Businesses are constantly looking for ways to improve their lead generation pipeline and increase sales. Email lists, physical networking, TV and radio advertising, and SEO are some of the methods employed by California businesses to achieve these ends. Another method worth consideration is that of affiliate marketing.
Affiliate marketing connects businesses with networks of publishers and marketers. They promote the business and get paid a commission or fee for every sale or other desirable action taken. Affiliate marketing can be very effective and is highly scalable, but it does pose certain challenges, including technological challenges posed by implementing affiliate tracking code.
Of course, it’s more applicable in some industries and less in others. Wherever there are intermediaries, the growth opportunity for affiliate connecting is higher. Think travel, any kind of sales, or iGaming – affiliates have been thriving in those fields. For instance, providers like Ghost Partners come in handy in reviewing iGaming websites, analyzing their incentives, and digesting their offers to ordinary players and consumers.
To some extent, affiliate marketing enables the business to determine how much it will pay its referrers. Programs like Amazon Associates, which is the best-known and most popular affiliate program, pay its marketers less than 5% of every transaction: a rate that should be sustainable for most businesses. Generally, rates vary between 5% and 25%. If the business can offer more, it will likely attract more affiliates to promote its products and services.
There are affiliates who specialize in social media marketing, video advertising, blogging, and many other forms of marketing. Employing experts in all of these fields would be unfeasible for the average business, but offering an affiliate program negates the need to do the work in-house and it can expose the business to new marketing channels and new markets.
Some of the benefits of affiliate marketing are indirect benefits. For example, the more affiliates that promote a business, the more the business’s name is published online and talked about. It features in videos, on blogs, and on various other channels. This kind of brand exposure would otherwise be very expensive for the average business.
Another indirect benefit is that affiliate marketing can actually help with SEO and social media marketing efforts. The brand gets exposure on popular social media platforms. It also receives links from many affiliate partners. Mentions and social interactions can boost social media presence, while links from other websites can push a business’s profile up in the search engines. This can prove to be true even if the marketers don’t make any direct sales.
This brings us to another benefit of affiliate marketing – after the initial outlay to incorporate affiliate tracking and create visuals and other media for publishers to use, the business only pays when it sees results. If an affiliate doesn’t make a sale, they don’t get paid, but the more sales they make, the more they earn, which makes it beneficial for both sides of the agreement.
This also makes affiliate marketing a scalable marketing solution. It is possible to set limits on sales and affiliate efforts, and the business can choose to lift these limits if it can set up the required infrastructure and ensure it will meet additional sales.
While there are benefits to affiliate marketing, there are also challenges. Quality control can be difficult. Although affiliate networks may impose some quality checks, these tend to be limited, and even if the company vets every affiliate application, there is no guarantee that the marketer’s quality won’t drop once they have been accepted.
Although the business can set its own affiliate commission rates, there are industry standards, and these can be difficult to keep up with, especially for small businesses and startups. If the business is unable to match or beat the affiliate rates of competitors, the best marketers will be more inclined to sign up with these other programs.
There are technical requirements for establishing an affiliate program. Marketers are given unique URLs and codes to use in their links. When a potential customer clicks through and makes a purchase, the business’s website needs to determine the link that was used and then assign the sale to the appropriate affiliate. Most affiliate programs also offer payment for purchases made within a certain amount of time after clicking the affiliate’s link, which means the proper use of tracking cookies. Reporting, accounting, and other elements of the relationship also need to be automated.
Affiliate fraud is a thing, and this sees unscrupulous affiliates use fraudulent techniques to artificially inflate their performance. Affiliates might spoof traffic if they get paid for site visits, use bots to auto-fill forms when paid for signups and detail collection, or join schemes that see affiliates sign up to other programs when they have no clear intention of making any purchases.
