I think affiliate marketing is one of the most interesting digital marketing channels and is worth £6.3 million in the UK*, and is responsible for driving 30% of activity for Marketers. This article is going to discuss affiliate marketing, what it is and how it works.
So, what is affiliate marketing?
Put simply affiliate marketing is where other businesses or people promote your products or services. They then receive a commission for activity driven to your site. Those businesses are called affiliates, the companies that they are promoting are called merchants.
Affiliate commission
For promoting your business affiliates are provided with a commission, this commission can vary for example it could be a % of a sale or a set price.
The commission rate can vary depending on your priorities for example you may be able to provide more commission for a sale that drives a new customers compared to an existing customer, 79% of publishers say that affiliates drive engagement with their existing customers
There is also the opportunity to provide different affiliates with different commission rates. For example, if there is a particular affiliate you would really like to work with you can offer them a higher commission rate.
Affiliate commission rates can also be time sensitive, for example if you are launching a new product, you could increase the commission rate during the launch period.
Customer actions
During this article we have discussed affiliates getting commission on orders or sales that they driven through to your website as this is the most used conversion. The affiliate channel is more flexible than that, there are a number of other conversion types that you can work with affiliates to drive such as:-
- Email subscription
- Content download
- Survey completions
- Competition entrees
Affiliate networks
These relationships are managed via an affiliate network, although you can set up your own affiliate program without using a network, most people will use a network as they take the complexity of managing payments to the affiliates, they have built relationships with affiliates, and they have lots of great technology available to help affiliates to promote your products.
The networks are a middleman that help to connect affiliates and merchants, they will manage the tracking of orders or sales and provide affiliates their commission.
The networks are also able to provide a facility for affiliates to access your marketing collateral on a self-service basis.
Part of their remit, depending upon the network and the level of service that you have subscribed to, they can help you to grow your network by connecting you with appropriate affiliates.
Affiliate Network Costs
Affiliate networks will generally charge a setup fee for merchants, this will vary depending on the network. In addition to this there will be an affiliate network commission this is a percentage of the affiliate commissions. This means that it is in the affiliate networks best interest to help you to drive sales via the network.
Building your network
Simply by joining a network you will not guarantee sales, you must work for it, you need to be able to provide affiliates with –
Marketing collateral –
Affiliates need information in order to promote your brand, this will vary depending on your business but you can provide affiliates with –
Graphic banners – the network will advise you of the sizes that can be used and what are the most popular. Over time you will be able to identify which assets your affiliates are using most often.
Text – providing affiliates with text for PPC ads or social media means that your brand message is consistent, and the affiliates can use the information straight away.
Product feeds – if you are selling a product providing a product feed allows your affiliates to easily integrate your products into their programmes.
Email templates – providing an email template that can be easily uploaded to their email service provider so that they can easily integrate it into their email campaigns.
Communications –
You need to talk to your affiliates regularly, providing them with regular information about your offering, keeping them up to date with the latest information.
The networks will have methods for you to communicate to your affiliates as well as potential affiliates.
Where possible you should build 121 relationships with your affiliates, especially with your important ones, if possible, arrange regular meetings with them.
Affiliate networks may provide networking events where you can meet and great existing and potential affiliates.
Keen commissions
You need to make sure that the commission you are offering is attractive to the affiliate, so that they will want to start promoting you. You can even offer specific commissions to specific affiliates.
Can anyone become a Merchant?
Merchants will be expected to be able to meet a set criterion to become a Merchant. This will vary depending on the Network that you are applying for, generally the criteria is around volume of traffic that you are getting to your website at present.
So I hope you have a better understanding of what affiliate marketing is, what is involved and what an important part of your marketing mix it can be.