Affiliate marketing can be a great business opportunity if you want to maximize your revenue. In this article, our web agency experts at My Little Big Web present how affiliate marketing works and the strategy behind it.
Affiliate marketing strategy
Affiliate marketing involves entrusting the promotion of your products or services to an affiliate, who will receive a commission when an individual meets an objective thanks to this advertising.
This is a sales chain. To illustrate this strategy, let’s say that company X offers to sell its products or services with seller Y (an affiliate platform, a company or an individual). When an individual makes contact or makes a purchase with the affiliate link of seller Y, seller Y will receive a commission.
This affiliate marketing strategy is profitable for Company X, which takes advantage of the affiliate’s audience to sell its products or services, while the affiliate earns a commission. In this respect, affiliate marketing can be seen as the process of spreading the creation and marketing of products across different parties, where each party receives a share of the revenue based on their contribution. This is where the affiliate will attempt to attract and convince potential customers of the value of the merchant’s product so that they will ultimately meet a goal.
Affiliate marketing is therefore a strategy that relies on the relationship between:
- The merchant, which we can also call the creator, seller or retailer. This party creates and sells the product. It can be a start-up, an SME (Small or Medium Enterprise) or a large company.
- The affiliate, i.e. the advertiser, can be an affiliate company or an individual such as a social network influencer, for example.
- The consumer, i.e. the customer who makes this affiliation strategy work.
The cost of the affiliate network is usually included in the price of the product, which means that the consumer will not pay more than if this strategy had not been implemented.
Becoming a seller and setting up an affiliate program
If you want to implement an affiliate marketing strategy, you will need to follow a number of steps to ensure that it is effective.
Establish your strategy
First you need to find the product or service you want to promote and know which audience to target. Ask yourself the following questions:
- What are the subjects I am passionate about?
- Is there a wide audience interested in this product or service?
- What is the level of competition in this market?
- Are there any affiliate programs for this market?
Next, define your audience, create a brand identity and think about how you will communicate on your different platforms.
Whatever niche you want to enter, make sure the affiliate is authentic, since this will encourage people to interact with your brand. Keep in mind that no one likes to be spammed and if your affiliate publishes content just to earn a commission, people will quickly realize this and won’t be interested in what they post.
Choose your affiliate program
Afterwards, you will have to find an affiliate network and implement a real follow-up between the affiliate and the buyer in order to know who to pay the commission to. This tracking can be done using online software or a plug-in added to your website.
Here are three possible scenarios:
- Your online store is hosted on a WordPress site, in which case you can add plug-ins such as WordPress Affiliate Platform Plugin or Affiliate Pro, for example.
- Your online store is hosted on Shopify, in which case you can use plug-ins such as Refersion, LeadDyno or Omnistar.
- Your online store is hosted on a different platform than the previous two, in which case you can use online tools such as Gumroad or Digital Product Delivery that will allow you to create affiliate program partnerships and allow affiliates to earn commissions.
Analyze your results
Determine the budget you are willing to invest in your marketing strategy to increase traffic to your website. Then you will need to calculate conversions and commissions to determine where to focus your efforts.
Choose which channels to communicate on
Which websites will you be promoting these products on?
- Media sites: The media generally have a large network of websites, which means you can reach a wide audience.
- Product or service comparison sites: These sites monetize affiliation by reviewing products and services.
- Influencers and micro-influencers: These marketing players, who often work in a niche market based on their interests (e.g. fashion, sports or food), present and promote your products to their audience.
- Advertisers who practice paid online advertising: These affiliates use paid advertising, whether on search engines or social networks, to promote your products.
All of these approaches have their advantages and disadvantages, some being more suited to certain niches than others. For example, if you sell watches and your target audience is young and female, using influencers on Instagram can be a very effective strategy since a large portion of this audience uses the platform.
The different affiliate marketing payment models
Affiliate marketing strategies rely on a variety of payment methods:
- Cost per click,
- Cost per lead,
- Cost per sale,
- Cost per view,
- Cost per link,
- Cost per registration, and many more.
Our experts will explain the most common payment models.
Cost per sale
With the Cost Per Sale model, the seller pays a commission when an Internet user makes a purchase through online advertising set up by the advertiser. This is the most widely used payment method in affiliate marketing strategies.
Cost per click
With the Cost Per Click (CPC) model, the seller pays a commission to the affiliate when an Internet user clicks on one of their ads that redirects them to the seller’s website. For example, the Internet user may have clicked on a Google Ads or Facebook Ads advert that was created by the advertiser.
Cost per lead
With the Cost Per Lead model, the company pays a commission to the seller as soon as an Internet user contacts the company by any method previously defined by the affiliate. This lead can be a request for a quote, a call or a subscription to a newsletter, for example.
Like all marketing strategies, affiliate marketing requires time, money and above all knowledge of online marketing and advertising.
However, if you would like to promote your products or services, but don’t know where to start, we welcome you to contact our experts.