If you work with consumer-facing products, whether as a marketer, public relations professional or even a small business owner, you’ve probably heard the phrase “affiliate marketing” get tossed around.
But what is affiliate marketing?
Affiliate marketing is the process by which a person or entity, otherwise known as the affiliate, earns a commission for marketing another company’s products. Through unique links, the sales are tracked from the affiliate’s website and/or platform, and they are then given a share of the profit.
There are two main segments of affiliates that tap into this process:
You might be thinking, “Why should I share my profit with an affiliate when I already put money toward social ads or paid media opportunities?”
With the rise of online shopping, affiliate marketing has quickly become a multibillion-dollar industry and is now responsible for 16% of all internet orders in the U.S., more than triple what it was 10 years ago. In today’s crowded media landscape, affiliate links are emerging as the way to get featured in digital media. And with 81% of brands now having affiliate programs, you could quickly fall behind competitors if you don’t follow suit.
There’s a reason why everyone is jumping on the affiliate link bandwagon. Let’s review the benefits this strategy has for consumer-facing brands.
Compared to other online advertising methods, affiliate marketing is extremely cost-effective. With over 73% of merchants stating their affiliate marketing programs meet revenue expectations, it’s clear the low investment yields high returns.
Additionally, paying out commission for actual sales – rather than leads that need nurturing – is a low-risk form of marketing. Affiliate marketing gives you immediate customers with who you can then build relationships on your own terms.
Seventy-four percent of consumers identify word-of-mouth as a key influence in their purchasing decisions. By working with affiliates who have direct access and influence on your target consumers, you raise brand awareness among an audience that’s highly receptive to what you’re offering.
Ninety-four percent of publishers use affiliate marketing networks. In today’s digital landscape, many publishers use the profits from affiliate links to keep their publications running.
Affiliate links have become so popular some national publications will prioritize products that can offer an affiliate link over those that cannot.
ROI is notoriously hard to measure in public relations; however, it’s an important metric many are expected to report on. One of the benefits of affiliate marketing is the ability to work with affiliate networks that offer coinciding insights and data.
With access to detailed dashboards and reports, you can track to see how your affiliates are performing and pivot your business strategy if the desired outcomes aren’t being achieved.
Affiliate marketing is only going to continue to grow in popularity within the next few years, and it’s easy to see why with all the benefits it offers. Consumer brands should start thinking about investing in an affiliate program or risk getting left behind by competitors.