What Is Affiliate Marketing? (+6 Benefits of the Model)

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. You can 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 partnerships, there’s not more you need to sink into affiliate marketing if you don’t want to.

Particularly once a company is comfortable working with an affiliate and has built a good relationship, it can let go of the reins and trust them to generate high-quality content that organically markets its 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 you’ll only pay affiliates for 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 paid media strategy, that require you to pay for every click leading to your website. 

Affiliate marketing, however, ensures that your monthly 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 overlapping with your target consumer.

5. Flexibility

You can easily make your affiliate program smaller or bigger at little or no cost. It offers 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

Affiliate marketing has been proven to have a much higher return on investment than most other marketing strategies. One major reason for this is that 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 to 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. The biggest thing you'll need is a way to assign unique and trackable links to your website 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.  

What Is an Ideal Affiliate Partner?

Choosing the ideal affiliate partner is similar to creating a buyer persona that helps a brand understand its ideal target audience. The two processes can be particularly similar because oftentimes the perfect affiliate partner is already an avid consumer of your brand.  

However, unlike a typical consumer, ideal affiliate partners also have 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 a passionate consumer of your brand, has a sizable reach or sphere of influence, and shares the same values on which you built your business.  

Product Positioning 

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. In order to do that, they need to be able to find it.  

While affiliate marketing alone has a low cost-barrier to entry, if you have a wider marketing and branding strategy in place, you'll have an easier time positioning yourself for those ideal affiliate partners.    

Affiliate Partnership Awareness 

The last step before reaping 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 and boost overall awareness for your entire organization.