5 Important Facts of Affiliate Marketing 2020

affiliate marketing

Affiliate marketing is a sort of performance-based marketing in which a business rewards one or more affiliates for each visitor or customer brought by the affiliate’s own marketing endeavors. 

Affiliate marketing is everybody’s dream. You just have to promote a product or service on your website or social media channels, and every time a customer makes a purchase, you get a commission. To put things simply, minimum effort, maximum revenue. Or, at least that’s what all the guru’s and get-rich-fast programs mentors want you to believe. Theory and practice are two separate things, so you shouldn’t expect to duck into a pool of gold coins like Scrooge McDuck.

Structure of Affiliate Marketing: 

This industry has 4 important and basic players: 

• The merchant (also known as ‘retailer’ or ‘brand’) 

• The network (that contains offers for the affiliate to choose from and also takes care of the payments)

• The publisher (also known as ‘the affiliate’)

• The customer

The market has grown in complexity, resulting in the emergence of a secondary tier of players, including affiliate management agencies, super-affiliates, and specialized third party vendors.

Affiliate marketing overlaps with other Internet marketing methods to some degree, because affiliates often use regular advertising methods. Those methods include organic search engine optimization (SEO), paid search engine marketing (PPC – Pay per Click), e-mail marketing, content marketing, and (in some sense) display advertising. On the other hand, affiliates sometimes use less orthodox techniques, such as publishing reviews of products or services offered by a partner.

Affiliate marketing is commonly confused with referral marketing, as both forms of marketing use third parties to drive sales to the retailer. The two forms of marketing are differentiated, however, in how they drive sales, where affiliate marketing relies purely on financial motivations, while referral marketing relies more on trust and personal relationships.

Affiliate marketing is frequently overlooked by advertisers. While search engines, e-mail, and web site syndication capture much of the attention of online retailers, affiliate marketing carries a much lower profile. Still, affiliates continue to play a significant role in e-retailers’ marketing strategies.

affiliate marketing

Advantages of Affiliate Marketing:

1. Affiliate marketing is performance-based:

The main advantage of having an affiliate program is that it is entirely performance-based. Because affiliates are only paid a commission once the desired action has taken place, they’re more motivated to drive the conversion you’re looking for. This mitigates any efforts that drive traffic with little to no value to your company while also ensuring that you get what you pay for.

2. It helps broaden your audience

Affiliates can be found in every market and product category that exists today. Whether you’re looking to break into the retail industry or for something more niche like handcrafted vintage toys, there will always be relevant websites to align with. The great news is that many of these affiliates will already have an established visitor base. These partnerships grant the opportunity to expand out into new markets that you might not otherwise have had the bandwidth to explore or to further saturate your existing target markets, giving your brand a much stronger online presence. Think of these partners as an extension of your current marketing or sales team.

3. Helps boasting reputation:

By partnering with trusted bloggers and reputable websites, you can further the reputation of your brand and its products. These partners will champion your products and, in our opinion, will further solidify consumer confidence in your product or service. While in the research phase of a purchase, consumers are more likely to trust a 3rd party’s opinion over content produced directly from the site selling this product. Consumers also have a certain level of trust in websites they frequent for product recommendations.

4. Cost effective

For many of the reasons listed above, affiliate marketing can be extremely cost effective. If you’re only paying commissions when the desired conversion occurs, you’re not throwing away ad dollars on placements that have no proven value. Furthermore, recruiting affiliates in new markets is an easy way to branch out into that market without the overhead cost of creating an entire marketing campaign, mitigating the need to sink money into an unproven market for testing.

Disadvantages of Affiliate Marketing:

affiliate marketing

1. You Don’t Control Affiliate Marketing Programs

Logically, you don’t own affiliate marketing programs, so you just have to use existing ones.

In this way, you are entirely dependent on your merchant’s rules and respect their conditions. A program that may look appealing at times, later can become less and less competitive, but you won’t be able to adjust the terms yourself, all you can do is to communicate the need for further adjustments regarding discounts on the given products, etc.

And then wait for the merchant to implement changes.

2. You Don’t Control Your Competition

Competition varies depending on the industry. As there are strong benefits of joining affiliate business, such as low costs of investments, high-profit opportunities and no expertise needed, a lot of people try their hand at affiliate marketing. Practically anyone can join and be successful.

Highly talented affiliate marketers from the same niche make up a fierce competition, which is an obvious danger to your performance and a significant disadvantage.

However, this shouldn’t scare you. Remember that the obligatory factors of success are hard work and persistence.

3. You Can’t Establish Your Customer Base

The truth is, once a referral is made, a repeating customer won’t ever purchase from you again.

Of course, he will do it directly to the affiliate vendor to repeat the purchase. That’s the nature of affiliate business. You commit to driving new leads again and again.Unless you engage into marketing affiliate programs that provide recurring commission.

Some of Sass affiliate marketing programs offer recurring licenses and because of this, fixed recurring commissions. To give you an example of such an approach, take a look at the Live Chat Affiliate Program.

You will find out that the 20% commission is paid monthly or yearly as long as the customer stays with the company. This makes the cooperation fair and also easy to calculate. And the best part is that statistically, the customer stays with Live Chat for about 2,5 years. Whoa!!!

4. No Guarantee of Revenue

Pay-per-performance can be a tremendous opportunity as well as a significant risk. No one promises that working as an affiliate marketer will be easy and that you are going to earn the expected revenue right away. It’s a challenge you have to face and put all your efforts into maximizing the opportunity, but all in all, it’s difficult to predict how much money you will make on it in the end.

5. Freelance Jobs are Not for Everyone

It takes a particular personality to feel comfortable with such a working style. In some circumstances, it can result in feeling blue like loneliness or stagnation. But there are ways to minimize and overcome such a mental condition. Just don’t close yourself away from people at your home. Find your working space somewhere outside and go there every day.

I bet that there are lots of coffee shops designed especially for remote work in your city, so just look around and discover one that suits you best.

Read More:

Important Facts about Micro-Moments Marketing 2020



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