Affiliate Marketing for Beginners: What It Is and How To Get Started

If you haven’t heard the term “affiliate marketing” before, it’s a popular advertising tactic where businesses reward third parties for generating traffic and leads for them. The affiliate marketing industry is worth over $17 billion and for 20% of brand marketers, it’s the most important customer acquisition channel they have at their disposal. With statistics like that, it’s no wonder affiliate marketing has taken off so rapidly over the last few years. 

Simply put, a good affiliate marketing program will allow you to promote and exponentially grow your business while simultaneously blending smoothly with your other marketing channels. It’s a great way to generate significant online revenue and drive more sales. 

The growing popularity of affiliate marketing as an effective digital marketing tactic is a sure sign that you should get on board. Our beginners’ guide will walk you through everything you need to know—from basic definitions to how to get started with your own program. 

What is Affiliate Marketing?

Affiliate marketing is a revenue-sharing model in which an affiliate promotes a business's goods or services to help them achieve their sales goals. In turn, affiliates earn a commission from the sales made as a result of their advertising efforts. The push toward less traditional marketing tactics is opening up new avenues to generate significant online revenue, benefiting brands and affiliate marketers alike. 

How Does it Work?

By leveraging the abilities of a variety of individuals for a more effective outreach strategy, affiliate marketing spreads the responsibilities of product marketing and creation across parties. To ensure affiliate marketing success, three distinct parties need to be involved: 

Seller and Product Creators

A seller can be either a product creator, vendor, merchant, or retailer with a product — be it goods or service — to market. Occasionally, the advertiser can participate as the affiliate and also profit from the revenue sharing associated with affiliate marketing efforts. 

The Affiliate or Publisher

An affiliate, also referred to as a publisher, markets the seller’s product in a way that’s appealing to potential consumers. Whether an individual or a company, the affiliate focuses on persuading consumers to make a purchase. To attract consumers, affiliates often target a specific audience and adhere to that audience’s interests. 

The Consumer

For an affiliate system to work successfully, there must be sales. And, of course, consumers are the ones who make that happen. Affiliate marketers advertise products and services to consumers through various channels by using affiliate links that direct them to the merchant’s website. When consumers do so, however, the Federal Trade Commission requires that affiliates clearly disclose their relationship to the retailer.

How do Affiliate Marketers get Paid?

For those looking to increase their income online, affiliate marketing is an inexpensive method of making money without the hassle of actually selling a product. However, the way affiliate marketers get paid after linking the seller to the consumer can get complicated. For the affiliate to earn a commission, the consumer doesn’t always need to buy the product. An affiliate’s contribution to the seller’s sales will be measured differently depending on the program.

Here are four ways an affiliate gets paid:

Pay per Sale

After a consumer purchases a product, the affiliate receives a percentage of the sale price of the product from the merchant. In this program, before they are compensated, the affiliate must get an investor to actually invest in the affiliate product. 

Pay per Lead

In this more complex program, affiliates are compensated based on lead conversions. Pay per lead demands an affiliate persuade consumers to not only visit a merchant’s website but to entice customers to click and take action. 

Pay per Click

Utilized by some affiliate marketers, pay-per-click (PPC) programs help affiliates redirect consumers to a merchant’s website. Because an affiliate is paid based on the increase in web traffic, their focus remains on engaging consumers to the extent that they move from the affiliate’s site to the merchant’s site. 

Pay per Install

With this payout system, each time an affiliate directs a user to the merchant’s website and that user installs a software product the affiliate gets paid. 

Common Types of Affiliates

Affiliates use different methods and practices to reach their target audience and make sure they stay engaged. 

Influencers

Affiliates can benefit from leveraging influencers in their marketing strategy. Since influencers already boast an impressive following, they are likely to persuade consumers’ purchasing decisions. When influencers successfully direct a seller’s products to consumers, they receive a share of the profits. 

Bloggers

Through content marketing, bloggers excel at increasing a seller’s conversions. A blogger can spread the word about a product’s value by writing about it and promoting it along with providing links to drive traffic back to a seller’s site. 

Paid Search-Focused Microsites

Advertised within a partner site or on the sponsored listings of a search engine, microsites can garner a serious amount of affiliate sales. Paid search-focused microsites offer targeted audiences relevant content with straightforward call-to-actions. In turn, this increases conversions. 

Email Lists

Email marketing holds the power to impact affiliate marketing income. Despite its older origins, it can help promote a seller’s products. Affiliates may build email lists over time, or leverage email newsletters with hyperlinks, increasing the chance of consumers purchasing a product, thereby earning the affiliate a commission. 

Large Media Websites

Media websites have the potential to create huge amounts of traffic and build large audiences. Most commonly, these large websites provide product exposure through the use of affiliate links or banners, which ultimately improves conversion rates. As a result, both the affiliate and the seller benefit from top-notch revenue. 

Benefits of Affiliate Marketing for Brands

To help you understand the real benefits of affiliate marketing, here’s a list of the top six benefits.

High ROI

Aside from being an effective tool for attracting new customers and increasing sales, affiliate marketing is known for producing a high return on investment (ROI). In fact, 84% of businesses rate affiliate marketing as a better marketing channel than others. In addition to increasing ROI, affiliate marketing produced an average return on ad spend (ROAS) of 12:1 across all industries. To determine your ROI, divide your gross profit — your revenue minus your costs — by your costs, and then multiply it by 100. 

Low Start-up Costs

To protect your bottom line, it’s essential to avoid getting tied into pricey and unprofitable purchases. Compared to other advertising techniques, affiliate marketing allows marketers to partner with online retailers at a much lower cost. It’s also responsible for 16% of U.S. eCommerce sales, which proves how beneficial it can be for companies. 

Increased Traffic

With affiliate marketing, you’re likely to witness a surge in traffic to your site. Not only do affiliates expand your audience, but they also bring them to your site. When traffic volume is higher, your rankings improve, brand awareness grows, and sales and profitability increase. 

Reputation Boost

After building a reliable affiliate network to promote your brand, you will soon begin to see how this marketing strategy can also boost your company’s reputation. A business with credibility attracts more consumers and has a more loyal customer base.  Companies with a reputable brand can often charge premium prices for their products or services. 

Brand Recognition

In addition to boosting your reputation, affiliate marketing is a quick and effective method for building strong brand recognition. With affiliates working as brand ambassadors to advertise your company in a relevant, colorful, and positive way, you can also rapidly improve your customer acquisition strategy. Affiliate marketing companies can benefit from building relationships with influencers and bloggers to increase traffic to their sites through word-of-mouth advertising. 

Getting Started

If you’re ready to get started, follow these steps. 

Pick your Niche

Merchants turn to affiliate marketers because they can reach target audiences composed of potential customers. When you pick a specific niche, you’ll be more likely to build an affiliate platform with original content that meets the demands of an underserved audience. It’s wise to pick a niche that offers value to a sizable, underserved audience.

Choose the Right Platform

Use a platform that matches your niche. Consider which platform is best for your audience. You may discover that using a mix of platforms is the best route to help your affiliate marketing endeavors. 

Create a Website and add a Disclosure Page

After you’ve chosen which platform to use, you’ll need to create a website. As an affiliate, you’ll need to let your users know how you make money from your website by adding a disclosure page.

Add a Privacy Policy and Terms of Service Page 

In addition to a disclosure page, you need to include a privacy policy along with a terms of service page. This way, you’ll be protected from legal issues, but also be able to build trust with your audience. 

Join an Affiliate Marketing Network

Joining an affiliate network can both improve income opportunities and streamline relationship-building processes with merchants. While it’s not always necessary, many affiliate networks will help affiliates optimize their chances of success. To find one that best suits a product and audience, researching your different options can lead you in the right direction. 

Expand your Network

Using a mix of digital marketing tactics including SEO, content marketing, social media marketing, and so on can increase your network and your overall audience size. By combining these tactics rather than using only one of them, you may find that your marketing efforts will create a bigger impact. 

Tips for Optimizing Affiliate Marketing Campaign Performance

While affiliate marketing can improve your company's bottom line, it takes work and often requires a lot of optimizations. Here are our top tips to make it pay off. 

Analyze Through Average Performance

Pay close attention to performance metrics by tracking your typical daily, weekly, and monthly average performance. To get a sense of average activity, keep tabs on your leads, clicks, and sales. By collecting average performance data, you can verify whether your campaign is effective and focus on what needs to change. 

Combine Customer Behavior Data with Affiliate Marketing Data

By analyzing customer behavior data along with affiliate marketing data, you’ll gain a deeper understanding of what’s working and not working. This information will help guide your marketing strategy, allowing you to adjust your affiliate marketing campaigns to deliver desired results. 

Look for the Best Converting Sources of Traffic

To optimize your affiliate marketing campaigns, focus on your main traffic sources. Analyze current data to determine any traffic sources or segmented audiences that are generating a high conversion rate. 

Improve your Funnels

Make sure your funnels are designed to make consumers take action. An affiliate marketing funnel is effective when each stage of the clients’ decision-making process is properly mapped out, guiding them to purchase the products they’re searching for.  With the right funnel, the customer journey path will lead consumers to the designated product/service landing page, encouraging them to act on the desired goal.

Partner with MarinOne to Successfully Incorporate Affiliate Marketing into your Paid Media Strategy

Because affiliate marketing offers a big bang for your buck that other strategies can’t compete with, it’s quickly becoming a central aspect of many marketing strategies. With the benefits being so apparent and as the market continues to grow, more businesses are adopting it so they can stay ahead of their competition.

MarinOne has all the tools you need to make affiliate marketing a successful pillar of paid media. We can set you up with actionable tactics that will help you drive more sales, boost conversions, and gain influence, repurposing your affiliate relationships for high performance advertising.

Whether you're new to affiliate marketing or looking to step up your current performance marketing game overall, our MarinOne experts can help.