What is Affiliate Marketing?

21 January 2022
by Archie Williamson
5 mins
What is Affiliate Marketing?

Affiliate marketing is a performance-based marketing activity where a publisher is rewarded by a retailer for referring customers through its own marketing campaigns. The publisher acts as the “affiliate” and earns money in the form of a commission for each single recommendation that ends with a transaction on the retailer’s site.

Affiliate marketing is one of the lesser-known marketing tactics, trailing in popularity to white hat SEO, content marketing and digital advertising. You might then be surprised to hear that UK businesses spent £1.6bn on affiliate marketing in 2020 and that the overall industry is growing 10% annually and is now worth approximately £10bn.

Why is investment soaring? Affiliate marketing is relatively simple to execute, low-risk in terms of upfront investment, and easy to scale when you begin building networks and using the power of your content to generate passive income. Eight in 10 businesses and publishers say they have started trying to implement affiliate marketing, or have already done so.

You can’t just do it on your own, though. Affiliate marketing and the processes involved are based around three core parties, each of which support and feed into the other. They are:

  • A publisher who promotes the products or services.
  • A merchant or retailer who pays commission.
  • A customer who takes action and buys a product or service.

A fourth party, the network that manages affiliates and acts as an intermediary between publishers and merchants, is also involved in many affiliate marketing campaigns. Networks make it easier for publishers to find relevant affiliate programs. While they are not always necessary, networks are usually free to join, increase the reach of affiliate marketing, and provide services and benefits that make it easier to manage, such as faster payments and better tracking and reporting tools.

How does affiliate marketing work?

The affiliate is a company that publishes content such as blogs, articles and videos and uses these digital marketing resources to promote the products and services offered by the merchant. This is why affiliate marketing makes sense for so many companies, as they are already investing in content and increasing the visibility of it in search engines and online through organic SEO. How does the promotion work?

  • You include a link to the merchant’s site in your blog or social media post.
  • The customer then clicks on this tracking link and is directed to the merchant’s site.
  • The customer completes a purchase.
  • The affiliate network records the transaction.
  • The transaction is then confirmed by the merchant.
  • You get paid a commission fee.

The action that a customer takes to trigger a commission does not always have to be a direct purchase. It could be for a visitor just completing a signup form for lead generation. What exactly is required and the rate of commission, which can vary from as little as 5% to as much as 50% depending on the type of promotion, will be set out by the agreement or program. The most popular payment model is pay-per-sale (PPS).

How do I start using affiliate marketing?

Choose a niche and build an audience

You might already have the foundations in place for affiliate marketing. All you need is a website, blog or social media account that can influence target audiences. Ideally, you want to build an audience around a specific niche that dovetails neatly with a merchant’s offerings. Content is still king, though. High-quality blogs capable of engaging readers will give them more reason to click through to whatever you are linking to.

“The niche you choose for your affiliate site guides how much time/effort you’ll need to put into building it to a point where you begin to see SEO results,” business owner Elise Dopson says. She notes that trying to muscle in on search rankings for broader industries like software and healthcare may be challenging, as bigger blogging sites with ample budgets currently rule the roost.

Dopson adds: “The secret is finding untapped areas where competition isn’t as fierce – and getting in there before other people recognize it.”

Select an affiliate program

Next, to make the whole process easier, you should consider signing up to an affiliate program such as Amazon Associate, which claims to help publishers “monetise their traffic”. After joining a program, you need to choose products and services to promote. Don’t just opt for any at random, though – you need to try and work with a company that offers whatever you are familiar with and are confident enough to recommend. Making a poor choice here can reflect badly on your business, so choose wisely.

Create content and optimise for SEO

Now it’s time for the task of content creation and optimising it for SEO to promote affiliate products. Formats you could use here include tutorials, reviews, interviews and how-tos. And just like organic content, finding and including relevant keywords based on search intent is important for boosting visibility in search engines.

One golden rule to follow when crafting content is to never explicitly tell anyone to buy a product, and to always disclose to readers that there are affiliate links within. You want to build trust and loyalty with an audience, which will help with affiliate marketing. Any underhand practices will undermine this completely. So, recommend things based on your experiences and don’t promote things you have never used.

Track conversions and get paid

After you have published content with affiliate links, any clicks and transactions will be tracked, and a merchant will then pay a commission when they have attributed those actions to your website or social media profile. This tracking process doesn’t cover more in-depth metrics that will enable you to assess the performance of campaigns, though, so undertake your own data analytics to see what content works best.

“Super” affiliates can earn thousands of pounds per month just by monetising traffic from content. If you need access to a team of writers to create blogs, or require expert assistance to optimise them for search, we can help. Contact us today to find out more about our SEO services.

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