Affiliate Marketing has become a profitable revenue stream for businesses to grow sales without investing on traditional advertising methods. As per a research conducted by Rakuten Advertising, more than 80% of advertisers ran an Affiliate Program and over 10% of their budget was allocated to Affiliate Marketing. Businesses investing on affiliate marketing channels are scaling up and the industry is expected to grow up to $8.2 Billion in 2022. In this post, we will cover Affiliate marketing, benefits, channels, statistics and much more.
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What is Affiliate Marketing?
Affiliate Marketing is an advertising strategy that allows affiliates to earn commission by recommending and promoting product to others. It is an online sales tactic where you promote another company’s product or service and generate commission on the sales. Affiliates earn commission based on the sales generated through their referrals.
Affiliate is an individual or a company who helps promote product or service and earns profit from each sales they make. It is a performance based job opportunity that helps you generate income without creating your own products or setting up a business venture.
When done correctly, Affiliate marketing may become the most influential sales channel to build brand awareness and increase credibility. Promoting products and services using affiliate marketing is a lucrative source of increasing sales and also aids in gaining reputation and trust with the customers.
Affiliate Marketing Statistics
- 84% of publishers and 81% of brands incorporate Affiliate Marketing.
- There is 10.1% increase in affiliate marketing spending every year.
- Affiliate Marketing accounts for 15% of all digital media revenue.
- 15%-30% of all sales are being generated by Affiliate Marketing.
- Affiliate Marketing is a global industry worth over $12billion.
- Companies have allocated 15% of all marketing budgets to affiliate marketing.
- 84% of bloggers use affiliate marketing to grow the audience.
- 73% of the merchants reported that their affiliate revenue met their needs.
- Digital media has allocated 15% of the advertising revenue for affiliate marketing.
- More than 50% of the affiliate traffic comes from mobile devices.
- Spending on affiliate marketing is increasing at a rate of 27% CAGR.
- 90 percent of the advertisers said that affiliate marketing is important to their digital marketing strategy.
- 60% of the large merchants who earned $5 million were using affiliate marketing over the past 5 years.
- Most of the affiliate marketers use email channels to communicate with affiliate managers.
- Digital affiliate products generate 50% commissions.
- 22% of the affiliate marketers drive traffic leveraging SEO.
- With optimized keyword targeting, affiliate sites can get 7 times more conversions.
- Retail affiliate niche generates the highest revenue %.
- 90% of advertisers said affiliate programs are important.
The above statistics clearly depict the rising demand of affiliate marketers. In the present digital era, as more and more people are moving online, it is estimated that affiliate marketing will continue to grow in the near future.
How Affiliate Marketing Works?
Affiliate Marketing process involves three parties:
- Seller or Product creators
- Affiliate
- Consumer
Seller is an individual or business firm with a product or service. Examples of product is household goods, appliances, etc. Service examples can be tutorials, courses, etc.
Affiliate, also known as Publisher is an individual or a company that persuades customer to purchase the product and promotes it. Affiliates promotes the products and services on social media sites, blogs and websites.
Consumers are the buyers of the products or services marketed to them by the affiliates. When a customer purchases the product through the referral link, profits is shared both by the affiliate and the seller.
Each affiliate gets a unique link to make it easy to track who was responsible for the sale.
When a customer clicks on the link, a cookie gets stored on their device which helps in tracking the customer journey from affiliate’s website to the shopping cart and purchase. Upon clicking the affiliate link, the consumer is redirected to the brand’s website where he completes the purchase with the referral link. On successful purchase, the company pays commission to the affiliate as per the incentive structure. Commission rates vary depending business niche and agreement.
How do Affiliate Marketers get paid?
Affiliate Marketers get paid in the following different ways:
Pay per sale: In this marketing model, the merchant pays the affiliate a percentage of the sale price after the customer purchases the product.
Pay per lead: In this marketing model, the merchant pays the affiliate on the basis of leads conversion. Affiliate gets commission when the customer visits the website and completes the desired action such as signing up for product subscription, subscribing for a newsletter or downloading file or software.
Pay per click: This module focuses on redirect customers from their platform to the merchant’s website. Payment mechanism is based on the increase in site traffic and number of clicks.
Why to become an Affiliate Marketer?
Affiliate Marketer is a lucrative business stream of earning profit and has several benefits. Some of them are:
Low risk: There is no cost involved in joining affiliate marketing programs. You can start making money instantly without any investment.
No hassle of providing customer satisfaction: An Affiliate marketer has the only job to link the seller with the customer. They don’t have to deal with providing customer support or handling customer queries.
Convenient: An Affiliate marketer gets complete freedom and total independence in choosing which category of products to sell and how much time to devote. They are free from company regulations and restrictions and have flexible work timings.
Easy to set up and manage: As an affiliate marketer, you get the option of promoting products from different brands and earn commission from all of them. There are no setup costs or business registration formalities.
Performance based job: Affiliate marketing job is solely based on performance. You get commission for each sale made. As there is no fixed salary structure, you can earn more rewards by promoting products and services to increasing number of people.
How to start Affiliate Marketing?
Decide the platform: Firstly, you need a platform to begin marketing online. It can be a website, blog, youtube channel or social media page. Starting a blog or a youtube channel is quite easy these days due to plenty of material and resources available online. Make sure to disclose that you are adding affiliate links.
Select the product niche: Choose a niche that best suits your business needs and requirements. To improve your chances of ranking in the SERPs, select a topic that focuses on a specific category. Example, instead of opting for a general category like food, choose something like south indian cuisines or baking food items.
Choose affiliate programs to join: You can decide which affiliate program to join based on the niche and level of expertise in a particular industry or business. The best way to select a program is by conducting a Google search. If you are interested to become an affiliate for a particular brand, you can even reach out to them and communicate if they would be willing to build affiliate relation.
Research on your end: Research the products and services before deciding to become an affiliate for them. If you want your affiliate business to be successful, researching is absolute necessary to evaluate whether the product or service solves the customer’s problems.
Drive traffic: The next step is to boost visibility in the search engines so that more and more people click on the site and read it. You can increase traffic in three different ways – creating PPC ads, conducting site SEO and building an email list. PPC ads campaign is suitable if you are into a high-paying affiliate program and have sufficient budget to invest in these ads. If you are a newbie in the affiliate marketing field, then its best to opt for SEO.
Get more clicks: In order to get more clicks and maximize traffic, links must be placed in the right way and in the right context. Avoid adding too many links as it would make the post look spammy and irrelevant. In addition to proper link placement, including call to action buttons, tables, helps in improving the content readability leading to increased visibility and clicks.
Convert leads to sales: In Affiliate Marketing, two kinds of conversions occur. First is click to product page and second is visitor buying the product. The best way is to view public income reports where you get to access how bloggers make money in affiliate programs. These are easily available on Google. Also, you can analyze products which have huge demand and seek information on online forums and communities.
Compared to other business advertising models, affiliate marketing is a cost-effective channel with minimum investment and least risk. Due to its ease of start and implementation, it has become one of the most popular monetization techniques to earn an extra revenue stream to your business.
Affiliate marketing helps in expanding your online marketing opportunities and has a significant impact on the business growth and revenue. Moreover, it supports all areas of your business broadening your audience reach and visibility. Therefore, more and more businesses are opting for affiliate marketing as it serves as a successful tool in driving profits and increasing sales.