Affiliate Marketing Guide – Everything You Need to Know in 2021
In the ever-evolving world of digital marketing, it’s invaluable – and essential – to keep tabs on what’s new, what has stayed the same, and what channels make the most sense for growing your business. Our updated affiliate marketing guide is designed to take some of the guesswork out of this oft-misunderstood channel, shedding light on what makes it a uniquely powerful avenue for increased visibility, highly qualified traffic, and relationship-building.
What is Affiliate Marketing?
Affiliate marketing is a marketing model in which a mutually beneficial relationship is established between a business/brand and partners known as affiliates or publishers. These affiliates help to increase visibility and traffic for the brands they’ve partnered with, earning a predetermined fee or “cut of the sale” for eventual purchases their promotional efforts help earn for a business. Businesses are able to determine which of their affiliates helped in securing a sale thanks to advanced tracking capabilities of affiliate networks. A large volume of Affiliate Marketing is performance based, which is why it is a notoriously high ROI channel.
Translating affiliate marketing to a brick-and-mortar retail model, the affiliate is most similar to a salesperson who earns a commission on their sales. However, a key way in which affiliates differ from salespeople is that they play a much more active role in acquiring those shoppers.
Whereas a salesperson’s primary responsibility is to serve the customers that enter a shop, an affiliate helps bring in new shoppers. Just as you’ve worked hard to establish your brand, they’ve worked hard to establish a name for themselves and grow their readership or base. When you partner with an affiliate, you’re paying them for giving your brand visibility and reach in their network, or more simply, introducing you to their “friends.”
What is Affiliate Marketing Not?
For starters, affiliate marketing is not a new marketing model. While it has grown and evolved over time, it has been in use for more than 20 years. To put that into perspective, if modern affiliate tactics were possible in the 1990s, we could expect to see influencers and brand ambassadors rocking JNCO jeans and a matte brown lip. Come to think of it, that matte brown lip has made a recent comeback – and that’s how long affiliate has been fashionable!
Affiliate marketing is also not a “quick win” channel.
While you can expect that certain high visibility partnerships will bring about a rapid influx in business, the best, most reliable, and consistent results are seen when you’ve taken the necessary time to establish your partnerships. This is done by thoughtfully crafting promotions, cash back/commission rates, creative banners, newsletters, and more strategic direction that will resonate with your affiliates and their audiences. The closer you work with your publishers and test various exposure and placement opportunities, the better you can analyze performance and improve results.
Key Players in an Affiliate Marketing Relationship
There are four primary parties in affiliate relationships – merchant, network, publisher, and customer. Let’s take a closer look at the role each plays in marketing success…
Merchant: The merchant, or brand, provides the actual product or service that is being offered and promoted
Network: The network is where merchants, or their representative affiliate agency, utilize tracking technology, capture reporting to analyze data, share details about their program for discovery by publishers, and more. By running their program through a network, brands are able to increase their visibility exponentially, reaching a wide array of engaged publishers looking for promotional opportunities that will appeal to their readers
Publisher: The publisher is the affiliate themselves. This can be an individual sharing content with their followers on their blog, vlog, or social media platform, or a larger publisher outlet fueled by many people behind-the-scenes, including major coupon and review sites
Customer: The customer is the individual or business that has purchased the product or service being sold by the merchant
Popular Affiliate Publishers
- Cashback/Loyalty/Benefits
- Coupon/Deal
- News/Media
- Content Platform
- Niche
- Sub-affiliate Networks
- Comparison
- Services
- Students Perks
- Fundraising/Charity
- Payment Installment
Influencers
Chances are that most people reading this are following influencers or brand ambassadors on social media, and/or have made a purchase based on influencer content. In short – influencers are the ‘cool kids!’ They are the ones who always seem to have the latest and greatest version of whatever it is that interests you, from sneakers to organic skincare.
Influencers have amassed a dedicated following on the platform or platforms of their choosing, and regularly share content with their followers to not only help them discover new things, but provide them a peek into their everyday lives. Their content isn’t typically exclusively promotional in nature; to maintain their followers’ interest, influencers will often share myriad aspects of their life, thoughtfully incorporating products or services from merchants they’ve partnered with.
By working with influencer networks, the affiliate channel is able to build these relationships on a massive scale.
Brand Ambassadors
Brand ambassadors are the “next step up” from influencers, and can be thought of as cheerleaders for your brand. While an influencer might showcase your product in action once, or even a few times, a brand ambassador is dedicated to, and passionate about, your product or service. These partnerships are typically coordinated with the brand’s PR team, are more involved than influencer partnerships, and extend for a longer period of time.
While influencers might partner with brands whose products they are just being introduced to, brand ambassadors are experts, or highly regarded in their field. It is common to financially compensate ambassadors, and provide them with free products, but the relationship isn’t always as transactional as an influencer partnership. In fact, many brand ambassadors happily share the ins and outs of your product through word-of-mouth advertising without any form of payment. These are people who genuinely believe in your brand, and want to help in getting the word out so others can enjoy it, too.
Bloggers
While there is often overlap between influencers and bloggers, with some people fitting into two or more of those categories, we wanted to highlight the value of bloggers in a very specific niche – even if they don’t have a sizable following.
Let’s assume the product you want to promote is a high-quality knitting yarn. Your product is available in an array of colors, washes beautifully, and is generally regarded as a pleasure to work with. While a well-known fashion influencer might get your yarn in front of more eyes, partnering with lesser-known bloggers whose content is exclusively focused on knitting will get your product in front of the right eyes. This will result in not only more qualified – and likely to convert – traffic to your site, but the blogger will be better informed about what aspects of your product to share with their readers.
They ‘speak the language’ and know what’s important to highlight, and can grow to become a brand ambassador if they truly love your yarn. Upload creative banners to your program to be picked up and used on blogger sites.
Coupon/Deal & Loyalty/CashBack Sites and Apps
Coupon and deal sites and apps are among the most popular sources of affiliate traffic, with many “sharing” part of their revenue with the shoppers who start their journey there. Popular sites in this category include Rakuten (formerly Ebates), RetailMeNot, BeFrugal, Honey, Hip2Save, and SlickDeals, just to name a few.
Using Rakuten as an example, shoppers can create their own account, and begin their shopping journey at Rakuten.com. From here, they will click on affiliate links to whichever participating retailer they are interested in shopping with, and earn varying percentages of ‘cashback’ on their purchases. This cashback is paid to shoppers on a recurring schedule, which is currently every 3 months for Rakuten.
One of the most important aspects of partnering with sites like Rakuten is securing interested shoppers that you might lose out on if you aren’t a partner. This is because Rakuten will recommend similar partner sites to shoppers when the site they’ve searched for isn’t on Rakuten. If potential customers see that another site has the same product for a comparable – or even lower – price, chances are good they will shop from the recommended site instead so they can earn cashback.
Review Sites
As shoppers become increasingly reliant on reviews to aid in their ultimate purchasing decisions, the importance of reviews grows as well, with dedicated review sites poised to play a key role in your success.
To be certain, not all reviews are part of an affiliate relationship. Many of us have left on-site reviews for products or services we have firsthand experience with, whether good or bad. However, there are also dedicated review sites, often focused on one particular type of product. This is where affiliate most often comes into play.
Let’s assume the product you’re selling is a folding exercise bike. You want to get your bike in front of shoppers ready to buy and have all the most important features highlighted to help them in making their decision. Partnering with a review site dedicated to home exercise equipment can help make that possible. These reviewers can share images of your product, videos of it in use, all the most important specs and considerations, how it stacks up against similar products in regard to craftsmanship, price point, size, and more. They may even feature it in a “Best Folding Exercise Bikes of 2021” post, helping their review to be returned in the SERPs for the most qualified searches.
As an added bonus, since their content is so focused on one particular area, chances are good that they have strong organic positioning for related searches as well, further aiding in increased exposure. And – of course – if shoppers click on the affiliate links they’ve been provided to include in their reviews, they will get their share of any resultant sales. So it “works out” for everyone!
News & Media Websites
While not all news and media websites feature affiliate links in their content, there is a growing likelihood that the links you click are indeed affiliate links. For many, it’s simply a matter of leveraging the content they’ll be writing anyway to earn a commission.
Let’s assume a news site was writing an article about the “Hottest Holiday Gifts for 2021.” For this article, they would be focusing on popular presents for children, teens, and adults, highlighting products and services that have been consistently earning buzz and excellent reviews in recent months. Their primary goal and article purpose remains the same – to provide their readers with shopping inspiration and direct them to some of the most sought-after products of the season. The only difference is the links that lead to those products will earn them a commission if shoppers ultimately purchase when clicking through from their article.
The advantage to brands is not only increased exposure but a better understanding of which partners – and which content types – send the most qualified traffic to their site. This can help them in continuing to refine their own affiliate program to focus more heavily on these partner and content types.
How Do Affiliates Make Money?
While there are a few different payment methods in use in the affiliate space, the most common partnership model enables brands to offer publishers a share of any revenue that is generated by the merchant from visitors to the publisher’s site. In fact, it is affiliate marketing’s pay-per-outcome model that many brands love most about the channel, as it comes with a lower risk than some other initiatives. Brands also typically carve out an affiliate paid-placement budget. These are fixed, one-time fees for additional exposure, sometimes to a larger audience that is fronted regardless of the performance outcome.
Am I Ready to Invest In Affiliate Marketing?
Considering launching an affiliate program, but aren’t sure your product or service is the right fit? While we have seen affiliate success with brands of all niches and sizes, there are some qualities that the most successful brands typically share…
Established Priorities
If you are running a new or quickly evolving business, and your day-to-day operations, priorities, and goals are shifting by the week (or day, or hour!), it may serve you best to wait until those foundational elements are ironed out before you partner with an affiliate agency. Not only does a successful campaign take time to set-up and execute, but many of your affiliate partners themselves need to have a solid understanding of your brand, your products, and who you are as a company.
Healthy Margins
While an affiliate program can certainly help to increase your margins, you will need to have a strong budget from the outset to ensure the best placement and partnerships. If you would be going into the red just to give your affiliates their cut of the sale, it would be best to wait until your business is more robust.
Strong Brand Recognition
Affiliate marketing has certainly helped countless brands transcend from ‘never heard of them’ to a household name, but the more brand recognition you have from the beginning, the more likely it is that established affiliates will want to join your program. That said, even if you have low brand recognition, having a clearly laid out business model and direction, solid reviews, and high conversion rates can go a long way.
Popular Category in the Digital Space
Simply put, there are certain categories of products that consumers are more likely to buy online than others, and brands within those categories tend to have the most profitable affiliate programs. Some categories that perform especially well include apparel, pet supplies, home goods, groceries, cosmetics/skin care, and products designed for children and busy moms – particularly if these items are unique, and not widely available through larger sites like Amazon.
How to Get Started With an Affiliate Marketing Strategy
While there are some basic steps businesses can take on their own to get an affiliate program started, if you’re looking for the best reach and results possible, working with an experienced affiliate marketing agency is key. Let’s look at two of the biggest reasons why…
They already have established relationships and invaluable experience.
- Our affiliate marketing team boasts an average of 7+ years working in the space. Perhaps more than any other marketing channel, the longstanding professional relationships our team has built with myriad networks and publishers will bring immediate benefit to your program launch
- They have spent thousands of hours not only working with the people side of affiliate but the tools and overall digital marketing landscape side, too. They have navigated every technology shift, work closely with networks, and have learned how to make the most of the channel for merchants in countless B2B and B2C markets
- Whatever your product or service, our affiliate team has the necessary knowledge and resources to execute your strategy in the most modern, efficient way possible
They not only know the lay of the land, but they also helped pave it.
- If affiliate marketing were a neighborhood, our team would be the lifelong residents who knew all the best restaurants – and the ones to avoid! – and were on a first-name basis with everyone at the coffee shop, hardware store, public library, and post office
- They would remember who used to live in each house on your street and understand how things have changed, and how they’ve stayed the same
- In a sense, the internet truly is like its own community, and it helps to have the mayor on your side (that’s us!) when you’re looking to connect with the townspeople
The Benefits of Tinuiti’s Cross-Channel Affiliate Program
Many brands partner with Tinuiti because they are seeking a more informed, cohesive marketing strategy and execution. While we are always happy to work with other partners a brand might be engaged with, digital marketing in particular moves at a very fast pace with lots of moving parts, and the brands we work with appreciate the benefits of having all their marketing initiatives “under one umbrella.”
Working with one agency for all your marketing efforts helps streamline communication between channels so the left hand always knows what the right hand is doing, and can adjust their own initiatives as needed to improve overall performance.
Affiliate Marketing ROI: Is Affiliate Dead?
In short – absolutely not! Affiliate marketing is not only far from dead, it is becoming an increasingly important channel for brands looking to reach coveted Millennial and Gen Z consumers. Shopper savviness has only increased over time (especially in a digital-era of shopping in 2020 and beyond), with more resources at our fingertips than ever before to help us make informed, smart decisions about the products and services we buy. Many modern consumers look to reviews and other firsthand experiences available to aid in their decision, with insights from brand affiliates being an important part of their research.
Many of us are familiar with the African proverb, “It takes a village to raise a child.” While children will naturally receive the majority of their nurturing, learning, and instruction in the home, their extended family and community at large have important roles to play in helping them grow. Affiliate marketing can be thought of in a similar light.
It takes a lot of time, money, dedication, and passion to cultivate a strong business. And while it might all start with one or two people, you can not only grow it faster with help, but extend your reach into areas you might not have otherwise.
Your affiliates are part of your “village” – the proverbial aunts, uncles, and neighbors that help your business grow to new heights by introducing it to audiences you might not be able to reach on your own. Depending on the nature of the affiliate relationship, they may provide insights into how your product or service works, showcase it in action, share enticing deals with their readers, and so much more.
Ready to learn more about how Tinuiti’s affiliate marketing services can help you build a hardworking village for your brand? We’d love to chat!
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