Affiliate Marketing Explained

What is affiliate marketing?

Affiliate marketing is a type of internet marketing where businesses pay other businesses or individuals a percentage commission for promoting their products/services based on the number of leads or sales obtained through their marketing efforts.

In simple terms, if you are an affiliate (sometimes a publisher), you use your skills and influence as a marketer to promote a company’s product by referring customers to it. If a customer goes ahead and buys the product because of your recommendation, the company pays you a commission or a kickback for promoting and converting a lead on their behalf.

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How does affiliate marketing work?

There are two major parties involved in affiliate marketing:

• Companies (also referred to as the merchants, advertisers, retailers or brands) – These are the businesses that are willing to give commissions to individuals or companies who have the skills and influence to market their products. They partner with affiliates with the aim of generating more sales and leads cost-effectively.

They can pay their affiliates through performance-based models such as Pay Per Click (PPC), Pay Per Lead (PPL), and Pay Per Sale (PPS).

With affiliate marketing, these companies are sure of only paying marketing fees for actual leads and sales unlike with traditional advertising.

• Affiliates (Individuals or companies) – Affiliates are commonly bloggers and other content creators that help promote a company’s product by writing reviews, making videos and using other forms of marketing. They use affiliate links that direct their followers or readers to the company’s website. If the customer buys a product because of this influence, the affiliate get’s paid.

Breakdown of the marketing process

As an affiliate, you start by signing up for an affiliate program like Amazon’s Affiliate Program. When you sign up, you will get a link (affiliate link) that you can use whenever you mention the advertising company on your website or Vlog.

When a visitor to your channel clicks on the affiliate link, a cookie is added to their browser to track and see if they become a customer and order something from the company’s website. If they do, the company is notified and depending on the affiliate program terms, and you get a commission on a monthly or weekly basis.

If you are considering becoming an affiliate marketer, it’s a great channel to make passive income. However, you will need to put a considerable amount of effort to gather a huge following, search engine ranking, and high conversion rates.