Affiliate Marketing the Top Model of Advertising
What was created in 1997 by the Amazon founder out of a party mood, is now part of the good form of online marketing, so to speak. What is meant is the internet-based commission program affiliate marketing or partner program. It is both a particularly important marketing tool and a worthwhile business model without having to make any advance payments. What is no longer a book with seven seals, however: Affiliate marketing offers the possibility of earning or leaving a lot of money with the right strategy .
An idea that changed everything
If the stories are to be believed, it was Jeff Bezos who was asked by a young woman at a cocktail party whether it was feasible to market thematically appropriate books on her website for a commission – she owned a divorce platform. With this question everything changed, because after that evening Bezos decided to develop a sales model called the Associates program, which paid website operators a commission after a successful referral. When you hear the name Bezos today, it should come as no surprise that 60,000 entrepreneurs took part in the first year. According to Amazon, there are now millions. And Amazon is still one of the front runners today.
However, it did not take long before the Amazon partner program, or better known as Affiliate Amazon, turned out to be successful and many similar models followed suit. In the meantime, affiliate marketing has become an indispensable part of online marketing , it even plays a central role. In 2019, 74 percent of affiliates, 61 percent of merchants and 90 percent of agencies were happy about increasing sales.
Affiliate Marketing – The Definition
According to Digopaul, affiliate marketing is an online marketing tool based on agency commission. This creates a business partnership in which an affiliate (also called publisher) provides a company (also called merchant) with communication space on its websites or social media channels and provides this with a so-called affiliate link. The publisher uses this link to direct his contacts to the provider’s services and receives a commission for each purchase or transaction. The idea itself is not new, it has been part of the daily business of sales-oriented organizations and of sales structures of sales and network partnerships for decades.
If you look closely at the words affiliate marketing and translate them, you get verbs like: connected, affiliated or affiliated. This allows the affiliation of partner networks and the merging of sales partners to be derived and also clearly understood. Terms that are often used synonymously for affiliate marketing include: Affiliate programs, partner programs or associate programs.
And this is how affiliate marketing works
In practice, a partner , also known as an affiliate, advertises the products or services of a company, known as merchants, on their website . For every successful referral that was generated via this advertising measure or website of the affiliate, he receives a commission or previously agreed remuneration. The remuneration is always negotiated individually and payment is actually only made when a certain action has been carried out. This can be, for example, ordering a product or clicking on a banner . It should be noted, however, that you always have an eye on the commission, also to check the competition.
The merchant – among other things called advertiser or seller, which means something like dealer – is the advertiser in affiliate marketing. He has to keep his business going by promoting his products with targeted advertising measures and convincing potential customers to buy from him. Nevertheless, his reach is limited, with an affiliate he has the opportunity to advertise his content or his products or services on the appropriate affiliate pages in order to address more customers and increase sales . The merchant only pays the affiliate if a click , sale or lead has come about. In addition to customer acquisition, the level of awareness can also be can be increased.
Anyone who has their own website or blog or something similar can become an affiliate. Affiliates – also known as publishers or sales partners – can earn money by marketing third-party products on their website and thus generate another source of income. The only thing he has to do is to include the merchant’s advertising material on his website to promote the products and services. It is important that, for example, the banner advertising and the target group match the website. Because if the advertising doesn’t address the right target group , they won’t click on it either. The affiliate acts as a partner and depending on the previously agreed remuneration model, he receives commission.
Affiliate networks refer to platforms that act as an independent interface between merchant and affiliate, they bring both parties together. These networks search for suitable cooperation partners will not only facilitates, they also incorporate a variety of activities such as: billing, tracking – measures or customer support. With an additional affiliate network , not only can the success of advertising measures be measured, but it can also be further optimized.
Affiliate link means something like affiliated connection. This is a partner link provided by companies that receives an identifier for the partner. The mediation works with this variant via link.
Affiliate marketing agencies
Sometimes merchants also decide to hand over affiliate marketing to specialized agencies. Depending on the company, the success of affiliate marketing depends on professional program maintenance or customer acquisition. It also makes sense to renew the advertising material at regular intervals. In the event that a merchant cannot muster these capacities or even skills, it is strongly recommended to consult an agency. One should not forget the focus on customer journey tracking and the associated analysis, which is of great importance for affiliate marketing . To get really meaningful conclusions from online marketing-To be able to draw activities and uncover touchpoints, a precise analysis of the customer journey is essential. This is the only way to document the customer’s path and to set the right marketing budget.
How is it now billed?
There are different models that have established themselves for the remuneration of affiliate marketing .
- Pay per click: This type of billing is very popular because it does not charge a flat rate, but rather a commission is only paid when a click occurs.
- Pay per lead: This variant is only of interest to merchants, because a commission is only due when an action is carried out, for example when registering for the newsletter or when placing an order.
- Pay per Sale: With this method, payment is only made when something has actually been bought. The amount of the remuneration is usually based on a previously defined percentage or an agreed fixed remuneration.
Always stay up to date
In the digital age simply nothing works without a mobile phone, no network is the word of the approaching end of the world, which is why the smartphone is of great importance for affiliate marketing. Most affiliate traffic came from mobile devices as early as 2016. Since 2018, speed has also been a ranking factor. In the meantime, companies and affiliates have adjusted their websites and shops or even develop their own apps. Nevertheless, an online shop should not be exclusively responsive, the ordering process should still be possible in a few easy steps via smart device.
Conclusion on affiliate marketing
New forecasts for the US market have shown that a whopping 8.2 billion euros will be spent on affiliate marketing in 2022 . In 2017 it was only 5.4 billion. For anyone looking to get into the multi-billion dollar affiliate marketing business, finding a profitable niche is recommended. Regardless of the niche, affiliate marketing has benefits for both parties. The advertiser increases his level of awareness and has the opportunity to win new customers. The sales partner increases its sales and thus benefits from the partnership. If affiliate marketing is used in a targeted and correct manner, a successful future for entrepreneurs can result. However, it must be clear that success also takes time and will only grow with a well-thought-out idea. The better the advertising strategy is planned, the more traffic can be generated.