We’ve explained the definition of marketing in our opening blog post titled ‘If you haven’t got a blogging clue‘, but I’m sure many of you are wondering what on earth we mean by ‘affiliate marketing’. Let’s begin by defining an affiliate most simply as a commercial entity that has a relationship with a larger entity i.e the affiliate operates on behalf of an organisation.
What is affiliate marketing?
Affiliate marketing, a form of internet marketing, involves the use of affiliates in order to increase traffic to your business website, therefore leads and potential sales. Affiliates refer people to purchase products and services from your website and are rewarded on a commission basis per new sale, making affiliate marketing a cost-effective form of marketing.
One example of affiliate marketing involves either individuals, or other businesses writing positive reviews of your products, containing a link to purchase the product from your website. If a sale is gained from the traffic generated by this link, the affiliate will earn a specified amount of commission, which is usually anywhere between 1% up to 75%. This form of marketing is most commonly used within the beauty industry, where commission rates are around 30% of sales.
Pros of affiliate marketing
If done successfully, affiliate marketing will result in benefits for both the business and the affiliate. Setting up your own affiliate program gives you the ability to control your own corner of the online marketing world, reaching a global audience without actually engaging in any online marketing activity yourself. As affiliates are rewarded based on performance, you will only pay for the results of increased sales. This form of marketing also strengthens a merchant’s SEO (search engine optimisation, explained in a previous blog titled ‘Marketing Definitions – What is SEO?’, thus improving their rankings for product-related keywords. The use of affiliate marketing ultimately has the ability to increase your revenue at a low price.
On the other hand, becoming an affiliate is simple and usually requires no initial investment. Providing that a merchant offers an affiliate program, anyone can apply. It is not necessary that you have an extensive marketing or sales background as long as you are able to write appropriate posts, blogs, or run your own website. Once you are familiar with the affiliate marketing process, it would be beneficial to earn from many different sources by applying for additional affiliate marketing programs and applying your skills to other areas.
Cons of affiliate marketing
It is near to impossible for a company with a large number of affiliate marketers to monitor and approve the content that everyone posts, therefore it is possible that affiliates could engage in false or misleading advertising in order to maximise their commission, thus damaging the reputation of the merchant. Companies must also be careful with regards to unlawful use of their trade names, brands and logos.
For the affiliates, in order to reap the full benefits of this marketing process, it is necessary that they research the advertiser’s products, and write relevant content that would improve the SEO of their posting, therefore resulting in more clicks and sales, therefore commission. If their content does not lead to sales then they are not rewarded. A proportion of any money made must be paid to a network who provide the link between the affiliate and the merchant. In rare cases, a merchant has closed down a program without informing their affiliates so no commission is paid out.
Affiliate marketing- is it worth it?
Even if we take the potential disadvantages into consideration, affiliate marketing still remains a simple and cost-effective method to increase sales online. Marketers simply have to research before hand and by implement simple security measures in order to easily negate all these disadvantages and enjoy the advantages of the affiliate marketing program.
Thank you for reading this week’s blog and we hope you understand the term affiliate marketing a little better now. Make sure you tune in next week if you haven’t got a blogging clue about B2B (business to business) marketing!