Explaining The Affiliate Marketing Business Model

Along with online sales, affiliate marketing is gaining momentum. Numbers speak about the prospects of this modern profession – by 2022, profit from affiliate marketing will amount to more than 8.2 billion dollars. This is not surprising, because today most of us prefer to make online purchases. Every year, the e-commerce industry is growing at 23% and according to statistics, 95% of purchases will be made online by 2040.

Let us take a closer look at how affiliate marketing works and what steps should be taken to get started in this area.

What is affiliate marketing?

Affiliate marketing is a way to promote a company’s products or services, which is rewarded with a commission for each attracted customer.

Simply put, you just advertise a product and get paid for the targeted action of attracting customers. The most common example of implementing affiliate marketing is a referral link.

This is a unique link that directs customers to the product page and also notifies the store who exactly brought the customer to pay for their work.

Affiliate marketing benefits

Let us take a look at the benefits of this online profession:

You can work at any time, anywhere in the world with free Internet access.
You can not be limited to an advertising campaign for one product – you can cooperate with different partners at the same time.
No need to worry about creating a service, purchasing a product, finding suppliers, logistics, warehouses, etc – you sell what is already on the market.
You do not have to personally deal with customers, process their complaints or claims.
Additional income – with high-quality promotion of the affiliate program, it will work for you around the clock and bring an excellent stream of passive income.

If the average salesperson has to spend time in a physical store and promote the products of one company, you have the opportunity to earn commissions on several companies simply by focusing on marketing.

Who is involved in affiliate marketing?

There are usually several parties involved in the chain of an advertising campaign: advertiser, affiliate network, webmaster and consumer. Let us take a closer look at each:

Advertisers

These are the companies that are the creators of the product. They turn to third-party advertising sources, allocate a budget for the promotion of a product or service and pay for the webmaster’s work.

Affiliate networks

These are platforms where advertisers can post offers and attract partners to cooperate. In fact, such platforms are intermediaries between publishers and offer owners. Of course, you can work directly without third parties, but affiliate networks have a number of valuable advantages:

the network provides access to a variety of offers in different directions.
you will have a personal manager who will help with technical questions, activate a private offer, increase the interest rate and much more.
the affiliate network provides payments on demand or once a week, while the advertiser pays only once a month.
affiliate networks take on the financial risks associated with advertisers.

Webmasters

These are the people who drive traffic to products and services. The main task of a webmaster is to get people to take targeted actions: register on the site, fill out an application, place an order, etc.

Customer

The person who performed a target action or purchase of a product.

Traffic sources

The main thing for a webmaster is to feel their target audience. In this case, you will understand on which platforms to place this or that advertisement in order to get the most interested customers. In general, ad campaigns can be placed almost anywhere. Here are some of the main traffic channels:

Organic Search

It is the most popular channel on the Internet. Search engine algorithms crawl millions of sites every day and show the ones that will most accurately respond to queries. We can see these “most useful pages” in the top 10 Google search results.

Advertising in search results

These are the ads that we see before and after the top 10 results, they are labeled “ads”. Such a promotion can be configured on the advertising platforms of search engines – Google Ads for Google and Yandex.Direct for Yandex.

Display ads

These are the ads that we come across when we go to various sites. Static banners, videos or animations appear in their interface. Also, the commercial can be seen, for example, on YouTube before the main video starts. The transition to the site from such ads will generate “display advertising” traffic.

Social media traffic

Social media traffic sources can be Facebook, Instagram, Twitter, Pinterest, YouTube and others. It is very easy to set up targeting by age, geography, interests and other parameters.

Referral links

A referral link can be placed almost anywhere – on a blog, on a forum, on a personal website, etc. This can be either native advertising in the story of how you found the best food for your cat, or direct, for example, in a chat room for discussion.

Email newsletters

This type of traffic will not attract new customers, but only return old ones. The fact is that we can only send messages to users who have already left their data on the site.

Mobile traffic

These ads are run on mobile phones. Targeting can be customized by carrier, operating system, site ID and even phone brand. The most popular mobile ad formats are banners (display), pop-unders and push-notifications.

What payment models are there in affiliate marketing?

There are many models of paying for a webmaster’s work, but here are the most popular ones:

PPC (Pay per Click)

Although this model appeared in the list of the most popular, it is not very common, since the payment for such a targeted action is too low. In most cases, this model is used by the websites that do not want to optimize their income, but simply want to hang up their banner code and periodically withdraw the accumulated amount.

PPL (Pay per Lead)

This model is profitable only if the user has taken the necessary action – registered on the site / in the game, filled out an application, subscribed to the newsletter, etc.

PPS (Pay per Sale)

This model is used when the user has the opportunity to make a purchase online. It is mainly popular with e-commerce businesses. In some cases, the webmaster can receive a percentage of the cost of the product. If you agreed on 10% and brought a customer who bought products worth 10,000, then from this purchase you will have 1,000.

PPV (Pay per View)

Payment is made for 1000 impressions. This model is more commonly used by large portals and is very rare in affiliate marketing.

Lifetime (“Lifetime” payment from customer purchases)

Extremely attractive but rare payment model. It means completely shifting the responsibility for advertising onto your shoulders. Therefore, webmasters do not always agree to it, because they simply do not have enough funds to purchase such a large traffic flow. In addition, no one cancels the risk of changing the rules of the affiliate program.

All these payment models can be divided into two categories: one-time (once a month) and regular (daily, with a large traffic flow) or every week. In general, these rules are set by advertisers or affiliate networks, but they can always be negotiated – perhaps they will make concessions to you.

How to start making money with affiliate marketing

In fact, it is not as difficult as it might seem. In order to get started with affiliate marketing, it is enough to adhere to a clear plan:

Choose a platform

Any social network, portal and website can be used as a platform for product promotion. Even Instagram or Tik Tok will do. Of course, you should start with platforms where you already have a target audience and gradually develop others. However, you can use other methods of promotion, for example, email newsletters.

Decide on your niche

It is very important to focus on one highly specialized topic. For example, the topics “finance” and “physical products” are very broad. Instead of tackling everything, try something specific – for example, “binary options” or “bad”. Also, try to pick a topic that you know or are interested in. This way you will not get tired of working with a niche and you will not have to quickly switch to a new one.

Find your audience

Advertise your blog in every way to attract as many interested readers and potential customers as possible. Nowadays, this is easy to do thanks to the ability to customize the targeting in detail. You can specify the most detailed parameters – age, gender, interests, geography, etc. To retain your audience, keep quality content in mind.

Sign up for an affiliate program

Take the time to choose an affiliate program. Take an interest in the reputation of the program on thematic forums, determine for yourself whether the offered conditions suit you and whether the affiliate program can provide exactly the product that interests you.

Select products to promote

The choice of products for advertising is yours, so approach it responsibly. To get the most profit, pay attention to factors such as popularity and reach in different countries, number of users of a product, etc.
Conduct a market analysis and make sure the products are in demand. A good choice is to start with seasonal items.

Create quality content to promote your product

To be successful, you will need to work on the quality of the content as well. Do not think that more is better. This can play against you, because no one likes to read a dull blog filled with advertisements. Make your page lively, vibrant and interesting. Do not forget that affiliate links should fit harmoniously into the content of your blog. For starters, you can bring in a third party content maker. This will show you how to do it and learn a few skills. But if you are not ready for additional costs, take a look at how your colleagues or competitors create content.

Optimize and monitor

Optimization, testing and analysis are integral stages of working with affiliate programs. Set aside a small budget, create several different ad formats and promo materials and then launch impressions and analyze the statistics obtained. Disable or modify what does not satisfy you. Remember that all ads are worth checking carefully. It happens so that elements with a low CTR bring leads, while those with a high CTR do not bring conversions.

Make profit

By adhering to all the rules, you will be able to reach the desired income. Study the terms of the affiliate network or direct advertiser carefully. Remember that you can work with several offers at once, which will bring you profit even when you are on vacation.

Conclusion

These basic principles of getting started in affiliate marketing will help you quickly navigate in the field and get a good start. Be patient – do not expect crazy income right away. Focus on your niche and offers. As your blog or website grows, set new goals for yourself and keep growing.

We hope that our article helped you understand affiliate marketing and became an impetus for professional development.