For Affiliates/Advertisers

What is affiliate marketing and how does it work?

There are a lot of myths and misconceptions about affiliate marketing business, which makes it difficult to tell expectations from reality. As you may guess, affiliate marketing is not about making money while you sleep, it is more about the efforts you put in while being awake to see the results upon waking up. But what is affiliate marketing all about, and how can you get started on this lucrative path? Let’s break it down. 

Here’s a simple affiliate marketing definition and example: 

Affiliate Marketing is making a profit in the form of commission by creating useful and in-detail recommendations for services and products of the direct advertiser (offer owner). 

Example: you found your perfect affiliate program (for instance, in a nutra niche), got your affiliate link, created an in-depth analysis or review of the product/service (e.g., a supplement) and then you start driving traffic, for instance, to your site or one pager. When a consumer visits the vendor via your link and makes a purchase, you earn a commission based on the terms defined in the affiliate program you use.

So what is affiliate marketing in simple words? It’s earning profit by driving traffic through an affiliate link to a company that owns the offer and is interested in generating more sales and expanding its brand through partnerships with affiliates

Key Players in Affiliate Marketing: What is the Meaning of Affiliate Marketing for Each Player?

To dig deeper in the process, it is essential to look at every participant of the affiliate marketing ecosystem. There are 3 main Players (Merchant, Affiliate, and Consumer), and 2 optional (Affiliate Network and Affiliate Manager). According to the definition of affiliate marketing, the offer owner (Company) create an affiliate program with its conditions, affiliate marketer gets approved for participation and gets their affiliate links, and then starts driving traffic (i.e., Audience) via this link, just like this:

Key Players in Affiliate Marketing

Merchant/Advertiser/Company (Offer owner)

Offer owner is the company who created the product or service and wants to generate new customers by partnering with affiliates who would promote this company. 

What is the meaning of affiliate marketing for the Company? 

With the help of affiliate marketing the Company (Offer owner) outsources the acquisition of new customers and expands brand reach. In most cases, creating an affiliate program might often cost less than spending the defined budget on direct advertising or influencer marketing. 

Affiliate 

Affiliate is a person (content creator, publisher, blogger, etc.) who promotes the product or service of the offer owner via their affiliate link and gets commission when the user, who clicked on the link, buys the product. 

What is the meaning of affiliate marketing for the Affiliate? 

Affiliate marketers get commission for the purchases made by their audience.

Buyer/Consumer/Audience

Audience is the end-point of the affiliate ecosystem, so if the affiliate’s strategy is well-thought through and meets the needs of the consumer, it results in a purchase and commission. 

What is the meaning of affiliate marketing for the Buyer? 

The Audience is satisfied by finding the product or service they were looking for. Besides, it is not a secret that consumers do their research through Google and other search engines (as well as social media) about products or services they’re interested in before making the final decision. As a result, in-depth information about the product solving their issue is what Buyers need and what they are grateful for. 

Affiliate Network 

An affiliate network is a link that connects offer owners with affiliates. As intermediaries, they also ensure timely commission payments and the tracking of sales. Using an affiliate network helps to compare the available offers and decide which affiliate marketing offer is best among the presented one. It also facilitates getting paid and ensures that you are receiving the payment for everything that has been done so far, regardless of the offer flow type (check what is a flow in the “How to use an affiliate network” section of this article). 

What is the meaning of affiliate marketing for the Affiliate Network? 

Affiliate Networks either earn a percentage of the sales or leads generated by their registered affiliates, or impose setup charges, monthly subscription costs, or transaction fees on the merchants for access to their platform and services.

Benefits of Affiliate Marketing

When we already answered the question of what affiliate marketing business is and what are its main players, let’s talk about its benefits. Affiliate marketing brings a bunch of advantages for all key players in the chain of affiliate business. Thus, for those wondering if affiliate marketing is good or bad, the answer is obvious.

Affiliate marketing offers great potential for consistent passive income. When researching online income opportunities, more and more entrepreneurs ask, ‘what is affiliate marketing business’ to understand how they get passive income in the form of earning commissions by promoting other companies’ products. In fact, many affiliates have earned over five figures in USD within a year without creating a product or service itself, dropshipping, or taking additional risks. Therefore, benefits for entering the affiliate scene as an affiliate, are the following: 

Low-risk;

You don’t need to worry about the actual process of producing an item or service, nor about delivering it to the client. 

Low cost of start up;

You pay only for expenses related to the promotion of your link, depending on the type of strategy that you choose. 

Highly scalable;

Depending on your progress, you can start promoting more products or expanding to new markets. 

Performance-based earnings;

Your earnings are closely linked to your own marketing activities, giving you both motivation and control over your income.

Diverse opportunities;

Since the affiliate marketing model is easily applied to different sorts of businesses, it’s the market with hundreds, if not thousands, of opportunities. 

Flexibility;

You can build your affiliate marketing business at any convenient time and place. After all, what’s online affiliate marketing without such flexibility? 

Besides, flexibility is also presented in the opportunity of changing the niche or specific affiliate program, since there is a large number of offers to choose from.  

How to Get Started with Affiliate Marketing

What is affiliate marketing and how to start it are very related questions and usually they come together. As we already covered affiliate marketing definition and examples, let’s continue checking what should be the first steps if you want to start your own affiliate marketing business. 

Whether it would be a complete immersion or just a side hustle for additional income, getting started with affiliate marketing can mainly be divided into three main stages: choosing the niche, finding the right affiliate program (via affiliate network or directly from the offer owner), defining your strategy of promoting the affiliate link you have to the right audience, and, finally, driving the traffic. All these stages have their own nuances and principles that you should be aware of before joining the affiliate community. 

Choosing a Niche

While choosing the right affiliate niche, it is optimal to follow the Ikigai principle. That said, you should feel value and meaning in promoting the product or service you chose, and, at the same time, it should have a high paycheck. 

To use the Ikigai principle, while choosing the right niche, it will be helpful to think about the next aspects: 

  • What you love and feel passionate about
  • What you have expertise in 
  • What the audience needs to solve its ‘pain’
  • Whether or not the products in the niche have a high paycheck
  • What is the level of competition in the niche
  • What is the size of the audience interested in the niche products

When all these facets are united, you get your perfect high-paying niche, as illustrated here: 

There is also a differentiation between choosing the product/service that you already had some buyer’s experience with (involved affiliate marketing), choosing the one that is somehow related to you (related affiliate marketing), and selecting a product that is not connected to your field of interests or expertise, and which you have never tried before (unattached affiliate marketing). 

Nevertheless, when you start out in the affiliate marketing business, it would be better to choose the niche that you’re genuinely interested in. At the same time, make sure that there is an earning potential in this specific niche – check the average paycheck and what the conditions that the affiliate offers have. By choosing the right niche, it will be easier to see which affiliate marketing is best for you in terms of strategy, niches, and presented offers. 

Finding the right Affiliate Program

After the niche is determined, it’s time to hit the ad networks to haunt for the profitable affiliate offers from direct advertisers. 

There are two approaches to finding affiliate offers. First, it’s using affiliate networks and comparing the offers and selecting those you find the most appropriate in the chosen niche. The second approach is connecting with direct advertisers (offer owners). The last option is more time-consuming but it doesn’t include the fees associated with affiliate networks. For a start, the first approach is more convenient and easier. So let’s focus on finding an affiliate program via specialized affiliate networks. 

Here are top affiliate marketing networks to start with: 

ClickBank

Niches: a wide range of niches, the main ones – Health & Fitness, Self-Help, E-Business & E-Marketing, Business & Investing, Home & Garden, Cooking, Food & Wine, Parenting, Travel, Education, Spirituality & New Age. 

CJ Affiliate (formerly Commission Junction)

Niches: Retail & Shopping, Health & Wellness, Travel, Finance & Insurance, Home & Garden, Technology & Software, Parenting, Education, Automotive, Food & Beverage, Pets.

AdCombo

Niches: Nutra, Dating, Health & Beauty, Gambling, Finance, E-commerce, Sweepstakes, Crypto, Education, Travel.

Affiliaxe

Niches: Health & Beauty, Finance, Gaming, Dating, Business, E-commerce, Software & Technology, Education, Travel.

How to use an affiliate network

After choosing the preferred platform(s) and signing up, access the offers dashboard to browse all the available offers from advertisers. You may use filters to sort offers by category, payout, and other criteria. In most cases, the offer will include the information about the allowed traffic source, payout structure, and promotional materials. 

Pay attention to the number you see in the “Default Cap” as it refers to the predefined limit set on the number of conversions, clicks, or impressions that an affiliate can generate for a particular offer within a specific time frame (i.e., daily, weekly, or monthly). Default cap is often present in the affiliate offer to ensure that the affiliate campaign does not exceed the direct advertiser’s budget or the desired scope of actions per defined period.

There is also another parameter that you need to check before choosing the offer, it’s “Flow”. In affiliate marketing, the “flow” refers to the sequence of steps that a user needs to go through so that the affiliate can get commission for this interaction.

Some common flow types in affiliate offers are:

  • Single Opt-In (SOI): The consumer needs to submit their basic information (e.g., email) without further verification.
  • Double Opt-In (DOI): The consumer must submit their information and then verify it via a link in the confirmation email.
  • Cost Per Sale (CPS): The consumer must complete a purchase. 
  • Cost Per Lead (CPL): The consumer must submit their contact information 

Overall, we see the tendency that CPS and SOI are among the most common flow models in affiliate marketing. CPS is mostly prevalent among e-commerce and physical product offers, while SOI is more common in diverse digital products and online services where collecting leads is the primary goal. Of course, there are also other types of flow, like Credit Сard Submit (when an affiliate earns a commission when their buyer fills in the credit cards information) or Revenue Share (when an affiliate earns a percentage of their customer’s purchase). 

After getting acquainted with all the available offers, apply for the one you find the most relevant to you and your audience. Please note that some offers may require prior approval from the offer owner before you can get your affiliate link and start working on bringing purchases to the advertiser. 

Once approved, get your unique tracking link from the offer details page and download available materials to start promoting the offer. The link allows advertisers to track and credit any referrals you generate, compensating you with a commission for successful sales, so make sure you copy and paste it correctly. 

In addition to all that being said, it is essential that you check the guidelines and terms of the affiliate network you use, as well as all the details on the offer itself to avoid any misunderstandings, violations, and sanctions. 

Methods of Promoting your Affiliate Link

In a nutshell, we can differentiate three main methods of affiliate link promotion: Content-Based Promotion (Blogs, Webinars, content on UG platforms), Social and Community Engagement (SMM and Crowd Marketing), and Paid and Direct Marketing. In its turn, these methods can take various forms. 

Content-based Promotion 

  • Blog Posts + SEO (Search Engine Optimization)
  • Email Marketing
  • UG platforms (YouTube, TikTok, Pinterest)
  • Webinars and Live Streams
  • Product Reviews

Social and Community Engagement

  • Social Media Marketing (Facebook, Instagram, X)
  • Forums and Online Communities (Crowd Marketing):
  • Niche forums.
  • Q&A Sites: Answering questions on platforms like Quora.

Paid Advertising and Direct Promotion:

PPC & Targeting

  • Google Ads: Targeted ads leading to content with affiliate links.
  • Facebook Ads: Ads targeting specific demographics.
  • Instagram Ads: Promoted posts or stories.

Native Ads

  • Blend your ads subtly with regular content with Adskeeper 

Coupon and Deal Sites:

  • Promotion: Listing affiliate links on coupon/deal websites.

Affiliate Networks and Marketplaces:

  • Join Networks: Partnering with affiliate networks.
  • Marketplace Listings: Listing links on marketplaces for product recommendations. 

Tracking and analyzing performance

It’s hard to underestimate the role of tracking and analyzing the date in affiliate marketing. By monitoring and analyzing key metrics, you can see how your efforts are translating into clicks, conversions, and commissions as well as define which strategy works best for the given offer. 

 Voluum, ThriveTracker, and BeMob are the most popular trackers among affiliates. While using one of these trackers, it’s essential to keep an eye on such important metrics as CTR (click-through rate), CR (conversion rate), and ROI (return on investment). 

The first indicator, CTR, measures the percentage of people who clicked on your affiliate links compared to those who just viewed your content. Then, CR indicates how many of all those clicks led to an actual purchase. And last but not least, ROI is a ratio between the funds you spent on your campaign and the received profit. This way, ROI assists you in getting a clear understanding of the profitability of your campaigns. 

Analyzing the data will help you to spot the trends and find directions for further growth. For example, if one of the channels you use is driving more conversions, it will be a good decision to focus more on this channel and less on the one that shows less efficiency (or even discontinue such low-impact campaigns). 

Challenges and How to Overcome Them

During your path of becoming a trusted affiliate with 6-figure income, you may encounter a number of challenges on your way. Here are the most common of them and ideas on how you can deal with them. 

Building Traffic

Challenge: Generating traffic to affiliate links is not always quick, especially when starting from scratch. 

Solution: Try out utilizing multiple sources of traffic, including SEO, social media, and paid advertising. Launch Adskeeper’s native advertising campaigns with the high-quality traffic coming from our publishers who work in more than 245 geo worldwide. Native advertising is one of the ways of promotion in affiliate marketing that can help you get one way closer to building the optimal flow of traffic, especially in the very beginning of your link promotion. 

High competition

Challenge: Many niches already have a great number of affiliates competing with one another for audience’s attention. The presence of Caps in the affiliate program also proves that it would be challenging to build a stable flow of passive income in the niche with high competition. 

Solution: Thoroughly research niches before choosing one. Check the caps that are encountered in the affiliate offers, if any. Focus on those niches that both have a balance of demand and moderate competition. 

Banner Blindness

Challenge: If you choose to use the paid advertising to promote your links, you may encounter the banner blindness issue, when users are scrolling past the ads not paying attention to them. 

Solution: Native advertising proves to be way more effective than traditional banners as it blends naturally with the content feed on the page. Adskeeper also has special formats that are similar to the design of SMM posts, which makes it more engaging for the audience. 

While the obstacles within affiliate marketing remain, it’s crucial to perceive them as drivers for growth and innovation, and not burdens coming in a way. 

Conclusion

Affiliate marketing solves many problems in client acquisition and facilitates building the trust of the brand among the potential consumers. In short, affiliate marketing is a win-win-win for all three main parties involved. It offers great potential for consistent passive income for affiliates, increased brand reach for companies, and easier way of finding the perfect product for consumers. 

If you are starting as an affiliate, then affiliate marketing is a simple yet powerful way to turn your passions into profit by helping others find and buy what they need to solve their problems. The fruit of it can be very rewarding, but affiliate marketing is all about dedication and hard work, as well as a desire to grow and learn new approaches to stay on board.