As you get deeper into the world of digital marketing, terms come up again and again, like infallible formulas that no one can ever explain to you how they work or their full potential. One of these terms that probably comes to mind is affiliate marketing.
But what exactly is affiliate marketing, is it new, and how can you benefit from it? Today we will answer all these questions.
What is affiliate marketing?
The truth is that affiliate marketing is nothing new: it has been used in the traditional market for more than two decades. Now, with increasing digitisation, this type of marketing has leapt into the world of digital marketing.
Affiliate marketing is a very useful tool, which allows you to get leads and earn money without much effort or investment.
Sounds great, but how is this achieved? The basis of this system is that the affiliate promotes products or services of other people or companies on their website or blog, so every time a user purchases that ad, the advertiser pays a percentage of the profit to the affiliate.
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How can I apply affiliate marketing?
One of the most common ways to do it is through affiliate links on social networks, on a website or on a blog. Advertisers provide a URL with an identifier to their affiliates, and thanks to the power of cookies they can know when a user has reached the website and made a purchase through the affiliate link.
To do this, affiliates offer entertaining or valuable content on their platforms that attract users, making it much easier for them to be receptive to advertising products or services that match their interests. It is a system that has adapted very well to the world of digital marketing, not only because of the ease of expanding and scaling the affiliate network but also because of the low effort and investment required.
Firstly, advertisers only have to pay affiliates when users buy the product, making it a very cost-effective way of obtaining quality leads and investing very little money in advertising. On the other hand, affiliates receive a percentage of the profit from each sale effortlessly and with very little risk, as they do not have to create a product.
Types of affiliate marketing
We’ve already talked about the keys to affiliate marketing success and now it’s time to break it down even further so that you can take advantage of its full potential.
That’s why we’ve grouped the most common types of affiliate marketing, according to the type of monetisation and the platform on which they are used. If you want to earn income passively or get to sell your product faster, add affiliate marketing as an inbound marketing strategy.
Types of affiliate marketing by monetisation category
Monetisation by CPC
One of the most popular monetisation types when it comes to affiliate marketing: is the Cost Per Click (CPC) model. The affiliate is paid for each time the advertisement on their website or blog is clicked on by a user, without the need for them to buy the product.
An example of affiliate marketing by CPC is the one that is given by placing a banner ad on websites or blogs, which can be clicked by users.
Monetisation by CPA
Another of the most popular types of monetisation in affiliate marketing is Cost Per Action (CPA). This model is very similar to CPC but requires users to also perform some action on the website they reach after clicking on the advertisement.
Most commonly this happens when a sale is made and this is why this type of monetisation requires more effort from the affiliate to sell.
Monetisation by CPM
In this particular type of monetisation, the affiliate is paid per thousand impressions, hence the name Cost Per Thousand Impressions (CPM). It is used on different platforms and can sometimes be much more profitable than the CPC or CPA model, although it requires a much larger volume of users.
CPV Monetisation
Finally, we have the Cost Per Sale (CPV) model, a classic of affiliate marketing. This is the original model that has been used for decades, in which the advertiser pays the affiliate for each product that is sold when the affiliate’s link is accessed.
Types of affiliate marketing according to platform
This type of affiliation is one of the most common. You can find it by consuming content on social networks such as Youtube or by reading articles on blogs. There, affiliates leave the link to the advertised product or service, after capturing the attention of an audience with similar interests.
Search engine affiliation
This method, along with affiliate links, is one of the most common types of affiliation. Many SEM strategies are based on this system, which creates advertisements that appear when searching on search engines such as Google.
This is called PPC or pay-per-click advertising: it focuses its efforts on attracting qualified leads through the purchase of keywords that rank in search engines.
Through cash-back platforms
Some platforms offer a return to their users when they make purchases on that website, usually in the form of a direct discount, redeemable points or discounts on other products.
This is a smart way to encourage consumption, as the user’s perception is that they receive more benefits than if they shopped elsewhere.
Through email marketing databases
Email marketing has become a very powerful tool with the increase of mobile users, as through newsletters you can maintain more frequent communication with the user and offer them a sense of exclusivity.
Simultaneously, a specific target can be reached, offering content that is of interest to them to establish a more direct relationship and then giving them access to products or services with exclusive promotions, generating a higher conversion.
Through affiliate networks
Another very common system is affiliate networks. This is nothing more than an affiliate platform that acts as an intermediary between advertisers and affiliate candidates, facilitating more optimal relationships.
It also provides tools for greater control of affiliate networks, allowing you to track metrics such as CTR, number of sales and profits made by affiliates.
Through co-registration databases
Similar to the email marketing system, it is based on advertiser databases where users voluntarily register. Thanks to this, users gain exclusive access to offers and benefits from companies that are of interest to them.
Advantages and disadvantages of affiliate marketing
If you have come this far, you will have seen that affiliate marketing is a very beneficial tool for both advertisers and affiliates.
Of course, it also has its weaknesses and that’s why we’ve put together the following list so you know how to get the most out of it.
Advantages
- It has a very low cost for advertisers compared to other types of advertising.
- It is easy to scale by expanding affiliate networks across many platforms.
- It allows you to attract qualified leads that are genuinely interested in your services.
- It carries little risk for affiliates as they do not advertise their product.
- Affiliates do not have to invest effort in creating a product.
Disadvantages
- It can generate rejection if the advertising is very intrusive (pop-up banners, content aimed solely at selling the product, misleading advertising…).
- Affiliates must pay special attention to the conditions of affiliation, as it is a very widespread system and many companies do not comply with the established percentages or end their promotions without paying what is due.
- Poor execution of these campaigns can lead advertisers to be victims of their own success, having to overpay affiliates.
