What is Affiliate Marketing?
Posted on 5th May 2023 at 12:17
Read Time: Approx. 6 Minutes 41 Seconds
Author: Suzanne Cook
What is affiliate marketing?
Affiliate marketing is where a brands products or services are promoted by a 3rd party. When someone purchases through the unique link, a commission is earned. Commissions are usually a percentage of the sale price but can be a fixed amount.
What is an Affiliate Marketing Service Provider?
An affiliate network acts as a link between the online brand/merchant and publishers (affiliates) allowing website publishers to find and join affiliate programs which are suitable for their website (typically to generate income from). It also allows websites offering affiliate programs (brands/merchants) to reach a larger audience by promoting their affiliate programs to all the publishers participating in the affiliate network, this supports their business’ performance, both in traffic and revenue!
There are different types of affiliates, some perform better than others.
1. Lower Funnel: The primary objective is to maximise conversions. Onsite conversion, cashback and voucher code sites tend be some of the top performers due to customer user journeys.
2. Mid funnel: The primary objective is to ensure interest in the brand is being created by being visible when customers research the brand or product. Closed community, loyalty, influencers, subnetwork and CSS partners would fit within this funnel.
3. Upper Funnel: The primary objective being creating brand awareness . Premium content publishers would be such partners, allowing for high quality coverage of the brand, however, are more competitive and expensive, making collaboration more challenging. Conversions are a lot less and knowledge of the brand must be extensive, but buyers will prove to be more valuable.
All affiliates contribute in different ways and being able to decipher the type of publisher will help categorise them under each funnel:
Cashback sites such as Quidco and TopCashback reward customers by providing a % of their purchase back, if they purchase through them.
Loyalty publishers like Collinson Group, enable customers to gain reward points once they have shopped their brand online via their site, which they can then redeem against flight tickets or other products. Alternatively, there are sites such as easyfundraising, where every time you shop online, the brand pays them and then they send the money to the customers preferred charity.
Voucher code publishers (vouchercodes.co.uk, Myvouchercodes) provide platforms where all a brands discount codes are accessible in one place, making it easier for a customer to purchase with a discount.
Closed Community publishers (Blue Light Card, Health Service Discounts) are also similar to a voucher codes site however a user will have to log in before seeing any discounts and verify their status such as student, teacher, keyworker or military. These sites tend to offer a more exclusive deal compared to other voucher code platforms.
Content publishers are a brilliant way to build brand awareness and reach a wide audience. It is a lot easier to get published in these editorial sections when it is a well-known brand, however perseverance, investment and time tends to be the way. These publications could be online or by magazine/paper form. Linkby is a platform where a brand can push a campaign along with a budget to their desired publishers and then the publishers can accept and promote the campaign via their magazine/platform.
Influencer (a person promoting via Instagram, Tiktok, LTK or Facebook) Brands can pay or product gift to allow people to push their products via their social channel. It enables the brand to partner with people they believe reflects their brand and reach similar people through the influencers followers. Exclusive codes can also be pushed along with the reel/post.
Fintech are Buy Now Pay Later partners (Klarna, Laybuy and Zip), they have an online shop/app for users to buy brands products and there are promotional opportunities to gain more coverage for the brand.
Onsite conversion publishers provide personalised engagement tools that sit on the brands site. Intent.ly and Salesfire help customer journeys by prompting them with brand messaging/promotions using overlays or notifications onsite during specific user behaviours (exit intent, basket abandonment). preventing the brand losing the traffic and gaining more conversions. Salesfire also offer a self serve option allowing brands/agencies to launch their own overlays/notifications. Gocertify help attract and acquire any closed group user by providing campaign widgets to brand websites allowing closed groups access to exclusive offers and they will verify each user before sharing it.
Subnetworks (Skimlinks, Sovrn ) are platforms who have many publishers onboard enabling a brands news/promotions to reach bigger audiences and gain more coverage.
CSS are a comparison shopping service, to support driving higher sales and extra visibility, allowing consumers to easily find the best product at the best price (Redbrain, Left My Tag) These can run alongside in-house / direct Google/Bing ads activity.
These affiliates choose to promote the brand online, by sharing a product or service on a blog, social media, podcast or website and when a user clicks and purchases from the brand, they earn a commission which is agreed before the promotion and set up within the affiliate platform. The platform includes technology which can track the traffic and sales via a unique tracking code that the affiliates include.
The benefits of affiliate marketing for advertisers?
There are many benefits for an advertiser;
Publishers have a strong, trustworthy relationship with their audience, therefore when they promote a brands product and services they are more likely to engage and purchase.
A cheaper marketing option
Affiliate marketing is a performance based model, meaning brands tend to only pay if the publisher generates sales, normally it is commission based which are set up in advance. Also, comparing to Google Ads, affiliate marketing can be a lot more cost effective as the ROI tends to be higher, due to only paying commissions for sales and not for traffic.
Gain a broader audience
Most publishers have an established audience, enabling the brand to reach an audience which was proving difficult before. The new audience then becomes part of the brands reach and data base for the future to grow the relationship.
Builds brand awareness
Having many publishers promote the brand, driving more traffic to the site enables more people to see the brand and begin to recognise the business and products.
Contributions to other channels
We regularly see affiliates contributing to other marketing channel sales journeys. If a user hadn’t seen the brand promoted by a specific affiliate they may never have come across the brand or clicked through to discover more. For example, a user has searched ‘spotty black dress’ on their browser and Fashiola (a shopping type affiliate) has shown a spotty red black dress from the brand who hadn’t managed to make it the top of the search terms. The user will now click through Fashiola and discover the brand and their other products.
Aids other marketing
Businesses can push certain products and on-site campaigns to publishers to gain more coverage, which in effect can reach a wider audience and gain more engagement. The brand may have a sale on site and there isn’t enough engagement so they can ask affiliates to promote the sale to reach a broader audience, which in turn provides more conversions.
Acquiring new customers and retaining customers
It is important to get new customers onboard to build the brands database but to do so they must ensure they retain customers by involving them in rewards and having access to ‘exclusives’.
How to get started with affiliate marketing
1. Decide on a network
There are many platforms to choose from e.g. Awin, Rakuten Advertising, CJ Affiliate, Impact. Your competitors may be on the network and you have a decision to make whether to follow or differentiate your selected network from the crowd. Some platforms perform better in certain regions compared to others, their onboarded publishers may resonate with your brand more than others and their teams will offer different support levels. It will all depend on your brand, what your reach is and how much support you will require to run the programme.
2. Build your platform
Create your profile, set up your baseline offer (this will be the offer that publishers first see and can sign up to) and add assets and text links enabling publishers to pull them from the dashboard and start promoting the brand as soon as possible.
3. Invite/accept publishers to your programme
Aim to invite top publishers at the beginning, these will begin generating clicks and hopefully sales not long after. It is important to build a good relationship with each of your publishers to ensure they know how to reach you and to show how willing you are to grow the partnership.
4. Begin to optimise
Once you have onboarded a range of publishers you will be required to optimise. You can do this by offering tenancies, different commissions, exclusive codes and PPC rights in return for placements.
It is important to develop a strong relationship with the publishers and have ongoing comms providing updates on the brand, this will grow the partnership and keep the brand in the affiliates minds when opportunities arise. You will learn which optimisations work and which don’t through testing and having the strong relationship with publishers enables you to have the support and performance views. The above explains the importance of why a dedicated resource for affiliate marketing is required, either internal or agency.
Tagged as: Affiliate Marketing, Digital Marketing, Ecommerce, Start-ups, Thought Leadership, Top Tips
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