What is affiliate marketing and how does an affiliate program work?
In recent years, affiliate marketing, also known as performance marketing or affiliate marketing, has become one of the most important online marketing strategies
when it comes to promoting a product or service. Also, on the part of the advertiser, it is an excellent tool to monetize a blog or a web page.
The Interactive Advertising Bureau (IAB) dates this branch of marketing to the mid-1990s,
when Amazon founder Jeff Bezos developed a technique that linked to the websites of other sellers who were not interested in direct marketing their books to Amazon.
Despite this, it was not until 2014 when this term became popular and jobs were developed around this new marketing technique. What Is Affiliate Marketing, And How Does It Work?
What’s affiliate marketing?
Affiliate marketing is an online marketing strategy based on obtaining results.
In it, an online store or advertiser promotes its products or services through ads on the websites or blogs of its affiliates (also known as publishers) through affiliate systems.
In this way, the advertising company is able to expand its presence and reach a much larger audience than it could reach with its website alone.
And, in turn, the affiliate earns a commission for each sale of a product or service that has been made through his link.
In most cases, affiliate marketing is made up of these 4 main agents:
- Advertiser: the brand that wants to promote its products or services.
- Affiliate or publisher: website or blog that is in charge of promoting the products of other companies or the services of the advertiser.
- Affiliate Program: It is a network through which advertisers and affiliates come together. The latter offer advertising space
both on their websites and on social networks in exchange for a commission established by the advertising company. - Final consumer: a person who purchases the service. Always on the advertiser’s page, previously going through a link or banner that the affiliate has on his website.
Affiliate marketing is based on a pay-per-action (CPA) model, whereby the advertiser pays its affiliates for the results obtained and not for campaigns or ad impressions.
How does an affiliate program work?
Now that you are clear about what affiliate marketing is, do you want to know how an affiliate program works technically?
Affiliate marketing uses cookies in order to correctly track the information from the banners and links located on the affiliates’ websites.
In this way, an affiliate program is capable of knowing when a user has seen or clicked on a certain ad and
stores all the information related to the visitor’s browser (date, time, content visited…).
In this way, each time a user clicks on a banner or an affiliate link and makes a purchase (or any other agreed action) on the advertiser’s website,
cookies are capable of tracking all this information so that the affiliate program can identify the actions that are carried out and assign the commission that corresponds to the affiliate.
Main affiliate programs in Spain
Whether you are the owner of an ecommerce and want to become an advertiser, or you simply want to make your blog profitable and get extra money per month,
here I show you the main types of affiliate programs in Spain that may interest you:
- Awin: a new affiliate platform that recently landed in Spain, joining Zanox and Affilinet, two of the most used affiliate networks in Spain.
- Commission Junction : One of the most recognized affiliate platforms worldwide. It has a very intuitive and flexible user interface that will allow you to optimize and get the most out of your program.
TradeTracker : Currently has more than 5,000 active programs and 250 advertisers from different sectors to be able to choose the category that best suits the content of your website or blog.
- Amazon affiliate system: The Amazon affiliate program is one of the most common among people
who are dedicated to niche positioning or who have a community behind them in a format such as a blog or a newsletter.
Affiliate Marketing: Win-Win Model?
Many times we hear affiliate marketing in which both parties win: both the advertiser and the affiliate.
The advertiser is able to expand his brand, reach many more people and increase his sales thanks to the dissemination of his products.
In addition, you only pay per action performed (registrations, sales, subscription…).
In the case of the affiliate, he is in charge of promoting a company’s products and, in return, receives commissions each time a user performs a certain action on his website.
But are they all advantages? Is it always a strategy that can benefit both the advertiser
and the affiliate? Let’s look at the main advantages and disadvantages of affiliate marketing.
Advantages and Disadvantages of Affiliate Marketing for Affiliates
Both from the point of view of affiliates, there are some advantages and disadvantages that you should take into account when joining a program of these characteristics.
Advantages for affiliates
- If you are an affiliate you do not have to have a product inventory, offer support or post-sale service. You only deal with the promotion of the advertiser’s products.
- minimal risk. By not having to invest in stock, the risk when implementing such a strategy is very small.
You can join several affiliate programs or different advertisers.
Analyze which programs offer the best commissions or which products
you think can get a higher conversion when recommending them and joining them.
If at any time the conditions change, you can unsubscribe and consider other options.
Disadvantages for affiliate marketing
- It is about recommending a product, so if you do not want to lose the trust of your customers, you need to take care of your strategy and analyze the pros and cons of the services that you are going to advertise.
It is important that your recommendations are credible and real if you want to win conversions. - If you have a blog, it is necessary to create specialized content when making product or service recommendations. If you want to achieve good results, it is not enough to include only a banner or an advertisement on your website.
- Commissions are only a small part of the price of the product you recommend.
Advantages and Disadvantages of Affiliate Marketing for Advertisers
On the other hand, if you are the advertiser and you want to expand your brand, there are also some advantages and disadvantages that you should weigh before starting with a strategy of this type:
Advantages for advertisers
- It is a good way to increase the audience you are targeting by paying only for the results obtained.
- It does not require a large investment. Although some affiliate programs do require a small fee to sign up, it usually does not involve a large outlay for your e-commerce.
Also, you only pay commissions when the action is completed. If the results are not positive, you do not have to pay your affiliates or publishers.
- The final consumer makes the purchase in your e-commerce, so they become your customer directly.
It will be registered in your database and you will be able to carry out loyalty actions or recurring sales through a good email marketing strategy.
Disadvantages for advertisers
- Not knowing the affiliate’s activity or website in depth can in some cases damage the reputation or brand image of the advertising company.
- You have no control over your affiliates.
- At any time, one of your best publishers can decide to leave your program if the conditions do not interest them or they have a better offer.
- Affiliates are not exclusive.
This means that an affiliate can be recommending your brand in a post, and at the same time,
- also recommend your competitors. This usually happens when an affiliate creates a post like
“The best online Excel courses for 2018”.
At GoDaddy we also have our affiliate program!
Now that you know what affiliate marketing is,
how an affiliate program works and the advantages of this branch of online marketing both from the point of view of the advertiser and the affiliate,
do you want to start with such a strategy on your website?
At GoDaddy, we also have an affiliate program through the Commission Junction and Zanox platforms.
You have available up to 100 creatives in the form of banners
or text links to insert on your website or blog.
So, if you like our service and want to recommend us, we are waiting for you with open arms!
