Understanding Affiliate Programs and How They Differ From Influencer Marketing

 

The end goal for any business is to find a way to reach more consumers. And of course, reaching more consumers often translates to an increase in sales. That said, there are ways to reach more customers without having too much overhead or having to hire marketing specialists. Enter: affiliate marketing.   

Simply put, affiliate marketing is a partnership between a merchant site and an affiliate site. The intention of this partnership is for the merchant’s product or service to be exposed to a wider pool of customers the affiliate already has access to. For the affiliate, the value add is a fee which is paid for through traffic, clicks, or sales (depending on the agreement with the merchant). Essentially, the affiliate site makes a call to action directing consumers to the merchant(s) and earns their fee based on the process (or sale).

How does affiliate marketing work?

Still a little lost? Here’s an example: Let’s say Bob (the affiliate) runs a website called “Bob’s Bike Bunker.” This site creates online reviews of different bikes, has a following of 20,000 readers, garners organic interactions, backlinks, and is already monetized thanks to banner ads. Bob could partner with Schwinn, Norco, or bike retailers (the merchants). All he has to do is put a call to action link at the end of his reviews leading his readers to said merchant’s site. If a customer chooses to trust Bob’s review, follow the call to action, and purchase a bike from the linked merchant, Bob receives a fee. How that fee is calculated would depend on what Bob and his merchant partner agree upon but the average is 50 percent of profits on the sale in a “Cost Per Sale” agreement. There are also arrangements where affiliates receive a fee per action which can mean a variety of things (clicks, impressions, sign ups, email registrations, opt ins, etc). The agreement itself is up to you and your partner but at the end of the day the affiliate is being paid to share their customer network with the merchant.

Who are the parties involved in affiliate marketing?

  • The Customer: This is your standard, internet searching, credit card touting consumer on the hunt for that perfect buy. They’re definitely on the hunt for something and perhaps that thing is found through an affiliate who puts them onto a suitable merchant.
  • The Affiliate: This is the one with the keys to the customer pool. They have a following, their following trusts their word, and they can convert those followers to consumers with just one easy link – for a fee, of course.
  • The Merchant: This would be you. The business with the product or service to sell. You want to reach more consumers, and by partnering up with an affiliate, you now have access to an entire network of shoppers who may be looking for exactly what you have to offer.

Keep in mind, that despite being a great resource for merchants and a great way to monetize for affiliates, Affiliate Marketing can be seen as somewhat of a bad word. This is primarily due to “bad apples” such as scammers or those with overall bad practices being thrown into the mix. This bad reputation can also come at the hands of “bridge pages” which are set up to trick the customer to go to a site they don’t care about or aren’t interested in. However, when done properly, affiliate programs can be an incredible tool to help monetize online content and drive e-commerce sales.

From a business owner’s perspective, not only can affiliate marketing offer you a platform to further increase your brand’s awareness (through the reach of your partner affiliate) but it has the potential to offer quite a nice return on investment for very little overhead. Aside from costing less, the threat of “boom or bust” that comes with other campaign-based marketing initiatives is low. Instead, with affiliate marketing, you can expect a long-term, steady stream of revenue.

The difference between working with an affiliate partner and an influencer

Of course, affiliate marketing is only one of the options you have in front of you. While influencer marketing has some overlap with an affiliate program, the two have very different tenets. Typically, an influencer is brought onboard to help strategically build a brand’s following. An influencer can also be hired for a specific campaign period or product launch. Conversely, an affiliating marketing program is a “set and forget it” system that has more of a long-term, “trickle” effect on your ROI. Influencers get hired to boost numbers, and raise awareness but don’t necessarily focus on the actual sales side of things.

Between the two options, affiliate marketing is far more affordable and less risky. There is little overhead, and really only positive outcome, if done ethically and correctly. That said, influencers have also been known to set up affiliate programs but often this is in tandem with a flat fee.

Whether you’re strictly e-commerce, or are a brick and mortar retailer looking to dip your toes into the online world, affiliate marketing has many upsides. It really comes down to what your goals are. If you’re looking to grow fast, or build a foundation, perhaps investing in an influencer and setting up an affiliate program with them is the wise choice (so you can have the best of both worlds). However, if you’re looking for a steady stream of income that doesn’t take up too much of your time, affiliate marketing could be the perfect fit. Either way, you need to weigh out what the cost is in terms of the return and decide whether the difference fits your overall strategy.

Dante Berardi Jr.

Dante Berardi Jr.

Dante Berardi Jr comes to Hubba from a background in content creation and grant writing for musicians and artists. A writer/musician himself, Dante has a thirst to consume words and the stories they create when pieced together. He sleeps too little, reads too much, lives on coffee and will talk your ear off about vinyl.
Dante Berardi Jr.

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