What’s Affiliate Marketing?
Affiliate marketing consists of promoting products on different channels (for example, blogs, YouTube videos, recommendation websites, etc.) in exchange for a commission from the brand.
For example, let’s say we have a blog where we post work-at-home product reviews. A user visits the blog, takes an interest in a desktop, and clicks a link posted in the article to go to the product page on the company’s website. If the sale is closed, the blogger will receive a commission for it.
Affiliate marketing is strictly based on the results. The company that makes the affiliate campaign will only pay if it gets a direct and measurable result (later we will explain the different results that can be paid with affiliate marketing). On the other hand, the owner of the website or blog, or content creator will only charge if this result occurs.
Affiliate marketing has been around for a long time, in fact, it existed long before the internet. For example, we can think of a restaurant that has an agreement with a nearby hotel, so that it pays you a commission for sending customers.
However, the popularity of affiliate marketing skyrocketed with the popularity of the internet, mostly thanks to Amazon, which has the largest affiliate program in the world.
Amazon’s history with Affiliate Marketing began in the 90s when there were still few options to promote itself on the internet. There were no Google Ads or social media yet, and email marketing was very new. The main option was to insert paid advertising in newspapers or high traffic portals, but instead, Amazon chose to promote itself through the thousands and thousands of “personal pages” (predecessors of blogs) of private users in exchange for a commission. (which was around 8% at the time). The program exploded and as a result affiliate pages began to appear until it became the great sector that it is today.
It should be noted that some brands perceive affiliation as something negative and refuse to use it because it can lead to fraud since some affiliates use poor techniques to generate conversions. But if we are able to properly filter the conversions, this type of program can be very profitable. Today, the affiliate software needed to manage affiliate marketing is affordable and affordable for almost all companies.
Pay-For-Results Models in Affiliate Marketing
Cost per sale (CPV): the affiliate receives a commission when their links generate sales. In some programs, it is not necessary for the sale to be immediate, but it can take up to 24 hours between when the user clicks on the affiliate link and the final conversion. In addition, if the user adds other products to their cart, the affiliate will also charge a commission for them.
Cost per action (CPA): the affiliate receives a commission when the user performs a certain action after clicking on their links, for example, filling in a form.
Cost per click (CPC): the affiliate receives a commission each time a user clicks on one of their links to the company’s website.
Cost per thousand impressions (CPM): the affiliate receives a fixed amount each time the content that links to the company (for example, a banner) is viewed a thousand times.
Most Frequent Channels to Generate Affiliate Traffic
Blogs and websites: a very popular affiliate marketing channel, which allows the affiliate to write in detail about the products they promote. For example, there are many websites dedicated to publishing reviews and comparisons of a specific product category in order to generate affiliate traffic.
Google Ads: This channel can be very relevant for high-value products, in which the amount of the commission compensates for the advertising spend.
Social networks: many influencers turn to affiliate marketing as a way to supplement their income.
Email marketing: affiliates who have developed a good database can take advantage of it to include affiliate links in their emails and get more conversions.