You’ve probably seen the term “affiliate marketing” buzzing around the internet. All the advertisements of catchy ways to make money in your sleep or creating a passive side income are generally attributed to affiliate marketing. It’s may be trending, but is it important? Let’s answer the big questions: What is affiliate marketing and how does it relate to you and your business?
What is Affiliate Marketing?
Affiliate marketing, or AM, is essentially a referral system. It’s built upon the idea of affiliates promoting other people’s products and earning a commission on sales made through that affiliate’s marketing efforts. AM works by revenue sharing, which is the genius behind it. As a mutually beneficial relationship, affiliates are happy to promote products when they’re taking home a slice of the pie.
Sounds great right? Having an army of marketers promoting your products online for a small commission? It is, and that’s why it’s increasing in popularity. It’s a billion dollar industry ($12B worldwide) and it’s even catching up to email marketing. AM usually works through a system of unique links. Affiliates market your product on their websites or blogs via these special, custom links allowing you to track purchases back to them. In addition to these links, AM also works through referral codes. In this case, the affiliate would market a custom referral code (usually tied to their name), for example, ASHLEY20, to be applied at checkout.
You may be wondering, how do you keep track of these sales and attribute it to an affiliate? Well, there’s plenty of software options that make AM easy and affordable. Some popular options include Tapfiliate, Affiliately, and PartnerStack but there are many others.
Is Affiliate Marketing right for my business?
With AM gaining serious momentum, it’s hard to ignore it. However, it’s not right for everyone. AM works with eCommerce and online businesses since payment is completed online. In addition, AM is better for products with a high enough price point to justify the cost. The typical revenue share for affiliate marketing sits around 3-15%. If your product is cheaper, you may need to offer much higher commissions (or higher volumes) to justify the AM’s sales efforts.
If you’re a local or small business and affiliate marketing doesn’t quite fit your needs, “influencer marketing” may be a better outlet for you. You can find local influencers (social media personalities who have established credibility in a niche) and discover many creative ways to work with them in your area.
What does Affiliate Marketing mean for Small Business?
Affiliate marketing is estimated to grow 10x in the next few years so whether it’s right for your brand or not, it’s important to be aware of it. AM is changing the way brands, especially small businesses should approach their audiences. People are looking at other, real people online to tell them what to try and buy. Successful affiliates have serious influence over the internet as followers soak in the very mentions of products.
Whether AM is right for you or not, think about your marketing in a new way. Consider what your audience wants and be sure to deliver content of value. Are your posts educational, entertaining, or controversial enough to start a conversation? Market like an affiliate and most of all: stay true to your brand!
If you’re going to try affiliate marketing, let us know. We’d love to hear your thoughts and experiences. Good luck!
Yala is launching Yalaffiliates – an exclusive affiliate marketing program making video ads easy and accessible for everyone. Contact us for more information!