Affiliate Marketing

Affiliate marketing is based on the concept that the affiliate promotes another person’s or company’s products or services and earns a commission for it. All sales are tracked via affiliate links and the affiliate takes a percentage of the profit from each sale from their website, blog, social media, app, etc. It is a very popular tactic to drive sales, generate online revenue and profits by benefiting the brands and the affiliate marketers and spreading the risk between them.

There are three main elements to affiliate marketing. First, the seller (‘the brand’ or ‘merchant’), an individual or a company who creates the product or service and might be involved or not in marketing it. Second, the affiliate (or publisher), a person or an enterprise who promotes the product to their audience and gets a share of the retail price. The third key participant in the process is the consumer who purchases the products/services via the affiliate site.

There are different ways in which affiliate companies reward their affiliates depending on their objectives. The three main performance-based payment models are pay-per-click, pay-per-lead, or pay-per-sale, where the latter two are preferred for being more advantageous to the merchant. Because all three types are based on how well the affiliate is performing in contributing towards the company’s goal, they are also known as performance marketing. The commissions earned by affiliates are paid at regular intervals, usually on a monthly basis.

The term affiliate defines two very distinct business concepts. In Corporate and Tax Law, an ‘affiliate’ is a company connected to another company as a subsidiary or a member. In the context of online commerce and marketing, an affiliate is a company, or an individual, who sells or markets the products or services of another company. The seller (or merchant) offers affiliate links containing tracking codes so every sale or referral can be tracked and commission paid to the affiliate.

The short answer is ‘Yes, absolutely!’. It can bring big rewards but it certainly needs an investment of time and effort. As an affiliate, it is important to focus on a category you understand and can focus on. Then, define a highly targeted and ready-to-buy audience and attract them with the right keywords and by promoting your site, blog, or social media profile to them. Finally, stay abreast of digital marketing developments and don’t be afraid to learn via trial and error.