What is affiliate marketing?
Do you know what affiliate marketing is? We are living in an era of digitization where affiliate marketing is a hot topic. It’s been many years, and the world is still digging this goldmine. Many people around us always search for online sources to promote business and earn money. Now internet marketing has ended this search, and we have an effective way to make and promote businesses. According to Statista, by the end of 2022, freelancing will reach up to $8.2 billion. We know it’s a significant figure. But we should keep ourselves aware of how to use this. But we can’t convert it into a passive income source without knowing it properly. So, let’s learn more about it:
What is affiliate marketing?
Affiliate marketing is an advanced method of promotion. However, in this, we promote the products or services of other people against the commission. However, the circle of the affiliate marketing revolves around the set amount of commission. After selling those products, the affiliate marketer gets the pre-decided percentage as a commission. By looking at these stats, you will know how this thing is trending.
- In the USA, 82%-84% of companies are using affiliate marketing to promote their products and services.
- As a result of these efforts, we saw a surge of 10% in the USA’s online spending. Due to this surge, the total figure reached up to $6.8 billion in 2020.
- Moreover, according to the official Google figures, they saw a surge of 200% in the trend. But this report is presenting the statistics from 2015-2020.
- AM navigator stated that around 40% of the marketing professionals take it as a top digital skill.
With the help of these promising stats, it is evident this side hustle can turn into a money earning machine. However, it is a fantastic earning opportunity for bloggers and marketers.
Parties involved in affiliate marketing:
According to Wikipedia, there are four parties in the process. But mainly, there are three different parties involved in affiliate marketing.
- Affiliate: The word affiliate means publisher. However, this party can range from a single individual to the entire company. As a result of affiliate marketing, these companies earn thousands of dollars in terms of commission.
- Consumer: The customer makes the affiliate system go in circles and circles. Without consumers, affiliates can’t earn a commission because they buy products and play a vital role in running this circle.
- Network: The network work as a medium between affiliate and consumer. If we look at the famous examples of networks, then “Blogger.com” is one of those. These networks introduce affiliate programs to enhance their sales against the specific ratio of commission.
After learning what is affiliate marketing now, we move to the next step. If you want to become a marketer, then know what affiliate marketing is and how it works.
Popular terms about affiliate marketing:
You can know the real meaning and concept of affiliate marketing without knowing the terminologies. Like many other niches, there are specific words that are associated with this. So, let’s learn what those words are.
| Affiliates | Publishers who use affiliate programs links to promote commodities |
| Affiliate marketplace | These are networks or central databases for affiliate programs like wealthy affiliate |
| Affiliate software | Software that companies use to create affiliate links and programs |
| Affiliate links | Unique link generated by networks to track the progress of promotion |
| Affiliate ID | It is a bit similar to the affiliate links |
| Payment mode | Different affiliate networks offer different ways to withdraw money |
| 2-tier affiliate program | In this method, you recommend others to join an affiliate program, and in return, you receive a commission if a sub-affiliate sale something |
| Custom affiliate income | Many companies offer custom affiliate income when they make the most sales |
So, if you want to be a real affiliate marketer, then understand and learn these terms. There are many types of platforms that are helping to earn money through this method. For instance, you can use Amazon associates, hosting, or e-com sites to earn money. If you have a deep understanding, you can perform well on the steep ground of affiliate marketing.
What is the history of affiliate marketing
It is a common opinion that Amazon associates were the first company who introduced the concept of affiliate marketing. But it’s not like this, and we need to know where this concept originated. So, William J. Tobin was the person who invented the idea. We also know him as the world’s first internet marketer. Let’s learn more about the founders of internet marketing.
William J. Tobin: 1989
William J. Tobin invented affiliate marketing in 1989. The idea came into his mind when he launched an affiliate program for his company, PC flower & Gifts. As a result of this successful campaign, the company earned $6 million in 1993. However, due to immense success William patent this concept in 1996.
CDNOW: 1994
A company named CDNOW launched a concept that was the copy of William’s vision. CDNOW launched this concept with the name of BuyWeb in 1994. However, this affiliate program was working on the idea where music sites could review the albums. Later they could refer those albums for purchase against a certain amount of commission.
Amazon Associates: 1996
Amazon Associate entered the market with a bang. It was in 1996 when Amazon launched a program to gain global interest. In this program, bloggers add an affiliate link to their sites or blogs. As a result, they get a commission if someone buys the products using their unique link. Due to substantial positive response now, Amazon is at the top of the list.
Commission junction & Click Bank: 1998
Commission junction and Click Bank were the real game-changer who came into this field in 1998. The students founded commission junction at the University of California. On the other hand, Tim and Eileen Barber were behind the Click Bank and designed an affiliate network. Both of these platforms work on the concept where merchants and affiliates promote their businesses and products. However, it helped them to find suitable affiliate partners for their brand.
The Click Bank and Commission junction’s main aim is to give an equal chance to the small retailers. As a result of this effort, small retailers can win the marketers. Now, these networks have become one of the largest promotional sites.
US federal trade commission rules and regulation: 2000
With time affiliate program proved a massive hit. So, it was necessary to regularize these programs. In 2000 FTC came with the guidelines to regulate the online marketing industry. However, with these regulations, the publisher must add a disclaimer in the content if they add a link. In this way, they can keep the customer well aware that they are buying through an affiliate link.
What are the famous types of internet marketing?
What is affiliate marketing? We have known the answer to this question in depth. But the topic is vast, and many other things are vital to know. So, we can’t head further without discussing different types of affiliate marketing. If we look at the stats, then 81%-84% of bloggers are earning money using affiliate marketing. But there are other ways to generate traffic and make money.
Unattached affiliate marketing:
Unattached affiliate marketing the name is speaking itself the meaning of this concept. In this type of internet marketing, the publisher doesn’t directly connect with the products or services they are selling. However, the publisher solely relies on the Google ads, PPC, and all other paid modes in this affiliate link. It means that there is no need to build the authority of the blog before adding affiliate links. But it has a drawback that you only rely on the ads; that could be expensive. If you get enough conversion rate, then you are lucky because it’s not everyone’s cup of tea.
Related affiliate marketing:
Related affiliate marketing is a type in which bloggers link the products that they don’t use. In this type, bloggers put an ad or link on a website/blog where they already have earned authority. However, bloggers run the affiliate links in the form of sidebar ads or banners. For instance, if you post recipes on your blog. But you are adding the link of utensils that you don’t use. In simple words, it is related to marketing, and many bloggers do this against a certain percentage of commission. But this type of affiliate marketing isn’t suitable and has the risk of losing trust. So, it’s better to choose the products before suggesting them to others wisely.
Involved affiliate marketing:
As the name shows, it is a type of affiliate marketing in which the publisher fully involves the process. In involved marketing, the publisher tries the products before starting the promotions. The best way to promote this type of content is to add it casually to the content. It means that it’s not recommended to add it as a side ad or in the form of banners. Thus, the visitors buy recommended products because they trust your suggestions. So, try to choose the products wisely and after proper research.
The payment model of the concept:
Generally, an affiliate marketer earns when a customer clicks and buys through an assigned affiliate link. Moreover, there are following other famous affiliate marketing payment models.
- PPS: It is pay per sale where the affiliate receives money against each sale. However, it is the most common and applicable method.
- PPL: It is pay per lead, and the affiliate receives money against each generated information. However, it may be about online form submission, trial creation, or free demo signup.
- PPC: It is pay per click, and the affiliate receives a fee for all traffic or clicks. But it is the least suitable method.
Most of the networks use the pay per sale method in which the affiliate receives a fee if he sells anything. After having the whole discussion, it’s vital to mention that it is 100% free to start. Moreover, you can link your sites with other platforms like YouTube, Facebook, and Instagram to grow traffic. So, you only need the right areas to put your energies and earn money using online means.