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

4min.

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What Is Affiliate Marketing and How Can You Use It to Promote Your Business?d-tags
18 June 2024
Affiliate marketing is a way of promoting products or services where both parties benefit: the company gains more customers, and partners earn additional income. Read on to understand how to create an affiliate program that can effectively increase conversions on your website without requiring substantial financial investment.

4min.

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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.

However, before you start planning an affiliate program, make sure that the website where your customers will be directed functions correctly and actually allows them to buy your product, subscribe, or sign up for a newsletter – in short, to convert.

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

What Is Affiliate Marketing?

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.

How Affiliate Marketing Works [YouTube Example]

  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.

Affiliate marketing in a nutshell:

Company A contacts Company B → Company B places an affiliate link in their content → Customer C clicks the link and purchases the product → Company A earns/gains new users → Company B receives an affiliate commission

4 Biggest Advantages of Affiliate Marketing for Each Party

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.

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6 Steps to Effective Affiliate Marketing

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

StepsWhat You Can Do
Choose the right affiliate partners• Contact partners whose target audience is also your target audience.
• Check if your affiliate partner’s values and communication style match your brand.
Establish clear terms for collaboration and affiliate commission• Define the compensation your affiliate partner will receive for each sale.
• Specify the promotional methods to be used, such as affiliate links or banner ads.
Take part in creating valuable content• Encourage affiliates to create content that increases click-through rates on your affiliate link.
• Provide clear guidelines on brand promotion and image to maintain consistency.
Monitor results• Use tracking tools to monitor sales generated by each affiliate.
• Analyze which affiliate marketing methods and promotions are most effective for you.
Motivate your affiliate partners• Regularly pay commissions to maintain motivation among your partners.
• Organize contests and offer additional rewards for achieving specific goals.
Maintain good communication• Engage with your affiliate partners to discuss results and plan future strategies.
• Be open to their suggestions and ideas.

The Future of Affiliate Marketing: What to Expect?

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.

Summary: Affiliate Marketing and SEO

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.

Therefore, before running your affiliate marketing strategy, be 100% sure that your landing page operates smoothly and encourages visitors to make a purchase, leave their email, or take any other action that matters to you.
Author
Diana Samiczak Marketing Delante
Author
Diana Samiczak

Marketing Specialist

She supports the development of marketing strategies. She derives great joy from shooting videos and collaborating with other people.

She is a student of international management at the Jagiellonian University. As a hobby, she plays in the Ecce Homo Theater and follows Marvel characters.

Author
Diana Samiczak Marketing Delante
Author
Diana Samiczak

Marketing Specialist

She supports the development of marketing strategies. She derives great joy from shooting videos and collaborating with other people.

She is a student of international management at the Jagiellonian University. As a hobby, she plays in the Ecce Homo Theater and follows Marvel characters.

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Award - Deloitte 2021 Award - European eCommerce Awards 2022 Award - European Search Awards 2022 Award - Global Agency Awards 2022 Award - IPMA Award - US Search Awards 2021