An Introduction to Affiliate Marketing for Advertisers

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Affiliate marketing has a plethora of benefits, as evidenced by the great results reported by those who implement it into their marketing strategies. Hayley Lambert of Acceleration Partners is here to provide you with insight into Affiliate Marketing – “Affiliate Marketing for Dummies” if you want it.

For those who want to show the benefits of affiliate marketing to their CEO or CMO, this introduction and guide will describe exactly what it is, who the main players are, and how to get started.

What is Affiliate Marketing?

The definition of affiliate marketing by the Oxford English Dictionary is:

“A marketing agreement whereby an online retailer pays a commission to an external website for the traffic or sales generated by their referrals. “

Affiliate Marketing is a performance-based model that allows an advertiser to partner with individuals or businesses to promote their products and / or services.

It involves three key parties, an advertiser, an affiliate, and a customer.

Whatever the partner does – generate sales, leads, new customers, etc. – you only pay them after they delivered on this desired action. The performance model is results-based.

A successful affiliate program has a win-win framework for advertisers and their affiliate partners. And, when successfully set up and managed, the affiliate model can contribute a significant percentage of your income online.

Here is an example of how the affiliate model can be used to generate sales:

Who are the key players?

Advertisers – Companies that sell their products and / or services through the affiliate marketing channel. (Also known as Trademarks and Merchants)

Affiliates – A person or business that promotes an advertiser’s offering and is paid based on performance to drive a predefined desired action, such as a sale or lead. Affiliates are an advertiser’s marketing partner. (Also called publishers and partners).

Affiliate Marketing Agencies – An independent company that offers affiliate marketing services to advertisers. The agency works directly with affiliates and with the affiliate network or SaaS platform that meets the technological needs of the program. Some affiliate marketing agencies also offer consulting services.

Affiliate networks – An affiliate network acts as an intermediary between affiliates and advertisers. They usually track, report and pay affiliates. Affiliate networks offer advertisers full management or self-service management.

Customers – The audience that affiliates influence. Actions can include making a purchase, submitting a lead generation form, signing up for a newsletter, and more.

Media agencies – Usually a full-service digital agency that has an affiliated department. They can manage an advertiser’s entire digital strategy or just the affiliate channel.

SaaS (Software as a Service) platforms – SaaS platforms provide advertisers with tracking, reporting and payment; however, they generally do not offer an account management service, which sets them apart from affiliate networks.

How does an advertiser get started?

To become an advertiser, the key requirement is that your website is transactional and that the “desired action” such as a sale or lead generated from a completed form can be completed by the online customer. It’s also essential to make sure that you have a compelling product or service that affiliates will want to promote to their audience.

Why Use Affiliate Marketing?

The popularity of affiliate marketing is due to the flexibility, transparency and measurability of the model. Benefits for advertisers include:

  1. Low risk. The affiliate model means that advertisers pay on performance rather than clicks, making it a low risk form of marketing. Whether it’s selling goods, getting a new lead, or even targeting new customers only, the affiliate channel can deliver.
  1. Soft. The affiliate model is incredibly flexible. You can find the right solution for your business, whether it’s building an internal team, joining a network or outsourcing management to a specialist agency. You control how you manage your program and the partners who promote your brand.
  1. At low price. While some initial investment is required, payments are then made solely on the basis of performance metrics, once the initial setup is complete.
  1. Increase brand awareness. The affiliate channel is an excellent springboard to promote your business; there are hundreds of thousands of affiliates on different channels with a range of promotion methods. By working with affiliates, you can increase brand awareness among new audiences and increase brand loyalty with existing customers. You control who you work with, selecting the partners who best match the brand.
  1. Data information. The affiliate channel is measurable and transparent. Detailed data insights allow you to manage your overall ROI or campaigns with specific partners. Decisions can be made based on real-time performance, making the channel scalable and flexible.
  1. Expand into new markets. Affiliate marketing is a low risk and profitable way to enter new markets. Many affiliates have a global audience, which can be a good way to test consumers’ interest in a new market.
  1. Scale quickly. Affiliate marketing allows you to scale your business with minimal cost and low risk. You can test new markets, new messages, and work with a variety of partners while monitoring spend and ROI.

Affiliate marketing is an essential part of the marketing strategies of many brands. The channel is ever-changing, flexible, and low-risk, allowing you to reach a disparate customer base at scale in a cost-effective manner.

A well-run affiliate program will allow you to target not only the right customers, but also the products and buying behaviors to generate profitable and incremental growth. Essentially, you can build an effective and truly flexible sales force based on your needs.


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