What is Affiliate Marketing? Everything You Need to Know

Affiliate marketing refers to programs that aim to sell more products for a company through partnerships with third-party online salespeople called affiliates or publishers.

Unlike traditional Contextual Advertising, affiliate marketing programs allow content publishers to connect directly with advertisers.

A successful affiliate marketing campaign can lead to a higher income for publishers than publishing contextual ads from services like Google AdSense.

From an advertiser’s standpoint, affiliate marketing is an efficient way of promoting one’s products because the reward system is based on the publisher’s productivity.

The advertiser only needs to pay if the publisher successfully facilitates a sale.

History of Affiliate Marketing

The affiliate marketing business model is not new. It was introduced shortly after the first few businesses started offering products and services on the web.

The commission payment system of offline salespeople likely inspired the affiliate marketing commission system.

In the sales world outside the internet, salespeople have been paid via commission or a percentage of the payment amount for the longest time.

It is a shared sales model in the cosmetic, homeware, car, and pharmaceutical industries. The first recorded transition of this business model to the online world happened in 1994.

It was a flower-selling business called PC Flowers and Gifts. Its founder, William J. Tobin, designed and patented revenue sharing and visitor activity tracking.

The first affiliate network was the Prodigy Network, an IBM-owned subscription service that offered online services like access to news, games, polls, and more.

Network subscribers were allowed to earn a commission for facilitating a PC Flowers and Gifts sale to other network members.

In 1996, Amazon launched what we now call Amazon associates. At the time, Amazon focused on selling tangible books.

A website owner can post a banner ad or a link that leads directly to the product page of a specific book. The commission is paid if a visitor who uses the link purchases the book.

Many other affiliate marketing schemes were launched in the following years, but Amazon Associates became the most popular.

Since then, affiliate marketing has become more popular as a website monetization method. In 2006, for instance, sales generated by affiliate marketing in the UK amounted to $2.92 billion.

The popularity of affiliate marketing increased even more when more people participated in online content creation.

In the early 2000s, Web 2.0 content became increasingly popular online. People turned to blogs and forums for answers when they faced problems.

Some blogs and forums monetized their online properties using affiliate marketing programs. By positioning affiliate products as solutions to people’s problems, they earned money from the content they posted on their websites.

Around 2011, Google cleaned up its search engine results pages with what is commonly called the Panda update. This update in the search algorithm penalized websites with poor content.

This was mainly because many website owners gamed the process of ranking in Google’s search result pages.

This process is called search engine optimization (SEO). By doing practices frowned upon by Google, webmasters with websites with hardly any helpful content managed to reach the top spot of search result pages.

Practices like stuffing a webpage with keywords or creating thousands of fake links to websites allowed these webmasters to raise the rankings of their spam web pages.

Most of these spam web pages were monetized by affiliate links and banners, and with Google cracking down on these web pages, the black hat days of most affiliate marketers ended.

After the Google Panda updates, websites that provided valuable and engaging content rose to fill the top positions of the search result pages.

Because of this, websites with excellent content managed to get affiliate marketing sales. In the following years, affiliate marketers saw the emergence of social media websites.

With this, smartphones and other mobile devices replaced personal computers as the primary internet access tools.

With these changes in the Internet marketing world, affiliate marketing strategies also evolved. The internet became a truly multimedia experience.

Text content no longer ruled the internet. Instead, videos and images dominated the screens of internet users.

This gave way to a new breed of affiliate marketers. Some of them do not even own a website. They generate affiliate sales through their Facebook pages, YouTube Channels, and Instagram accounts.

These days, people do not spend countless hours surfing the web. Instead, they stick to one or two apps, fully engaged in their content.

This is the current state of affiliate marketing. The old ways of succeeding in this business still have some value.

You could still earn by posting helpful content on your WordPress website. However, if you want your affiliate marketing game to improve, you need to master the social media marketing world as well.

The Affiliate Marketing Business Model

As we discussed above, affiliate marketing is a revenue-sharing business model designed to increase the sales of a particular product or service.

Before we talk about how you can take part in this business model, let us first discuss the different players in this type of business:

1. The Advertiser

To understand affiliate marketing, one must understand the three parties involved in this marketing program.

The first is the advertiser or the business that wants to promote its products or services. They set up their affiliate marketing program or sign up with an affiliate network to manage the marketing program for them.

The advertiser aims to sell more products and reach new markets online. They usually set up this program to access online markets they cannot get through traditional online advertising.

Affiliate marketing also has other benefits for the advertiser’s online presence. By setting up this program, more content creators will discuss their products.

Some of these content creators have thousands of fans. Each one of these followers will be exposed to their products.

Even if these followers do not purchase a product now, they will still become familiar with the promoted product.

They may look for the product in the future without passing through the affiliate marketing channel. Advertisers should provide the tools publishers need.

For instance, they could offer marketing materials to affiliate publishers to promote their products and provide a platform to facilitate the publisher’s participation in the program.

Most affiliate programs come with an account to the affiliate marketing website. This website serves as a source of all the tools the advertiser provides. It also comes with a dashboard where the publisher can track their performance.

2. The consumers

The next party in the affiliate marketing business model is the consumers. Consumers refer to the people who buy the advertiser’s products.

Advertisers want suitable consumers to see their marketing materials. If they like the advertiser’s product or service, they can click the link provided with the marketing material and start purchasing.

The internet is filled with people who can become consumers. However, the best types of consumers are those who are willing and able to buy the advertiser’s products.

A willing consumer is interested in the product or service and has a personal reason for wanting or needing it.

Consumers can buy the product if they complete the purchasing process. First, the consumer must have the technical know-how to purchase online. He or she should also have enough funds to pay for the product or service offered.

3. The Publisher

The last part concerns publishers. Publishers are the people who post advertisers’ marketing materials for consumers to view.

Affiliate programs usually require their publishers to have an online asset that they can use to attract consumers’ attention.

Most affiliate programs require that you have a website where you will promote their products or services.

While a website is usually required when signing up, the publisher is not limited to promoting the advertiser’s marketing materials there.

Depending on the affiliate program guidelines, the publisher can use contextual advertising, social media marketing, and other means to bring attention to the affiliate offer.

Becoming a publisher is the best way to earn money in affiliate marketing. As a publisher, you will generate leads toward the websites of your affiliate advertisers.

This means that you need to attract people who are likely to buy the advertisers’ products and encourage them to go to the advertisers’ websites and make a purchase.

This part, however, is easier said than done. Though billions of people use the internet daily, you cannot reach most.

A big chunk of the online population does not speak English. Only a tiny percentage of English speakers are interested in the topics you discuss in your blog, videos, or podcasts.

Even among people interested in the subject you are talking about, only a tiny percentage intend to buy online.

Most people still prefer to buy things through brick-and-mortar stores if they are available. Many who habitually buy things online have preferred online stores, and many buy from popular sources like Amazon.

The most successful publishers earn consistently through affiliate marketing by establishing themselves as authorities in their chosen fields.

You may also follow this path. Most of these people are already experts in their fields and only use online marketing as a source of extra income.

For example, if you want to create content related to your job, you can brand yourself as an expert.

A gym trainer can create a website where he posts content that gymgoers can do when they cannot attend his classes.

In the process, he can promote fitness-related products that his website’s visitors can use. Because the gym trainer is an expert in his field, the visitors to his website will likely follow his advice.

You can also take the same approach by starting an affiliate business based on what you do for a living or on a hobby you like to do.

Doing so can establish yourself as an expert in that field. It will also be easier for you to find your first website followers. You can encourage the people you meet at work to visit your website.

You can provide free advice to keep visitors returning to your website there. In the process, you can monetize the website by suggesting your products and services.

You could then use affiliate links to direct your visitors to these products and services. A carpenter, for example, could provide free carpentry lessons on his website and his social media accounts.

Together with his content, he could provide Amazon Associate links to the product pages of the tools and other products that he uses in his carpentry lessons.

You must provide evidence to your website visitors to establish yourself as an expert. For instance, you can create an About page with your credentials and achievements in the field.

You could also provide photos of your work to show people that you are who you say you are.

While it is easier to convince people to buy the affiliate products if you are an expert, other approaches exist to become a trusted source in the affiliate marketing business.

For instance, you can also become a successful publisher, even if you are just a beginner at your chosen topic.

Instead of providing advice based on your personal experience, you can also give them as you learn a new topic.

A beginner carpenter, for example, could show people his journey in learning to become an expert. In the process, he could share the lessons he learned together with the tools he uses to learn.

Many people who go to the internet are beginners who want to learn something. It is rare to see a free website that will teach you everything you need to know to learn a skill.

Most websites that teach specific skills tend to be paid and often demand a high price. However, you can offer the audience a free version of these websites. Instead of charging people for information, you can earn it through affiliate marketing income.

How To Become An Affiliate Marketer

To become an affiliate marketer, you only need to join a good affiliate marketing program and start spreading the affiliate link. To make money consistently, however, you need to be competent in your approach to the business.

Here are the things you will need to start with this business:

1. A website

As stated in the previous chapters, most affiliate programs require that you have a website before you will be accepted.

Advertisers check the website to see what types of content you have. Some advertisers are incredibly picky when choosing affiliates.

They only accept those whose websites can bring in vast amounts of traffic. Don’t worry because beginner-level affiliate marketing programs will accept even publishers with new websites.

2. A profitable niche

You cannot just create any website if you want to become a successful affiliate marketer. In particular, you need to be careful when choosing a niche market.

Remember that the types of affiliate marketing products that you can sell will depend on the niche market you choose to participate in.

For instance, if you want to sell only high-ticket items, you must ensure that the niche market you’ve selected has high-ticket affiliate marketing programs.

3. An organic source of traffic

In internet marketing, there are two ways for you to get traffic: organic and paid. While some affiliate marketers use paid methods to earn through affiliate marketing, these methods expose you to a higher financial risk.

Those who use these methods have developed their skill over years of trial and error. For now, you should focus on building assets that will help you gather organic visitors.

This includes social media accounts and pages, forum memberships, accounts in niche-specific online communities, offline traffic sources, and other similar assets.

If you want to succeed from day one, consider where you will get your website traffic.

4. A membership to an affiliate marketing program

There are tons of affiliate marketing programs on the web. However, not all of them will suit the type of traffic you can get.

You must choose an affiliate program that fits the audience’s needs. Previously, We discussed the best affiliate marketing programs for your audience and How to make money with your WordPress website blog.

The four factors above are the minimum requirements for becoming a successful affiliate marketer. After choosing an affiliate marketing program, you can apply directly from the specific website.

Most application processes require you to fill out a form with your details. In addition, the application form may also ask how you plan to generate traffic for your affiliate offers and what types of products you wish to promote.

The form may also ask you how much traffic your website gets a day and what other monetization methods you use on the said website. In addition, you may be asked to fill out a tax form.

This part will depend on the affiliate program’s country of origin requirements. When signing up for Amazon Associates for Amazon.com, for instance, US citizens will be asked to fill out a US tax form. A different form will be required if you apply for the Amazon.ca (Canada) Associates program.

How complicated is the application process?

For some affiliate programs, getting in is easy. Some may even automatically approve your application.

However, more specialized programs will ask for more requirements after you apply. The most demanding programs will have their employees scan your website for the quality of the content.

They may reject your application if they are not satisfied with the design or quality of your website’s content.

These highly selective programs usually do this for different reasons. The majority of them do it to protect their brand.

Big brands want to be associated with websites that have high-quality content. Some will only accept websites that have been around for a long time and have hundreds of archived content.

Some brands will also reject your application if they see that your website or its contents do not align with their target consumers.

For example, if your website is in English and you apply with an affiliate program for Spanish people, you will likely be rejected.

My application has been approved. What’s next?

The real work begins after the application process. Now that you have a product or service to promote, you can start gathering traffic and funneling it toward your affiliate links.

There are multiple methods you can use to do this. First, you can use paid methods as a source of traffic.

You can use advertising platforms that allow affiliate links and pay for the clicks or views that your ad gets.

With this method, you are spending money to make money. You will need a bankroll of hundreds, if not thousands, of dollars to make this strategy work.

You will also need to ensure that you follow the guidelines set by the affiliate advertisers. Most will restrict you from using specific keywords in the advertising targeting.

For example, if you sell Nike rubber shoes, the affiliate program contract may restrict you from using keywords like Nike.

They do this to prevent affiliate marketers from competing with the mother company in the advertising bidding.

The second method of sending traffic is to spread the link around the web. In the past, people used sleazy techniques to get clicks on their affiliate links.

Some of them, for instance, put their affiliate links in the signature part of their forum accounts. This way, when people see their forum comments, they also see the affiliate links.

Many forums have learned about this technique and now ban links in signatures. Some affiliate programs also allow redirects and pop-ups to gather traffic.

An affiliate marketer using a redirect, for example, may set up a page that will automatically redirect to the affiliate website.

Visitors who visit that page are automatically transferred to the affiliate program’s landing page. The problem with this strategy is that most people who go through the automatic redirect are sent to the affiliate program’s website unwillingly.

Most of them will bounce (i.e., leave rather than continue seeing other pages on the website). This excess traffic from nonbuyers will eventually take its toll on the advertiser’s website.

This is why many affiliate programs ban redirects. Some people also use link pop-ups to send people through the affiliate link.

They may set the pop-up to appear after a particular link in the website is clicked. Upon clicking the said link, another window or tab will open.

This works both for desktop and for mobile browsers. The affiliate link is triggered when the pop-up opens and the affiliate landing page loads.

This process of sending traffic to affiliate programs is also problematic. Aside from being prohibited by most affiliate programs, browsers also tend to have pop-up blocking technology.

This prevents most pop-ups from opening even when the correct link is clicked. Content marketing is recommended to gather traffic for your affiliate programs.

Content marketing involves gathering internet users’ attention through different content media types. You can use text, audio, images, videos, or a combination to invite people to visit your website.

News websites are a classic example of websites that use content marketing. They create news articles and accompany them with videos and relevant images.

After making them, they post their content on their social media properties. They spread their news articles through Facebook, Twitter, and other social media marketing platforms.

When a person interested in the news sees the article, the headline and accompanying image should compel them to click the link.

This will lead them to the news website. After reading the article, they may press the up-vote button for the content. Some may even share a link to the content with their friends.

By doing this, they are spreading the news and increasing the reach of the news article. Other people interested in the news may also click on the article.

Afterward, they may share the content with their social media followers and continue spreading the news.

Some people looking to read that specific news article may also go to Google and search. Because of proper search engine optimization practices, the article landed in the top spot of the search result page with its relevant keywords or key phrases.

Because of this, more people from Google manage to read the content. Some of the readers who are interested in the content of the article may also choose to share it with their friends.

While this may seem like a simplistic illustration of how content marketing works, this is how it happens for most content on the web.

Content creators create content and share it on relevant online hotspots. They develop their skills in grabbing people’s attention over thousands of hours of practice.

You could also do the same with your affiliate marketing business. You could lure internet users to visit your website by creating and sharing content relevant to their interests and needs.

While viewing your content, they should also see the affiliate ads you share on your website. A percentage of them will click on these marketing materials and purchase them. You will receive a percentage of the sale amount that your referred customers spend.

Common Affiliate Marketing Mistakes

Many people who try to build an affiliate marketing business fail because they make common mistakes that ruin their business.

Here, we will discuss the most important mistakes so you can avoid them when starting your affiliate marketing career.

1. Thinking that a website is the only way to sell affiliate products

Many affiliate marketers make the mistake of focusing too much on their website and not finding other opportunities outside to promote their affiliate products.

Now and then, your followers will forgive you if you promote them through Facebook, Twitter, or even Instagram.

When guest posting on your friends’ websites, you can also post affiliate links relevant to your topic.

Make sure that you get the permission of the website owner first. Few will allow you to do so. However, if it is possible, you should take the opportunity.

2. Not building a community from day one

The biggest affiliate marketers in the industry can demand certain discounts, freebies, and other promotions.

They can do this because tens to hundreds of thousands of people follow their content. This is your goal and it makes sense to start building this goal for day one.

From your first article or video, you should already start considering your audience as a part of that community.

If you have this kind of mindset, you will be able to avoid making some of the basic mistakes in this list.

With a community-building mindset, you will put your community member’s interests first. You will not focus on factors like commission rates of your products or conversion rates of your marketing tools.

Instead, you will be able to focus on helping the members of your community. You can do this by providing useful content to your audience (community members) and opening them to exclusive offers that only you can give them.

In the beginning, though, try to help your community members by providing them with the information they need.

As your community grows, you will be repaid by the love they show your content. They will talk about it, not only in the comment areas of your website but also in other places online.

3. Becoming to sales by claiming exaggerated results

Many affiliate marketers think that selling is all about highlighting the positive parts of the products they promote.

This is far from what is happening in reality. The population of internet users is becoming smarter each year.

They are becoming more mindful of false information. This is especially true with internet buyers. With thousands of products available online, the average consumer has options on where to get their products.

If you make exaggerated claims regarding the features and benefits of the product you are promoting, most people will call you out for it.

People are more vigilant now with these types of schemes. If they think that you are fooling people with your claims, they may make a post about it on social media.

It is common nowadays for regular people to attack businesses by posting negative things about them online.

When posting about your products in any of your content, you should make it a habit only to talk about the facts.

When using a product, for instance, you should only talk about how you like to personally use it. Talk about the pros and cons of the product based on your experience.

If you set an extremely high expectation, your audience will be disappointed when the product arrives in the mail.

Because you have a website, they will be able to go back to your claims and leave negative comments. They may even call your entire business a scam. You do not want this to happen to you.

4. Not working with a partner

An affiliate marketing business is easy to start. You can fund it and work on it on your own.

However, it is also the ease of entry that makes it easy to let go. Many people who fail at affiliate marketing give up on the task before they even start making money.

When they fail to see results in the first few weeks of creating content, they start to doubt the process and consider quitting.

Many of them give up on their project before the sixth month period. One way to avoid this is by working with others who believe in your vision.

I am not talking about hiring an employee. Instead, I am talking about working with an Affiliate marketing partner. A business partner motivates you to work on the business even when you do not want to.

It also has the same effect on your partner. They will also be forced to work on the business because you are holding them accountable.

A partner not only increases the amount of work hours put on a business but also gives it a longer financial runway.

In startups, the runway refers to the amount of time that the capital fund of a business can fund its operations.

If all business partners chip in to fund the affiliate business, the financial risk will be divided. In the beginning, the first few people you will convince to use your affiliate links are your family and friends.

Your friends and family members will be the first group of people who will see the content and marketing materials you share on your social networking accounts.

With a partner, the reach of your organic marketing will significantly increase. You can double the number of people who see your marketing materials if both partners share the content with their personal social media accounts.

5. Failing to track results

After building your affiliate marketing assets, you cannot just sit back and wait for the business to make you money.

You need to continue observing the system you’ve developed and examine how it could be improved.

Examine each step that your customers take before they end up making a purchase and find ways to improve their success rate.

In some cases, you may need to improve your activities in gathering traffic. There may also be some improvements needed in converting your traffic into paying customers.

You can only learn what improvements are needed if you track the important data on your website.

Luckily, you can do this for free with tools like Google Analytics, Google Webmaster Tools, Twitter Analytics, Facebook Pixels, and other forms of website activity tracking technology.

They are easy to set up but the insights they provide can be the difference between success and failure.

Choosing the Right Niche

Choosing the right niche is just as important as choosing the right affiliate program to join. Many beginners start just making affiliate marketing websites as the first topic that enters their minds.

Three months into the project, they are no longer motivated to work on the topic. This is one of the primary reasons why beginner affiliate marketers quit on their projects.

Here, we will discuss how you can choose the best niche for you:

1. Make a list of your hobbies, interests and passions

First, you will need to make a list of the hobbies, interests, and passions you have in life. Consider the things that you spend the most of your time in.

You could also include a topic about your occupation if you enjoy talking about it. Also, think about the topics that you would like to learn. Choose at least 15 topics and list them down.

2. Arrange the topics you’ve chosen according to how much you enjoy talking about them

Next, you should arrange the topics based on how much you enjoy them. Right off the bat, you will notice that there are some topics that you enjoy more than others.

Look into these topics first when you are deciding on an affiliate marketing niche.

3. Survey other people’s interest in the subject

Starting with the first topic on your list, you should start researching the interests of other people in the topic. You want to start working on a topic that people are interested in.

You can start by surveying the content in your big traffic sources (Google Search, Facebook, X, and Instagram).

You could do a quick Google search about the topic and take note of the content that comes out.

You could also look into the content marketing accounts in social networks that deal with this type of content.

You can guess the popularity of a topic based on the number of engagements they get on social media.

4. Survey the competition

If you are satisfied with the amount of interest that a topic gets, you should check the competition in the market about it next.

You probably already encountered some of your content marketing competition when you were doing the previous step.

Any website that is doing some sort of content marketing is one of your competitors because they are trying to take your target audience’s attention away.

The more competition you have, the harder it will be for you to stand out in the content marketplace.

Ideally, you should pick a topic with the least amount of competition. However, at times, you can succeed in a high-competition niche by narrowing your content’s focus only to the more profitable topics.

With the topic of recreational running, for example, you could choose to focus only on the topic of running gear.

You could share content about the latest and best running shoes, clothing, and gadgets in the market.

5. Find the most commonly searched problems about this niche

Now that you have a niche in mind, start planning the types of content that you will create. You should start writing about the content before you even set up your affiliate marketing website.

This way, you will be able to start promoting the moment the website is live. To find topics to talk about, you should start with the problems that people interested in the niche face.

If you are just learning about the topic yourself, you should look into the problems that beginners tend to run into. This way, you will also be writing from a beginner’s point of view.

6. Find affiliate products that can solve the problems in these niches

After choosing the niche based on its popularity and the amount of competition in the market, you should look into the available affiliate products you can sell in that niche.

You could start by looking for products that will solve the problems established in the previous step.

The easiest way to start is to look for products and brands on Amazon. Amazon sells pretty much everything.

If you cannot find the product that you would like to promote to other companies, there is a good chance that it will be available on Amazon.

Amazon though has a low commission rate. To get better commission rates, you should check if the product you want to promote can be found in other affiliate networks discussed previously.

KEEP READING:

Wrapping Up

Now that we have understood affiliate marketing, we have discussed its history and the different players in this business.

We also discussed how to become an affiliate marketer and how complicated the process is. Lastly, we discussed the common mistakes to avoid when you are on an affiliate marketing program.

WordPress website owners can make money online after joining an Affiliate marketing program. Create the website, consider where to get traffic, join an affiliate program, and make money. That’s it.

You may also want to see our guide related to Affiliate marketing such as What is Amazon FBA?: Everything You Need to Know in 2024, 15 Best Affiliate Marketing Programs You Need To Join 2024, Content Marketing and SEO: How To Use Them Together, or How To Make Money With Your WordPress Blog (2024).

That all. Let’s meet in the comments to see your view on this.

Let us discuss Affiliate marketing.

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