What is affiliate marketing, and how it works

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By 2022, affiliate marketing content generated approximately $8.2 billion in revenue in the US, per Business Insider Intelligence. For many businesses, affiliate marketing is a driver for long terms sales and conversions on google.

Affiliate marketing is a type of online marketing in which businesses or individuals promote other businesses products or services in exchange for a commission. Affiliate marketing can be an effective way to reach new customers and grow a business.

If you’ve ever wondered what affiliate marketing is and how it works? In this post, we’ll give you everything you need to get started.

1. What is affiliate marketing and how does it work?

Affiliate marketing is a type of online advertising where businesses pay other companies or individuals to refer their products and services on a commission basis. Affiliates place special affiliate links (referral links) in their content, which earn them money when those links are clicked by visitors interested in the advertised products.

Affiliates typically earn money when a link is clicked, and a purchase has been made based on your recommendation. However, some affiliates may also be paid for clicks to a website, email or free trial signups, and app downloads.

By using affiliate marketing, companies can reach a wider audience and grow their customer base more quickly and easily than they might otherwise. Additionally, businesses can be more selective about which affiliate websites they work with since they only have to pay for advertising when it results in sales.

2. How to get started with affiliate marketing

Affiliate marketing can seem like a daunting concept, with so many different elements to consider. However, getting started with affiliate marketing is actually quite simple.

First, you need to identify a few affiliate programs that you would like to work with. Different affiliate programs have different requirements for joining, so do your research beforehand and be sure that you meet any eligibility criteria.

Once you’re accepted into an affiliate program, you’ll receive an affiliate link with a specific URL or code that keeps track of the referrals you send the company. Referrals are tracked by a cookie placed on a visitor’s computer.

Once you have your affiliate link, it’s time to start creating content that promotes their products or services. This can include blog posts, social media, Youtube videos, Podcasts, ebooks, and more. The key is to be creative and engaging while still providing useful information that is valuable to potential customers.

If the content you create results in a conversion based on the company’s criteria, you’ll be paid a commission. Some commissions are paid as a percentage of a sale amount, a fixed amount, per lead, or a reoccurring fee.

Many brands give a commission based on a 30 and 90-day cookie duration window. Cookie duration will vary and is up to the brand affiliate program. If, for example, you send a visitor to a brand’s website with a 90-day cookie duration, and that same visitor later goes back on day 45 and makes a purchase, you’ll still get a commission.

It will depend on the specific affiliate program.

And finally, stay organized! Keeping track of your affiliate links and sales data is essential for monitoring your progress and determining the most effective forms of promotion over time. It’s helpful to create a spreadsheet of all of your affiliate products and links.

3. Types of affiliate marketing

According to Pat Flynn of Smart Passive Income, there are three main types of affiliate marketing
1. Unattached affiliate marketing,
2. Related affiliate marketing,
3. Involved affiliate marketing.

People earn money as an affiliate in these three primary categories. The affiliate marketing category is how we are associated with the product or service we are an affiliate for.

1. Unattached affiliate marketing

Unattached affiliate marketing is where you have no relationship or authority with the products or services you’re marketing. It is a basic pay-per-click affiliate marketing where you have no connection between you, the product, and the audience. You’re just putting links in, hoping someone will click the link and you’ll make a sale.

This is not the type of affiliate marketing you want to aspire to do, and is known as the dark side of affiliate marketing. You’re not providing anything of value or serving your audience. You’re instead just looking to make money.

2. Related affiliate marketing
Related affiliate marketing is where you have a presence online, and you use that presence to promote a product or service on your website, in a blog post, or a social media post. The product or service is related to your niche, but you don’t actually use that product or service yourself.

The problem with this type of affiliate marketing is you’re risking your relationship with your audience by recommending products you don’t use yourself. If you recommend a bad product, you run the risk of breaking that trust with your audience. So if you do plan to dabble in related affiliate marketing, make sure you’re only recommending something you know you can trust.

3. Involved affiliate marketing
Involved affiliate marketing is where you recommend a product or service you’ve personally used and trust. It’s the best type of affiliate marketing. It’s recommending a product or service you can actually write about. It’s showing it’s part of your process and how you use strategy.

It’s not a banner ad with a link you can stick anywhere on your site. It’s the most honest and helpful version of affiliate marketing. It’s you sharing your experiences and involvement with a product or service.

Focus on the method that works best for you, but ideally, it’s the one that provides the most value to your audience.

4. Affiliate program vs. affiliate network

Affiliate programs and affiliate networks are two key concepts in affiliate marketing.

An affiliate program is an affiliate agreement between a merchant (a brand) and the affiliate is referred to as an affiliate program. An affiliate program refers to the set of rules and terms that define how an affiliate can participate in the affiliate marketing channel.

Affiliate programs let affiliates join a merchant’s affiliate program and then have access to various types of promotional tools (affiliate links), as well as commission rates based on sales volume or conversions. Affiliate programs are typically managed by a single merchant or brand owner.

For example, when I signed up to be an affiliate with ConvertKit, I signed up directly on their website. I manage my account and payouts directly with Convertkit’s affiliate program.

In contrast, an affiliate network is a platform or marketplace where merchants and affiliates can connect and collaborate with each other. Affiliate networks act as hubs where publishers, brands, agencies, and other merchants can connect with relevant affiliate partners based on a target audience and niche market segments.

This allows affiliates to capture more value from their affiliate relationships while also improving overall campaign performance. Amazon Associates is an example of an affiliate network. It’s one platform with many brands. Affiliate networks include:

• Amazon Associates
• Impact
• CJ (formerly Commission Junction)
• Rakuten Advertising
• ShareASale.com
• AWIN
• FlexOffers
• ClickBank
• Avangate Affiliate Network
• AffiliaXe
• MaxBounty
• GiddyUp
• Tradedoubler
• eBay

5. Why do affiliate marketing

Affiliate marketing is a great way to earn some extra income online by promoting products or services that you believe in. Many affiliate marketers looking to build a lucrative long-term strategy choose to partner with affiliate programs that align with their own interests and passions.

Some of the key advantages of affiliate marketing include the following:

• The ability to connect with people who share your interests or passions. Since affiliate programs are typically industry-specific, this allows you to connect with others who are interested in the same things that you are. When building your affiliate marketing business, it’s important to find an affiliate program whose core values align with your own. This will help you create more meaningful partnerships and ultimately achieve greater success.

• Flexibility and convenience. Thanks to the Internet and advances in technology, affiliate marketing is now accessible to anyone regardless of location or demographics. As long as you have access to a computer and an Internet connection, it’s possible for you to start earning money through affiliate marketing – even if you’re not particularly tech-savvy!

• It is mostly passive income. Once you’ve created the blog post or video it requires minimal work and updates to maintain it. It can continue to earn you money for years to come.

• It’s more affordable and easier than creating your own product. You won’t have upfront costs, have to ship anything, deal with customer service, maintain inventory or manage returns and cancellations.

6. How much money can I make as an affiliate marketer?

Overall, affiliate marketing is somewhat easy to start and is a lucrative way to make money online. But it doesn’t happen overnight and does take a long-term commitment. There are affiliate marketers that make a few hundred dollars a month, and there are many that make six figures a year. There are also affiliate marketers that make multiple six figures a month!

How much you make is based on your affiliate marketing strategy, your niche, and how much traffic you have to your content. But the most important element is trust and authenticity. Both play a big role in whether or not your affiliate links will convert into a sale.

Most affiliate programs are free to join, which keeps your start-up costs down. Done correctly, an effective affiliate marketing strategy can take you from a part-time side hustle to a profitable online business.

Regardless of the approach you take, affiliate marketing can help you to increase your income by giving you the freedom to work from anywhere and allowing you to focus on generating leads and closing sales. With the right techniques and hard work, it is possible to achieve great success as an affiliate marketer.