What Is Affiliate Marketing?

 

Affiliate Marketing: How to Turn Product Recommendations Into Passive Income

In today’s hyper-digitalised world, if you aspire to start a passive income stream from your online activity to complement your monthly paycheck or simply wonder how you could make money online without really worrying about developing a product of your own, you are not alone. One of the most efficient ways to do this is to collaborate with businesses to help them reach a wider customer base and start an income source in the process. Crucially, this collaboration is irrespective of whether or not you have your own business.

If you aren’t participating in affiliate marketing, it’s time to consider taking advantage of this lucrative revenue stream.

 

 

What is affiliate marketing?

Affiliate marketing is the process of making money online every time a customer purchases a product based on your recommendation. This is an online sales tactic that allows you – ‘the affiliate’ – to earn a commission and helps the product owner increase sales. At the same time, it makes it possible for affiliates to earn money on product sales without creating products of their own.

Simply put, affiliate marketing involves referring a product or service by sharing it on a blog, social media platforms, or website. The affiliate earns a commission each time someone makes a purchase through the unique link or code associated with their recommendation. Do it right, and this performance-based opportunity can be a source of additional income or help diversify the revenue streams of an existing business.

How is affiliate marketing different from influencer marketing?

If an affiliate is redirecting customer traffic to a merchant’s website, doesn’t that qualify as influencer marketing? While there is indeed a natural overlap between affiliate marketing and influencer marketing, they are not necessarily the same. It is important to understand the differences between the two and how each of them works in order to maximise the revenue-generating opportunities offered by both.

Influencer marketing is a collaboration between brands and individuals who already have a sizable audience (or influencers), where the individuals are paid to endorse or promote the brand or its products/ services. It is a marketing strategy by which brands reach their target audience and try to ‘influence’ their purchasing behaviour.

With affiliate marketing, brands incentivise affiliates to promote their products/ services online by offering a commission for every sale they cause. i.e. the affiliate receives a commission if a visitor purchases the product from a link (or code) unique to the affiliate, published on their website or channel.

In influencer marketing, the number of followers, social media impressions, and interactions measure the ‘engagement’ that an influencer could generate. This is a key factor that determines the amount paid to the influencer based on their quote, whether or not the influencer activity actually leads to sales. Typically, influencers are paid a one-time fee, or a per post/content fee, for the activity.

On the other hand, in affiliate marketing, site traffic, sales volume, and average order value are the bases on which the affiliate gets paid a commission. This may be a pre-decided percentage of the product sales effected by them or a flat-fee commission. This means, affiliates get paid on achieving a business outcome for the brand, whereas influencers are paid for the work they put in.

While these distinctions hold true, the similarity between successful influencers and affiliates is that both produce engaging content that resonates with their audience and instils a sense of trust. Therefore there is often an overlap between the two.

How does affiliate marketing work?

To participate in an affiliate marketing program, you’ll need to:

1. Find and join an affiliate program
2. Choose which offers to promote
3. Obtain a unique affiliate link or code for each offer
4. Share those links or codes on your blog, social media platforms, YouTube channel or website.

And you collect a commission anytime someone uses your links or codes to make a purchase. Commission rates vary dramatically, depending on the company and the affiliate program. At the low end, you’ll earn about 5% of the sale but, with some arrangements, you can earn as much as 25%. In some cases,  affiliate marketing programs provide a flat fee per sale instead of a percentage.

Benefits of the affiliate marketing model

Affiliate marketing offers several benefits to you as an affiliate, one of which is its ease. Your side of the equation simply involves handling a part of the “marketing” side of the product’s success— i.e. educating customers. You don’t have to worry about the harder tasks, like developing, supporting, or fulfilling the offer.

Affiliate marketing is low risk. Since there’s no cost to join affiliate programs, you can start making money with an established affiliate product or service without any upfront investment. Also, affiliate marketing can generate a relatively passive income through commission. Though initially, you’ll have to invest time creating traffic sources, your affiliate links can continue to deliver a steady paycheck.

Finally, successful affiliate marketing offers the potential to significantly scale your earnings without hiring extra help. You can innovate to reach out to a wider audience while your existing work continues to generate revenue in the background.

How to find affiliate programs?

If you’re wondering how to get your feet wet in affiliate marketing, you’ve got a few options. Not every company offers affiliate programs—some businesses manage their own affiliate programs while others use an affiliate network.

An easy way to find affiliate programs is to visit an affiliate marketplace or platform. Browse your niche to find top-performing affiliate platforms. Here are some of the most popular ones in India:

• AffiliateFuture
• Admitad
• ClickBank
• vCommission
• Resellerclub
• ShareASale

Another option is to visit the websites of the products and services you use and like, to see if they have an affiliate program. Brands like Juicy Chemistry, selling organic skincare products have their own affiliate programs up and running. So if you are a user of their products or knowledgeable about skincare in general, this affiliate opportunity might be right up your alley.

You also can take a more direct approach. Reach out to the owner of a great product you come across and see if they offer an affiliate marketing program. If they don’t, they might be happy to set up an arrangement with you, such as presenting you with a unique coupon code to share with your followers. The best deals often are found when you’re the first to inquire and have a relevant distribution channel, such as approaching the seller of a new fitness product if you’re a health and wellness blogger.

Affiliate marketing programs will have terms of service you need to follow, so read the fine print carefully. For example, your link usually will have a cookie with a specified timeframe, and some programs don’t allow you to purchase pay-per-click ads using the product or company’s name.

Choosing your first affiliate program

As you brainstorm products or browse through affiliate platforms, the most important criteria to keep in mind is that the product/service should be aligned with your audience, or the audience you hope to build. Ask yourself, is it something your target audience would find valuable? Does it fit with your area of expertise?

A food blogger probably wouldn’t promote beauty products, for example. A wide range of other products would make more sense, such as cookware, meal kits, gourmet ingredients, or even aprons.

Also, make sure the product or service you’re promoting is a fit for the platform you’re promoting it on. For example, home decor and clothing are well suited to image-heavy platforms like Instagram (@CinematicPyschologhy).

However, if you’re promoting purchases that need a more in-depth assessment, like software, your review may convert better on longer-form content platforms, like a blog or YouTube.

Which platforms to use for affiliate marketing?

There are several platforms to earn money through affiliate marketing, some of them are listed below:

• Your own website or blog
• Instagram
• YouTube
• Twitter
• Facebook
• LinkedIn
• Reddit
• Email

While any platform could be used for sharing your affiliate marketing links or codes, it’s useful to determine which platforms are the easiest to reach your largest audience with uncompromised trust, and where they are most likely to buy the products you are marketing.

For example, if you write well and have an audience seeking newsletters, email and your own blog may work out the best for you. Business products may be the easiest to market on Linkedin. If you have a large number of followers on Instagram, that should be the best place to begin. However, there’s no reason to limit yourself to any single platform.

Tips to promote your affiliate offer

 Source (DUE)

As mentioned earlier, affiliate marketing revenue eventually can become a form of passive income, but you still have to do some heavy lifting up front. The success of your program will depend on the quality of your recommendation.

To make a convincing recommendation, it’s best to get personal. Share your experience in your blog, social media post, or video. If you’re writing a personal review, give a candid opinion based on your experience with and knowledge of the product. The more open you are, the more authentic you will be.

However, that alone is not enough. Take into consideration the tips below while promoting your affiliate offer.

1. Build trust
2. Talk to a product expert
3. Create a product tutorial
4. Find relevant search terms
5. Consider your angle
6. Set your distribution strategy
7. Try offering a bonus
8. Keep things legal and above board
9. Display your affiliate links/codes prominently 

1. Build trust

People will be more comfortable following your advice if they feel they can trust you. Trust is a key factor in your affiliate marketing efforts, because people need to trust you enough to act on your recommendations. The level of trust you’ll need to make affiliate sales depends on your industry and the products you’re recommending—for example, it takes more trust to be an effective affiliate for a INR 3,000 course, than it does for a t-shirt that costs a few hundred rupees.

Building trust, however, is something that happens over a period of time. So, if you’re new to creating content for affiliate marketing, don’t expect success overnight. And more importantly, don’t be disheartened or impatient with your project to make affiliate marketing work for you. Patience, persistence and consistency are your allies in building trust.

2. Talk to a product expert

An option you can explore in terms of your content is interviewing others who use the product or service, or even interviewing the person who makes or sells it. Authentic experience of a product’s user, and the expertise of a product expert, both add a weight of meaning to your recommendations.

This can give your recommendation more depth, creating a narrative for your audience. And if done well, they will increasingly seek your content to discover or learn about new products.

3. Create a product tutorial

While your success with affiliate marketing can depend on the overall size of your following, another way to drive higher-converting traffic is by providing a tutorial on the offer. Moreover, people often perform “how to” searches on Google, such as “how to save money for college” or “how to decorate a laundry room.” If you offer a tutorial that solves a searcher’s problem and clearly showcases the value of the product, your referrals will make more sense in context and you’ll provide the customer with a stronger incentive to purchase the product you’re recommending.

4. Find relevant search terms

If you’re promoting an offer through a blog post or YouTube, research which keywords someone might use in a search engine to find an answer to a related problem. Google Ads Keyword Planner is a good tool that can help with identifying and targeting the right keywords and phrases. (It’s free to use, but you’ll need to create an account.)

5. Consider your angle

Depending on your offer, figure out how much energy you should invest in instructional or tutorial content, which is often a natural lead-in to someone trying a product for themselves. For example, you could record a video of yourself using and getting the most out of a physical product, or showing off the benefits of a digital product, like software. It helps audiences catch a glimpse of the product's utility before making a purchase.

Unboxing posts are popular, so if you receive the product in the mail, document your experience opening it up.

6. Set your distribution strategy

Once you’ve created your promotional content, share it on your website or social media platforms to let network effects take over. If you have an email list, you can create an email marketing campaign. And be sure to have an affiliate marketing hub on your website with a resources page where you share a quick list of all of the tools you use and love.

7. Try offering a bonus

Sometimes marketers promote their affiliate programs by offering bonuses to anyone who purchases the offer. For example, you could give a free ebook you wrote to any follower who makes a purchase. Promotions like this encourage customers to buy by sweetening the deal. It is especially persuasive if the bonus you offer is something you normally sell, because then shoppers can see its actual monetary value right on your site.

Sometimes if you have the right audience and great engagement, you can strike a deal with the promoting brand to offer an exclusive bonus for your audiences. This is often a win-win for both you and the brand, since you get to incentivise your audience to purchase through your links for exclusive offers, and the brands get to target their discounts more effectively to the right audience.

ShoutMeLoud, a blog that earns a good share through affiliate marketing promotes such an exclusive offer with SEMRush, the SEO tool, as seen in the image below:

The most common bonus programs seen in India are coupons, free trials, product giveaways or extra discounts for a service/ products purchased with the affiliate links. 

8. Keep things legal and above board

According to ASCI (The Advertising Standards Council Of India) Guidelines, there are some duties that need to be fulfilled when you’re doing affiliate marketing like the use of a disclosure label.

(source: Buzzfeed)

A disclosure is required for all brand promotions if there is any material connection between both the entities. In the case of affiliate marketing, your content contains a hyperlink or discount code, where you get paid for every ‘clickthrough’ and sale that can be traced back to your content. Therefore you must use a disclosure label.

Even if you put links in your content for your family brand it’s necessary that you disclose it. If you’re promoting something at your own expense and there is no material exchange of any kind with the brand you are choosing to talk about, no disclosure is necessary.

All disclosures you make must be prominently visible in a way that it can’t be missed. While ASCI, as a matter of principle, does not impose penalties and fines, it may escalate non-compliant cases to the government and sector regulators to protect consumer rights.

The guidelines are designed to help the affiliates work collaboratively and communicate effectively and responsibly with the industry. This protects the consumers from being misled and thereby protects the long term interests of the affiliates and the industry.

While this may sound foreboding, maintaining such transparency will further earn your audience’s trust in the long run.

9. Display your affiliate links/codes prominently

Where and how you feature your affiliate links and codes in your content must be carefully thought through. While it’s important not to seem pushy, it’s vital that an interested user does not miss them. Below are a few general tips you could put into practice in your affiliate marketing campaigns.