How would you like to make money online by sharing your favourite products or services with your followers? If this sounds like a dream come true, you might be interested in affiliate programs, which are a popular and profitable way of earning income on the internet. But what exactly is an affiliate program and how does it work? What are the benefits and drawbacks of becoming an affiliate?
In this article, we will answer these questions and more. We will define what an affiliate program is, how it operates and show you real-life examples to grasp it better. We will also explore the different ways that you can get paid in such programs and how they contrast with referral ones. In addition, we will help you choose the best affiliate program for your niche and goals. By the end of this article, you will have a clear picture of affiliate programs and how to use them to your advantage. Read on!
Affiliate Program: What Does It Mean?
Affiliate program is a way of collaborating between an advertiser (merchant) and partners who market the advertiser’s products/services and earn commissions for doing so. Advertisers have a commercial offer that they are willing to pay intermediaries to promote. Affiliates, also known as arbitrageurs or webmasters, are middlemen who generate sales for the advertiser using their own traffic sources and receive compensation for their efforts.
Affiliate programs and affiliate networks are different terms, even though they are sometimes used interchangeably. Affiliate networks are platforms that collect and manage multiple offers and act as mediators between affiliates and sellers. They monitor the performance, handle the payments and assist affiliates with setting up the required links. Affiliate networks vary in their additional features, but most of them provide technical support and trackers where affiliates can access their traffic reports.
Affiliate or Referral: What’s the Difference?
A referral program is a way of incentivizing your existing customers to spread the word about your services to other potential customers.
An affiliate program is a broader term that includes referral programmes as well as other types of partnerships with online marketers, influencers or publishers.
Some affiliate programs and networks also have a referral scheme, where they reward their affiliates for bringing in new affiliates to join the program. The rewards can vary depending on the company and the product. A referral link with a unique code is used to track which affiliate has referred a new one.
Advertisers and Affiliates
Affiliate programs involve two parties: advertisers (merchants) and intermediaries (affiliates).
- If you are a merchant, you can create an offer for your product or service, whether it is a physical item, an online course, a casino game or anything else. You also provide a tracking link for your offer and specify the terms of work for intermediaries, such as the payment amount and method, plus the allowed or prohibited sources of traffic. Additionally, you can cooperate with affiliate networks, which are platforms that connect advertisers and affiliates. You register on the affiliate network site, publish your offer and terms of cooperation, and wait for your application to be approved. Once it is, your offer will appear in the network’s catalogue and affiliates will be able to choose it for cooperation. This is not mandatory, but many merchants opt for it to increase their exposure and reach.
- If you are an affiliate, you can browse the offers from different advertisers and select the ones that match your interests and abilities. You then promote the offers using your own traffic channels, such as websites, blogs, social media or email lists.
A well-known example of an affiliate network is Amazon. Anyone can sign up and generate an individual affiliate link to products from the Amazon catalogue. The intermediary can distribute affiliate links to products in different sources and each time someone clicks on them and makes a purchase, the affiliate will receive a small commission.
❗️❗️❗️Don’t miss: Amazon Storefront: A Game-Changer for Influencers, Affiliates and Brands
Pre-landing Pages
Imagine you want to promote a subscription to a self-development course. A banner advert alone won’t cut it. You have to explain what the course is about and how it can benefit your potential customers. But a banner ad is too small to fit all that information. That’s why you need a pre-landing page, also known as a transit page.
It’s a landing page that the user visits before reaching the main site of the advertiser, which helps to boost its conversion rate. This page provides more details about the product and helps to “hook” the interest of the potential customer. You can create a pre-landing page from scratch or use one of the existing transit pages that some offers provide.
Payment Models
Affiliate programmes vary in how they pay webmasters for target actions:
- CPA (cost-per-action). This is the payment model for a specific action. The advertiser defines the action in advance. It can be filling out a form, registering on the site, providing contact information, such as a phone number or email.
- CPS (cost-per-sale). This is the pay-per-sale model. In this case, the webmaster gets a commission only if the customer buys something. For example, Amazon’s affiliate program uses this model.
- CPC (cost-per-click). This is where the advertiser pays for each unique click to the site. This type of affiliate program was common when digital marketing was just emerging, but now CPC is less popular.
- CPV (cost-per-view). This is the model in which the webmaster earns money for each view of the advertiser’s video.
- CPI (cost-per-install). This is the payment model in which the webmaster gets a fee if the customer installs an app.
See It in Action: Affiliate Ad Campaign
Suppose you are an advertiser who has a new dating site to promote. You can’t do it by yourself, because you lack the resources or the expertise. So you turn to an affiliate program:
- You post your offer in the affiliate program. In the terms and conditions you specify that you will pay $0.1 for each new user who signs up on the dating site.
- The webmaster reviews the offer and its conditions. He sets aside $100 for an advertising campaign. He decides to use banner adverts as the traffic source.
- After 10 days, the webmaster stops all the ads. He has spent all $100 and attracted 500 new users to the dating site.
- The webmaster’s earnings are: $0.1*500=$50. In other words, the webmaster has lost money, having invested $100 in advertising and earned only $50.
Important: webmasters use their own money for advertising campaigns. And, if they don't break even or make a profit, no one will reimburse them for the loss.
Crunching the Numbers
Affiliate programs can be a lucrative source of income, but they are also unpredictable. You might make a killing one month and barely break even the next. Your earnings as an affiliate depend on several factors, such as:
- Advertiser’s terms. Some merchants are generous and offer their affiliates a high commission rate, while others are stingy and only pay a small flat fee.
- Offer’s relevance. Some products are more in demand than others and, therefore, more profitable to promote. For instance, a digital camera is not a hot item that will bring you a lot of sales.
- Product’s price and quality. If the product is expensive but not appealing, you will have a hard time convincing your audience to buy it. This is especially true if you are working on a cost-per-sale (CPS) basis.
- Quality and quantity of your traffic. The more visitors you attract to your website and the more likely they are to convert into customers, the more money you will make.
- Sales funnel. By knowing the steps that your potential customers take before making a purchase, you can tailor your content and offers to their needs and preferences and increase your conversion rate.
- Targeting skills. You need to know your audience well and match your offers to their interests and problems. Trying to sell a drill to a teenager is a recipe for disaster.
- Testing process. You can’t just create one ad campaign and expect it to work on every platform. You need to test different versions of your ads, with different messages and images and see which ones perform better. You also need to experiment with different sources of traffic. For example, you might find that targeted ads on Facebook are more effective for your niche than contextual ads on Google.
How to Pick the Right Affiliate Program
As an affiliate, you have two ways to find a suitable program. You can either sign up for an affiliate network and browse through their catalogue of offers, or you can look for individual merchants who have a “Share affiliate link” option on their product pages. By clicking on it, you will get your unique tracking link and join their program.
But no matter which option you choose, you need to consider the following factors before promoting any product:
- Product relevance. You may have seen ads for a credit card knife or a long-lasting foundation. These were once hot offers from affiliate programs with high conversion rates. But relevance is not always about popularity, it is more often about necessity. You want to promote products that solve a real problem for your audience.
- Sales page. This is the first place where your potential customers land after clicking on your link. You need to assess it from their perspective: is the information clear and convincing, does everything function properly, is the mobile version user-friendly, etc.
- Seller reputation. Customers tend to trust familiar and reputable brands more. The higher the brand loyalty, the higher the chances of making a sale.
- Affiliate terms. This includes the types of traffic sources that are allowed, the amount and frequency of commission payments and the duration of cookie tracking. It is advisable to start with niches that use the cost-per-action (CPA) model, where you get paid for generating leads rather than sales. People are more willing to provide their contact details or complete a survey than to spend money. For example, dating and gambling are niches that work on the CPA model. They are easier to learn from because the desired customer action does not involve any financial risk.
Conclusion
Affiliate marketing is a great way to earn money online by promoting products or services that you trust and believe in. It can be a rewarding and flexible career option for anyone who has a passion for a certain niche and a knack for connecting with their audience.
However, it is not a get-rich-quick scheme. It requires hard work, dedication and constant learning. You need to choose the right products, the right platforms and the right strategies to succeed as an affiliate marketer.
We hope you found this article useful and informative. If you want to learn more about affiliate marketing, you can check out our other articles on this topic. Thank you for reading and happy earning!
