply as an advertiser to succeed with this strategy.
What is Affiliate Marketing?
Affiliate marketing is a kind of digital marketing in which the advertiser pays only for the results obtained (conversions, leads, clicks, etc.). To achieve these results, the products or services are promoted through third-party sites or affiliates, which give space to the ads in exchange for a commission.
Affiliate marketing first emerged in 1996 when Jeff Bezos, the founder of Amazon, devised a way to link the pages of other sellers so that they would take a commission for each book sold. More than 20 years later, this model is still more alive than ever, and it provides advantages for all those involved:
- Advertisers attract new customers with much less marketing effort and only pay for the results achieved. It makes it easier for them to manage their budget while always ensuring a positive return on investment.
- The affiliates obtain an economic return since they take a commission for each result. Therefore, affiliate marketing is an easily accessible solution to monetize websites and blogs.
- And finally, if this type of marketing is managed correctly. The consumer also benefits through highly personalized recommendations. For example, from a blogger who explains how he uses the product or service daily to insert the link affiliate.
Affiliate Marketing Players
To better understand how this model works, let’s take a look at the three big players in affiliate marketing:
We call “advertiser” to the company selling products or services promoted through affiliates. From online subscriptions to appliances, the world of affiliate marketing has a place for all kinds of advertisers. In addition, this strategy can be adapted to very different company sizes and budgets, from large multinationals to sole proprietorships. The advertiser is in charge of designing the creative material (from a banner to a simple link or telephone number) that the affiliate will be in the order promoting.
Affiliates are the intermediaries that connect advertisers and consumers in exchange for a commission. As with advertisers, the world of affiliates has room for all shapes and sizes. From the individual blogger looking to monetize their website to large affiliate companies. Where the advertiser provides the creative material. The affiliate is generally free to create the promotional content by writing a blog post about the product.
At the end of this entire process, we have the consumer or end-user who gives meaning to this strategy. They are the ones who see the ad posted by the affiliate. Click on a link (or submit their information via a form), and end up visiting the advertiser’s website to complete the conversion.
Cookies, The Allies of Affiliate Marketing
This affiliate marketing guide would not be complete without mentioning cookies, as they are essential for adequately attributing results. As you may already know, cookies are small files web servers send to Internet users’ hard drives containing information about their preferences and browsing patterns.
In affiliate marketing, cookies are use to remember a user’s behaviour, for example, which links they click. In this way, tracking their actions to know how they have come to buy the advertiser is possible.
Thus, when the user clicks on an affiliate link, the link through which they reach the destination website (the advertiser’s page) contains information about the affiliate, the ad they clicked on and the amount of the commission. Let’s see the whole process in more detail:
- The affiliate establishes an agreement with the advertiser. Through which they will promote their products or services in exchange for a commission.
- From that moment on, each time the affiliate mentions the advertiser’s products or services on his website, he will include an affiliate link.
- The consumer visits the affiliate’s website and clicks on one of the links. At that time, a cookie is store on your computer.
- The consumer purchases (or another conversion) on the advertiser’s website. While completing the process, the advertiser checks your computer for affiliate cookies.
- Upon finding the affiliate cookie, the advertiser notes the corresponding commission. This commission is add to a report where the advertiser collects. All the traffic and conversions that come through the affiliate link.
- At the end of each billing period (usually monthly), the advertiser pays the corresponding commissions to the affiliate.
Affiliate marketing is performance-base marketing in which a business rewards one or more affiliates for each visitor or customer brought by the affiliate’s marketing efforts.