No doubt you’re probably sick of hearing about ad blocking by now, but ad blocking services have opened up some interesting conversations around alternative ways for publishers to make a buck or two.
Affiliate marketing is one of these methods, it also allows retailers to sell more products with relatively little up-front investment. Win!
So what is affiliate marketing?
In its basic form, affiliate marketing is when a publisher drives traffic to an e-commerce site in return for a commission if those visitors take a specific action within a set timeframe.
Usually, the desired action is buying something, and the publisher will get a share of that sale in return for directing the customer to the item or product page.
How it works
The process is split between four marketers ( aren’t we all marketers at heart really? ):
- There is a merchant ( it’s more of an American word but stick with me if you’re reading this from a British point of view )
- A network
- A publisher
- And a customer
Each one of these have a different roll to play in affiliate marketing and we can go over this now:
The Merchant / Retailer
A brand is looking to increase sales but all those content campaigns have taken up its marketing budget and it doesn’t wish to spend any more this quarter.
The opportunity for the brand is quite simple, it doesn’t have to spend money on its marketing but instead, pay once a sale has been made on an item. This is a very dumbed down version of what it actually is, but in principle, this is a simple way to look at it.
- The retailer gives a publisher a trackable link to its site.
- The publisher includes the link in its content.
- If someone follows that link to the retailer’s site and buys something within a certain timeframe, the retailer pays that publisher a percentage of the sale.
Networks effectively act as the middle man between multiple retails and the publishers. So a publisher could sign up and get access to any merchants that network is working with, and vice versa.
Life gets lots easier for the retailer working this way, but it does mean they give up a large amount of control over where their products are advertised.
People who include affiliate links to retailers on their sites and promote the products of said retailers. Hoping that people will click the link and buy something when they make it to the store view.
If the user makes it through to the product page and checks out, then the publisher will get paid a percentage of the sale.
The publisher will either get paid for the product purchase or they’ll get paid for each click or action the customer takes, depending on the arrangement they have with the provider.
Some publishers include affiliate links in most of their daily content, while other sites are dedicated to producing content with the specific goal of selling affiliate products.
Us, well the person who sees the link and clicks through to the product or item from the publishers site.
Around 70% to 80% of affiliate programs use revenue sharing to compensate, i.e. the affiliate gets a percentage of any sales that result from their affiliate links.
But there are other payment methods available, such as cost-per-action (CPA), which could be used when the brand in question isn’t actually selling a physical stock. An example of this is Cubeitz who’s selling a subscription-based service.
Then there is cost-per-click (CPC), where the brand is simply paying the affiliate for traffic. Google ad-words.
Affiliate Marketing Conclusion
If you’re a retailer or a publisher, affiliate marketing, like most digital strategies, is not going to fix any issues that your site might have all by itself.
What it does do, however, is add another revenue stream without the need to expend masses of effort or money. This is particularly important for publishers with the rise of ad-blocking software in the browser and in your OS.
Brands that want to use the affiliate marketing route need to remember that it is still a form of advertising, and there are certain responsibilities that come with that.
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