What is Affiliate Marketing?
What is affiliate marketing? To put it simply, it is an advertising model wherein a third-party company will be assigned to help market or advertise a product, thereby generating leads or traffic to their masters.
The third-party company are known to be the affiliates of the company that hires them and will receive commissions based on certain parameters, including incentives gained when a product has been sold.
In this day and age, people are actually engaging more on e-commerce which is why the rise of affiliate marketing is inevitable. Affiliate marketers are people or companies that provide links to e-commerce websites directly on their website. They get paid if people were to click on those affiliate links and purchase whatever product is on there.
Understanding Affiliate Marketing and How It Works
Affiliate marketing has actually been around for so many decades now. In fact, it even predates the internet, but it only really rose into prominence with the rise of web cookies, digital marketing, and analytics.
Any company that runs an affiliate marketing program can help track the links that can bring in some traffic or leads and, by using internal analytics, they can see how many people actually ‘converted’, thus bringing in some revenue.
So, how does this all work? Well, an e-commerce merchant that has just started putting up his own business will most likely hire an affiliate. This can either be a person like an influencer or a blogger or it can even be a full-fledged company that is dedicated to bringing affiliate services to businesses who need it.
The hire affiliate will then market and promote their products using their own channels. For instance, if the affiliate is someone who owns a blog, then they can create content pieces that will help promote the product- enticing his audience to go and click on the link if they want to purchase it.
The affiliate can do so in numerous ways. Aside from creating content and providing affiliate links, they can also implement text or banner ads and sometimes, create emails to their general audience that includes the affiliate link.
Once their audience clicks on the link and purchases whatever is on the e-commerce website, the merchant will then provide commissions to their affiliate partners depending on what is agreed upon by both parties. Typically, commissions may range from 5%-20% of the sales price.
The Pros and Cons
The main purpose of getting an affiliate marketer is to help the merchant sell more products. Of course, there are some advantages, as well as disadvantages to this as well.
Back in the day, the affiliate can actually earn money just based solely on clicks. Whether the person who clicked on the link ultimately buys something or not, they would still get money.
This was problematic back then because some marketers would use software to generate as many clicks as possible. That is why it has been changed now to reflect that they will only receive commissions once the person who clicked on the link actually purchases something from the online store.
Aside from that, another disadvantage is that affiliate marketers tend to sweeten the deal by talking only about what’s good about the products as opposed to giving an unbiased opinion. That is why people are cautioned to buy from people who have affiliate links.
Still, there are advantages to affiliate marketing. So long as you do not engage in fraudulent activities, it would be a worthwhile investment.