Read here to find out six benefits of affiliate marketing, and why you should consider setting up an affiliate program for your business.
Jun 05, 2023
Businesses are more frequently seeing the benefits of affiliate marketing in their strategies today. Understanding what affiliate marketing is and how it fits into your industry can help you fold it into your marketing strategy and give you a competitive advantage.
Affiliate marketing is defined as:
a partnership-based marketing strategy in which companies partner with affiliate representatives to effectively supplement content marketing of a product or service with a low budget, no in-house design team, and at a well-contained risk level; all while offering an ROI with a high ceiling, an increase in brand awareness, and bolstered business growth through sales.
Of course, some things sound too good to be true, but in this case the benefits are a consequence of marketing that is highly targeted and effective. Businesses can identify a target market and select the perfect set of representatives that’ll suit the brand—this is exactly what affiliate marketing does.
Before you launch, you’ll want to choose a full-service email marketing software to perfectly execute your affiliate marketing campaign. Before that though, let’s go over what's involved in affiliate marketing and some of the key benefits that come from adopting it as a strategy.
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Affiliate marketing involves partnering with loyal consumers to promote your product and then rewarding them for their efforts on a commission basis. This is an effective strategy that brands employ to improve sales.
Quite often, it’s better used in tandem or coupled with other marketing outreach strategies and overarching campaigns.
Affiliate marketing usually involves a partnership between a business and a content creator (or affiliate) to help bring attention to, and in turn promote the sale of, products or services where the retailer agrees to pay a commission to the affiliate marketer for every sale they drive.
Certain affiliate programs even reward their affiliates on a per-click basis.
To track traffic and sales generated by any one affiliate partner, the brand assigns them a unique link that directs users to a specific sales page. The affiliate is then paid a certain percentage of sales made through those links.
“It was found that the affiliate marketing global spend in 2017 was $8.6 billion, with the $5.4 billion US spend making up a large chunk of that.
By 2023, it is estimated that global spending will increase to $14.3 billion, and rise further to $15.7 billion in 2024.”
According to Kinsta, 54% of brand marketing professionals rank affiliate marketing among their top three channels for customer acquisition while 20% report it in the number one position.
Why are companies spending so much on affiliate marketing campaigns? Below are some of the benefits of using affiliate marketers in your business:
1. Low Cost of Start Up
An affiliate program does not require that you have an advertising team for ad visuals or that you purchase ad space. Rather, you have the option to depend entirely on your affiliates to come up with content that organically markets your products and services.
Other than the initial effort you invest in selecting affiliate partnerships, there’s not more you need to sink into content marketing if you don’t want. This is one of the reasons it is such a popular method of marketing.
Once a company is comfortable working with an affiliate and has built a good relationship, they can let go of the reins and trust them to generate high-quality content that organically markets their products and services.
2. Low Ongoing Cost
Since most of your marketing activities are done by affiliates, they’ll also bear the chunk of the cost attached. And since it’s a commission-based program, it means that you’ll only pay affiliates from sales they bring in.
This marketing model makes costs easy to manage and does not interrupt your cash flow. That’s a major departure from other marketing models, such as PPC or paid media strategy, that require you to pay for every click leading to your website.
Affiliate marketing, however, ensures that your monthly content marketing cost is directly associated with sales generated.
3. Low Risk
Low cost means low risk. Since the cost of your affiliate marketing program is directly correlated with sales generated, you don't have to stress out about losing money on your investment, which is perfect for businesses on a tight budget.
4. Targeted Traffic
Another key point is that the affiliates you partner with are ultimately handpicked by you, ensuring the traffic coming to your site is from individuals who find your product or service useful.
This is important because your audience of ideal affiliates, content creators and passionate consumers who resonate with your brand, will most likely have their own audience which overlaps with your target consumer.
You can easily make your affiliate program smaller or bigger at little or no cost. It also offers you a great way to scale up your business without breaking the bank.
You can also choose to scale the compensation of your affiliate marketing program to match the growth of your business. This is worth considering because the larger reach an influencer has, the more authority (and sales) they can direct to a site through an affiliate partnership.
As with anything, the more competitive your affiliate program is in its compensation, the more high-quality affiliate partnerships it will attract.
6. High ROI
Having the keys to product innovation and effective management skills doesn’t guarantee a high ROI; you’ll also need to get your marketing right.
Affiliate marketing has been proven to have a much higher return on investment than most other marketing strategies. One major reason for this is because your target audience will hear of your product or service from affiliates that are naturally positioned within their spheres of influence.
In short, you’re channeling your marketing efforts through affiliate partnerships who have direct access and influence over a highly targeted and receptive audience that you both share.
How to Start Affiliate Marketing
Starting an affiliate marketing program on the company side of things is fairly easy. You’ll need a website, of course, a product or service to sell, and a way to assign unique and trackable links to affiliate partners.
Beyond that, the benefits of affiliate marketing strategies rely on partnering with influencers and passionate consumers who are already aligned with your brand, have a sizable reach, and generate captivating content.
The following will help you attract the type of top tier affiliate partners who will add true measurable value to your organization.
The Ideal Affiliate
First and foremost, you’re going to want to define what the ideal candidate for an affiliate partnership looks like. This is the first step in maximizing the benefits of affiliate marketing in your organization.
This is extremely akin to creating a buyer’s persona which helps a brand understand their ideal target audience. The two processes can be very similar because oftentimes the perfect affiliate partner is already an avid consumer of your brand.
However, unlike a typical consumer, ideal affiliate partners are also people with large spheres of influence. This makes public figures, content creators, and anyone with a public platform and audience a strong target for an affiliate partnership.
Additionally, your ideal affiliate partner should be someone who shares the same values as your brand.
All in all, the ideal affiliate partner is an avid and passionate consumer of your brand, has a sizable reach or sphere of influence, and shares the same values on which you built your business.
When considering how to attract ideal affiliate partners to your organization, it’s important to recognize where they’re currently spending their time both online and offline.
This will help you put your product in places where potential affiliate partners can naturally find, learn about, and test them.
Imagine you design and sell modern, stylistic putters. You need to build both brand authority and awareness in a hyper-loyal marketplace while also generating sales. A young golf influencer with dreams of making the PGA tour would be a perfect candidate for an affiliate partnership.
They have the audience and are aligned with your brand. Now they just need to fall in love with your product and in order to do that, they need to be able to find it.
Positioning your product or service in the natural path of your ideal affiliates will help generate interest in your affiliate marketing program.
Affiliate Partnership Awareness
The last step to start with and reap the benefits of affiliate marketing is bringing on affiliate partners and finalizing the contracts. This last step though, requires some amount of affiliate partnership awareness.
If the passionate consumers and influencers you’re targeting as affiliate partners don’t know an affiliate partnership with your brand is a possibility in the first place, they certainly won’t know that they should even consider applying.
Entering affiliate partnerships will also attract additional potential affiliate partners, strengthen your brand’s content marketing strategy, and boost overall awareness for your entire organization.
Affiliate marketing is quickly becoming a central aspect of many marketing strategies, largely because of the high bang for your buck that other strategies cannot offer.
While the space continues to grow, the benefits of affiliate marketing are more apparent to businesses of all sizes, and we can expect to see a steady increase in the number of organizations using the method moving forward.
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