What is Affiliate Marketing?
Affiliate marketing is one of many diverse ways to generate new customers and revenue for your brand or products. A majority of the time, affiliate marketing is a pay per acquisition based marketing strategy that allows for very effective marketing and efficient CPAs. Depending on how your affiliate marketing program is set up, affiliates are also paid per acquisition, normally in the following: percentage or set dollar amount per sale. There are certain instances where affiliate partners will require a flat fee + commission.
How Does Affiliate Work?
The main goal of all affiliate programs is to drive profitable customers and volume on both the client and affiliate site. One great thing about Affiliate as mentioned above, is that if you are able to put together a strong foundational program, you should see efficient CPAs and a high ROAS.
It should be mentioned that affiliate marketing is not a channel you can turn on and off, so you need to feel comfortable with a consistent monthly budget to support the channel. You are always able to monitor spending and adjust your program to fit your budgets. The brand’s cost for advertising a particular product or subscription is largely tied to the cost paid to the affiliate, and they are only paid when a purchase is made. This makes affiliates easy to track and cost effective.
Affiliate Sales Cycle:
- Your brand’s Ad, Offer, or Link is shown on a partner site
- Customer Clicks the Ad or Link
- Customer is sent to your brand’s landing page via tracking link
- Customer makes a purchase at the store
- Affiliate Network records purchase and details of the transaction
- The purchase is confirmed by brand as a valid sale
- The transaction is credited to the correct partner + commission is released
Affiliate networks (AKA Affiliate Tracking Platforms) are key to running a successful affiliate marketing program. Networks typically handle all tracking, commissioning, offers/text links, reporting and payments to the affiliate partners. Some networks will provide full-service management of your program, OR, if tight on budget, self-service management. Your monthly network fees will mirror that of your service level. One of the most important things to factor when looking into affiliate networks is their ability to provide your company with a network of affiliates. This allows you to easily identify and recruit affiliate partners that you think will be right to promote your business.
Is Affiliate Right for You?
In one way or another, affiliate marketing can be right for pretty much any business and any budget. Getting started with affiliate marketing requires only one large cost for a tracking platform, mentioned above, and due to the vast amount of platforms, you can find one that will fit the bill for your budget. The pay for performance nature of affiliate marketing allows companies to start making money out of the gate. If there is a bigger budget to pull from, the pay per performance method can be coupled with paid placements or opportunities to drive both sales AND brand awareness.
Many companies see the greatest ROI with affiliates when their brand is already in a good place. Affiliate marketing is mainly demand based and typically works best for companies that already have clear brand recognition.
Affiliate marketing is a constantly evolving marketing arm that is filled with thousands (if not millions) of affiliates, new and evolving technologies, and tried and true networks that can help generate the best results for your business.
Now is the time to drive into Affiliate! If interested in Metric Theory’s Affiliate Marketing program, please reach out to our team.