What is Affiliate Marketing?
Affiliate Marketing is a type of advertising that enhances sales with the help of referrals. In simple words, Affiliate Marketing is all about referring to a product or service by post, blogs, social media platforms, and websites. To understand it better, let’s know about the 3 parties which are involved in affiliate marketing. These are as follows:
- The User – A user is a potential customer who might visit the referral link posted on social media or through a website.
- The Affiliate -The Affiliate is the content creator or the website owner on which the referral has been posted to enhance sales.
- Merchant – The Merchant is the person who has provided the link of the product or service to the Merchant.
One thing worth noting is that in Affiliate marketing, the merchant does not pay the affiliate unless and until the user gets converted into customers or any purchase is initiated. In some situations, affiliates are paid per click.
Which Platforms Are Used For Affiliate Marketing?
There are various platforms used for Affiliate Marketing. Prominent ones are stated below.
- Your website or blog
Why Opt For Affiliate Marketing?
Small or big, most organizations these days are opting for Affiliate marketing. Here’s why you should do it too.
- Cost-Effective– If you choose Affiliate marketing, there is no need for any advertising team. All that’s needed is to have a good relationship with an affiliate and you are good to go.
- Low ongoing cost – Merchants need to pay only in the cases when there are sales or any purchase has been initiated. The commission-based programs are highly beneficial.
- Less Risky – Affiliate marketing works in a non-complex manner and even if there is no sale, the merchant won’t have to pay anything.
- Better Traffic– While collaborating with an affiliate, you are already aware of the type of content they create and can choose the one to whom your target audience can relate with.
- Less Rigid – The Affiliate marketing plan does not require high investment and is easy to modify as per situations.
- High Return on Investment -Affiliate marketing has been providing a much higher return on investment than other marketing strategies.
What Are The Different Steps Involved In Affiliate Marketing?
Different steps in Affiliate Marketing are as follows:
- Developing a website – To begin Affiliate marketing, you need to have a website with a user-friendly interface that can easily initiate purchases.
- Knowing your target audience – Every product is not for everyone. For becoming an effective affiliate marketer, choose your niche and refer to products and services as per their needs and choices.
- Figuring out the best among the products – You can take the help of Facebook Audience Insights and Google Analytics to find the demographic and interests of people who visit your website.
- Keeping an eye on other Affiliate programs – A prominent aspect of affiliate marketing is thorough research. Read reviews on various affiliate marketing providers and take notes on which products could do well with your target audience.
- Create relevant content – A successful affiliate aims that every user who visits their website gets converted into a customer and should never leave due to poor content that is not well-optimized.
Measuring The Effectiveness Of The Affiliate Marketing Programme
Designing and implementing any marketing program is not enough. It is equally important to measure the effectiveness of that program. Here are the three Key point indicators that can be used to measure the effectiveness of an Affiliate marketing program.
- Effective Earnings Per Click – The EPC reveals to you how each of your affiliates is performing per 100 clicks.
- Total Revenue by Affiliate- It is all about keeping the track of earnings by all the affiliates in a spreadsheet for measuring long-term effectiveness.
- Average Order Value -To calculate the Average Order Value or AOV, divide the total revenue generated by the total number of orders.