If I offered you a slice of a $1.7 billion pie, would you want a piece?
Passive income — making money while you sleep — is the dream. Affiliate marketing is how many small businesses and individuals get started on this track. The concept of affiliate marketing is that you leverage your network or website to promote products from other companies who pay you to do so. For every item sold, the participating affiliate partner gets a percentage of the profit in a process called ‘revenue sharing.’
The most popular example of affiliate marketing is the Amazon Associates Program at Amazon.com. Since Amazon carries 480 million products, there is bound to be a product that falls under any niche that can be promoted on a website. It’s hard to believe that Amazon’s Associates Program began over 20 years ago in 1996. Many people today believe that affiliate marketing is an “old school” get-rich-quick scheme that has been played out. This isn’t the case.
“Email marketing is still king of the digital marketing and advertising space. However, given the great strides that the affiliate-marketing sector has taken over the past two decades, it could soon usurp email’s coveted position at the top of the heap,” reports Toby Nwazor in Entrepreneur.
According to an article published just last month in Marketing Week, the affiliate marketing industry is worth $1.7 billion and is expected to grow. That’s a lot of money to walk away from, whether you’re a business who is hoping to sell more products or an individual who is looking for additional revenue streams and ways to monetize a website.
Here we break down what affiliate marketing is not, what it is, and how any person or business can start their own successful affiliate program in 2018.
What Affiliate Marketing Is Not?
Affiliate marketing is not a get-rich-quick strategy. In fact, it’s the opposite. It’s a get-rich-slowly strategy, especially if you don’t already have the network or SEO power to support your sales goals. For most affiliate programs, once you sign up you have to sell a certain amount of product or at least have a minimum number of clicks on your promotional links to remain an active participant before the company drops you.
That said, monetizing your network or website only works if you have the basics in place: an active community, an engaged audience that trusts you, and a steady stream of reliable traffic. Otherwise, you’re setting yourself up for failure.
Have these in place before you take the plunge:
- Consider this: 1000 people visit your website monthly. 100 of those visitors click on your affiliate links and one person buys. That’s an average conversion rate of 1%. If you sell a fancy $250 blender with a commission rate of 4%, you earn just $10/month. More targeted traffic, more opportunity.
- Audience Engagement. You need to (1) have a marketing strategy and (2) make sure that your affiliate links factor into this strategy. Is your site capturing email addresses? Do you send regular email blasts? Are you regularly publishing top-notch content on your site and social networks?
- An Understanding of Search and Analytics. Say you’re pulling in 10,000 visitors a month to your site. In order to grow your affiliate business, you’re going to need to attract new traffic. This requires a deep understanding of your audience, SEO basics, and web analytics to track your success. Start by learning the biggest ranking factors for SEO and tailor your strategy accordingly.
Once you have these basics down, you’ll have all the ingredients for success — it’ll just depend on how effectively you use them and how consistent you are with managing, growing, and refining your program.
What Affiliate Marketing Is?
Affiliate Marketing is an excellent way to monetize your website’s existing and future search traffic. Individuals running home businesses, such as bloggers, consultants, entrepreneurs, can create a second stream of income without having to create a new product or service and at zero cost (zero risks) to join.
- While it is zero risk to join, you do have to be selective about which affiliate programs you align yourself with. Sign up for affiliate programs with reputable companies who will deliver quality products to your audience, so you don’t lose the trust of the network you’ve built.
- Some companies have been known to stiff affiliates on their payments, so if you’re putting forth a significant effort, you will want to do your research and be sure that the company is on the up and up.
“Always disclose your affiliate relationship,” writes home business advice columnist Randy Duermyer in The Balance, “If you write a review or use an in-text link as a recommendation, you want readers to know that may lead to compensation as well. This ensures you retain transparency and trust with your readers, but also, it’s required by the FTC’s endorsement rules.”
Affiliate Marketing is also an excellent way for businesses to sell more products and reach a wider audience. It’s not just the promoters who benefit from affiliate marketing. Passive income works both ways. The sellers are the ones keeping a majority of the profit. If you’re a small business owner considering affiliate marketing, you have more legwork to do on your end.
- Be selective about which companies and brands you allow to promote your product. Communicate to make sure that they are accurately representing you, your company, and your product.
- You will need to ensure that your chosen partners have the right traffic and the right audience for your niche. You’re going to need to agree to these up-front before taking the plunge.
“The best way to think about affiliate marketing is quality over quantity,” writes Steve Olenski in Forbes, who serves on the Editorial Board of the Journal of Digital & Social Media Marketing. “There are a lot of small websites that will promote your product, but the key is finding a small number of partners that will deliver conversions.”
5 Simple Tips for Affiliate Marketing Success
- Promote products you actually use. The best way to tell if the product is a great fit for your audience is to try it yourself. This will make endorsing the product naturally. You can sleep easy knowing that you’re recommending a quality item from a reliable company to your audience.
- Take search into consideration. Google’s algorithm experiences over 500 updates a year. The tried and true SEO tactic of link building has experienced changes in how links are weighted and factored into search results. How Google defines the ‘quality’ of links is still a gray area. Google doesn’t count affiliate links editorially, and you need to be careful about how you use them. Ensure that the products you’re recommending are relevant to the niche and existing content of your website. Take care to review and avoid common black hat SEO practices as well.
- Use multiple platforms to promote affiliate links. Beyond flashy banner ads, incorporate affiliate links into your blog posts where they fit naturally. Consistently publish helpful, relevant content for your audience. This will keep your current visitors coming back and will build on your search traffic for the future. Leverage the links in your email marketing efforts as well. Include links and product promotions on social media, such as Facebook and Instagram — the two hottest channels for eCommerce right now.
- Leverage PPC, but don’t rely on it. Pay-per-click will give you results fast, but it shouldn’t be used as a crutch for lagging traffic. As we mentioned earlier, it’s important to have the traffic in place before you sign up for affiliate programs — and you should constantly be striving to increase it. First, PPC is expensive and will significantly cut into your ROI. Additionally, PPC has a lower click-through-rate than natural links or quality content. Using time-tested SEO strategies will always yield better, longer-lasting, and more lucrative results than PPC.
- Get comfortable with analytics. Carefully monitor the success of your affiliate programs. Follow your visitors through your website’s sales funnel, so you have an understanding of where your clicks and conversions are coming from, what marketing tactics are successful, and what strategies need to be adjusted. If you’re using banner ads, remember that less is more. You may be seeing a lag in results because your audience is overwhelmed visually.
By following these guidelines and taking it upon yourself to have traffic, search, and marketing strategies in place before you launch your affiliate program, you will see results if you choose to participate in affiliate marketing in 2018.