Businesses employ a variety of strategies to achieve one main goal: to market their products and services to their target audience. Some of the different marketing strategies these businesses deploy include social media marketing, media buying, PPC (pay-per-click), content marketing, search engine optimization (SEO), and email marketing.
But the most lucrative of these marketing strategies is affiliate marketing.Affiliate marketing is so critical to business success that organizations send representatives to world-renowned Affiliate Meetinga gathering of lead generation experts, content marketers, SEO experts, and conversion optimization experts.
But what is affiliate marketing and why is it so important for businesses worldwide to make it one of the core aspects of marketing? This article answers these questions and more.
What is Affiliate Marketing?
Affiliate Marketing Refers to an advertising model in which a business or organization compensates individuals through an affiliate marketing program to drive high-quality leads or traffic to the organization’s products and services.
These individuals, known as third-party publishers, or affiliates, receive a commission every time their traffic leads to a sale for the organization. In other words, affiliates market the company’s products and services in exchange for a post-sale commission.
Affiliate marketing is one of the simplest forms of online marketing. It’s so simple that experts recommend it to novices as a great way to get into online marketing. It’s also one of the most lucrative ways to make money online, probably second only to email marketing.
Affiliate marketers — another term used to describe affiliates or third-party publishers — do not require special training or previous experience. Instead, affiliate marketing success requires a passion for niche markets and solid persuasive writing skills.
Of course, assuming you have persuasive skills like copywriting. In this case, you can bring that skill to your affiliate marketing business. However, anyone can do affiliate marketing as long as they have a passion for marketing.
Why Affiliate Marketing Matters to Businesses
Affiliate marketing is vital to businesses and brands for many reasons. For example, research shows that affiliate programs are primarily responsible for generating an average of 23% of sales for brands. Additionally, companies operating subscription-based services, SaaS business models, and product review divisions have seen notable success in affiliate marketing.
Affiliate marketing also accounts for 15% of digital media industry revenue. Additionally, approximately 58% of membership purchases in 2018 were made via mobile devices. Statistica reports that affiliate marketing spending within the U.S. is estimated to reach $8.2 billion by 2022.
This shows the power of affiliate marketing. The following also shows why brands are using affiliate marketing as one of their core marketing strategies today:
The main goal of any offline and online business is to get instant approval from as many potential buyers as possible. As affiliates drive more and more traffic to your website every day, the result is a significant increase in brand awareness, i.e. more people know about your business and what it means.
Since affiliates also share in brand revenue, they become loyal fans. Their vested interest in the brand’s success will drive them to do everything legally to earn the trust of potential customers.
Reach a wider, targeted audience
Small businesses or startups benefit the most from affiliate marketing. They can leverage the audience of their affiliates to amplify the brand’s reach. However, reaching new target audiences can be challenging or spend a lot of money on an ad or campaign.
But businesses can partner with third-party publishers that resonate with your brand. These affiliates will drive targeted traffic through their links to your website so they can buy your products and services.
Monitoring the overall performance of your business enables you to deploy operational improvements in the future. Affiliate marketing tracking provides high-quality data that gives your brand insight into your target market, where they come from, why they buy, the best time for them to buy, and more.
Brands research and analyze these rich collections of data to dramatically increase conversion rates. This is possible when you make the necessary changes to your website. This might include making your website mobile-friendly, creating more engaging visual content or creative, etc.
Most consumers no longer rely heavily on companies’ marketing messages on their sales pages. Instead, they have higher expectations and are primarily looking for social proof or testimonials to validate any brand’s claims.
In-depth research shows that nearly 95% of consumers rely heavily on online reviews before making a purchasing decision. Therefore, when a brand successfully builds rapport with a highly engaged target audience, the market will leave behind a lot of social proof, making it easier for its affiliates to generate significant sales.
Enjoy a higher return on investment (ROI)
Determining the return on investment (ROI) of advertising and marketing campaigns can be challenging and unpredictable. As mentioned earlier, affiliate marketing is unique, a performance-based business model that is used only for profit. Companies don’t pay potential buyers for clicks or impressions; they only pay for closed sales.
This is one of the key reasons why small businesses use affiliate marketing to promote or market and sell their products/services. Channel your branding efforts through an affiliate marketing program that allows you to gain influence and directly reach a highly targeted and receptive audience with a high probability of doing business with your organization.
Affiliate marketing is the most cost-effective strategy any organization can deploy, especially when compared to the cost of advertising. Also, affiliate marketing is performance-based, which means that affiliates only get a commission after a successful sale.
Businesses can set up their affiliate programs, which include a commission structure. This prevents such companies from wasting money on mostly ineffective advertising.
Organizations all over the world use affiliate marketing as part of their sales strategy. However, other technologies cannot provide the same level of growth, promotion and sales as this unique marketing system.
This is why businesses of all sizes will continue to adopt affiliate marketing as the market grows day by day.