What is affiliate marketing?
Affiliate marketing involves a publisher (affiliate) signing up to an affiliate program offered by a retailer (advertiser) to promote and sell their products on a commission-based payment model. The publisher promotes the products or services using a unique link, which sends traffic to the company’s website. If the lead purchases the product, the publisher is paid a percentage of the sale. From a business perspective, it can be thought of as a way of expanding the marketing team by hiring people through third-party companies who are paid only following successful sales are made.
Before we explore the benefits of affiliate marketing specifically for businesses and content creators, let’s have a look at some of the general benefits that anyone wishing to go down this marketing path can expect to receive:
low ongoing costs
low, or nonexistent risk
a new way of making profit and potential passive income
easy setup and implementation
increased competitive advantage
networking possibilities with influencers
high conversion rate
What are the benefits of affiliate marketing to small businesses?
Small businesses often have limited resources and budgets. Sometimes they do not even have a dedicated marketing team to promote their business. Affiliate marketing offers a cost-effective and efficient way to drive more traffic to your business and increase profits. However, while having a terrific affiliate marketing network is a huge advantage for small businesses, you still need to be selective in who you choose.
Rather than accepting everyone into your program, it is best to have a vetting process in place. In the same way that an ecommerce search marketing strategy impacts your brand’s visibility, your affiliates also impact your brand image and reputation.
Much like the search engine strategies used in ecommerce, affiliate marketing will help increase your product exposure and increase sales. Here’s a rundown of its benefits:
1. Boost brand awareness
Every business’s online goal is to be easily recognized by as many potential buyers as possible. As affiliates drive more traffic to your website, they increase awareness of your brand and its reach. Because affiliates earn a share of your revenue, they have a vested interest in your success, are loyal brand advocates, and help build trust with potential customers.
2. Enhance social proof
Consumers today are more informed and have higher expectations than ever before. They rely heavily on social proof of a brand’s reputation. According to research, almost 95% of consumers read online reviews before deciding to make a purchase. When a company builds rapport with an engaged audience that trusts them, their affiliate product or service reviews provide credible social proof to prospective buyers.
3. Reach a broader targeted audience
Small businesses can tap into the audience of their affiliates and, as a result, expand their brand’s reach. These new audiences might not have been easy to target and identify using other marketing and advertising methods. By selecting affiliates who resonate with your brand, you ensure that the traffic you receive through an affiliate’s link will be targeted to those who find your products or services useful.
4. Improve conversion rates
The ability to track how your business performs enables you to make operational improvements in the future. By collecting data from affiliate marketing tracking, companies can gain essential insights into where their customers come from and why they are buying.
Studying and analyzing the rich collection of data helps companies improve conversions by making changes to their website, offering more engaging visual creatives, and identifying which affiliates bring in the most revenue.
5. Save money
When compared to the costs of advertising or other marketing initiatives, affiliate marketing is far more cost-effective. Because it is performance-based, affiliates are only paid when they generate a sale. Businesses set up the commission structure in advance and avoid wasting money on ineffective advertising campaigns.
6. Gain a higher return on investment (ROI)
For most marketing and advertising campaigns, determining ROI can be challenging and an unpredictable waiting game. The performance-based model of affiliate marketing is built for profitability. Businesses are not paying for potential buyers through impressions or clicks, only for closed sales.
This is one of the primary reasons small businesses choose to utilize affiliates to promote and sell their products or services. By channeling your promotion efforts through an affiliate program, you are gaining influence and direct access to a receptive, highly targeted audience more likely to buy from your company.
