The basics of affiliate marketing deviate from the basic idea of traditional marketing models. They deviate from traditional marketing methods because of a number of factors but mainly because of technological changes. Affiliate marketing is a means to pull more customers or traffic to your product through someone else. It sounds exactly like how advertising works but it’s not. Its uniqueness lies in the entry barrier to participate in affiliate marketing which is relatively lower. In other words, anyone can market products in this model.
This is the reason behind affiliate marketing’s popularity; anyone can participate. It is becoming more and more popular for brands to opt for this model of marketing. The statistics show that as of August 2020, 80% of brands used affiliate marketing to garner more attention. Furthermore, it is a marketing model which contributes approximately 16% of the global ecommerce sales. Therefore, it is safe to say that it is a method of marketing which is here to stay and grow. But how does it work?
Variants of the affiliate marketing model
Affiliate marketing, as explained in the first paragraph, is used by third parties to advertise a brand/product to earn a commission. But it would be unfair to reduce it to this explanation. To understand the basics of affiliate marketing it is vital to know about its variants in terms of how those third parties earn a commission. These variants can therefore, be broadly categorized in the following three ways:
This adheres to the basic understanding of affiliate marketing. You lead a potential consumer from your own website/blog to that brand’s online location where they end up buying that product. A portion of that sale would be your share as commission. This is the standard model for affiliate marketing.
The pay-per-click model eliminates one step from the standard ‘pay-per-sale’ model. In this variant, you as the third party don’t get a commission on every sale but a commission on every click that leads the potential buyer to that product’s online location. Companies pay for this variant of affiliate marketing in order to encourage more traffic to their products. It is efficient for both the parties involved.
The pay-per-lead model is slightly more complex. Here, as a third party you would be compensated for conversion of leads, hence, ‘pay-per-lead’. Your job here would be to lead potential consumers and make them do one of many actions. It can be making them fill out a form or making them submit their personal information by signing up to a newsletter.
Importance of a niche
Affiliate marketing can look extremely simple but it requires a keen eye to understand the niche that your audience would find attractive. There needs to be an interrelation between the blog you’re maintaining and the the kind of products or brands you’re helping via affiliate marketing. If your blog does well, you will earn more as a result of that traffic. This is why finding your niche is so important. There are approximately 570 million blogs online as of December 2020 which means there exists cut-throat competition for online attention. Therefore, instead of choosing a broad category such as ‘fitness’, be more specific by choosing, for example, ‘jumping ropes’ or ‘yoga mats’. This would allow your blog to be higher up in search results. Having a particular niche also helps you create a more dedicated audience, resulting in consistent organic traffic.