November 3, 2023
Last update
11.3.2023
06 MIN.
With affiliate marketing growing at a rate of 10% year by year, it’s clear that it’s not a fleeting trend but here to stay - Here is the ultimate beginner’s guide to affiliate marketing just for you!
Natasha Hylton
We've all read stories about people sipping cocktails on the beach in a far away exotic destination while making thousands of dollars in passive income. This is the dream that we’ve often been sold in relation to affiliate marketing. Whilst this will probably not be the case for most people, affiliate marketing is a lucrative business and if you invest some time and energy into it, you could start earning a decent salary.
Since 2020 global search for affiliate marketing has soared and according to Google Trends it reached a peak in July 2023. As companies move further away from traditional marketing efforts, affiliate programs have become an indispensable tool for businesses, looking to outsource their marketing efforts as it is often low cost and low risk. Global affiliate spend is projected to reach $13 billion by the end of 2023, so whether you’re an avid marketer or a total beginner there’s a piece of the pie for everyone.
If you’re a digital marketer looking to get into affiliate marketing but don’t know where to start then this article is for you. Keep reading to discover how to pick a niche, where to find affiliate programs and the dos and don’ts of building your affiliate strategy.
Image from Google Trends
Affiliate marketing is a very specific type of online advertising model and before we dive in, let's define a few key terms that you may not be familiar with yet, but are bound to see frequently pop up.
Affiliate marketing: Affiliate marketing can be defined as a marketing arrangement in which a retailer pays a third party to promote and sell their products in exchange for an incentivised commission.
Affiliate/ Referer/ Promoter/ Publisher: The person who promotes the product or service to their audience.
Merchant/ Advertiser : They are the creators of the product or service that you are selling.
Consumer: These are people who are the end users and purchase the product.
Affiliate network: Merchants will often use a network, which acts as a go between for the advertiser and the affiliate. You may find access to a promoter dashboard, resources and promotional assets hosted here.
Vanity coupon: A vanity coupon is a tracked coupon that is unique and tailored to a promoter. An example could be a use of their name and the percentage of the discount i.e. JOHN30
Tracked link: A tracked link is a way for merchants and publishers to track the number of leads and traffic that comes from their promotional link. This can be created as a UTM ( Urchin Tracking Module) or a personalized URL.
Conversion: A conversion is when someone comes to your website and performs a desired goal for example, fills in a form, starts a free trial or purchases a product.
PPL: Pay Per Lead. This is an advertising technique in which a publisher will receive payment each time a visitor clicks on his/her ad.
CPA: Cost per Action. This is where a publisher will receive commission based on a certain action taking place,
PPS: Pay per sale. The advertiser will pay the affiliate a percentage of the cost of the sale to the promoter.
Image sourced from reliablesoft.net
Simply put, an aspiring publisher will sign up for an affiliate program via an affiliate network. Once accepted, they will usually receive a unique tracking code, a discount code to incentivise their audience and access to resources and assets to help them promote the product. It is then down to the affiliate to start sharing their custom link and start promoting the product via content creation. They then track their conversion and start generating earnings from their link. It sounds pretty easy right?
There are a ton of benefits of affiliate marketing for both advertisers and publishers.
Firstly affiliate marketing is great for advertisers as it is an example of cost-effective marketing. In terms of tracking ROI (return on investment) an affiliate program often requires less up front costs in comparison to offline marketing and print ads. With attribution tracking and advanced analytics, it is easier to have a more transparent view on sales and conversions. Plus, compared to traditional marketing efforts, which require a lot of trial and error in order to achieve a good engagement rate, affiliate marketing is a great alternative for advertisers as they can tap into a larger audience than their own, which usually has an already engaged online community. Additionally, affiliate marketing customers spend more than average consumers. Those who purchase products and services through affiliate marketing programs have a 58% higher average customer revenue. Another perk is that affiliate marketing is performance based, meaning that affiliates will usually only earn commission when a certain action is performed i.e. a click of their link or sale of a product, so there is little to no financial risk for publishers.
Affiliate marketing is great for beginners in digital marketing as it doesn’t really require any special skills or knowledge. As affiliate marketing has a very low overhead, once you’ve set up your website and strategy you can start generating income with minimal effort. Moreover, it’s a great way to earn passive income, with some of the top earning affiliates such as John Chow who is estimated to earn roughly $100,000 per month. Although it is unlikely that you would be earning six figures straight away, affiliate marketing is a great side hustle and a fantastic way to diversify your stream of incomes. According to a survey of STM forum users, 81.2% of affiliate marketers are making over $20,000 per year. Other benefits of being an affiliate include having access to exclusive rewards that the product you’re promoting offers for example, the most common is commissions (percentage of the sales) but you may also receive free products and samples, exclusive rewards, networking opportunities in a niche that interests you and access to training or education. It's also a great option for people seeking flexibility in their work schedules and autonomy in their work. So, are you ready to make that leap and start your affiliate journey?
Free image from Canva
There are a lot of steps to go through before you decide to join an affiliate program. You need to think about what type of product you would like to promote and which niche product would suit you best. You also need to have an audience to promote the product to, or take steps to start building one. Certain sectors are more difficult to break into, like the fashion and beauty industry, but other popular and more accessible niches include travel, education and e-learning, and technology.
When picking a niche you need to ask yourself the following questions:
Using these questions as prompts will help you to narrow down the potential niche markets that you could work in. One of the bonuses of affiliate marketing is that unlike a typical salesperson, you aren’t just limited to selling one product. You have the opportunity to promote products from different businesses and earn a commission from all of them, which opens up the possibility of having multiple streams of income. When starting out, try to target an audience that correlates with your interests but also has a large and untapped audience as you’ll be more likely to see success and leverage conversions.
When conducting your background research there are also different types of affiliate programs to choose from and that may impact which products and services that you choose to promote.
Image sourced from Vector stock
In order to find affiliate programs, you can do a simple online search, or investigate which referral links your favorite influencers or bloggers are using and see if the programs are open and accepting new promoters. There may also be online groups and forums that share information about the best affiliate programs for beginners and for your niche. When selecting a program, you also need to take into consideration the payment methods and also the commission structure that the merchant is offering. Is there a monthly minimum payout that you need to reach before cashing out your earnings? Do they follow a PPS or PPL pricing model and is this sustainable for you? Does the advertiser allow bank transfers or accept paypal as a payment method? These factors, as well as investigating customer demand for your chosen product, will help you to determine the profitability and sustainability of promoting your niche product.
Image sourced from Digital Scholar
You also need to think about your strategy as an affiliate marketer and how involved you are in marketing the product. Affiliate marketers can fall into three main categories: unattached affiliate marketing, involved affiliate marketing, and related affiliate marketing.
Involved affiliate marketing is the most profitable and successful type of affiliate marketing as it appears more authentic in comparison to the other two types, however, it can be tricky to leverage initially as you need to nurture your audience and build up a level of trust. There are pros and cons to each of these types of marketing and it is up to you to decide which is the best fit for you and your business. Regardless of which approach you opt for, for each of these types of affiliate marketing strategies, you need to conduct some market research and competitor analysis to ensure that you are promoting your chosen niche to the best of your ability.
Contrary to popular belief, affiliate marketing is a marathon not a sprint. Remember to be realistic when beginning as an affiliate marketer, it is easy to become discouraged when we feel that our efforts are fruitless. According to Demand Sage, 95% of aspiring affiliate marketers will start and give up shortly afterwards. When you start out, you may have some short term wins but ultimately you need to put in a lot of time and effort to nail your strategy and establish a steady flow of passive income, this could take some time to put in place.
Image sourced from Unsplash
One of the advantages of affiliate marketing is that it doesn't require a lot of financial investment, however you must dedicate some time in creating a space where you can promote selected services and products. Where you decide to place your affiliate links is an essential part of your strategy. To start, you will need a domain name and website hosting provider. Make sure that your domain name is short and is relevant to the niche that you'll be working in. Choose a website hosting service that is fast and has everything that you need like Bluehost or GoDaddy. You should also put a content management system in place that will help you build the website without a need for in-depth knowledge of technical code. According to Earthweb around 43% of affiliates tend to use WordPress when starting out. It is also highly recommended when creating a theme that will be visually pleasing for your potential customers and that your site speed is optimized.
With affiliate marketing growing at a rate of 10% year by year, it’s clear that it’s not a fleeting trend but here to stay. There is money to be made in affiliate marketing, however when starting out, make sure that you measure your expectations, it’s highly unlikely that you’ll become a multimillionaire affiliate marketer overnight. By researching potential niches, taking the time to build a platform and audience, you’ll have the building blocks to becoming a key player in the affiliate marketing industry.
Interested in social media and want to get started in affiliate marketing? Sign up to the Iconosquare affiliate program now!
Natasha Hylton specializes in performance and growth marketing at Iconosquare, which is a powerful social media analytics and management platform for social media marketers. Starting as a Partnerships and Affiliate Program Manager in 2022, Natasha’s role has developed to include managing press relations and external communications as well as generating new and fostering existing partnerships for Iconosquare via influencer and digital media channels.
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