What is Affiliate Marketing?
Affiliate marketing is an online business model and advertising method where a third-party publisher (the affiliate) partners with a company and gets paid by generating traffic to said companies’ services or products.
This model can become a profitable stream of revenue for someone who takes part in it. As a result, it’s a growing space, and that’s a trend that’s projected to persist. Statista reports that US affiliate marketing spending is due to reach $8.2 billion by 2022, up from the $5.4 billion recorded in 2017.
As an affiliate, you’ll receive a commission for every sale made through your recommendation. Each referral that converts means money in the pocket for you as the affiliate marketer. According to ROI Collective, “Affiliates are usually paid per an action (CPA) or per lead (CPL) per their agreement with the company.” However, some affiliate programs will also reward the publisher for leads such as website clicks, downloads of an app or free-trial signups.
For example, an advertiser could set up a collaboration with an affiliate who owns a blog. The blog owners will then review specific products and provide trackable referral links that take consumers to particular promotions and products. Commission rates vary based on the company and what they offer. On the lower end of the scale, you’ll see 5% of the sale, and others will offer as much as 50%. Other affiliate programs will provide a flat rate over a percentage.
Thus, affiliate marketing is an excellent way to monetize views and engagement from existing followers on your website, blog, YouTube channel, app, podcast or other social media platforms.
Business2community offers this breakdown of the three types of affiliate marketing:
- Pay-per-sale: In this program, the merchant pays an affiliate when the affiliate sends a customer who makes a purchase. Some merchants pay the affiliate a fixed rate per sale, while others, like Amazon, pay a percentage of the sale.
- Pay-per-click: In this arrangement, the affiliate is paid based on how many visitors arrive at the merchant‘s site via the affiliate link. Regardless of whether visitors make a purchase, the affiliate gets paid.
- Pay-per-lead: This type of program pays affiliates based on the number of visitors to the merchant‘s site who sign up as leads or fill out the requested information on the website.
According to Shopify, affiliate programs are usually free to join, so there are no high startup costs. “Done well, this performance-based opportunity can go from side hustle to profitable online business idea by netting you a healthy income.”
For affiliates, taking part in an associate marketing program allows them to become involved in e–commerce without establishing or maintaining their own store. It also provides the opportunity to monetize a website, blog or social media and earn a commission.
For advertisers, affiliate programs have proven to be an effective way to target high-quality leads with an improved likelihood of converting into paying customers.
How to become an affiliate marketer
Choose a niche
When starting as an affiliate, the first step is choosing a niche. By conducting thorough research before picking an area of focus, you ensure you’re selecting the right one for you. It should be something you have experience with and are passionate about. As an affiliate, authenticity is your greatest asset. You must come across as having authority in the space and be someone people trust when it comes to the resources and products you recommend. If you want your audience to take you seriously, you also need to set the bar high for what type of businesses you’ll work with and promote.
An example of someone with authority within the health and wellness niche is Katie Wells, also known as Wellness Mama. Katie runs a blog, an e-commerce store, a podcast, sends weekly newsletters and is active on all major social platforms. Her audience views her as a credible source for all things health as she’s built up a platform within this field over several years. Additionally, in her weekly email newsletters, there are usually several affiliate links included.
According to Elise Dopson, founder of Sprocker Lovers, “The niche you choose for your affiliate site guides how much time/effort you’ll need to put into building it to a point where you begin to see SEO results. For example, SERPs for software, marketing, and healthcare are all dominated by huge blogging sites with even bigger marketing budgets. The secret is finding untapped areas where competition isn’t as fierce—and getting in there before other people recognize it.”
Website creation
Do you need your own website to become an affiliate marketer? While not technically necessary, there is a long-term aspect to this that’s worth considering. When creating an affiliate website, you’re essentially building online real estate that will grow in value over time. Later on, you may decide you’d like to sell your affiliate site, leaving you with significant profit versus if you did not invest time and effort into building a site.
According to FE International’s CEO Thomas Smale, blogs and content websites are popular among online business owners, and for a good reason. He says, “They’re relatively easy business models to get started, and, when done properly, can be very profitable. The affiliate model is one of the best ways to monetize a content site, but many key drivers determine an affiliate business’ value.” If you have an affiliate website, or you’re considering creating one, it can be a good idea to look into Affiliate Website Valuation: What’s Your Affiliate Site Worth?
Author Andrew Williams covers topics such as WordPress, SEO and affiliate marketing. According to Williams, one of your first steps as an affiliate, after deciding on your niche, should be to develop a domain name and buy that domain through a registrar. Afterward, you will go on to set it up to work with a web host. He recommends setting up a WordPress site and including plugins and tools like Google Analytics, adding the Yoast SEO plugin to make your site search engine ready and including social sharing buttons, amongst other things.
Choose your platform
As an affiliate marketer, you need to choose the platform you’ll be using to build your audience.
According to Shopify, the following three platforms are most relevant.
- Niche topic and review sites – These sites review products for a specific audience or compare a line of products against their competitors. This method requires you to create content related to the review space and post regularly to draw in an audience.
- Digital content - Digital content creators include bloggers, YouTubers, or social media influencers. They create niche content that resonates with a target audience. The goal is to introduce niche products their audience will enjoy organically. This increases the chances they’ll buy, and you’ll earn an affiliate commission.
- Courses, events, workshops - If you’re an educator, you can integrate affiliate partnership offers into your events.
No matter which route you take, authenticity and audience building are the two most crucial elements for affiliate marketing.
Spencer Haws from Niche Pursuits points out that there are advantages to building a more targeted micro niche site. That way, you can cover a topic more in-depth and send lots of authority signals to Google that you should be ranking well for the terms. “If all you write about is tents, you will likely have more topical authority for that particular subject than if you were writing more broadly just about general ‘camping’ topics.”
SEO and Keyword Research
Profitable niches can be competitive. The key is to strike a balance between earning potential and competition. To determine the market and who you’re up against, target specific keywords and run them through an SEO tool like Ahrefs. By using this tool, you can audit competing sites, vet domains and check their backlink profile. It’s an excellent way to discover strong keywords you’d like to target and rank for. For example, let’s say you’re looking to get into the gaming niche. If you run a keyword like “video games” through Ahref’s keyword explorer, this dashboard will appear, and you’ll be able to view metrics such as search volume per month in the US and worldwide. You’ll also get an estimate of how many backlinks you’re likely to need to rank in the top ten for this specific keyword.
Once you’ve determined your target keywords, start incorporating them into your content.
Several websites can help in optimizing your performance. These include free options like Google Analytics or Google Keyword Planner or paid SEO tools such as Ahrefs.
Do not overlook SEO, as it’s an integral part of succeeding with affiliate marketing. You can find out more on The Importance of SEO and the 8 Best Practices that Have Stood the Test of Time.
Once you’ve started incorporating keywords, you should track metrics and optimize as you go along. This way, you’ll be able to improve keywords and see what works and tweaks you can make to your content to drive more traffic.
Conversion rate optimization
As you focus on getting people to your site, there is another factor that you should consider: conversion rate. A conversion is when a visitor on your site takes the desired action you want them to. Such as signing up for a service, complete a web form or buy a product. As an affiliate, you are looking to drive people to your affiliate links, have them click on them and hopefully convert on the other end of those links.
Conversion rate optimization (CRO) is the process of improving your website and content to increase conversions. According to VWO, conversion rate optimization helps you understand your website’s usability better while giving customer behavior insights and tips on making your UX better to meet your goals.
You’ll want tools available to provide you with vital data like the number of leads generated, click-through rate (CTR) and conversions. Google Analytics is a tool that can be helpful when examining metrics like the number of new users versus existing followers. VWO also offers a free trial for their CRO tool. CRO is by no means a stagnant strategy. It will be an ongoing process of learning what content works and continuously optimizing to increase conversions.
Shopify also advises that as your content volume increases and you post more, you can use affiliate marketing tools like social listening tools, website analytics, and social media insights to discover who your audience is and what they like.
Creating content
A well-designed website is crucial to increasing website traffic. But the design must go hand in hand with thoughtfully created content. The content is what draws your visitors in and converts them into potential leads. So it would help if you aimed to supply users with engaging, helpful and relevant content. That’s what will differentiate between visitors staying on your site and taking the desired actions (converting) or leaving without doing anything.
Amanda Walgrove from Taboola Blog says “By launching affiliate marketing campaigns across high-quality blogs and publications, brands will be well-positioned to drive traffic back to their e-commerce pages and engage niche communities of customers who are ready to discover new products.”
Note that it’s essential to protect your affiliate marketing links as each of your affiliate links is connected to you as the one promoting the service or product. The brand you’re working for can then reward you for the conversion made. According to Ahrefs, an affiliate link usually looks something like this:
When someone clicks that link, a cookie gets stored on their device. For example, this affiliate cookie does the following:
- It helps the merchant attribute the sale back to the right person.
- It (usually) holds an expiration date, so you get paid even if the buyer delays their purchase.
Add these links seamlessly into your content. For example, if you’re writing product reviews, your content should be honest. When providing product reviews, you need to discuss the downsides and the positives of the products openly. Honesty will prevent you from coming across as biased or disingenuous by overly promoting something. It would be best if you had your audience connect with your content and your responsibility is to promote products or services that your users actually need. Credibility is a great asset as an affiliate and is something you’ll need to build up over time. In time, as a credible and established source of information, you’ll see the amount of traffic to your site, and the sales you make are more likely to increase.
Note that the Federal Trade Commission requires affiliates to disclose to your followers that your post contains affiliate links.
Increase reach through social media and email marketing
As an affiliate, you must utilize the platform where there seems to be the most momentum and growth potential for you.
- YouTube – the second largest search engine globally, is a host to a multitude of affiliate marketing content. It’s an ideal place to earn an affiliate commission if you master the visual format of the video-based platform. When you see a YouTube review directing you to a link in the description, the chances are that it is an affiliate link. To build an audience on YouTube, you’ll need to produce great content and leverage keywords.
This drone review is the top-ranking video for “best drones in 2021,” and the description contains many Amazon Associates affiliate links.
- Instagram – another great option to promote affiliate offers. According to Affilorama “Some Instagram marketers make the top 5 of leaderboards, boast over 1 million followers, and see high engagement when they promote their affiliate offers.” Instagram has seen massive growth over the last few years, and video-based platforms like Tik Tok are also growing exponentially to cater to e-commerce marketers. According to Statista, “In 2023, the photo-sharing site is projected to reach 120.3 million monthly active users in the United States, up from 107.2 million users in 2019. “Instagram recently announced the launch of its very own affiliate marketing program to provide more revenue options for content creators. Currently, in the early stages of testing, the new “native affiliate tool” will allow creators to find new products available for purchase in the app, and then share with their followers and earn a commission for any purchase they drive. Instagram says that it will test the option “with a small group of US-based creators and businesses” first before making it available to a wider range of creators.
- Email – is a valuable tool to drive traffic to your site while simultaneously allowing you to communicate directly with your audience. You can also include affiliate links in your email copy and drive traffic to new content on your site. The key to email marketing is to refine your copywriting skills, provide your audience with as much value as possible and formulate clear CTA’s.
Learn more about the 13 Email Marketing Best Practices to Embrace.
There are also automation marketing tools available to help boost your marketing campaigns. Choosing the right one for your needs can help you scale and streamline your business and help you nurture leads. This article covers the 59+ BEST Affiliate Marketing Tools.
The best affiliate programs for beginners
As an affiliate, you aim to collaborate with notable brands and promote reliable, top–quality products. According to Buildapreneur, “The best affiliate programs for beginners (or for anybody for that matter) are the ones that offer a wide range of product price points. They have products that range from a couple of bucks to expensive products that are hundreds or even thousands of dollars.”
Ahrefs divides affiliate programs into three tiers:
- High-paying, low-volume affiliate programs – affiliate programs for niche products with high payouts. For example, ConvertKit‘s affiliate program pays almost $700 per month if you send just 80 customers their way. However, as they sell CRM software for small business owners, there‘s a limited pool of buyers.
- Low-paying, high-volume affiliate programs – programs for products with low payouts but mass appeal. “For example, take PS4 games. Many people play PS4, but the average cost of a game is only around $50, and affiliate commissions are usually in the single digits. This means you‘ll earn $2–3 per sale if you‘re lucky.“
The good thing about these types of programs is that they offer many products to sell. Amazon‘s affiliate program, for example – where you can make up to 10% commissions on almost anything Amazon sells. “The other good thing is that you often get commissions on the entire value of the purchase rather than just the product you recommended. To make these types of affiliate programs pay, you‘ll need lots of traffic.”
- High-paying, high-volume affiliate programs – programs that include products with mass appeal and high commissions. For example, credit cards. This type of program will usually attract affiliates with more experience in the field and is not as well suited for beginners.
How do you choose the right affiliate program for you?
When you’re brainstorming products and affiliate programs, keep in mind that the ones you choose should align with your interest and the audience you’re aiming to reach. Below is a list of recommended affiliate marketplace platforms well suited for beginners:
Another option is looking into products and services that you use to see if they offer affiliate programs. Big companies like Amazon have the Amazon Associates Program. The e-commerce platform Shopify offers its Shopify Affiliate Program. Another option is Wix, which gives affiliates $100 for every conversion. Tripadvisor offers at least 50% of the commission they receive from their hotel booking partners. As an affiliate, you will link to specific hotels on Tripadvisor, and when a user comes to their site via your trackable affiliate link – you get paid. Tripadvisor states on their affiliate’s page that “You still get paid when users click out to our hotel booking partners, regardless of whether or not they book.”
You can also reach out directly to brands within your niche and find out if they have affiliate marketing programs. Of course, some brands won’t have this setup but might still offer you a once–off promotional code you can share with your audience.
True Classics is an e-commerce store selling t-shirts and other apparel. They offer their affiliates a 15% commission on every order.
Amazon’s affiliate marketing program
One affiliate program that’s worth highlighting is Amazon Associates. This program is an excellent place to start for those who are beginners in affiliate marketing. The Associate’s Program can be a simple way of monetizing your website. You sign up, receive approval, and go on to place Amazon’s affiliate links on your site. Once a visitor clicks on your affiliate link and makes a purchase, you will earn a commission from the referral. The Associate’s Program Commission Income Statement further describes how you receive a commission for qualifying purchases and what limitations might apply.
It’s free to join, and according to Amazon’s operating agreement, “the Amazon Associates Program permits you to monetize your website, social media user-generated content, or online software application.”
Read Amazon’s complete associate’s program policy to understand how this works in detail.
Final thoughts
Establishing oneself as an affiliate marketer may take some time. But once you harness the basic best practices and fundamentals within this field of marketing, you can grow a passive income stream that could eventually generate a sizeable income.