Affiliate marketing: what is it and how to make money step by step?
Affiliate marketing is a very lucrative branch of digital marketing that focuses on working with affiliation between brands to reach new potential audiences.
Whether you are a company looking to increase your online sales or a content creator or influencer who wants to monetize your online presence, affiliate marketing has a lot to offer you. Let's take a look at what affiliate marketing is and how to make money with it step by step.
What is affiliate marketing?
Affiliate marketing is the promotion of products on different channels (e.g. blogs, YouTube videos, referral sites, etc.) in exchange for a commission from the brand.
For example, let's say we have a blog where we publish reviews of products to work at home. A user visits the blog, is interested in a desk, and clicks on a link posted in the article to go to the product page on the company's website. If the sale closes, the blogger receives a commission for the sale.
Affiliate marketing is strictly results-based. The company running the affiliate campaign will only pay if it gets a direct and measurable result (we will explain later on the different results that can be remunerated with affiliate marketing). On the other hand, the website or blog owner or content creator will only get paid if this result occurs.
Affiliate marketing has been around for a long time 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 a commission for sending customers to them.
However, the popularity of affiliate marketing skyrocketed with the popularization of the internet, especially thanks to Amazon, which has the largest affiliate program in the world.
Amazon's history with affiliate marketing began in the 1990s when there were still few options to promote on the Internet. Google Ads and social media didn't exist yet, and email marketing was very new. The main option was to insert paid advertising in newspapers or high-traffic portals, but instead, Amazon opted to promote through the thousands and thousands of "personal pages" (predecessors of blogs) of individual users in exchange for a commission (which at the time was around 8%). The program exploded and as a result affiliate sites began to emerge until it became the large 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, as some affiliates use undesirable techniques to generate conversions. But if we can properly filter the conversions, this type of program can be very profitable. Today, the affiliate software needed to manage affiliate marketing is affordable and within the reach of almost every company.
Pay-for-performance models in affiliate marketing
- Cost per sale (CPV): the affiliate receives a commission when their links generate sales. In some programs, the sale does not need to be immediate, but it can take up to 24 hours between the user clicking on the affiliate link and the final conversion. In addition, if the user adds other products to his or her 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 your links, e.g. filling out a form.
- Cost per click (CPC): the affiliate receives a commission every time a user clicks on one of your links to the company's website.
- Cost per thousand impressions (CPM): the affiliate receives a fixed amount each time the content linking to the company (e.g. 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 particular product category to generate affiliate traffic.
- Google Ads: this channel can be very relevant for high-value products, where the amount of commission compensates for the advertising spendd.
- Social media: many influencers use affiliate marketing as a way to supplement their income.
- Email marketing: affiliates who have developed a good database can leverage it to include affiliate links in their emails and drive more conversions.
How to implement an affiliate marketing strategy in 7 steps
1) Choose a platform
As we've seen above, it's possible to do affiliate marketing through multiple channels, and some of them are as simple as putting a link to the company's website in your Instagram bio. But most affiliates rely on one of two channels:
- A blog. If you have a blog that is well optimized for search engines, you can generate organic traffic that ends up converting into affiliate commissions.
- YouTube. YouTube affiliate campaigns allow you to show the product and how it works in great detail, so they have great potential to generate sales and commissions.
2) Choose a niche
When Amazon started launching affiliate marketing campaigns in the 90s, it was relatively easy to stand out with your page. But nowadays the blogging and content marketing world is very saturated, so the smartest strategy is to focus on very specific niches. For example, instead of creating a blog about cooking in general, you can focus on utensils for cooking Asian food.
3) Look for affiliate programs to join.
Many brands today have their affiliate programs, covering very different sectors. Here are some examples:
- Amazon: one of the largest affiliate marketing programs in the world, with endless product categories to choose from. Commissions vary depending on the product chosen but can be as high as 12%S
- AAmrush: this software has a program that rewards affiliates with $200 for each subscription sold, $10 for each trial period, and $0.01 for each signup.
- Sephora: a cosmetics brand whose affiliate program emphasizes brand image and offers 7% commissions for each qualified sale.
- eDreams: this travel brand's affiliate program offers commissions of up to $25 in exchange for promoting their offers through banners, text links, and special promotions.
- Adsense: although it is not an affiliate marketing program in the strict sense, the monetization of websites and blogs through Google Adsense has many similarities with this type of campaign. The big difference is that Adsense affiliates do not choose which advertisers appear on their websites or blogs, although they can decide that a particular ad does not appear on their website if they do not consider it appropriate.
4) Create quality content
For your affiliate marketing to work, you will need to create high-quality content that your affiliate links will fit into naturally. For example, if you're in the business of product reviews, it's highly recommended that you try them yourself before writing about them, and even record some video using them to reflect your first-person experience. It is also important that you think about the doubts and objections of users about that product and tries to answer them in your content.
5) Generate traffic
To get users to click on your affiliate links, you first need to drive them to your website or your social media channels. Here are three sources of traffic to consider:
- Paid traffic: through pay-per-click campaigns, such as Google Ads or social media ads.
- Organic traffic: you can optimize both your website and your YouTube channel to improve their positioning and attract visitors.
- Email marketing: investing in creating a good email database is very profitable in the long run.
6) Generate clicks
You have already gotten users to enter your channels, now you have to get them to click on your affiliate links. To do this, you will have to optimize these three aspects:
- The location of the links: they must be visible, but without falling into spam.
- The context in which they appear: framed coherently within quality content.
- Calls to action: again, we will have to balance visibility with avoiding spam.
7) Generate sales
The last step in generating revenue with affiliate marketing is to get visitors to the company's website to become customers. Logically, there are many aspects beyond your control here, but to maximize your chances, we recommend collaborating with quality companies and making a realistic presentation of their products on your channels, so that they match the expectations you have created in users.