Let’s begin by defining the fundamental concept of affiliate marketing.
You earn money by referring customers to an online merchant. In return, you get paid.
Let’s break this down a little and split the concept into key areas.
- How YOU can refer people (prospective customers) to a merchant
- How successful referrals are measured and how YOU earn money
- How to understand the basics of an Affiliate Program
- A Live Example of Affiliate Linking
- An Affiliate Marketing Success Story
- How YOU can get started with Affiliate Marketing
By the end, you should have a pretty good feel for how affiliate marketing works.
How YOU can refer people to a merchant
There are many different channels you can use to refer traffic to the merchant. For example:
- Websites and Blogs
- Email Lists
- Messenger Apps (i.e. Messenger, Whatsapp)
- Facebook (Profiles, Pages, Groups, Watch Parties)
Most of these can be created with very little financial investment. That’s the great thing about Affiliate Marketing. The bar to entry is virtually non-existent.
The only limitations that you have will be determined by the merchant. For instance, some merchants might not like mass emails being used to promote their brand. This will all be outlined in the Affiliate Program Terms and Conditions.
How successful referrals are measured
After getting accepted onto a merchants affiliate program, you are assigned your own unique tracking code. The merchant uses the tracking codes to measure who is sending the traffic.
The tracking code is embedded in a hyperlink that you post on a website or social media, or send out via email or messenger apps. When somebody clicks on your link and is directed to the merchant website, the referral is attributed to you.
In addition to providing you with a unique hyperlink, most good merchants will also offer graphics, banners and other promotional materials you can use to help promote their product or service and send traffic their way.
You can see an example of banners provided by a merchant for the Getresponse affiliate program.
The Money Is In The Cookie
How does the merchant know that YOU referred the visitor?
OK, it works like this: When a customer clicks YOUR link (that’s the link that the merchant gave you to promote on your website or social media), they get directed to the merchant website which stores your unique affiliate code in a tracking cookie (a small text file) on the customer’s web browser (i.e. Chrome, Firefox, Safari). The cookie keeps a record of which affiliate referred them.
Another important consideration is how long the cookie stays active in the person’s web browser before expiring. The merchant decides this and it’s usually explained in their affiliate program terms and conditions.
Why is cookie expiration important?
Cookie life is important because if the customer doesn’t buy anything on their first visit but returns later to make a purchase, you will still get the affiliate commission as long as the then as the cookie is still alive and active.
Basically, the rule of thumb is, that for an affiliate, the longer the cookie lasts, the better.
I guess the next question is: How does a successful referral translate into income for you?
Well, the merchant will define how they reward referrals within the terms of their affiliate program. Let’s check out affiliate programs next.
How to understand the basics of an Affiliate Program
Firstly, there are different structures on how an affiliate is rewarded and this depends on the affiliate program:
- Cost Per Sale (CPS) Affiliate Programs: are schemes where you get paid if the person you send to the merchant purchases or subscribes to a product or service. The commissions paid are either a fixed amount or a percentage of the sale. Affiliate programs based on the Cost Per Sale model are the most common type.
- Cost Per Action (CPA) Affiliate Programs: are ones that pay you for sending traffic to the merchant website. The person you refer doesn’t even necessarily need to buy anything. Programs based around this model often rely on good volume, and each referral typically generates a smaller amount of income than a CPS affiliate program.
- Cost Per Lead (CPL) Affiliate Programs: are schemes where you get paid for a lead. For example, if you refer a person who then completes a particular action such as signing up for a free trial or demo, then you get a commission.
Some of the most rewarding affiliate programs pay recurring commissions. You will find it is especially true of Software As A Service (SaaS) providers where they will pay you recurring commission as long as the referred person remains a subscriber to their service.
Let’s take a look at the process of placing the affiliate link the merchant gives you onto your website and social media.
A Live Example of Affiliate Linking
The live example we are going to use to demonstrate affiliate linking is a promotion for the Builderall Affiliate Program.
The demo shows how to put a tracked affiliate link on this website (this exact page).
Builderall is a cloud-based software service that includes a suite of products that customers pay a monthly subscription to use. The software consists of tools to build and host an unlimited number of websites, create mailing lists, create sales funnels, create graphics and presentations and more.
I’ve used Builderall to demonstrate the process, but this is how it works for most affiliate programs.
Step 1: Get the Affiliate Link
Firstly, we log in to the Builderall Affiliate Dashboard, and there is a section with pre-made affiliate links for us to use. These contain our unique tracking code.
Step 2: Put the Affiliate Link out there
We copy and paste the affiliate link into a hyperlink. The link can be placed on our own website/blog, on Facebook, Twitter, Pinterest or any other social media channels.
The following video shows an example of the process.
An Affiliate Marketing Success Story
Here is a quick story to illustrate how affiliate marketing works successfully: The Darren Rowse Story.
Darren Rowse started blogging in 2003 on his Problogger website, recording a journal of things he was doing and thinking about in everyday life – music, culture, photography and spirituality.
Darren wasn’t doing anything that much different to what people like you and I do on social media channels like Facebook, Youtube and Instagram daily.
The most significant difference is that blog posts are usually a little longer and more detailed than your average Facebook post.
Darren’s Affiliate Goldmine
Around this time, Darren became aware of the Amazon Associate Affiliate program and Google’s Adsense program.
Darren signed up for both programs. From that point forward, instead of just writing his blogs, he would also supplement the content with links to matching products on Amazon.
For instance, a blog post related to photography and cameras would have links to Amazon pages selling the products mentioned in the content of the article.
Before long, Darren was raking in money (commission) from Amazon and Google.
Every time somebody read Darren’s blog and clicked on the Amazon links to purchase the products he was writing about, he received a commission.
Also, Google’s Pay Per Click scheme rewarded him by paying a small amount each time a user clicked on one of the adverts he was carrying on his website even if they didn’t buy anything
Heended up making more than $420,000 from Amazon alone.
How YOU can get started with Affiliate Marketing
Anyone can become an affiliate marketer. There are no bars to entry.
However, you will need some core elements in place to start earning money. As a rough outline, I’d consider the following list to get going.
- Decide the type of affiliate marketer you want to be. Are you going to blog? Are you going to do product reviews? There are several ways you can approach this… and it’s worth doing some research before you rush into the next stages.
- Setup a website. This involves registering a domain name and getting a web hosting package. You’ll use the website to send traffic to merchant websites. It is possible to do some affiliate marketing just with social media accounts, but I’d definitely recommend a website. Some merchants won’t even accept you into an affiliate program without one.
- Research the products and services that you want to promote.
- Apply to join affiliate programs with merchants who provide those products and services.
- Promote the products and services with your website and social media to drive traffic to the merchant.
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