As a marketer, blogger, or entrepreneur utilising affiliate marketing is virtually risk-free while the rewards are exponential. Affiliates are only paid when a customer converts once they’ve been driven to a website and therefore the margin for potential earnings exceed the risk of potential losses.
So, whether you are a blogger, or digital marketer hoping to make a side income or monetise a blog/website; Affiliate Marketing offers benefits and revenue potential for everyone.
In this article, we are going to outline the foundations of Affiliate Marketing including how it works, the advantages and disadvantages. Discuss various forms of affiliate commission tiers, types of businesses using affiliate programs and strategies for using Affiliate Marketing effectively.
Foundations of Affiliate Marketing
With affiliate marketing, a business outsources its marketing by enlisting affiliates to drive organic traffic to their business’ websites by offering them a commission once that traffic converts to real sales. Payment is only made to the affiliate when a customer makes a purchase not when they drive traffic. While an influx of traffic is equally important to marketers, the priority is always focused on generating new customers. For example, if your website generates over a million visitors per month, but these visitors fail to equate to more revenue or leads then that traffic is pointless. For this reason, the affiliate marketing sphere is so popular, especially in the web hosting industry, where the majority of their business is derived from affiliates.
How Affiliate Marketing Works:
- A marketer becomes an affiliate by signing up to a Company’s affiliate program. They are assigned a unique tracking URL. This tracks the traffic being driven by each affiliate.
- The affiliate then markets your company/product/service. Affiliates use a few avenues to do this. Most popular is through content marketing and blogs, others include paid avenues like Ad Words, YouTube product recommendation videos, email blasts, reviewing products on blogs, etc. The possibilities are endless. If starting your own affiliate program be sure to limit how affiliates can market your products.
- Traffic converts to customers and leads. This happens when the visitor purchases a product or service or signs up.
- The affiliate is then paid a commission for the conversion/new customer. Once you’ve got a new customer you pay out your affiliate their stake of the commission.
Advantages of Affiliate Marketing
- You only pay out for results: new leads and customers.
- Cost effective marketing.
- Affiliates may be better at creating content and copy that leads to more leads.
- Ahead of time, you know your cost per acquisition. This helps you to track if you’re losing money or making money.
Disadvantages of Affiliate Marketing
- Lack of Control: With affiliate marketing, you are unable to control the message, content and how your brand is represented. Be mindful of this and establish guidelines for your affiliates to follow.
- Lead quality may be lacking: There are no guarantees that the lead quality will be better with your affiliates. More than likely the quality may be on the same level as the organic traffic already coming to your website.
Affiliate Marketing Commission Tiers
There are two types of commissions that can be earned in Affiliate Marketing.
- Regular Commission that can range from 1%-200% for each sale a customer makes.
- Recurring Commission that incurs rolling revenue.
When considering commission that is paid per sale you want to look at the cost of the item and the commission rate. In most cases, if a product is a high-ticket item, for example, $1,000, most likely you will have a low percentage for a commission at let’s say 10%, which would then yield $50 per referred customer to the affiliate.
On the other hand, you may have a low-cost item for $30 with a commission of 50%, which would yield $15 for the affiliate per referred customer. Although the commission percentage was higher, the cost per item mattered at the end of the day.
Types of Business using Affiliate Marketing Programs
As a blogger or marketer, you can find affiliate programs for almost any industry or product. Some industries rely on affiliate marketing more than others, for example, web hosting garners most of its clients from affiliate marketing programs. Here are some of the most popular and profitable affiliate marketing programs by business type:
Internet Hosting Companies:
Hosting.co.uk has a great affiliate program which offers 50% commission on all sales across their product offerings. They offer low payout limits and can pay via PayPal. Payouts are in Pounds Sterling (£) and other currencies are automatically converted.
Plus 500 Affiliate Program offers some of the highest commission payouts in the financial industry. Plus 500 is a CFD trading platform that pays $200 to $800 per referred trader who invests money into the platform. The price of the payout depends on the country of origin or you can opt to choose a 20%-30% commission of the monthly grossed income of the customers you refer.
- Apple iTunes
- Travel Industry: Including airlines and resorts
- Digital Marketing Services
- Online Car Rental Services
- WordPress Template sites & Apps
- Bridal Industry
- And the list goes on!
Reseller Hosting vs Hosting Affiliate Marketing
Within the Hosting industry, there are two ways to make money. Via Reseller Hosting and through Affiliate Marketing. Let’s discuss the difference between the two.
What Reseller Hosting Actually Is
This is a type of franchised hosting if you will that works where you rent the server space to offer hosting packages from a larger hosing provider. You can brand your own hosting company and sell hosting services. Reseller hosting is perfect for anyone in the web development business or internet/tech niche that wants to offer more to their clients.
Affiliate Marketing for Web Hosting
As a blogger or marketer, you can easily join a hosting affiliate program and then write content geared towards driving traffic to that Hosting Provider in order to earn affiliate commissions from each sale.
As a Reseller Host, you can also join an affiliate marketing program from your main provider to earn additional income or monetise your blog.
Top Affiliate Marketing Strategies for Success Online
1. Understand your Audience
This is universal for marketing, in order to sell you must know who you are selling to. Understanding your audience is a key element in affiliate marketing strategies. In order for you to sell targeted products and service, you have to know the people that will use those products and services. You need to understand what motivates them, what their desires are and how deep their pockets go. Demographics and socioeconomic status are also important to note based on the products up for a referral. Conduct sound market research before launching your affiliate marketing plan to drive traffic to the company’s website.
2. Tailor the Content to the Audience
Once you know your audience you must then create content that is tailored to them that will convince them to follow the lead and convert to a sale. This is why content is another key element on our affiliate marketing strategies. All marketers and bloggers who wish to successfully use Affiliate Marketing to generate revenue will have to create or curate content that is specific to the audience that will purchase or opt-in to a product or service. Make sure your content is creative, unique and speaks to the brand you a representing.
3. Use Social Media to your Advantage
Social Media is a great platform to market your affiliate offers to your audience. Once you know and understand your audience you can tailor Facebook, Instagram and Pinterest Ads to your audience to bring in more leads and sales.
Affiliate Marketing is a great way to monetise a blog or make extra money as a marketer. With Hosting Affiliate Marketing you always have a high commission percentage and a low risk. Remember that the best affiliate marketing strategies are driven by great content and user engagement. So create a carefully made content marketing strategy to suit your affiliate message and the brand you are representing.