Understanding Affiliate Marketing

Affiliate marketing could drive valuable visitors to your business website…

Affiliate marketing is one of the lesser-known aspects of modern-day advertising, but it represents an increasingly popular method of driving up sales and attracting new custom. Although it predates the internet, Amazon has played a key role in bringing affiliate marketing to the masses. Today, the principle of using third-party organisations to increase visitor numbers or customers has become well-established, often in tandem with popular techniques like pay per sale and cost per action.

In essence, affiliate marketing is a symbiotic relationship whereby company A rewards company B for sending custom its way. This might occur when company B is unable to meet a customer’s requirements but knows that company A can, or where both firms offer complementary services. Company B may promote unique offers or discounts on behalf of company A, with the aim of persuading consumers to give the latter their business. In many instances, a customer clicking through from company B’s website/email/social media account to company A’s will generate a first-party cookie, which is then stored to acknowledge the source of that custom. This can sometimes be seen by the website address changing several times in the browser bar before the final destination site is reached.

Those tempting daily deals that arrive in your inbox are classic examples of affiliate marketing firms in action. Through conventional advertising methods like email marketing and banner ads, they entice potential customers with discounts before directing them to whichever organisation they happen to be promoting. These affiliate specialists earn a commission for every successful referral, in a similar vein to loyalty websites or even price comparison sites.

One of the drawbacks to affiliate marketing concerns the general lack of regulation in a fast-growing global industry that lies outwith the jurisdiction of any individual nation. The entire industry has been tainted by historic associations with spammers and adware, not to mention those grim web pages stuffed full of ads and links. Cookies are essential for affiliate marketing to succeed, yet people are increasingly wary of being tracked online. Just look at the fanfare surrounding the ad blocking software in Apple’s iOS9 platform.

It should also be borne in mind that effective affiliate marketing requires a great deal  of setup time, along with careful selection of partner organisations. Regular updates are required to maintain consumer interest, and Google’s latest SEO algorithms are less enamoured with link building than was previously the case. Don’t lose sight of the fact that affiliate marketing specialists are out to make a profit, which means their costs can be significant. The lack of industry standards or certification will continue to allow rogue agents to advertise themselves as legitimate service providers, even though most behave professionally.

So is affiliate marketing something to avoid? Well, not necessarily. In fact, it can offer considerable benefits to a brand or company. That’s particularly true in terms of market awareness and brand exposure, since affiliates can reach audiences a fledgling company or online-only brand could never dream of. While offering discounts would negate the modest margins made by many small businesses, affiliate marketing is great for promoting complementary services, such as a B&B offering its guests access to a nearby spa. The spa gets walk-up guests it wouldn’t otherwise have attracted (who may become repeat clients or provide free PR via positive reviews), while the B&B benefits from being seen to offer extra services. Employing an affiliate marketing firm can also free up a company’s limited resources to concentrate on their core markets, and the pay-per-result nature of this process means money isn’t being wasted on hit-and-hope advertising.

Because affiliate marketing isn’t being taught in classrooms, and few books have been published on this subject, interested parties should speak to a well-established firm of specialists. They will be able to offer clear guidance on how affiliate marketing can benefit a particular company or brand, in turn helping that firm to decide if this new strand of marketing is for them.

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