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What is affiliate marketing and how does it work

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what is affiliate marketing and how does it work

Let’s start with a simple concept, but perhaps not obvious: online advertising does not mean only Google and Facebook Ads but also affiliate marketing.

It is not only the web giants who can earn with the advertisements made by you to promote your brand. You, too, can earn by hosting advertisements on your site.

Would you like to know what they really are and how to earn with affiliations? Then this is the right post for you!

What is affiliate marketing?

The translation of affiliate marketing indicates a commercial action based on affiliation to a network, but its meaning is much broader.

To give a complete definition of affiliate marketing, you have to think of your site and your content as a shop with several windows. Imagine that big brands ask you to rent one of your windows to exhibit some of their products, which, transposed into the web world, means inserting code on your web page that makes the brand partner’s offers appear directly on the site.

What is their advantage? Intercepting an interested audience, i.e., reaching your visitors interested in the topic shared between you and the advertiser brand.

What’s your advantage? Get paid for every interaction of your visitors to the advertiser’s site.

How affiliate marketing works: The actors of an affiliate program.

To understand what affiliate marketing means, it will be useful to present the protagonists of this mechanism:

  • The advertiser. Organizes the affiliate program to promote his offer and searches for affiliates, bloggers, website managers, and portals to propose it to.
  • The affiliate. Participates in the affiliate program by entering the advertiser’s code on his site, which will refer to the object of the promotion.

Some affiliate programs are managed through platforms that automate and guarantee the commercial exchange between advertisers and affiliates.

Affiliate marketing is part of native advertising or that type of advertising that mixes with information or entertainment content on the web. Some love this formula because the advertising proposal is more discreet. Still, it is hated by many others, precisely because the gap between the commercial offer and the content may not be evident.

However, it is enough to observe and learn to recognize the sponsored contents, which usually stand out because they are limited to graphic boxes and reported with different fonts than the rest of the text.

Affiliate marketing is a superlative way to monetize with your blog. Identify the leading networks in your industry, research their affiliate programs, and keep a showcase of your store free for them.

But equally, it’s also a great way to promote your products or services. You could be the one who takes on the advertiser’s role and looks for affiliates to help you sell!

How to become a successful affiliate marketer?

The concept of your website or blog producing a passive income is fascinating to everyone. Online there are various tools, information materials, startups, and affiliate marketing courses that promise effective solutions, almost immediate earnings, and the possibility of turning your life by saying goodbye forever to work as an employee.

The truth is, becoming a successful affiliate marketer isn’t easy. You need to work seriously and be driven by an effective strategic vision. 

  • Select your niche. Starting from a specific niche in a saturated market, it is essential to build your own segment to build your online presence and consolidate your reputation. 
  • Build and optimize your website. It is then necessary to create a website with a stable and efficient platform and, above all, in SEO terms, to optimize it.
  • Create relevant content. You need to have some creative and original content that will add value to the audience segment with which you will try to interface. Reviews, how-to guides, insights, solutions to problems are just some of the types of content you need to work on to consolidate your presence and establish yourself as a reference for your niche.
  • Choose an affiliate program. Finally, it is necessary to choose an affiliate program, paying attention to reliability, commercial conditions, and compensation methods. 
  • Creation of a receptive and motivated community. It is an aspect that many underestimate. It follows the updates published continuously and guarantees a consistent flow of visits to the website. 

In this sense, it is wise to invest in promotion and direct marketing ways by creating a mailing list or even investing in SEO implementation strategies that increase traffic from search engines to the site.

How to choose an affiliate program?

There are two ways to find an effective affiliate program:

  • Search for affiliate networks, in particular those that give guarantees in terms of payments and tracking.
  • Rely on direct affiliate programs that are interfacing directly with the merchant, negotiating probably higher commissions, and clearing competitors’ field by obtaining an exclusive product.

An affiliate program must be properly screened in every aspect, from the usability of the landing pages made available by the merchant to the type of service offered, up to the minimum payout’s conversion window. 

Finally, there are two essential values of assistance and the availability of dedicated staff for any problem or criticality. Also, correctness is the basis of an effective relationship between affiliate and merchant.

Five best practices for a successful affiliate marketing strategy.

The first factor to consider for a successful affiliate marketing strategy is to have a reliable sales tracking method that provides reliable and comparable statistics against the affiliate’s data. Tracking users’ online behavior – from the moment they view a banner until they complete the entire online purchase process – is essential to assess the affiliate’s actual performance.

Several affiliate marketing platforms such as Commission Junction and Share a sale that has unbeatable tracking systems and allows you to have a complete view of the campaign’s conversion capacity.  Once the campaign is activated, it is good to track acquisitions with a certain frequency, not exclusively at the end. 

Periodically checking the affiliate’s data and comparing them with your tracking systems is a practical solution to guard yourself against any revolting surprises and acquire a complete view on audience behavior and overall sales performance.

One of the most concrete risks for a merchant is not realizing that an affiliate marketing campaign is now saturated. It happens when the ROI is not permissible or viable anymore or does not surpass 50-60%.

However, some actions allow, for example, the choice of new angles (and, that is, unexplored marketing levers that intercept consumers’ desires and expectations) or a new target to which the campaign is subjected and increase the ROI and have a sustainable campaign again.

The third rule concerns the determination of the cost per lead. It is not a question of establishing a mere sales commission. Each acquisition be it the sale of a product, the subscription to a service, or the download of an application, has a value attributable to multiple factors, from production costs to the case of a physical asset for the duration of a subscription.

Therefore, the affiliate’s performance must be paid based on the margins that each new lead can bring to the merchant and the costs incurred for organizing the entire affiliate campaign. It is also good to understand that relying on a third-party partner for affiliation still implies a constant control action on the networks through which the affiliate advertises the product or service that is the subject of the campaign. Not only to check for any conflicts with other campaigns paid traffic but also to assess the relevance of the media chosen and reconstruct the audience’s socio-demographic picture to which the affiliate is oriented.

Finally, the last rule: transparency. It is the indispensable element to build a good and solid relationship with your network of affiliates, both on the front of commissions payment, and to establish a collaboration path focused on concrete development possibilities and not on hypothetical promises to acquire amazing volumes of leads.

Conclusion.

If integrated into a broader strategic plan consistent with the communication objectives and real customer acquisition projections of a brand or company, affiliate marketing can prove to be an indispensable tool not only for increasing sales volumes but also to explore new promotional channels and conquer new market niches, as well as to increase visibility and obtain new contacts and business opportunities.

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