Affiliate Marketing Programs [Step by step Guide]
What You Learn In this Article
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Affiliate Marketing Programs The online world has tremendously affected our everyday lives that sometimes it might even seem impossible to imagine our lives without technology and online communication.
This trend naturally transferred to the business world, where the new technologies opened up so many exciting opportunities. The businesses out there were no longer confined by location or restricted by infrastructure.
Once everyone hurled to the big cities because these have been places enabling your business to grow. Businesses needed more qualified employees, they wanted exposure to more customers and opportunities to network and create partnerships. All of these required your business having headquarters in a big city,
but this is no longer needed. All you need is a computer and the internet connection, and you are ready to take your business anywhere you want.
Speaking of the business world, this term has so long been used in relation to big corporations and management teams, but nowadays, we see more and more one-man businesses that grow and expand their reach globally.
There is a significant number of businesses completely set up and run by a single person. Or they start as such, only to expand as their influence online
begins to increase. Entrepreneurship has become a popular business model which helped so many wonderful business ideas come to life.
The possibilities on the market are numerous, especially if we have in mind the online market. There are so many different ways and strategies to set up and grow a business, depending on the niche,
resources, knowledge, etc. What is safe to say is that these opportunities are a part of the online world, and new opportunities keep popping up. One of those is affiliate marketing.
While every business starting out nowadays will first create a website, optimize it and then head to social media to establish a presence there, not everyone will consider affiliate marketing as an opportunity at first.
The goal of this ebook will be to show you the real potential of affiliate marketing and how developing a strategy of your own can help your profits soar and your business grow.
For starters, you will need to understand the difference between being a merchant and an affiliate because these require two completely different strategies. In fact, these can develop your business in different ways, so you can either focus on one or choose to be both, a merchant and an affiliate, which, although less frequent, is still doable.
You will also learn about business models that are available in affiliate marketing. Affiliate programs and tools will be essential parts of your strategy, which is why you need to learn about those as well.
Your goal will be to learn as much as possible about affiliate marketing opportunities and about different affiliate programs and tools that enable you to form your own custom strategy, an approach and a plan which will be oriented towards one idea – improve your business through affiliate marketing.
Affiliate marketing is a part of online marketing, which means it is connected and related to all of the segments of online marketing.
This is why there will be a chapter about this connection, and how using affiliate marketing requires at least basic knowledge of online marketing in general.
Affiliate marketing statistics
Before defining the term and analyzing this concept of affiliate marketing, it is helpful to have in mind a couple of statistics that illustrate the state of affiliate marketing in the business world at this moment.
• Approximately 15% of the digital media industry’s revenue now comes from affiliate marketing. (BusinessInsider)
• Over 50% of top affiliate programs fall into 4 categories: Fashion, Sports, Health & Beauty, Travel (AMNavigator)
• Top factors for choosing an affiliate program are product or service relevancy (18.15%), affiliate program reputation (15.97%) and affiliate network or tracking platform (11.58%). (AffStat)
• The most common places to find new affiliate programs include information on the merchant’s website searches on Google and affiliate network websites. (AffStat)
• Affiliate marketing will affect 14% of all e-commerce purchases in the United States. (DigitalCommerce360)
• With the power of social media, content publishers, and a plethora of digital media readily available at their fingertips, today’s consumers are more educated and shopper-savvy than ever before. (Rakuten)
• When it comes to purchasing decision, price point had the most influence on a Millennial (62%), outweighing recommendations from a friend (55%), brand reputation (47%), and product quality (35%). (Rakuten)
• Mobile devices were crucial for Millennial mothers to search for the best possible price of a product (79.4%), read reviews (68.9%), and download coupons (67.1%). Even in-store shopping was greatly influenced by Millennial mobile users, with over half (52%) comparing prices to other retailers. (Rakuten)
• More than 30% of affiliate-generated sales originate from a mobile device. (Awin)
• Nearly 50% of affiliate-referred traffic originates from a mobile device. (Awin)
• 40% of marketing professionals quote affiliate marketing as the most desired digital skill. (AMNavigator)
What we can conclude about affiliate marketing is the following:
• Affiliate marketing has (and will continue to have) an important role in e-commerce
2. What Is Affiliate Marketing?
What do you do when you don’t know something?
You google it!
So I googled “How to make money online.”
Eventually, I discovered an industry called affiliate marketing. People were claiming to make $50,000+
online at home.
I was skeptical because it sounded too good to be true.
I didn’t know anyone in the industry. In the back of my mind, I wondered if this was all a scam to sell me
But I decided to go “all in” with this affiliate marketing industry. Why? Because I didn’t have any other
• I wanted to be a millionaire one day.
• I wanted to travel the world.
• I wanted to be my own boss.
I knew countless people like me were making money off the internet. If other people could figure it out,
then so could I.
As one of the strategies available to online businesses, affiliate marketing offers plenty of opportunities but before you get started you need to understand the entire concept and what it is all about.
The origin and development of affiliate marketing
The entire concept of affiliate marketing is focused on sharing the revenue by partnering up with others, and it is the concept that has been around for a while before the world wide web even started. In terms of affiliate marketing as an online business model, we can trace back its origin back to 1994 when the first affiliate program was launched by PC Flowers & Gifts.
One year later, they had over 2000 partners in their affiliate program. Perhaps the best-known affiliate program today, Amazon’s affiliate program, was launched in 1996. In fact, e-commerce websites, in general, started seeing affiliate marketing as an excellent way for them to increase sales without any direct promotion from their part.
Even though there have been several business models in affiliate marketing, what really changed the game was the introduction of Web 2.0. This shifted the focus to the user-generated content, optimization, and integration of social media.As a result, affiliate marketing became even more available to the ordinary people, bloggers, influencers, etc. who suddenly started seeing this type of marketing as a perfect way for them to monetize their online influence.
No longer has this partnership been available for businesses only, but individuals started taking a massive role in the concept, changing the world of affiliate marketing for good.
Affiliate marketing defined
Affiliate marketing is a type of performance-based marketing. This means that the efficiency evaluation and reward systems are based on the performance, which can be evaluated at specific intervals, or it can have a particular goal that needs to be achieved.
There are two roles in affiliate marketing which are crucial for this entire system to work. First, there are merchants, who decide to create an affiliate program.
They provide an offer for others to promote their business and earn their commission. On the other side, there are affiliates, who are also known as publishers. They are the ones that are interested in joining an affiliate program.
The main reason for merchants to create an affiliate program in the first place is the potential to increase sales and boost profit with no direct promotional campaign, except for enabling affiliates to join the program.
Since the entire concept of affiliate marketing is performance-based, there is no investment or pre-payment required by the merchants.
Affiliates are also motivated by profit to join an affiliate program. Once they enter the program, they are able to promote the merchant’s products in any form they can, in order to increase sales.
Their performance is tracked using trackable links and they are paid based on that performance, i.e., based on the conversions they achieve.
Apart from merchants and affiliates, who take an active role in affiliate marketing, it is also important to mention digital buyers. These are the modern consumers who are experiencing the buying process in a completely different way nowadays.
Not only does the habit of buying online instead of offline changes rapidly, but the way the consumers buy is also changing.
Digital buyers are more prone to explore products before they buy.
This is how showrooming and webrooming were introduced in e-commerce. Nowadays, buyers want recommendations,
and they want to see the benefits of the product. In fact, they look for recommendations from friends and people they respect (bloggers, influencers, etc.).
All of this has a positive influence on affiliate marketing because it increases the chance of online buyers finding the products through recommended (affiliate) links. Furthermore, a lot of surveys show that affiliate marketing drives performance, which includes brand discovery and awareness, as well as customer engagement and purchase. Affiliate marketing basically connects merchants and buyers and affiliates are those who connect the two.
Learning more about affiliate marketing (by reading this ebook for example) is the first step that is going to help you get started with this type of marketing. It is essential that you understand the basics to be able to explore your options and how you can leverage the potential of affiliate marketing.
As mentioned above, you will have to choose one of the two roles in affiliate marketing. If you have a product and you need help with the promotion of that product, then you will be a merchant.
On the other hand, if you have a great blog, lots of subscribers, or online influence, and you want to cash that in, you can do that by becoming an affiliate.
We can summarize the entire process by defining the tasks of these two participants. On one side, a merchant sets up a program. He provides everything needed for the product promotion,
including images and links. Affiliates join this program and start advertising the product using online resources. Their activity is being tracked through links. Once the online user clicks on an affiliate link, that activity is stored in the user’s browser cookies.
When the user buys a product, and this has been detected as a visit originating from an affiliate link, that affiliate is paid a commission.
The time interval during which the cookies stay in the browser can be different from one website to another, but it is usually a period of 30 or 60 days. This means that the transaction can be detected during that time interval and still be contributed to the affiliate.
For example, the user clicks on the affiliate link, checks out the product, but decides not to buy. However, the same user goes back and buys the product days later. This sale can still be attributed to the affiliate if the cookies are stored in the browser.
Types of affiliate websites Affiliate links can be shared on a number of different types of websites including:
• Price/Feature comparison websites
• Product review websites
• Personal websites
• Coupon websites
• File-sharing websites
• Video-sharing websites
• Shopping directories
There is no limitation when it comes to promoting an affiliate link, so an affiliate can use multiple resources to share these links online. In fact, the more exposure the link gets, the more likely it is for the affiliate to earn the commission.
Benefits of affiliate marketing
A tremendous popularity of this method of online marketing is the result of many benefits that can be obtained, for both merchants and affiliates.
Benefits of affiliate marketing
A tremendous popularity of this method of online marketing is the result of many benefits that can be obtained, for both merchants and affiliates.
Benefits for merchants
There is a number of benefits for merchants which encourages them to create and make available affiliate programs for their products and use this as a way to grow their businesses in the digital world.
Pay for performance
With affiliate marketing, merchants do not need any investment. There is no risk involved because no payment is made in advance. Affiliate marketing is often called performance-based marketing, which means the affiliates are only paid based on their performance. Once the sale is completed, the affiliate is paid a percentage of that sale.
Trackable links and affiliate marketing tools are used to create and track the performance of the affiliate links. This way, the merchants can successfully manage and monitor the traffic and inbound links generated by the affiliates.
Exposure and more inbound links
Since affiliate marketing is all about affiliates promoting your links, with methods that include posting the links on their website(s) or blog(s), it is likely that you will increase the exposure of your brand as well as the search engine visibility. If the websites that link to you have a good domain or paid authority, this will be a great boost for your SEO. Obviously, you will have to be careful here, because you should avoid accepting affiliates who are likely to post links on spammy websites or use suspicious methods to promote the links. This can harm your site reputation and thus have a negative influence on the site’s search engine ranking.
Increase in traffic through referrals
Another benefit obtained through links in affiliate marketing is an increase in traffic. To make this traffic really an asset of yours, you will need to have a compelling landing page and a powerful CTA, to make sure you take advantage of the traffic you receive through affiliate links. You might also want to generate leads through an offer or online promotion, which is another aspect you will need to include when designing the landing page.
Not only do you get to increase traffic and amplify sales, but you will also generate leads at the same time, with no additional costs involved. It is necessary to create a website page that will encourage users to sign up or claim an offer, after which they can become a part of your
mailing list. Regardless of the affiliate’s performance and earned commissions, these leads remain your asset that can be used later on for email campaigns.
Full control over commission rates, promo materials, and selection of affiliates
When you set up an affiliate program, you define the terms for participation, which means that the commission and other terms (such as cookies life) are in your control. The affiliates who want to join will have to accept those terms. You will also provide images and other materials used for the promotion, so here is another aspect you can control.
Benefits for affiliates
When it comes to affiliates, affiliate marketing also provides many benefits:
Unlike opening your own online store, where you will need an investment to start off, affiliate marketing helps you promote and sell products with no investment from your part. You do not own the products, so there are no costs of making or buying products. The only investment needed is the promotion of the product.
Minimal or no operating costs
If you already have a website or a blog and influential social media channels, you will not have additional costs. However, if you are starting without any of these, you will need to create a website (or blog) and to set up social media channels, and these will involve certain expenses,
depending on whether you will need assistance with those tasks or you will do them on your own. The costs involved would be for website maintenance, content creation, and content promotion.
No need to stock products
Since you do not own the products you are promoting, you will not need a warehouse to stock the products. In fact, if those are physical products, you will not be involved in the shipping process either. The only goal you have is to promote the product and direct the buyer to the website where the product can be bought using your affiliate link. Handling the products and shipping is done by a merchant, and it does not require your involvement.
Possibility to earn money 24/7
Affiliate links bring you profit at any moment of the day. Any time the visitors click on the link the activity is tracked and there is a possibility to earn a commission if the conversion is
completed. This kind of passive income is an excellent opportunity for bloggers to make a profit even when they are focused on other projects.
Large audience to reach online
Affiliate marketing offers a great potential because you are not limited by a specific territory or language. This helps you reach a large group of people, which results in more opportunities to earn from affiliate links promotion.
Multiple platforms to use for the promotion
As an affiliate, you will have many platforms to use to promote the products. The most common way to do so is using your website or blog, but social networks can also be used for such promotion.
Both merchants and affiliates can use affiliate marketing to grow their business online. They are joined by one common goal – to increase profit. Affiliate’s willingness to promote merchant’s products is motivated by the possibility to earn a part of the profit. On the other hand, a merchant is motivated to increase sales and is willing to share the profit in exchange for a new (or often recurring) customer.
It is a win-win relationship which is the main reason why affiliate marketing continues to be often used in online marketing.
3. Becoming a Merchant
Knowing about the benefits of affiliate marketing for merchants is enough to spark some interested in this performance-based strategy, but if you want to become a merchant, you will need to deeply understand what it entails and how to create and publish your affiliate program.
What is a merchant?
A merchant is a person (or a company) that creates an affiliate program. Merchants are sometimes called advertisers, creators, sellers, or vendors. Anyone with a product they want to promote can become a merchant by creating an affiliate program.
An entrepreneur, a startup or a large company are all possible merchants because participating in affiliate marketing process is not conditioned by a size of the business or an existing budget.
In fact, merchants are required little or no investment at all. Costs of affiliate program management may occur, especially when using affiliate software or network, but the program needs no investment for affiliates because they are paid based on their performance.
This means that only when the sale is finalized will the merchant issue a payment for the affiliate.
As a merchant, your main responsibility is to have an affiliate program that works and correctly track transactions referred by the participants in your program.
The management of this program requires software that will manage and track the performance of the affiliates and a person who will monitor the program and communicate with the participants in the program.
You are also able to choose the affiliates you want to work with. The main reason why affiliates should apply and then go through the acceptance process is the fact that suspicious techniques and methods have always been a part of affiliate marketing.
Merchants need their links to be promoted, but placing those links just about anywhere is not acceptable because it can actually harm your SEO and reduce your website search engine rank.
This is why you should create an application form for affiliates and choose criteria that should be met for an affiliate to become a member of the affiliate program. For example, you might want to focus only on one industry and select only the affiliates from that industry.
Another requirement can be the location. In this case, you would only accept the affiliates from a specific country. Other metrics can also be used to filter and select affiliates, such as page domain, Alexa rank, etc.
How to become a merchant?
The process of becoming a merchant involves several phases during which you will prepare the program and everything needed before the program is published and officially available online for affiliates to join.
Create a plan
The starting point is creating the plan. The central point of this plan is the product(s) or service(s) you want to sell through this affiliate program. You can choose one or several products (or services) depending on your business goals.
Creating and making the program available requires several things which include:
• Affiliate platform costs
• Banners and other materials creation (or you can use the DIY method)
• Landing page creation
Try to predict the costs, in the beginning, to determine the commission for the affiliates later on because your goal is to make this program profitable. Based on these management costs, you might want to increase or decrease planned commissions for the affiliates.
The next step is determining the commission that will be paid to the affiliates. Have in mind that this information is usually available to the affiliates before they join the program, and it is one of the factors that will motivate them to join.
The commission can range anywhere from 1% to even 100%. This depends on several factors:
• Industry standards – These dictate the terms on the market, and they should be a
guideline when determining the commission. You do not want to go too much below or
above industry standards, to stay competitive.
• One-time payment vs. subscription – If you have a subscription-based service or
product, your commission should be higher, because one referring visit from the affiliates
will actually result in multiple purchases for you.
• Size and popularity of your brand – Brand recognition has an important role, and in
affiliate marketing, large brands usually offer lower commission rates than smaller brands
Another thing to think about in terms of the commission is the following. Not all of the affiliates are the same, which is why you might want to provide different commissions for different affiliates.
Special offers and more generous commissions can be reserved for a limited number of participants in the program. Those affiliates can be long-term partners, those who already promote your competitors or the affiliates that have already generated a significant number of visits (and sales).
If you choose to have different rates for different affiliates, make sure you plan that ahead, so that you can be consistent with the payments. Define the exact rates, and how one qualifies for higher commission rates.
A final thought on commissions – do not lower the rates.
This can have a negative influence on the performance of your program, so you should avoid dropping the rates for even a little. Instead, when defining the rates in the first place, try not to give the maximum portion of the net profit you are comfortable.
Save that maximum for the premium affiliates (if you have such classification), but offer a bit lower commission rates for the others.
Cookie life is another part of the affiliate program you will have to think about when creating a plan. There are no specific rules for determining an ideal cookie life, but when you do so, think about these:
• Most internet users occasionally delete cookies (for example once a month)
• The largest percentage of sales occurs within a day of the click on the affiliate link
• Make sure you check your competitors and industry standards regarding cookie life
You can set up cookie life anywhere from one day (which is a bit strict option and it is rarely used) to 365 days or even lifetime. Longer cookie life increases the chance for the affiliates to earn their commission even if the sales happen days or weeks after the click on the affiliate link. Increasing cookie life is also one way to motivate the affiliates to join your program.
Terms of service
Terms of service or affiliate agreement is a document that regulates the terms and conditions that are valid for the affiliate program. Affiliates joining the program will have to accept those terms and conditions. This document helps you control the affiliate program and ensures you avoid and successfully deal with issues that might occur along the way.
The document can regulate:
• Affiliate obligations
• Prohibited activities
• Merchant’s rights and obligations
• Access to the affiliate’s account
• Payment regulations
• Termination of agreement
• Limitations of liability
Description of the affiliate program provides information for the affiliates who are interested in joining. Even though each description should be unique and you could style it any way you want, there are a couple of elements that are usually a part of every affiliate program description.
• Details about the program
• Information related to the cookie life
• Data available for the affiliates
• Advantages of joining the program
• Information on how to sign up (or contact information)
When creating the description, make sure the text is concise and focused only on what is most important for the affiliates to know before joining. This text should also persuade the affiliates to consider your program, so it needs to be engaging and interesting with perks of the program featured. Once you reach affiliates with this description, they can explore a more detailed explanation of the program and requirements in the terms of service document.
Most merchants use an affiliate network to manage their programs, which is why application form is submitted through this network. This means that the affiliates should first join the network (or log in if they already have an account) and then they will apply.
An alternative is to have an application form without going through the affiliate network application process. Instead, a merchant provides an application form which features affiliate’s information relevant to the merchant:
• Company information
• User details
• Website URL
• Accepting the terms of service
Additional questions can also be a part of an application form, and they can include information about:
• How did the affiliate find the program
• Does the affiliate have a strategy and a plan on how to promote the product
• Is the affiliate part of another (related) affiliate program
Email templates are a part of the initial correspondence with the affiliates. They include acceptance (approval) email and denial email. With these emails you inform the affiliates about the status of their application and whether they had succeeded in joining the program. Since the text involved in this correspondence is usually pretty much the same, it is helpful to create these email templates.
Approval email should also include:
• The data about the program/company – Affiliates sometimes apply to multiple programs, so it is helpful to remind them.
• Activation promo – Some merchants like to offer a special promo to the affiliates, such as cookie life increase during the first month since the activation, or commission increase, etc. The goal of such promotion is to encourage affiliates to start working on advertising your program immediately.
• Affiliate links – To speed up the process, even more, you could send affiliate links that are already coded, so they can simply copy and paste them.
• Contact information – You want to be accessible to the affiliates for any doubts or questions they might have, so make sure you end the email with contact information.
The main part of the denial email is the information that the affiliate has not been accepted. Other details could include:
• The reason for not accepting the affiliate – Usually, you will state “do not meet our approval criteria” as the reason. This is a generic reply, and it is perfect for an email template as it can be sent to all affiliates who are not accepted to the program. Occasionally, you might include the specific criteria that affected your decision, but this email contains more specific information and cannot be used as a general template.
• Contact information – Even if you decide not to accept a particular affiliate, you might want to leave the communication open by providing contact information. This way the affiliates can reapply if they fixed the issues that do not meet your criteria. Or, this simply gives them a chance to explain their strategy and why they applied for the program. In some cases, you might even reconsider the application. Additionally, denial email might be sent as a part of automated filtering and errors might occur. This is why it is essential to enable affiliates to contact you and ask for a personal review of their application.
Set up goals
The affiliate program is usually a part of your promotional strategy, and as such, it has goals you want to achieve. Thinking about goals in advance is going to help you choose the right approach, and it helps you evaluate the performance of the affiliate program.
The most common goal affiliates set up is increasing sales. Since affiliates directly help you increase sales by promoting the product links, this strategy is perfect for expanding the base of buyers. However, other goals can be achieved as well, such as:
• Generate Leads
• Promote your brand
• Increase traffic
• Generate inbound links
• Expand your reach
When determining goals, try to be specific and descriptive. Elaborate each goal to define the quantifiers that will later help you in measuring your success in achieving goals. Detailed definition of goals also helps you determine the strategies you want to use to be able to achieve those goals.
For example, if your goal is lead generation, try determining how much each lead is worth to you and this will then affect commissions you are able to offer to the affiliates.
Choose a network/software
Affiliate networks and/or software is usually a part of the affiliate marketing process because they assist the creation, management, and control of the affiliate program. Before you become a part of affiliate marketing, you will need to explore features of both networks and software, to see how you can benefit from each, regardless if you are a merchant or an affiliate. This topic is a part of two separate chapters later on in this ebook.
Promo material is a part of the affiliate program, which is often referred to as affiliate creatives. It includes banners, brand assets, and other creative marketing materials that are made available to the affiliates for them to use when promoting your program. These materials are provided by the merchant and they should:
• Be effective and engaging
• Have great graphics with readable fonts
• Have URL or phone number on the banner
• Feature a call-to-action
• Be free from grammar mistakes and typos
• Have a brand name or a logo
In terms of size, creatives can vary in size, depending on the type of promotion the affiliate is going to work on. As a merchant, you should provide a variety of banner sizes, so that affiliates can choose the right one for the campaign they are implementing.
Many merchants make this mistake and overlook the importance of size varieties. Affiliates may not want or know how to edit the graphic, which means they may end up using the wrong size. If the image file is too small, it will come out blurry. If it is too large, it might have a negative impact on loading time.
Strategy to promote the program
Finally, when you have everything needed to start your program, try to develop a strategy to promote the program. It is also a part of the process of becoming a merchant because your goal is to spread the word about the program. A strategy is a part of your plan that you create with clear goals and actions that will take you to that goal. When creating a strategy, think about this:
• Objective goals – Consider your goals objectively and realistically to make sure you focus on something you can achieve.
• Determine the budget – Promotion of the affiliate program can include a specific budget which will be used for paid promotion. Think about your business, the expected benefits of this promotion and then based on that, determine the budget you are comfortable to invest.
• List the actions – This list includes the activities and the media you will use for the promotion of the program. Obviously, the website is the starting point, but you can also use paid search engines ads, social media, etc.
• Determine strategy’s KPIs (Key Performance Indicators) – The goal is to determine specific values which will help you evaluate the performance of your strategy. KPIs should be measurable and relevant to help you assess and analyze the outcome and the influence this approach has on your business in general.
What to expect?
Becoming a merchant is only the first part. It is a more active phase, where you will have a lot of things to focus on starting from creating a plan to developing a strategy. However, once the program is live, once you start accepting the affiliates, the second phase begins.
What you can expect from this program is to be well-organized and efficient, if you have taken care of all the necessary components that make a successful program. If everything is organized well, if you have arranged the application process and you have a software tracking the progress for you, you can expect to have a program that runs smoothly, even when you are not online.
What you cannot expect is for this program to skyrocket overnight. Finding affiliates is not that simple, nor is it that fast. You will have to work on promoting your program actively in the online communities.
You will also have to offer some competitive terms and commissions as a way to motivate new affiliates to join. Besides promotion, the second phase also includes the management of the program. You have to monitor the activities of the affiliates, to issue earned commissions promptly, and to analyze the efficiency of the affiliates who are promoting your links.
All of this helps you improve your program, stay competitive on the market and make sure you are really making the most out of affiliate marketing.