The alternative to PPC campaigns (Google Adwords or Content Delivery Network) that appear increasingly expensive, as they work through auctions, affiliate marketing seduces advertisers more and more thanks to its revenue-sharing model (CPA) and volume Awesome incremental sales it brings. The affiliate marketing represents between 8% and 12% of online marketing investment in mature markets. Unfortunately, in Latin America, he still knows many challenges, mainly due to the lack of strong affiliation networks and the lack of education of digital marketing professionals on the subject.
What is affiliate marketing?
Affiliate Marketing is a digital marketing strategy that is based on the achievement of results. Affiliates we can refer to Companies/websites which are responsible for marketing merchants (stores or advertisers) by publishing their different ads or promotions. Affiliates work on commission and get that when the visitor enters their website and make some activities like (click on a banner, register, buy, etc.).
Affiliate marketing has 3 players:
- The customer makes a purchase (or any type of action defined as an objective) on the advertiser’s website, after being referred by the affiliate.
- The affiliate promotes the advertiser through his website, newsletters, his twitter account, Facebook, his YouTube channel, etc.
- The Advertiser provides the affiliate with the necessary promotional tools, and pays it per click (CPC) or more commonly for referred sales (CPA).
- 1 Advantages of applying affiliate marketing
- 2 Steps to implement an affiliate marketing strategy:
Advantages of applying affiliate marketing
It reaches more people and quality
This strategy achieves greater reach because where it is impossible to reach with other strategies, it is reached through the marketing of influencers. However, we must bear in mind that it is not a plan that should be developed alone but is the complement of others.
An important detail is that not only more people are reached but users are reached who may have a real interest in the product. This is due to the fact that affiliates choose to promote on their pages or blogs products that respond to the needs of their readers, in order to get more sales and be able to charge more commissions.
- The investment is almost nil
It is one of the ways that a brand has to promote its product without spending a lot of money and without investing time or effort. This is possible because the advertising work is done by the affiliate and the amount that is paid to him is very little within the bulky accounts of the company.
- Little risk and many benefits
Another advantage follows from this advantage: the risk is null and the benefits are many. The worst that can happen is that no affiliate can sell the product. With zero spendings of money, time and effort, what should you worry about?
But if all goes well, you will make numerous sales and have only lost a small percentage of them to be able to pay the affiliates. It should be noted that in the long run, the clients obtained by the affiliates can repeat the purchase directly in the company, saving you the commission.
Fidelity is achieved
Affiliates generally promote products they know and have tried. That way you gain the trust of the users and manage to make more sales and invoice more commissions.
For the law dissertation help company, this way of proceeding from the affiliates is a benefit because many of the clients they get become followers of the brand only because of the fact that they have been recommended by a certain blogger.
Sales then increase and the company adds among its ranks what is known as “brand ambassadors.” In other words, overly delighted customers with the product that they promote to all their friends, family and acquaintances.
Steps to implement an affiliate marketing strategy:
1. Choose your affiliate network from the affiliate marketing strategy
Unless you are an eBay or Amazon type internet giant, you will have to hire an affiliate network as an intermediary. To choose the network that corresponds to you, you will have to consider the following points:
- The visibility offered (quantity and quality of affiliates enrolled in the network). Take into account the specificities of your market (potential of the network in your region, with its type of products…).
- Tracking and reporting tools and options
- Cost of the additional fee charged by the network (override fee)
- Minimum Sales Required
2. Define your model and payment terms of the affiliate marketing strategy
- Payment model:
The CPA (cost per action) is the safest if you start in affiliate marketing. You will only have to pay the affiliate if an effective sale is made.
- Tracking duration:
It is the time during which the sale is attributed to the affiliate that the customer refers. The reason for this tracking is that a customer can decide 30 or 60 days later to make a purchase. We recommend a minimum of 30 days.
- Locking period:
It is the period from which a sale is considered irreversible and will be charged by the affiliate. It is important to correctly define the locking period to avoid paying the affiliate after-sales canceled by the customer. They will not exceed 50 days.
- Define incentives:
Remember that an affiliate/advertiser relationship has nothing to do with a seller/customer relationship. Membership is a revenue-sharing model. If the affiliate wins, the advertiser also and vice versa. Incentives can be a good way to motivate affiliates to improve the promotion they make of their products.
They have to be really attractive (for example: increase the CPA by 40% from 30 sales). They define achievable goals, but the affiliates will flee.
3. Prepare your advertising inventory of the affiliate marketing strategy
You have to provide affiliates with promotional content for your program to be efficient.
Prepare an inventory of banners and links. They are very easy to place for affiliates who are not technical experts.
For more results and to work with more advanced affiliates (such as price comparators), you have to make your product catalog available. It can be done through data feeds or API / web services. It is better to have both options.
4. Create your affiliate policy affiliate marketing strategy
You have to list here everything that is NOT allowed to do with your affiliate program. You have to protect yourself here against bad affiliates, who are basically going to take advantage of your program to generate commissions without increasing your sales.
- Prohibit the use of your trademarks (including spelling errors) in the domain name or AdWords campaigns.
- Prohibit the use of pop-under
- Prohibit content sites that will harm your brand image (violence, racism, pornography.).