Affiliate marketing is a very dynamic marketing strategy with several common approaches. This can make it difficult to know how, or where, to begin creating an affiliate program for your brand and products. This blog will help you increase your website traffic and sales by providing a breakdown of what affiliate marketing is, and how to find, empower and manage high-quality affiliates, as well as explore factors that need to be considered when defining goals for your affiliate program.
What is Affiliate Marketing?
Affiliate marketing is a common marketing strategy used to drive sales and generate online revenue. It has increased in popularity as digital marketing tactics have taken off. In fact:
According to Business Insider, 15% of total digital media advertising revenue is attributed to affiliate marketing
According to Mediakix, 81% of brands and publishers push an affiliate program because it involves a very small investment and creates passive and steady revenue
94% of publishers use more than one affiliate network according to Rakuten
To contextualize the above statistics consider the following:
When comparing Target to Walmart, Walmart wins 73% of all affiliate traffic. This means, due to strong partnerships, walmart.com wins approximately 12M visits monthly via affiliate traffic, whereas Target sees approximately 4M monthly visits.
Affiliate marketing has become so popular because it benefits both the referred and the referrer. The referred brand can increase sales while the affiliate earns a commission. Affiliate sales are tracked via links on all relevant sites so both parties know how much traffic the affiliate is bringing and how much commission they’ve earned.
What Can Affiliate Marketing Do for My Business?
Groupon was originally built on an affiliate marketing strategy. In 2009, Groupon was a struggling startup that was considered dead in the water, but after opening their affiliate program, the site took off and now has upwards of 50M active users.
In eCommerce, affiliate marketing has about a 16% conversion rate, the same rate as email marketing, and you can pay per sale. By comparison, paid search traffic converts at a rate of approximately 20% and requires you to run costly ads.
As a rule of thumb, brands need affiliates that are good matches for their products, as opposed to affiliates with the largest audience reach. Along the same lines, it’s better to open an affiliate program with a handful of quality affiliates rather than opting to work with many affiliates that have irrelevant traffic. For example, an affiliate that has millions of football followers would not be an effective partner for a perfume brand.