Affiliate marketing is win-win for all the parties involved in it, be it the merchant, the affiliate, or the consumer. A brand can increase its sales tremendously through affiliate marketing, affiliates get commissions, and consumers get the analyzed product among the different available options. Marketing is crucial for a business irrespective of its size. Marketing is the most important aspect of business. Affiliate marketing is a part of marketing. First of all, let us know what affiliate marketing is:
What Is Affiliate Marketing?
Affiliate marketing is a way to sell products of individuals or companies through affiliates. Affiliate marketing is also termed program marketing. An affiliate signs up to an affiliate program offered by a brand to increase sales on a commission or revenue-based payment model. Affiliates get a commission for selling a product. Usually, three types of affiliate marketing models are prominent in the market. They are pay-per-click, pay-per-lead, and pay-per-scale. According to a survey, 63% of companies still feel that their biggest challenge is generating traffic and leads. Let us have a look at some more statistics of affiliate marketing:
- As per a report, affiliates account for 40% of Amazon’s $100 billion annual sales.
- Affiliate programs generate over 20% of an advertiser’s online sales on average.
- Over 80% of advertisers use some form of affiliate marketing.
- According to Forrester Consulting, U.S.’s affiliate marketing spend will grow by 10% in the next five years and reach $6.8 billion.
How Affiliate Marketing Is Useful for A Business
Affiliate marketing helps to grow a business by making it more scalable in the most cost-effective way. The ultimate aim of a business is to increase its sales. Affiliate marketing very organically and helps businesses to increase sales smoothly. Businesses demand lots of risk-taking decisions. When it comes to using affiliate marketing, the risk is very less, whereas the reward is high. You do not have to pay extra from a business perspective, and you only have to pay after getting its fruits.
Why Affiliate Marketing is in High Demand
An affiliate company, agency, or individual focuses on increasing sales, not just on attracting visitors. If your visitor does not convert into leads from a business perspective, the effort almost goes in vain.
How Does Affiliate Marketing Work?
The working of affiliate marketing is simple and does not demand any specific qualifications. The better the marketing skills and technical knowledge you have, the better it is for you. The working of affiliate marketing has been mentioned below:
- An affiliate signs up as an affiliate network. She or he gets the URL from a company or a seller.
- This URL helps companies to track the progress of affiliates as well as consumers.
- Affiliates can use different platforms such as blogging, social media, or a video clip to mention the link and compel people to buy a product.
- Potential customers follow the link and hence end up preferring the product.
- When a sale or action is made, affiliates get the commission or revenue as assured by the seller.
10 Reasons Why Your Business Should Use Affiliate Marketing to Grow Your Brand
70% of companies are committed to increasing the lead generation budget to expose their brand and products to new traffic sources. Do you also need to increase leads in your business? Well, affiliate marketing is the best way to grow your popularity and increase your sales. Affiliate marketing is valuable for all businesses irrespective of their size. It significantly helps in growing the business. Let us have a look at how affiliate marketing helps businesses to grow their brand:
1. Helps to Grow Brand Awareness: Consumers are more likely to trust the retailer whom they know rather than a third person. Businesses and brands use affiliates to make a product and a service more scalable. An affiliate spreads the word about a brand in their circle and hence helps to increase its reach. The affiliate helps to grow brand awareness by giving a brand more exposure and reach to larger audiences.
2. Cost-Effective Service: We aim to get the best quality product or service in the most cost-effective manner. Affiliate marketing is one such marketing solution for a business. A business has to pay only for the results, so it is the best way of advertising products or services. The chance of affiliate programs going into losses is almost nil once you figure out the overall operational cost.
3. A Low-Risk Strategy: Affiliate marketing is a low-risk marketing strategy. A company has to pay only if the action is completed. So, there are almost negligible chances of money going waste as a brand has to pay for the actual performance. Affiliate marketing works on building connections rather than chasing leads.
4. Gain Targeted Traffic: In business, it is always important to customize a product and a service according to the audience. When you go for affiliate marketing, you rely on individuals who know about the products and the services of your industry. If the consumer is truly into your product it is easier to maintain the connection.
5. Boost Your SEO: As we have mentioned in the working of the affiliate marketing world, the affiliate gets the link. Whenever the link is clicked by visitors, it redirects it to the brand’s website. Affiliates publish the link on different platforms. The more the number of visitors the more will be the traffic which will ultimately boost SEO. Inbound links are highly beneficial in Search Engine Optimization and significantly help to improve ranking.
6. Helps to Create A Partnership with Experienced Salespeople: Affiliate marketing is useful for all sized people. If you are a newcomer in the business world, you get the opportunity to build partnerships with experienced salespeople through affiliate marketing. Any business can employ highly skilled and knowledgeable affiliates.
7. Offers High ROI: As per statistics by AM Navigator, the US affiliate marketing spend is approximately $5 billion annually, and worldwide over 80% of brands use affiliate marketing. When the cost per sale of affiliate marketing is compared with Google Ads, affiliate marketing is highly alluring. If a business opts for Google Ads, then sales can cost 20 times more than through affiliate marketing. Return on Investment in the case of affiliate marketing is higher in that of the pay-per-sale model.
8. Helps in Data Tracking: Affiliate networks help in monitoring each step and in better management. Through affiliate networks, brands can track the movement of consumers and their interests. Brands can track affiliates’ performance as well. Dashboards help in better organizing of data.
9. Consumers Trust Their Brand Ambassadors: Consumers trust more reviews and recommendations of people than the brand specification to buy a product or avail of a service. Affiliates help in generating direct sales by reaching out to a larger audience.
10. Access Foreign Markets: Affiliate marketing helps to increase the scalability of a business. If you want to market your product globally, affiliate marketing is the best and the most cost-effective way to enter the global market. You can contact affiliates overseas for marketing your product worldwide. Professionals can use their local knowledge to promote the product. You can easily find out the market value of your brand internationally.
Affiliate marketing is the most effective way to increase the sales of brands as well as to improve brand value.