Affiliate marketing is a system that depends on the performance of its actors . A company pays partners for sales created by their own marketing tactics. In general, these partners entrust the sale to other partners, and earn commissions from the latter's sales.
According to Business Insider, it contributes 15% of global e-commerce revenue. marketing , analytics, and cookies have made affiliate marketing a billion-dollar industry . There are several types of affiliate marketing. However, let's highlight the three most important ones: independent affiliate marketing, linked affiliate marketing and involved affiliate marketing. We will see what the advantages and disadvantages are, then how the concept works.
Understanding Affiliate Marketing
It was in fact Amazon which popularized this practice by creating a program. As part of this, websites and bloggers place links to a product's Amazon page. The goal is to collect advertising fees when a purchase is made. In this sense, it is essentially a pay-for-performance marketing program. In this process, the act of sale is outsourced through a vast network.
An e-merchant wishing to reach a wider base of Internet users and buyers can hire an affiliate. An affiliate can be the owner of several websites or marketing mail . An extended network requires the possession of several websites and a long list of emails. The committed affiliate communicates and then promotes the products offered on the electronic commercial with its network. To do this, he broadcasts banners, text announcements or links on his websites or sends emails to his customers. In order to attract public attention to a service or product, companies use advertisements in the form of articles, videos and images.
Visitors, by clicking on announcements or links, are redirected to the online sales of the E-merchant. If they buy the product, the affiliate is paid from the initially agreed commission, which can represent 5 to 10 % of the sale price .
The objective of this model is to increase turnover and make the relationship between the merchant and the affiliate “win-win”. Indeed, thanks to its profitability, this system is becoming more and more popular today.
The different types of affiliate marketing
There are three main types of marketing : independent affiliation marketing, linked affiliate marketing and affiliate marketing involved.
Independent Affiliate Marketing
It is an advertising model in which the affiliate has no connection with the product or service which he promotes. It does not require known skills or expertise in the matter, does not authorize and does not claim its use. It is the least committed form of affiliation marketing. The absence of attachment to the potential customer and the product provides the affiliate of the duty of recommendation or advice.
Related Affiliate Marketing
As the name suggests, this implies promoting products or services by an affiliate with a certain type of relationship with the offer. In general, the link is established between the affiliate niche and the product or service. The affiliate is therefore generally a public personality or an influencer , who is able to have an impact on public behavior. His image makes him a reliable source for Internet users, and increases the probabilities of clicks and traffic. However, the affiliate makes no declaration on the use of the product or service.
Involved Affiliate Marketing
This type of marketing establishes a deeper connection between the affiliate and the product or service they are promoting. The affiliate has already had “positive” experiences with the product or service, and shares their feelings with others. The principle is the same as traditional word of mouth. Their experiences are the advertisements, and they serve as reliable sources of information. Additionally, because they provide recommendations, their reputation may be compromised if there are issues arising from the offering.
Advantages and Disadvantages of Affiliate Marketing
An attractive opportunity cost
Affiliate marketing can be of particular interest to an advertising company or marketer. The company benefits from low-cost advertising and creative marketing efforts from its affiliates. And the affiliate benefits from additional income and bonuses. Affiliate marketing brings significant profit because the cost is lower . The company only pays per click, and the rest of the work is done by the affiliate. The latter will use all possible means to maximize his commission.
Then, the advertising company sets the conditions for an affiliate marketing program . At the beginning, companies essentially paid the cost per click (traffic) of banners. With the evolution of technology, the emphasis was placed on commissions on real sales or qualified prospects . At the beginning, this branch was a favorable , because the clicks could be generated by software.
The situation has changed
Today, most affiliation programs have strict conditions on how to generate prospects . Certain methods are also prohibited , such as the installation of advertising software or spy software which redirect all the research requests of a product to the page of a affiliate. Certain programs will also specify how a product or service must be addressed in the content affiliate link can be validated.
Therefore, in order to make an affiliate marketing program effective, one must have a certain sense of foresight. Terms and conditions should be clearly stated , especially if the contract pays for traffic rather than sales. Despite this, in the digital world, fraud is never impossible.
In short, to have convincing results in affiliate marketing, players will need to understand this model , and of course its advantages and disadvantages. Businesses looking for affiliates will benefit from properly vetting and qualifying their partners. Overall, it is an effective and inexpensive way to advertise products and services, increase brand awareness, and expand a consumer base.
