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Affiliate Marketing Fundamentals - A Step-by-Step Guide Part 1
Introduction
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.
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.
Digital buyers
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,
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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.
Getting started
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 product promotion,
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.
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
The 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 affiliates
When it comes to affiliates, affiliate marketing also provides many benefits:
No investment
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
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.
• Affiliate marketing is an amazing opportunity to increase sales (and revenue) for both merchants and affiliates.
• Content is the best way to promote affiliate links.
• Working on authenticity and reputation is the best way to earn credibility online and thus increase the profitability of affiliate marketing.
• Mobile is affecting affiliate marketing as well, which means the mobile user experience is something merchants and affiliates need to focus on.
Please Wait For Part 2
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