Affiliate Marketing Part 1 – Introduction

How to do it as an author, I would like to apologize in the beginning and dampen any expectation. 😉

I have been using affiliate marketing myself for some time and have learned a lot during that time. However, I am not an absolute affiliate marketing professional and will, therefore, not be able to reveal all the secrets and not have the right answer for every possible situation.

But I will share my knowledge with you, and that will surely help many of you to earn money with affiliate programs.

Otherwise, the same motto applies as always: You never learn, and you should always test, test, test.

Okay, enough of the preliminary apology and there you go.

Introduction to Affiliate Marketing

For all those who have not to deal with affiliate marketing so far, I would like to explain the concept behind it first.

Basically, of course, companies want to bring their products and services to men or women. This is done in very different ways, and usually, you have to stir the advertising drum for it. After all, thousands of companies are trying to sell their products.

The Internet offers the opportunity to follow a purchase process very carefully and so has created a new form of advertising, the Affiliate Marketing.

By a website or blog person incorporating a specific product link into his pages, he can get a commission for it, if someone goes over this link in the shop and there, for example, buys something.

As an example, Amazon is called. There you can register as an affiliate for free and generate unique links to categories or individual products in the Amazon store. If I then build such a link with me, then I get a commission of a few per cent, if someone clicks on these links and then buy something on Amazon.

As an affiliate, you do not sell anything yourself, but rather convey buyers (or prospects, but more about that later) to the merchant.

Of course, this ensures that you can advertise hundreds of products without any financial risk and then collect commissions. But of course, the commissions are never as high as if you were selling the product yourself.

Commission Models

The best-known way to earn a commission is the “pay per sale”. So you build, e.g. a link to a product on Amazon in his website, and someone clicks on this link and then buy this product on Amazon. For example, I get 5% of the product price as a commission well written.

But in addition to the “pay per sale” there are a number of other compensation models:

Pay per Sale

As I said, a commission is paid here, if I mediate a customer on my links to the dealer. As a rule, a cookie ensures that I also receive the commission if this brokered customer buys the product from the merchant a little later. (usually 30-60 days after clicking on the affiliate link)

Pay per Click

Similar to Google AdSense, you get a commission for a click on an affiliate link. However, these clicks are usually quite low.

Pay per Lead

This form of payment is quite popular and is used, e.g. in insurance. I get a commission well written if someone contacts me via my affiliate link to the dealer or, e.g. the insurance. This form of the commission is used particularly frequently in consulting-intensive products since hardly anyone buys or orders something immediately.

Pay per SignUp

This fee is charged if, for example, someone has registered for an online game and has reached it via my affiliate link. Although the compensation is usually quite low, but also here it makes the crowd.

Pay per View

The classic billing per 1,000 banner ads is also available in affiliate marketing. However, this compensation model contradicts the advantages that characterize the affiliate marketing.

Lifetime

Some affiliate programs pay commissions not for a single period, but over a longer period. This is usually the case with traders who sell subscriptions. As long as the brokered customer has a subscription with the merchant (e.g. server rental), I get an amount X month by month. This can be very rewarding if the brokered customers stay with the merchant in the long term.

There are a few more obscure compensation models, but in reality, they hardly matter.

Market data

Affiliate marketing will take place in 2 ways.

Either one cooperates directly with the dealer, as is the case with Amazon. You sign up directly at Amazon and can then also generate the affiliate links and choose the advertising material.

Or one uses one of the numerous affiliate networks. These have acted as an intermediary between merchant and blog/website operator. They provide the technique for measuring sales, clicks, etc. and billing affiliates.

As a result, especially many small companies and retailers use affiliate networks and do not set up their own. The blog/website operator finds in this way hundreds of engaging affiliate providers and everything runs through an account. Of course, this is not negligible from the time factor, considering that otherwise, as with Amazon, you would have to sign up separately for each merchant and all use a different billing software, etc.

For whom is affiliate marketing suitable?

Of course, Affiliate Marketing is not the best choice for everyone.

There are many other ways to earn money online. This includes, for example, the sale of advertising space, paid content, Google AdSense and many other sources of revenue.

Affiliate marketing has a lot of potentials, and if you let go of the right amount of traffic to the correct affiliate links, then it’s possible to earn very well.

According to a recent study, at least in the US, 17% of the surveyed affiliates (450 took part in the survey) earn over $ 20,000 a month with their affiliate programs.

However, the vast majority of affiliates (46%) earn relatively little (between $ 0 and $ 500).

Again, it shows that affiliate marketing is not a self-runner. Only if you are really clean and continually testing and optimizing, you increase your income. But that’s why I’m writing this series of articles.

Affiliate Marketing in Blogs?

There are always statements that affiliate marketing works poorly in blogs. And if you install affiliate links and banners as lovelessly as you do with AdSense banners, then it usually works very poorly.

But there are also excellent methods for blogs to use affiliate marketing. I will shed some light on these methods in an article in this series.

Blogs and the appropriate software, such as WordPress, but not an obstacle to affiliate marketing. On the contrary. Many successful affiliates use WordPress. It depends, as with many things in life, just on how to use the technique and of course I’ll go into it in an article.

And blogs, in particular, offer a significant advantage over standard websites. You can build a reputation as a blogger. And if readers trust you, then product recommendations will, of course, be better received than on any website.

Why is affiliate marketing the future?

Affiliate marketing is a so-called performance-oriented marketing tool. The costs are linked to the returns, and it will never happen that you have prices, but the marketing tool has done nothing. So it is with traditional banner advertising now and then.

Especially in difficult economic times, companies look very carefully at how effective a marketing instrument is. And in the case of affiliate marketing, companies only pay when sales are made.

That’s why it’s so popular right now. The costs are calculable, and if you plan your partner program as a company well, then there is no surprise.

But also for blog and website operators, affiliate marketing is exciting. If you do it right then, you can make perfect money.

Therefore, I assume that the importance of affiliate marketing will continue to increase in the future. But many companies have to get used to the fact that marketing is no longer centrally in their hands. That’s hard for some companies.

Pros and Cons of Affiliate Marketing

To conclude the introduction to Affiliate Marketing, I would like to reiterate the pros and cons of affiliate marketing.

Benefits of Affiliate Marketing

  • There are no up-front costs for affiliates. So you do not have to build an expensive shop, buy products or similar.
  • You have a large selection of affiliate programs.
  • Affiliate links and banners are rapid and easy to install.
  • You can address a target group very precisely with affiliate links.
  • That’s because you have full control and only see what you want.
  • Affiliate marketing offers a lot of optimization potential. That means work, but in the ideal case, one can increase the earnings as much as with almost no other source of income.
  • Affiliate marketing is perfect for the long tail. Do you have a website or blog with hundreds or thousands of old articles? Perfect!

Disadvantages of Affiliate Marketing

  • Especially with the “pay per sale” one is very dependent on the optimization of the shop. You do not influence that. If the shop is terrible, then I can still provide so many potential customers, there will be short sales and thus commissions.
  • There are no income guarantees. Who wants more security, is better served with the sale of banner spaces because there is certain planning security.
  • A big issue is transparency. Since traders usually unlock the commissions manually, no one can tell if the trader is paying all sales correctly. There are sure to be black sheep again and again.
  • Specific affiliate programs are not without legal concerns. For example, promoting drugs or gambling can have legal consequences.

I hope this introduction has provided a comprehensive and understandable picture of affiliate marketing.

Of course, this is just an introduction. Of course, details about choosing affiliate programs, optimizing affiliate websites, generating traffic, and so on follow. So do not complain immediately. 😉

As always, I am pleased about suggestions and criticism.

The next few days will be followed by part 2 of the article series, which is about finding the right niche. Because even when choosing the topic, you can set the course for successful affiliate marketing.