Affiliate Marketing for Beginners: Pros and Cons
Affiliate Marketing vs. Influencer Marketing
Affiliate marketing is a type of performance-based marketing. Companies often pay affiliates based on the number of clicks, leads, or sales generated. This form of marketing is not to be confused with influencer marketing. Although similar, affiliate and influencer marketing have different goals. Rather than getting paid to post, affiliates get paid WHEN they increase sales or leads. As for influencers, they get paid for a post, mention, or shoutout on social platforms.
Influencers can definitely do both and are utilizing their platform in many ways to create revenue. Whether it is considered a sponsored post with the influencer or an affiliation, it all depends on the terms of the brand’s direct or indirect relationship with them. As you can see, affiliate marketing is based on performance whereas influencer marketing is based on impressions and brand awareness.
Affiliate Marketing: How it Works
If a company chooses to have an affiliate program, they are choosing to pay per referral rather than per promotion. Affiliates can be found across all platforms such as YouTube, Instagram, Tik Tok, Blogs, etc. You name it, they’re probably on it!
A great example is Amazon’s affiliate program which allows anyone to advertise Amazon products on their website, social media, blog, or other online channel using trackable links created specifically for them. These unique links record the number of sales the affiliate generates.
To begin, a company must establish a specific goal in which the affiliate will get compensated for. In this scenario, let’s say the affiliate gets paid for each sale made. The affiliate will provide their audience with an affiliate link or a discount code. After a customer purchases a product using one of these unique links or promotional codes, the affiliate is paid a commission.
For example, a YouTuber might review a new product in one video and add a specific link for their audience to purchase the product. This URL is provided by the company to the affiliate allowing the company to track their customers who are coming from this specific source.
The same goes for discount codes. You’ve probably seen discount codes like “JEN2022” or “MK20”. These specific codes are designed to help the company track what affiliate influenced these customers to make a purchase.
Pros of Affiliate Marketing
- Reach new targeted audiences
- Backlinks boost your search engine ranking
- Can increase web traffic and sales
- You choose the commission model (pay per click, per lead, per sale, per impression)
- Gain new, loyal customers
Cons of Affiliate Marketing
- Risk brand image
- Performance measuring is getting harder to track
- Can be costly and time consuming
- Inconsistent results
- Possible fraudulent leads
As online shopping increases and visiting physical stores decreases, promoting your products or services through affiliates can be a valuable addition to your marketing funnel. This will give you the opportunity to reach new audiences, increase your website traffic, and hopefully gain new, loyal customers.
The advantages outweigh the disadvantages as long as you do your research, find quality affiliates, and understand how various tracking systems affect sales attribution and ROI. When it comes to establishing an affiliate program and locating ideal affiliates, consider using an affiliate network to save time and money.