Affiliate
Category: Marketing
What is Affiliate Marketing?
Affiliate Marketing is an online advertising model where a company (advertiser or seller) pays partners (affiliates or publishers) a commission for each customer, sale, or action generated from their marketing efforts.
In other words, this is performance-based marketing where the risk for the advertiser is minimal – they only pay when they get a specific result.
Key participants in the process
The system includes three main parties:
- Seller/Advertiser (Merchant/Advertiser): This is the company or owner of the product/service who wants to promote and sell it. They offer an affiliate program.
Example: Online clothing store, software company, web hosting provider. - Affiliate/Partner (Affiliate/Publisher): This is the person or company who promotes the seller's products or services through their channels. They earn a commission for each successful sale or action.
Examples: Blogger, YouTuber, website owner, Instagram influencer, Facebook page administrator. - Customer: The person who clicks on the affiliate link and performs the desired action (purchase, registration, etc.) on the seller's website.
How does Affiliate Marketing work? (Step by step)
The process is very simple and is often managed through specialized platforms:
- The affiliate joins an affiliate program.
They register for a company's affiliate program (e.g., through platforms like ShareASale, Commission Junction, or directly through the company's website). - Receives a unique affiliate link.
This link contains a unique ID that identifies the affiliate. For example: www.example.com?ref=12345. - The affiliate shares this link.
They promote the link through their channels: writes a blog article, shares it on social networks, creates a video with link in description, sends email to their subscribers, etc. - Customer clicks on the link.
When someone clicks on the affiliate link, a cookie is placed in their browser that "remembers" which affiliate sent them. This cookie has a validity period (from a few days to a few months). - The customer performs the desired action.
If the customer makes a purchase, registers, or performs another desired action within the cookie's validity period, the action is credited to the affiliate. - The affiliate receives a commission.
The platform tracks the sale and automatically credits the commission to the affiliate's profile. Then they receive payment (monthly, bi-monthly, etc.).
Payment methods (Models)
Affiliates can earn money in different ways, depending on the agreement:
- Pay-Per-Sale (PPS): Most common model. A percentage of the sale value or a fixed amount per sale is paid.
Example: 10% of each book sold. - Pay-Per-Lead (PPL): Payment is made when the customer performs a specific action that is not a sale (e.g., filling out a form, registering for a free trial, subscribing to newsletter).
Example: $15 for each customer who registers for a free account. - Pay-Per-Click (PPC): Less common in its pure form. Payment is made for each customer who clicks, regardless of whether they made a purchase. This is more typical for advertising networks like Google Ads.
Example: $0.10 per click.
Pros and cons
| For Affiliate (Partner) | Cons |
|---|---|
| For Advertiser (Seller) | Cons |
| Low barrier to entry: You can start with little or no investment. | Competition: In many popular niches, competition is huge. |
| Flexibility: You can work from anywhere and on your own time. | Reach expansion: You reach new audiences through partners' already established channels. |
| Passive income: Once you create content with affiliate links, it can generate sales for months ahead without constant effort. | Higher ROI (return on investment): Since costs are directly tied to revenue, returns are usually high. |
| Wide selection: You can promote countless products from thousands of companies in any niche. | Improved SEO: Affiliate links to your site act as natural backlinks, which can improve search engine rankings. |
| Cons: | Cons: |
| Competition: In many popular niches, competition is huge. | Program management: Requires time and resources to manage partners, track campaigns, and pay commissions. |
| Unstable income: Income can vary significantly from month to month. | Risk of bad reputation: If partners use aggressive or spam techniques, this can harm the brand's image. |
| Dependence on platform rules: Changes in Google, Facebook, etc. algorithms can affect traffic and income. | Payments for "lost" sales: Sometimes you have to pay commission even if the customer was on your site before (due to how cookies work). |
Real-life examples
- Tech review blogger: They place affiliate links to Amazon products in their articles. When someone buys a product through their link, they get a percentage of the sale.
- Makeup YouTuber: They share an affiliate link to a cosmetics website in their video description. They receive a commission for everyone who registers or makes a purchase.
- Web hosting advice website: The site compares different hosting companies and provides affiliate links. When someone registers for a hosting plan through their link, they receive a high commission.
Conclusion
Affiliate Marketing is a powerful and effective marketing model that benefits both sellers and partners. For sellers, it's a way to reach new customers with minimal risk, and for partners – an opportunity to create income by sharing products and services they believe in with their audience.