Affiliate marketing is the name given to the marketing modality based on the creation of a network of promoters (affiliates) who disseminate a product or service in their networks of contacts.
This is a growing market in the country and in the world. According to this article, which gathers statistics on affiliate marketing, 81% of brands rely on affiliate programs in order to optimize their business.
In addition, the global affiliate marketing estimate for 2020 was $12 billion — a figure that shows the potential of the segment.
If it’s the first time you’ve heard of the term, don’t worry. Read on to understand everything about affiliate marketing and the ways to become one and start making money on the internet.
What Is Affiliate Marketing?
We call affiliate marketing the modality of digital dissemination based on the construction of an affiliate network. These affiliates are responsible for spreading a product or service through their networks in exchange for a commission.
Currently, the system is widely used among digital influencers, who provide access links to products and services on their profiles in exchange for pre-established commissions with the companies advertised.
In this modality, each visitor or customer brought by the efforts of affiliates reverts a percentage of the investment made by the consumer in commission to the publisher. It may seem complex, but knowing what affiliate marketing is will surely open your mind to this type of digital work.
How Does Affiliate Marketing Work?
In addition to understanding what affiliate marketing is, it’s important to know how an affiliate’s income is formed, isn’t it?
In a simplified way, we can say that affiliate marketing works by exchanging the work of promoting products for a pre-established commission.
However, in practice, the structure of this commissioning can take place in different ways. Below, we show you 2 of the most popular commissioning strategies to illustrate:
1. COGS (Cost Per Sale)
In this model, widely used in e-commerces and other platforms for marketing digital products, the affiliate earns on each sales conversion made from a targeted link.
This type of commissioning is interesting, since, in many cases, the link directs the user to a certain product, but he chooses to buy more products in addition to that one. In this way, the affiliate is commissioned for all sales made from the link, even if they do not purchase the product (or only this product) offered by the affiliate.
2.CPL (cost per lead)
This model is most commonly used for companies that sell to other companies (B2B businesses) or ongoing service providers (such as Uber, which captures and converts customers at roughly the same time). This is because, in this business model, the main objective is to capture qualified leads to work and convert them into customers.
Therefore, in this commissioning model, the affiliate is paid with a fixed amount for each lead generated.
Another way to use CPL to commission affiliates is by associating the link with a lead capture stage of the company’s sales funnel. Some examples of this case are:
- filling out forms;
- requests for quotations;
- registration of customers interested in receiving some type of exclusive content;
- and so on.
Advantages of working with the modality
Now you know what affiliate marketing is and how it works. Are you still in doubt if this type of digital work is for you? Then check out our list of some of the advantages of working as an affiliate:
1. You don’t need to create a product to sell
Looking at it from this aspect, there is a similarity between working with licensing and selling digital products and affiliate marketing.
After all, in both cases, it is possible to choose on specialized platforms the type of product or service you want to market and register.
The biggest difference between the two activities is that, although it does not require the creation of a product, the marketing of digital products is more complex, and requires other knowledge and processes on the part of the seller.
2. It is possible to operate in several niches
In addition to dispensing with the need to develop an exclusive product, affiliate marketing also guarantees the program participant the freedom to operate in different niches.
3. Flexibility of working hours and location
Working in the digital environment carries with it this, which is probably one of its main attractions: the flexibility and autonomy to choose the best times and places to work.
Since the work can be carried out entirely over the internet, all you need is a good connection and a working device (such as a computer, notebook, tablet or even smartphone) to get the business moving.
4. Low investment
In addition to understanding what affiliate marketing is, it is important to understand that investing in the segment requires low investment. Many of the most popular affiliate marketing platforms don’t charge fees for signing up new employees.
Therefore, we can say that the costs added to the work are directly linked to the level of investment that the affiliate wants to make to improve their customer acquisition, lead conversion, and digital marketing strategies.
5. Delivery at the expense of the parent platform
Can you imagine selling a product and not having to worry about the paths taken by it to reach the customer? Well, by understanding what affiliate marketing is, you also understand that this is a reality for professionals in the field.
This is because the scope of work of an affiliate is restricted to the dissemination of their links and attracting those interested in clicking to know/consume what is offered to them.
All logistical work linked to products or services purchased (delivery, payment, support, service, etc.) is part of the parent company’s work.
How to work with affiliate marketing?
What’s up? Are you convinced about what affiliate marketing is and what are the advantages of this type of work?
The time has come, then, to understand how to start your journey in this market.
We have prepared a basic step-by-step guide to help you orient yourself and start investing in the segment!
- Research credible companies that work with affiliate marketing;
- Study the promoted product (this will help create more consistent marketing strategies focused on the right audience);
- Find the target audience for the product or service being sold;
- Bet on good digital marketing strategies (including paid ads, such as YouTube Ads and Instagram ads);
- Plan short, medium, and long-term goals;
- Measure your results and test new tools to streamline access.
Examples to inspire: companies that work on strategy
Finally, to complete our guide on what affiliate marketing is, we present 3 examples of companies that you probably know, and that work on the strategy.
Check it out below!