Affiliate Marketing

Affiliate marketing is used most effectively in the world of e-commerce. Now, affiliates can be a small but profitable part of your channel mix. Affiliate marketing is an inbound channel and it’s essentially where third parties, also known as publishers or affiliates, promote a product or a service and they receive a commission for a successful sale or a lead delivered through their website. So, they’re not selling something but they’re pushing people along a journey on your behalf. There’s four main parties in the affiliate landscape. Number one, the affiliate or publisher. These are the people who promote your brand for a commission of the sale. Number two, the advertiser. This is the brand whose product or service the affiliate is actually promoting.

Number three, the network. This is the software that tracks the sales and assigns the commissions. It’s the middle man that kind of manages everything. The customer who’s the person who buys the product after engaging with the affiliate’s content. While usually not the largest driver of traffic or sales for most companies, affiliate marketing can be a low risk, high return channel as part of your media mix. You know, if you think about it, the reason is that publishers are only paid if they deliver a sale, not just when there’s a click.

So, you only pay once a sale has occurred which makes it a much more lower risk channel versus something like PPC where you pay for a click regardless of whether there’s a sale or not. Now, again, PPC drives scale and affiliates drive something else. So, there is a differentiation between the two. Now, compared to mass traffic and conversion channels like PPC and SEO, affiliate market really just tends to be a smaller channel in the media mix but it can be really effective when deployed correctly. Within the world of affiliate, you know, we have to think about content types and the type of partners we want to work with to really optimize our performance.

So, it’s really important for digital marketers to understand the process of selling a product via affiliate networks. Let’s take a look at that process now. The typical affiliate customer journey involves just three steps. First of all, a customer reads a review or some content on the affiliate’s website and clicks a link to the brand’s website. Number two, the customer has been influenced by the seemingly independent review or advice from the affiliate’s website and buys on the brand’s website while the transaction value is tracked and counted by the affiliate network. Number three, the brand validates all sales via the network and is charged by the network for those sales.

These fees are given out as a commission to the affiliates and that’s how the process works.

While the affiliate gets a commission for driving traffic that results in sales, tracking this is essential to ensure there isn’t any fraudulent sales being recorded. To manage this process, both brands and affiliates are connected via a middle man piece of software called an affiliate network. This is a vital intermediary and it manages all transactions between the affiliates and the brands and just allows for transparency of payments. In the network interface, it’s also possible for brands to choose what affiliates they want to work with and for affiliates to apply to work with certain brands. So, it just kind of manages the whole thing from sales to who you work with.

All of this functionality is provided for a fee to the network from both the brand and the affiliate. Typically, networks are paid as a flat fee for both advertiser or affiliate or as a percentage of the commission of each sale or conversion. Now, it’s always best to explore what is the best approach for you before signing up to any networks? So, look at the costings, look at all of that stuff, and that’s how you decide how best to proceed when choosing an affiliate network.