Affiliate marketing is a pure performance-based channel and, although it can deliver astonishing results and ROI for ecommerce businesses, it remains a mystery to many of them. In most cases, just starting an affiliate programme is not enough. In our experience, the advertisers that see the best growth via affiliate tend to be the ones that take a patient and measured initial approach while trying to learn as much as possible about the channel and how to succeed within it.
Therefore, education on affiliate marketing can be split into two parts: the first about how it works and who is involved, and the second about how to build a successful affiliate programme. Let’s take a look at these and answer some questions below.
What is affiliate marketing?
Affiliate marketing is a type of performance-based marketing in which advertisers reward one or more publishers on an agreed action – typically sending visitors and customers to a website to buy a product through the publisher’s own marketing efforts.
Who are the core players within affiliate marketing?
There are four core players that are required as part of the mix, including the merchant, the network, the publisher and the customer.
Who is the Merchant?
The merchant is also known as the creator of the product, retailer or advertiser – this is usually the company that makes the product or provides the service for example Nike or Sony.
Advertisers extend their reach online by promoting their products or services on publishers’ websites and offer the opportunity of revenue sharing and a commission structure to other businesses (the affiliate) which already have a strong brand following.
In terms of size, the merchant can be anything from a start-up to a multi-national corporation, so long as the merchant is willing to pay their affiliates the help them gain traction with an audience.
What is the network?
The network is the bridge between the merchant and their affiliate. Although in some cases, a network isn’t always required, most companies will choose to work with a network for that added peace of mind.
The network is responsible for managing the relationship and will run due diligence checks, which can be important to uncover fraudulent activities before an agreement is made. It also provides tracking, reporting, access to publishers, payment management, strategic account management, admin support and a range of other services. Webgains is an example of an affiliate network. Each network is different, and it is up to each advertiser to decide which network(s) is/are the right ones for them. But what role exactly does the network play in the affiliate mix, and why are they beneficial to join?
You can find out about what an affiliate network is here.
Who is the publisher?
The publisher, also known as the affiliate, promote the advertiser’s products or services via their websites. They can be either a single entity or an entire business. In most cases, these will be news outlets, bloggers or influencers that operate within a specific industry. Examples of publishers include Quidco and TopCashback. Influencers also often act as publishers in affiliate marketing.
They will aid in the promotion of the product or service, by producing content such as blog posts, videos, photography and other media.
They may also go a step further to promote their content by placing ads, driving SEO traffic, and cultivating email contacts. Publishers use affiliate links to track purchases made through their site and earn commission from the merchant.
Different types of publishers
Just like there are different types of retailers, there are different types of publishers too. In order to learn affiliate marketing and then build a successful affiliate programme, it is important to understand who they are and how they work. Different types of publishers include:
- Voucher codes
- Content and bloggers
- Email and newsletter
- Social media
- Employee benefits
- Price comparison
You can find out more about each of these along with examples in our eBook ‘How to Grow Your Sales with Affiliate Marketing’. It is available to download for free via Webgains Academy here.
Who is the Customer?
The customer or consumers are the end-user who ultimately make a purchase via the publisher’s site.
Affiliate marketing strategies
Once you’ve got to grips with the fundamentals of affiliate marketing, it’s time to build an affiliate programme and relationships with publisher partners that convert to sales. To do this we’d recommend you download our free eBook guide ‘Building a Winning Affiliate Marketing Strategy’. In this guide you will learn:
- How to choose and measure publishers
- How to keep publishers happy
- What to expect from your programme
- How to measure programme success
- Tracking and technical considerations
- Understanding voucher strategies
- Defining, tracking, and targeting customers
- Ways to make your programme active