Getting recognized influencers to talk about your products and services is a great way to reach the untapped audience and engage with them. Today, 80% of the brands already leverage affiliate marketing to generate quality leads. Not only this, companies are allocating a significant 15% of their marketing budget to affiliate marketing.
Apparently, affiliate marketing is emerging as one of the most cost-effective marketing techniques for enterprises. However, despite creating a lot of buzzes, there is confusion around what affiliate marketing actually is, how it happens, and does it actually delivers results.
If you are one of these brands, it’s time to start reaping benefits and sending away the confusion. To help out, here are the answers to the most sought-after questions on affiliate marketing.
What is Affiliate Marketing?
Affiliate marketing is a technique where a company partners with a person to leverage their popularity to promote products and services. Affiliate marketers earn from this promotion based on mutually agreed terms, which can be either a fixed price or a part of the profit earned by the company. These sales can be tracked via affiliate links from one website to the target one.
How does Affiliate Marketing work?
Affiliate marketing is an effective strategy that helps individuals create profit from their promotional activities. There are mainly three parties involved in affiliate marketing:
1. Businesses that Own Products or Services
Businesses can be anyone from entrepreneurs, big brands, retailers, or anyone selling a product or a service. Sellers are not actively involved in promotional activities.
2. Affiliate or Publisher
An affiliate is an individual or a company that promotes the products or services of the business. They are someone whose ability to influence their target audience drive sales for the first party. If the purchase is made, the affiliate receives a portion of the profits made via the campaign. These people are generally niche-specific, drive a particular audience with shared interests, and use products similar to the businesses.
3. Consumer
These are the people with whom affiliates share the products and services via social media, blogs, websites, videos, etc.
These three parties form various nodes of the affiliate marketing campaign.
The following steps demonstrate how it works in practice
- An affiliate is assigned a tracking URL that tracks the traffic and sales made from the affiliate’s channel to the website.
- An affiliate marketer promotes your products and services via multiple mediums such as email blasts, blog posts, product reviews, videos, etc., whichever way works the best for them.
- Customers or leads convert when a visitor who views the promotions sign up or purchase the product or services.
- Affiliates receive a commission from the sales driven by their efforts.
Benefits of Affiliate Marketing
1. Helps You Boost Brand Awareness
Unless your customers recognize you in your niche, it is impossible to drive sales and revenue for your business. While marketing techniques are tailor-made to meet this demand, having an affiliate talk about your products and services will deliver incredible benefits for your business. These influencers are closer to your target audience; therefore, hiring them to build awareness for your brand can augment your reach beyond specific markets. They are considered loyal brand advocates who are trusted by their audience, therefore, establishing you among the potential customers.
2. Social Proof of Your Credibility
With a vast pool of audiences active on social media, this tool can serve as an incredible way to drive brand awareness. Today, customers browse your brands to analyze your credibility and reputation across the internet, most prominently on social media. No wonder social platforms are the first thing that would cross their minds if they have a good or bad experience with your products and services. This influences others who make their purchase decisions based on reviews. Therefore, engaging with affiliates helps you tap into the potential of social media and social proof your quality in front of prospective buyers.
3. Enhance Your Reach Beyond a Specific Market Segment
There could be a large segment of the audience that you could be targeting and yet fail due to limitations of the marketing techniques. That’s, thankfully, not the case with affiliate marketing. Affiliates are carefully chosen and have a stronghold in the market of your niche. Their reach helps you multiply yours by manifolds and drive this targeted traffic to your websites. When these visitors interact with your business, they are more likely to make a purchase than targeting a broader segment where you are not even sure if the people visiting your website are even looking for the products and services that you offer.
4. Increase Your Conversions
A slight extension to the above point. Of course, when you drive a targeted audience to your website, they are more likely to sign up for your services or buy your products. However, that’s not the only aspect. When you engage with an affiliate who influences a good portion of the market in your niche, you also gain insights into what consumers expect from your business. You can understand what types of promotional material entice them and which factors impact their buying behavior.
Analyzing these, you can also tailor your other marketing strategies to make the most of every single penny you invest in them. At the same time, you can get detailed information on buying patterns and make proactive decisions.
5. Optimize Financial Investments in Marketing Activities
Other marketing techniques render ineffective if you don’t target the right audience. Also, targeting the right market using the wrong material can further add up to the concerns inviting big questions from the decision-makers. All this costs a considerable amount of money, and every single money that goes wasted adds up to big decisions that are not generally in your favor.
Affiliate marketing does not work this way and is comparatively far more cost-effective. You only pay for the marketing activities that drive sales or conversion. Also, your products and services are only marketed to the people who would make a purchase or help you with it. This helps optimize your marketing investments and yields revenue.
6. Bolster Return on Investments (ROI)
When it comes to marketing and adv_ertising campaigns, it can be challenging to determine the ROI, and the time to get tangible results can be unpredictable. Thanks to affiliate marketing, this aspect has been changed for the better. Built on the performance-based model to maximize profitability, businesses only have to pay for closed deals, not impressions or clicks.
By driving affiliate marketing adoption across businesses of various verticals, enterprises can channel their investments in the right direction while gaining direct access to receptive and targeted audiences.
The Bottom-Line
Undoubtedly, affiliate marketing serves organizations as one of the most cost-effective marketing channels, regardless of their niche or the geographies they target. However, there are a few things to keep in mind:
- Choose the right affiliates who are established in your niche.
- Keep it real.
- Track your progress.
- Don’t spread your brand too thin.
- Make sure to target the right platform.
Following these simple things, you’ll optimize your approach and garner the best results from your investments. Can you think of more things that can add value to affiliate marketing programs? Please share your experience with us in the comments.
Author – Pooja Choudhary is an experienced digital marketer at Matellio with a love and passion for digital marketing. She enjoys implementing various writing styles and techniques. She is a graduate in Information Technology which gives her a broad spectrum of understanding of various tech tools and platforms.