Affiliate marketing basically stemmed from the realization that companies had an opportunity to market their products and services to consumers with the millions of websites that are visited each day. At the same time, website owners were realizing that they should be compensated for the hard work they put into providing their visitors valuable content. So, affiliate marketing emerged as a solution to help form relationships between advertisers (your business), publishers (websites that promote your business) and consumers (people you hope to buy from your business).
More clearly defined, an advertiser is a company that sells a product and/or service and is willing to pay others to help sell and promote them. A publisher is a company (or in some cases, an individual) that promotes an advertisers’ product and/or service in exchange for a payment (in most cases, this payment is in the form of a commission based on sales). Advertisers and publishers enter into an agreement with each other where the advertiser provides the publisher with whatever they need, such as creative banner ads, text ads, links, etc., to successfully advertise their product and/or service. Finally, a consumer solidifies the relationship. The consumer, presumably a visitor on the publisher’s website, sees an advertiser’s ad and clicks through to (hopefully!) make a purchase.
How does Affiliate Marketing work?
Please meet every affiliate marketers best friend — the cookie. Unfortunately, we’re not talking about Grandma’s homemade chocolate chip cookies. We’re talking about an internet cookie — a technology that works with web browsers to store information. When it comes to affiliate marketing, a “cookie” is put into a consumer’s browser when they click through an ad on a publisher’s site onto an advertiser’s site. SO what is this cookie storing? It is storing info such as who the advertiser is, who the publisher is, the specific ad the consumer clicked through, commission amount determined in the advertiser/publisher agreement, etc.
How do I get started?
If you’ve determined affiliate marketing is the right choice for your business, what are you waiting for? If you’re getting ready to do some serious affiliate marketing, it may be best to consider joining a network like Commission Junction or LinkShare. Some factors you’ll want to think about when setting up your program are:
- What kind of commission do I want to pay my Publishers? Do I want to do a percentage of sales or a fixed amount? Note that as you get more advanced, you can offer different types of commissions on different types of purchases.
- What kind of referral period do I want to set? As in, how long will I allow cookies to be stored in consumers’ browsers while still paying out publisher commission? A good tool to determine this time frame is to look at your Time to Purchase tab in Google Analytics. Do the majority of your customers purchase within one day? If so, you may want to consider a shorter referral period.
- Do you want to limit the number of referrals that come in? In most cases, this answer will be no, but the option is there for many affiliate networks!
- Do you want to offer additional incentives for Publishers that bring in a lot of sales? For example, an extra commission?
Some last things to keep in mind
When determining the scope of your affiliate program, competitive research will be key. I highly recommend that advertisers create a fake publisher account first, and then check out their competition. What commissions are they offering to pay? What kind of referral period do they have? Do they offer any incentives? You want to give publishers a reason to join YOUR program and choose to promote YOUR products and services. Another thing to watch out for in affiliate marketing is publishers violating your terms. Some common mishaps are publishers hosting coupon codes or links that you didn’t provide them (most likely grabbed off emails or another marketing channel) or publishers using your trademarked name in paid search. In some cases, this is actually a tactic for affiliate strategy, but it must be monitored carefully. When setting up your program terms, you have the option of making strict rules on things you don’t want, so you can call on them later if they are violated!
Are you considered adding affiliate marketing into your online strategy? If you already have, what other tips would you have for those getting started? We’d love to hear from you! Leave a comment below or connect with us on Facebook, Twitter or Google+.
Interested in becoming a publisher in 123Print’s Affiliate Program?
Check out our program and apply here!