Affiliate marketing is a partnership-based program where external "affiliates" individually direct people to a business' website in exchange for a commission based on those people performing a desired action, like making a purchase or filling out a form.
There are a number of benefits that come with an affiliate marketing program, like minimal upfront spend, a low risk level, and high ROI. Sound too good to be true? In this case, the benefits come from marketing that is highly targeted and effective. Businesses can identify a market and select the perfect set of representatives—this is exactly what affiliate marketing does.
In the sections below, we'll cover what affiliate marketing is in more depth, how to find the perfect partners, and the six primary benefits:
- Low start-up cost
- Low ongoing cost
- Low risk
- Targeted traffic
- Flexibility
- High ROI
Learn how to create noteworthy and memorable campaigns by registering today for Impact’s webinar: Attract, Engage, Stand Out - Building Effective Marketing Campaigns.
What Is Affiliate Marketing?
Affiliate marketing is a partnership between a business and a content creator (or affiliate) to bring attention to a company’s products or services. The affiliate handles content creation and/or distribution, and the business pays a commission to the affiliate for every sale they drive.
Certain affiliate programs even reward their affiliates on a per-click basis.
To track traffic and sales generated by any one affiliate partner, the brand assigns them a unique link that directs users to a specific sales page. The affiliate is then paid a certain percentage of sales made through those links.
"83% of marketers are using affiliate marketing programs to raise brand recognition.
And that’s just the tip of the iceberg because the affiliate marketing market is anticipated to register a 'compound annual growth rate of 7.7% between 2023 and 2030.'"
-David Gasparyan, Affiliate Marketing: Predictions and Strategies for Success, Forbes
Benefits of Affiliate Marketing For Your Business
According to Kinsta, 54% of brand marketing professionals rank affiliate marketing among their top three channels for customer acquisition while 20% report it in the number one position.
Why are companies spending so much on affiliate marketing campaigns? Below are some of the benefits of using affiliate marketers in your business:
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 understanding your 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 an 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.
In general, though, there are three different types of affiliate marketing:
- Unattached affiliate marketing
- Related affiliate marketing
- Involved affiliate marketing
Unattached Affiliate Marketing
Unattached affiliate marketing is where the affiliate has no direct connection or personal involvement with the product or service they are promoting. This form of affiliate marketing typically relies on pay-per-click advertising or other forms of online marketing where the affiliate's role is solely to drive traffic to the merchant's site.
Since the affiliate does not endorse or use the product, this method can sometimes lack credibility with the audience. However, it allows affiliates to promote a wide range of products without needing in-depth knowledge or personal experience.
Related Affiliate Marketing
Related affiliate marketing involves affiliates who have some level of authority or presence in a particular niche, but who may not necessarily use the products they promote. For instance, a fitness blogger might promote various types of gym equipment or supplements without having personally used them.
This method benefits from the affiliate’s established relationship with their audience and their perceived expertise in the niche. Although it is more credible than unattached affiliate marketing, it still lacks the personal touch and firsthand endorsement that can significantly influence purchasing decisions.
Involved Affiliate Marketing
Involved affiliate marketing is the most engaged form, where affiliates promote products or services they have personally used and truly believe in. These affiliates can provide personal testimonials and authentic reviews, which greatly enhance credibility and trust with their audience.
For example, a tech blogger might review and recommend gadgets they actively use. This type of marketing is highly effective because it combines the affiliate's authority and trustworthiness with genuine personal experience, often leading to higher conversion rates. However, it limits the affiliate to products they can genuinely endorse, potentially reducing the variety of products they can promote.
Partnering with involved affiliate marketers typically offers the strongest ROI, as these individuals are already immersed in the market of the brand they’re working with, and often already have an audience with whom they connect.
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.
Wrapping Up on the Benefits of Affiliate Marketing
Affiliate marketing is a central aspect of many marketing strategies, largely because of the high bang for your buck it offers.
While the space continues to grow, the benefits of affiliate marketing are more apparent to businesses of all sizes, and we can expect to see a steady increase in the number of organizations using the method moving forward.
Get the most out of your marketing efforts. Register today for Impact's webinar: Attract, Engage, Stand Out - Building Effective Marketing Campaigns.
