What Is Affiliate Marketing and How Can You Use It to Promote Your Business?

You have a product or service. You want to present it to a wider audience without spending a ton of money on advertising campaigns. So, you’re thinking about using affiliate marketing because you’ve heard it has practically no downsides. Plus, it’s relatively inexpensive – the only costs you really need to cover are affiliate commissions.

You may need UX, CR, and UX analysis for this.

Affiliate marketing is a form of collaboration where Company A and its partners – such as individuals, influencers, or other companies B, C, and D – mutually benefit through affiliate programs to promote specific products or services.

For each conversion, like app downloads, product sales, or registrations on Company A’s website, partners receive agreed-upon compensation.

1. Company A sells a product or service.
   News aggregator Ground News collects and publishes news from various internet sources.
2. Company A reaches out to Company B / Partner B to establish a collaboration.
   Ground News contacts Some More News, a YouTube channel that comments on current events worldwide.
3. Company B promotes Company A’s products/services in its content.
   Some More News features a short segment about Ground News in its video, explaining reasons to visit its marketing partner’s website.
4. Company B / Partner B uses a special affiliate link that tracks who clicked and purchased the product/service.
   Some More News displays the affiliate link at the bottom of the screen and encourages its viewers to use it, offering a 40% discount on one month’s subscription to its marketing partner’s news service.
5. Customer C clicks the link and purchases the product/service.
   The viewer of Some More News decides to subscribe to Ground News for one month.
6. Company A records the sale.
   Ground News gains a new subscriber.
7. Company B / Partner B receives a commission for encouraging customers to use Company A’s offer.
   Some More News receives compensation – known as an affiliate commission – for each person who subscribes to Ground News through their recommendation.

source: Some More News

Affiliate marketing in a nutshell:

For Company A:

✅ Company saves money on advertising since Partner B promotes its products for a commission.
✅ Affiliate marketing can be launched quickly with minimal upfront costs.
✅ Collaborating with, for example, a well-known fitness blogger, exposes Company A’s products to more people interested in workouts.
✅ If the affiliate program doesn’t improve conversions, Company A can easily terminate its partnership with Partner B.

For Company B / Partner B:

✅ Partner B earns a commission for each sale generated.
✅ Partner B avoids risks associated with product quality, production, or shipping since they’re promoting someone else’s products/services.
✅ Partner B doesn’t need to invest in the product/service they’re promoting.
✅ By promoting products/services from respected brands, Partner B improves their credibility among their target audience.

Below is a checklist for a sample affiliate marketing strategy that will benefit both you and your affiliate partners.

Trends and new technologies will shape how affiliate marketing evolves in the coming years. There’s a high likelihood that affiliate programs will become more dynamic with the integration of AR and VR technologies. Additionally, collaborating with micro-influencers and nano-influencers, who reach smaller but more loyal audience groups, could become necessary. Why? This is due to increasing emphasis on data protection and compliance with regulations like GDPR.

Of course, artificial intelligence will also play a role in shaping the future of affiliate marketing. AI will be used for data analysis and more precise offer personalization. Furthermore, sustainable development and ethical marketing, which Generation Z pays close attention to, will also influence the development of affiliate marketing. It’s highly likely that affiliate partners will primarily be companies that operate with sustainability and ethics in mind.

Yes, affiliate marketing can help drive more interested visitors to your website, especially if you partner with the right affiliates. However, if your landing page isn’t functioning properly or isn’t well-optimized for conversions, all your efforts and those of your affiliate partners could be in vain.