What Is Affiliate Marketing And How Does It Work?

In this article, I’ll would like to talk about what is Affiliate Marketing and how does it work? Affiliate marketing despite its headwind and tailwind has continued to gain momentum helping publisher and merchant to monetize their website. According to Nielsen “92% of consumers say they trust earned media, such as word-of-mouth and recommendations from friends and family above all other forms of advertising” Consumer continue to rely on trusted authority for  product recommendation. Forrester predicted that affiliate marketing spend will hit over $4.5 billion in the US alone. These statistics are staggering and 2017 will see earnings soar for marketers.

It’s simply a process of promoting another company’s products or services and earn a commission.

When you help a business to promote their products or services, you earn a commission when sales are made. Or if you have a product, you want to sell, a publisher can help you to promote it or you can promote a product and earn a commission yourself.

There are 3 parties involved in affiliate marketing. A publisher, an advertiser and a consumer.

• A publisher can be a blogger, magazine, newspaper or anybody who is involved in any type of business promotion.
• Advertiser or merchant is a company who is willing to pay publishers to promote its products or services.
• A consumer is someone who sees the ads and takes action either by clicking a link from the publisher site that takes her to advertisers site or by completing a survey or submitting information via a form .

How does a company track who is sending traffic to its site?

A unique URL is given to a publisher, this keeps track of the traffic coming from her site and whatever action that is taken by the consumer is recorded.

Why is it one of the most preferential methods of advertisement?

Advertiser prefers affiliate marketing because no payment is issued before sales occur.

The publisher also prefers affiliate marketing because they can reach out to companies who are most align with their long-term goals like cooperating with brands who offer similar service or good commission.

Affiliate marketing has evolved since the 1990s. While there have been so many obstacles in the past decade such as fraud, unreliable data and junking up SERPs with ads. It has come a long way and it’s set to become one the most revenue generator for publishers and merchants.

How Does Affiliate Marketing Work?

As a publisher when someone follows a link from your site and purchase a product you earn a commission. Commission come in forms of percentage or a fixed price as negotiated between parties involved.

Now, as a publisher to get started in affiliate marketing, you need to get a URL link from a company you like to promote and whenever you are writing about their products you simply use this link to recommend products. If your audience clicks the links, it directs them to the merchant site and when a sale is made you earn a commission.

There are different ways to track this, for instance, the use of cookies to monitor transaction and where traffic originated, this cookie technology remembers everything from login name, shopping cart content and registration information etc. It can store this information for up 30 days and within this period if a sale is made you are entitled to a commission.

How do you find a product to promote?

Search for companies in your niche who offer affiliate programs but you must research the products first and make sure is a product that offers value to your audience. You can use analytics tools to find out what products are most popular in your niche or use the online forum. This will help to gauge what products will most likely sell.

Keep in mind that you have to look for high-value products or product with a least 50 percent commission because that is the only way you can earn enough to pay the bill. You are never going to break even if you only take 4 percent commission for example.

What are the benefits of Affiliate Marketing?

• As pay-per-click cost soar and ineffective affiliate programs are on the rise.
• Affiliate marketing is commission based and you don’t have to pay or lose a thing if no sales are generated.
• It doesn’t require huge start-up capital.
• Merchants can gain more customers without wasting much-needed resource to acquire them.
• It is easy to track. Affiliate program helps to track things like click-through rate and how your audience interact with your site.

By now, you should understand what is affiliate marketing and how does it work. Next, you’ll learn the 7 steps to get started in affiliate marketing.