What is Affiliate Marketing? Everything You Need To Know

What is affiliate marketing?

Affiliate marketing is an advertising relationship between a company with a product or service, or merchant, and a partner, or affiliate. The affiliate promotes the merchant through various means in return for a commission for positive actions to the merchant, either in leads or in sales. Affiliate marketing is an effective promotional channel for merchants as it is a performance-based structure. And in the world of digital marketing strategies, it is also an easy execution for an active affiliate.

Table of Contents

How does affiliate marketing work?

The mechanics of affiliate marketing are relatively straightforward, often automated through affiliate marketing programs or software:

  1. The merchant and the affiliate enter into an agreement. This often covers the criteria for the affiliate, such as types of transactions (e.g., clicks, subscriptions, or sales) as well as commission amounts and payment schedules.
  2. The affiliate receives a customized URL that sends users to the relevant merchant site while creating a tracking cookie to confirm if the transaction occurred.
  3. The affiliate publishes the URL. This could be an ad on their website or a link in a blog or social media posts.
  4. When a user clicks on the link, the cookie tracks the users’ actions on the merchant’s site, recording any transactions and reporting to the merchant.
  5. The merchant pays the affiliate.

Affiliate marketing examples

As mentioned earlier, there are many digital channels for affiliate marketing. It benefits both merchants and affiliates to have something in common so that visitors will appreciate the offers. For example, a restaurant may want to partner with a food blog and not a pet lovers’ site. Also, offering incentives through affiliates again may benefit all involved:

  • Vouchers or discount codes can encourage an affiliate’s audience to click through to a merchant’s site.
  • Affiliates could promote a merchant through links in site content such as through a review or a positive mention with a link.
  • There are also outright advertisements on an affiliates site. This could be combined with discounts or voucher codes as well.
  • Social media mentions can engage the affiliate’s audience. For example, attractive holiday snaps can inspire hotel bookings.
  • Videos such as how-tos or positive reviews by affiliates can also drive traffic and sales as potential customers sees your product or service in action.

To show transparency and to promote confidence in users, affiliates should mention that they are benefiting from transactions completed through the links.

How to make money with affiliate marketing

The type of campaign a merchant is conducting and the goals they want to achieve will determine the type of commission they should offer to affiliates. They usually revolve around a “pay-per” model”. This could be pay-per-click, where the merchant pays for clicks through to their website as they mainly want to drive traffic to their pages. Pay-per-lead involves a user signing up for a newsletter or access to the merchant’s website, providing them with new leads for potential sales. And, of course, there is the pay-per-sale model, where the affiliate receives a commission for each sale completed from their link, which is often the best paying for the affiliate. Nevertheless, the merchant also benefits from all these models as well.

IBEX can help you with your affiliate marketing

Affiliate marketing can be an affordable marketing strategy for your company. You pay only for successes, defined by you, while achieving wider exposure for your brand. Are you ready to begin with affiliate marketing? IBEX Media Group is an experienced digital marketing agency that can advise you on the best affiliate marketing strategies for your needs.

Reach out to a IBEX digital expert today. We’ll help your business reach full potential with digital marketing with services such as Social Media marketingSEOFacebook Ads & Video Production.