What is Performance Marketing?<\/h2>\n
Performance marketing is a type of online marketing that involves a third party (affiliate marketers) promoting a company\u2019s physical products or services online through strategic affiliate links. This type of marketing is often considered as a sub-component of digital marketing.<\/p>\n
Two main parties of performance marketing are merchants looking to promote their products or services and affiliates \u2014 bloggers or everyday marketers, who promote company\u2019s links for commissions. Often, intermediaries \u2014 affiliate networks \u2014 bridge the gap between merchants and affiliates.<\/p>\n
Interested in trying out performance marketing for your business? Your first step is to find and set up a successful affiliate program<\/a>. Read on to find out more, and how affiliate programs can help your online business flourish.<\/p>\n Pretty similar to the definition we\u2019ve already covered, an affiliate marketing program is basically the whole setup that gets affiliate marketing<\/a> into action.<\/p>\n Relationships are formed between the merchant and the third-party affiliates. In return for a slice of commission, the affiliates will promote the merchant\u2019s products or services on their site through strategically placed affiliate links.<\/p>\n Now you\u2019re probably wondering, how does affiliate marketing work? Below, we\u2019ve gone over the three key players and how they each contribute to the program.<\/p>\n Also known as the merchant, seller of goods, or marketer, the brand is the entity actively seeking out advertising and promotion for its products and services.<\/p>\n The owner of the brand forms a partnership <\/a>with affiliates, paying them to promote their product across the affiliate\u2019s web pages, blogs, and social media channels. The brand\u2019s ultimate goal is to increase revenue and site visibility.<\/p>\n Examples of a brand might include:<\/p>\n The affiliate, also known as the publisher or partner, is the entity looking to solve the brand\u2019s problems by promoting its products across their marketing channels \u2014 in return for a slice of commission once a customer makes a purchase.<\/p>\n The ultimate goal of an affiliate is to drive as much traffic to the brand\u2019s site as possible, bumping up their revenue so they can earn a high paying commission. Affiliates often use tools like blogging and content creation to promote the merchant\u2019s products, though links can also be included on existing websites and social channels.<\/p>\n The main point is affiliates generally tend to have a good online presence on platforms that put them in front of a crowd. This crowd is one of the main reasons brands come to affiliates, so that they can get their product in front of a large group of people and potentially convert them into paying customers.<\/p>\n The consumer is the entity being marketed to. They\u2019re the ones that affiliates and brands are targeting to increase revenue and drive site traffic \u2014 they\u2019re you and me! We\u2019re the ones that brands are hoping will click through to a site, and buy the products and services promoted by the affiliate.<\/p>\n Running an affiliate program is a stellar marketing strategy because not only is it cost-effective, it\u2019s super low-risk. Payouts only happen once an affiliate link leads to a customer making a desired action, so you\u2019ll only ever pay if you actually get results.<\/p>\n Not to be confused with a pay-per-click model, affiliate programs are a form of pay-per-action advertising. After all, affiliates only get paid once customers make a purchase.<\/p>\n Still not convinced? Below, we\u2019ve included some of the top benefits of building an affiliate program.<\/p>\n Building an affiliate program into your marketing strategy is an easy way of boosting your traffic and revenue. We\u2019ve taken a deep dive into what you can expect from affiliate programs, and how they can benefit your business.<\/p>\n The great thing about an affiliate program is that it\u2019s low-risk and low-cost. Giving affiliates a slice of commission isn\u2019t going to break the bank, and you\u2019ll only ever pay if you get results. That means you only hand out commission once a customer has made a purchase via an affiliate link or code, and this gives you a safety net to work from.<\/p>\n The fact that affiliate programs are performance-based<\/a> not only provides you with a bit of safety, it also gives affiliates an incentive to work even harder and promote your product or services as much as possible.<\/p>\n Partner marketing can also help you earn some passive income \u2014\u00a0 leaving things in the hands of a trained affiliate can lead to affiliate sales overnight without you needing to lift a finger. As a cost-effective alternative to the more traditional marketing methods, affiliate programs can help you save money writing up pointless ads that won\u2019t always get you the coverage you need anyway.<\/p>\n One of the biggest worries for startups and small business owners is their online presence. How can they successfully execute a marketing campaign with little to no presence online?<\/p>\n One solution can lie in performance marketing. There are a wide range of established affiliates available for every kind of product market, so there\u2019s something for every business.<\/p>\n Choosing an affiliate that already has a loyal fan base is a great step, but choosing one with a fan base that\u2019s interested in your niche is even better. This will make it easier to break into your product category and tap into a market of potential customers, regardless of your current online presence.<\/p>\n It\u2019s one thing to big up your own product, but getting a popular affiliate to review and give your product the green-light really goes a long way in building trust and credibility in your brand.<\/p>\n It\u2019s easy for you to talk about how great your product is, but customers are more likely to trust a separate source, and this is exactly what an affiliate program provides.<\/p>\n When affiliates rave about your product, not only are they making it relevant, they\u2019re making potential customers see the worth in your company\u2019s products and services. This is effective, particularly if a potential customer is a fan of the affiliate you\u2019re partnering with. This is also a great way of landing a few referrals from a customer base that\u2019s already interested in what you have to offer (that is, if you pick an affiliate with a similar niche and target audience as your own).<\/p>\n Affiliate programs don\u2019t just increase the likelihood of customer purchases, they can also help boost your SEO (search engine optimization). This is thanks to affiliate links \u2014 the text links that affiliates use on their website and landing pages about YOUR product. This is a form of backlinking; something which Google loves.<\/p>\n The more affiliate links you have, the better the backlinking strategy you have, which all leads to you ranking higher on Google. It also drives more traffic to your site, helping you hit your content goals and get even more views.<\/p>\n Maybe you have an email marketing goal you want to hit? Maybe you want to get more subscribers signed up to your email list for your newsletter? A successful affiliate program can do just that, driving leads to your site and giving newcomers insight into what you\u2019re all about.<\/p>\n A cost-effective and low-risk alternative to other traditional marketing methods, affiliate programs are great at bumping up your revenue. In fact, performance marketing accounts for over 16% of all ecommerce orders<\/a>, and that\u2019s just in the USA and Canada!<\/p>\n All it takes is one purchase to keep a customer coming back, because once they\u2019ve experienced your product or service first-hand, they\u2019ll have built some trust in you. Not only does this bump up sales, but improves your customer retention, resulting in less churn and more a stable and consistent customer base.<\/p>\n Read also: <\/b>How to get brand ambassadors to supercharge your marketing strategy<\/b><\/a><\/p>\n Unattached affiliate programs might be the most basic of the three, but they\u2019re also the most risky. Involving PPC (pay-per-click) campaigns, you\u2019ll basically be getting an affiliate to promote your products on Google Adwords and Facebook.<\/p>\n Just as the name suggests, unattached affiliate programs don\u2019t focus on building deep relationships with end users, they\u2019re more focused on increasing revenue and visibility.<\/p>\n You don\u2019t even have to have a good online presence, and that\u2019s what makes these kinds of programs so popular.<\/p>\n The downside is pretty obvious, though; you\u2019re putting your products or services in front of an audience that you know nothing about. You\u2019re not actually targeting a specific group, you\u2019re just taking a gamble. While it can pay off, it\u2019s risky, and you lose wasting money on an ad that won\u2019t get any impressions.<\/p>\n Slightly more targeted than the unattached method, related affiliate programs involve promoting your brand\u2019s product or services on well-known affiliates\u2019 digital channels (think social media, website, and blog).<\/p>\n These affiliates will often have a similar niche and target audience to your own, so unlike unattached affiliate programs, you won\u2019t be going in blind.<\/p>\n That\u2019s the reason it\u2019s called \u201crelated\u201d, but that doesn\u2019t have to mean your brand or product is personally related to the affiliate.<\/p>\n You can get an affiliate to market your product, but that doesn\u2019t mean they actually have or ever will use your product. They\u2019re essentially just getting your ad out in front of their crowd so they can make a few extra bucks. While there\u2019s nothing wrong with this (and there are a few affiliates who are probably genuine), it\u2019s not guaranteed.<\/p>\n This affiliate program is actually less of a risk to you (the brand) and more of a risk to the affiliate. Why, you ask? Well, your company itself might be a reputable brand with great products, but there\u2019s always going to be a few…less than savoury companies out there. The ones who are happy to sell sub-par products if it means raking in the cash.<\/p>\n These companies will happily use this performance marketing tactic to get their goods in front of a large crowd, because they know that the partner\u2019s audience probably already trusts the affiliate.<\/p>\n This makes it easier to persuade the affiliate\u2019s target audience to purchase the product because, \u201chey, X really liked it. He always recommends great things. I can trust him.\u201d It might seem good, but if the affiliate\u2019s target audience starts making noise about how bad the product is (and how lousy it was for the affiliate to promote it to them in the first place), it\u2019s going to tarnish the affiliate\u2019s reputation alongside putting all their partners\u2019 reputation at risk too.<\/p>\n At the end of the day, there\u2019s nothing wrong with related affiliate programs. They work well as long as both the affiliate and the brand are transparent and honest.<\/p>\n An involved affiliate program is when an affiliate promotes your products or services and actually uses those products or services themselves, too.<\/p>\n These are the affiliates who have an actual interest in what you\u2019re selling, and are happy to spread the good word about it, on the basis that they know it\u2019s great and that their target audience would benefit from it too.<\/p>\n They care more about the value of the product they\u2019re promoting and less about the money it can drive. This kind of partner marketing is usually very personal and done within the affiliate\u2019s own blogs and webpages rather than a distant banner or small ad.<\/p>\n Affiliates that choose to market your product via this route usually care a lot about their audience, and only want to recommend products that are genuine.<\/p>\n The commission structure of each payment arrangement varies, so we\u2019ve run through some common options below.<\/p>\n In purchased-based (cost-per-sale) arrangements, brands pay affiliates a slice of commission once a customer has actually made a purpose. No purchase = no commission, so it\u2019s a risk-free arrangement for all merchants.<\/p>\n A popular example of a purchase-based arrangement can be found on Amazon. Every time someone clicks through and makes a purchase on Amazon via an Amazon Associate\u2019s (the name given to Amazon affiliates) site, they get a commission from Amazon.<\/p>\n Read also: <\/b>Amazon affiliate program: What can eCommerce business learn from a market leader?<\/b><\/a><\/p>\n In a traffic-based (cost-per-click) arrangement, brands pay the affiliate every time users click on their link through to the brand\u2019s website.<\/p>\n Unlike purchase-based arrangements, it doesn\u2019t matter if an affiliate doesn\u2019t get a customer to purchase anything. As long as your site traffic has increased because of the link they\u2019ve created, you have to pay them.<\/p>\n In a customer acquisition-based (cost-per-lead) arrangement, the basics are pretty similar to that of a traffic arrangement. The focus isn\u2019t on customers purchasing something, it\u2019s on the number of leads that an affiliate brings you.<\/p>\n This could be something as simple as getting a few extra users to sign up to a newsletter or your email list. If an affiliate increases these leads, you have to pay them.<\/p>\n Read also: <\/b>How to calculate affiliate marketing commissions?<\/b><\/a><\/p>\n The first step towards building an affiliate program is sourcing your affiliate partners. It\u2019s important you choose people who will promote your product and services well, driving sales and boosting traffic.<\/p>\n Before making a decision, it\u2019s best to check out how your chosen affiliate has promoted products. Ask about the kind of returns they got? How much were they able to boost revenue and site visibility? You want to try to pick a high-quality affiliate, so do a bit of research to gain some valuable insights into who you\u2019re looking at.<\/p>\n Affise Reach is a great place to start if you\u2019re looking to source and build relationships with trusted affiliates. A platform where brands and agencies partner up<\/a> will put you in contact with the best affiliates, giving you access to a broad network across multiple verticals, and the ability to easily source and manage relationships.<\/p>\n There\u2019s also a wide range of other recruitment channels<\/a> out there, so keep your eyes peeled. Some of the top affiliate recruitment channels include.<\/p>\n One of the easiest ways to source affiliates is by looking at your own customer base. If you\u2019ve got a base of happy, satisfied customers that already rave about your product, take it a step further with an affiliate program.<\/p>\n A simple example of a marketing tactic that a customer affiliate could employ is writing up a product review, listing all the benefits of your products or services, and how it\u2019s better than others on the market. That could be on a review site or your own product page.<\/p>\n Potential customers are more likely to be swayed by \u201creal\u201d people, leading to higher conversion rates and revenue. Your customer affiliate program might even have a domino effect, leading to even more consumers signing up as partners.<\/p>\n If you go down this route you\u2019ll only want your most satisfied customers promoting your products. Send out a few NPS (net promoter score) surveys to figure out which of your customers are fans of your products, and reach out to them on social media or email about your affiliate program.<\/p>\n The great thing about sourcing affiliates from your customer base is that you don\u2019t always have to pay them directly with money. You can simply give them free products and trials in return for promoting your products.<\/p>\n If you\u2019ve already got a large following, use it as a USP for your customer affiliate program, alluding to the fact that affiliates might get more followers and social media visibility as a result.<\/p>\n Read also: <\/b>referral program examples to fuel your customer acquisition<\/b><\/a><\/p>\n Reaching out to influencers is another popular method for sourcing affiliates \u2014 it means getting your product in front of potentially huge followings. It can be a little tricker to source them, however, as you\u2019ll need to stand out from the sea of other brands trying to approach them.<\/p>\n Try to pick influencers with a similar niche and audience to your own. Even better, try choosing influencers who already have an interest in your brand \u2014 this might just be enough of an incentive for them to promote your products or services.<\/p>\n With this route, you\u2019ll either have to give them a slice of the commission or sign them up to free products and trials (once again, this depends on their popularity and following).<\/p>\n A common commission method includes giving out codes and coupons to the influencer so they can share them with their community. While this can drive traffic and revenue, be sure that the influencer doesn\u2019t overuse and overshare your code. If so, you risk losing more money than you\u2019re putting in.<\/p>\n Your best bet is to get the influencer to only share codes in newsletters or special membership pages; this way, only a select few get a discount on your products. To gain more control over your codes and coupons and measure their performance effectively, consider trying the Affise Promo Code Tracking solution<\/a>. It helps you create easy-to-remember promo codes, set limits for using them, and track the results of promo code campaigns.<\/p>\n It doesn\u2019t matter whether you\u2019re an industry leader in your market or a smaller business, it\u2019s always useful to gain insights about your competitors and how they\u2019re running their affiliate programs.<\/p>\n You might find there\u2019s a few successful methods they\u2019re using that you can implement. You could even reach out to their <\/i>affiliates, presenting a compelling argument about why your affiliate program is better. It\u2019s only wise to reach out to competitor affiliates if you know they\u2019re great at what they do, though, so do a bit of research first.<\/p>\n Though not a direct recruitment method, optimizing your affiliate website and landing page is a helpful way of driving more traffic to your site and getting more affiliates to check out your offering.<\/p>\n This means making sure you\u2019ve got quality content and are fully optimized for SEO, using a variety of keywords and backlinks to target your ideal affiliate partners.<\/p>\n Whenever you reach out to potential affiliates across your channels, be sure to link to your affiliate landing page. Make sure this page is full of all the necessary information about your program, what you\u2019re looking for, and how affiliates can benefit and sign up.<\/p>\n This is also a great place to add a CTA, leading affiliates to the next stage of the recruitment process.<\/p>\n Paid ads are a super easy way to promote your product or services, but you’ll have to tailor your strategy if you want to be successful. As we\u2019ve gone over before, paid ads on platforms like Google Adwords and Facebook Ads are all a form of PPC and CPC advertising.<\/p>\n This doesn\u2019t make them \u201cbad\u201d, but if you\u2019re not careful, you risk putting your ad out in front of customers who aren\u2019t even in your niche (and subsequently won\u2019t buy your product).<\/p>\n Your best strategy with paid ads is to tailor your approach. Try to place ads in areas that your target audience visits a lot, and use specific keywords to reach them.<\/p>\n When going down this route, it\u2019s important that you constantly analyze your ROI and how much return you\u2019re getting from your ad. If you keep getting a consistently low ROI, it might be time to try another marketing strategy.<\/a><\/p>\n Once again, this isn\u2019t exactly a recruitment method, but it\u2019s always a good idea to check in with your current affiliates and see how they\u2019re working with your program. It\u2019s also a good way of filtering out any inactive affiliates and focusing your time and resources on those who are actually delivering results.<\/p>\n Consider setting up a few contests and prizes for your affiliate circle from time-to-time to incentivize them to work harder.<\/p>\n It\u2019s important to remember that your successful affiliates probably aren\u2019t working for your brand alone. They might be stretching their time and resources across multiple brands, so remind them of why your brand is different to all the others. This might help them stick around longer, or choose your brand over the four others that they\u2019re currently working with.<\/p>\n Attending marketing conferences and events<\/a> will help you network and find even more partners and other useful people, like affiliate managers, to work with. It\u2019s also a good way of nurturing existing relationships and keeping partners interested in your brand and affiliate program.<\/p>\n An easy way of getting your foot into the affiliate world is by signing up with an affiliate program directory.<\/p>\n It\u2019s important you choose a trusted and recognized directory with proven results of bringing in more affiliates and driving revenue, as there\u2019s bound to be a few that aren\u2019t as genuine as they let on.<\/p>\n A successful affiliate program will bring together brands and affiliates in one, single platform, giving access to different marketing tools and affiliate opportunities \u2014 and Affise Reach does exactly that.<\/p>\n Bringing together the best of brands and affiliates, Affise Reach is a network that makes partnerships easier<\/a> between marketers and merchants. With access to a 500+ strong brand and affiliate network community, Reach makes it easy for everyone to accelerate their growth and revenue quickly.<\/p>\n Read also: How to find affiliates for your business?<\/a><\/strong><\/p>\n Thinking of starting an affiliate program from scratch<\/a>? We\u2019ve included a step-by-step tutorial on what it takes to create and manage an affiliate program, and the best strategies for maximizing your success.<\/p>\n Your sensible first step towards creating an affiliate program is choosing a platform for it.<\/p>\n You can do it yourself from scratch, but it will eat up a lot of your time and resources. Just think about it \u2014 you\u2019ll have to manage and operate everything. From sourcing and establishing affiliate relationships, managing offers, and setting up analytical reports to optimizing campaigns, there\u2019s a lot of work that you\u2019ll need to take on if you\u2019re going it alone.<\/p>\n Your best bet is to find an affiliate management<\/a> platform to partner up with, particularly one that gives you access to a large existing network of potential partners. Before making your decision, ensure that your chosen management program has:<\/p>\n In case you hadn\u2019t guessed, Affise<\/a> can offer you all of that, and more.<\/p>\n The next step is figuring out your commissions and payment structure; how and when will you be paying your affiliates? You\u2019ll want to choose a payout structure that attracts and incentivizes affiliates to join, so think carefully about the kind of partner you\u2019re targeting.<\/p>\n The most popular payment method by far is pay-per-sale (or purchase-based payment). Every time an affiliate gets a customer to make a purchase via link or marketing effort, you pay them a percentage of the sold affiliate product. There\u2019s no hard or fast rule about commission rates but keep it fair! And remember, high commissions mean lower profit margins.<\/p>\n Another option for affiliate commissions<\/a> is to use the pay-per-lead method (acquisition-based payment). This means paying the affiliate each time a new lead signs up to your newsletter or free trial.<\/p>\n You could also opt for the pay-per-click method as we\u2019ve outlined previously, but it\u2019s starting to become more and more outdated. It\u2019s best to pick between the pay-per-lead or pay-per-sale method if you want to keep affiliates interested \u2014 you could even do a mix of the two!<\/p>\n If you\u2019ve got a lot of affiliates on your hands and are struggling to handle all the commissions, consider bringing in a CPA (certified public accountant). They can handle transactions for you, freeing up time for you to focus on more pressing business matters.<\/p>\n A crucial component of any affiliate program, setting up a defined policy and related rules will ensure that there\u2019s a binding agreement between you and your partners.<\/p>\n This will make sure no boundaries are crossed, and that affiliates aren\u2019t using any shady promotion methods, and are only marketing the way you have instructed. Not only will it help stop disputes and problems from occurring, but it also gives affiliates a guideline to work from.<\/p>\n When drafting up your affiliate program policy and rules, make sure you address the following:<\/p>\n The lifeblood of all affiliate programs, it all starts with finding your partners. How are you going to recruit affiliates to your program, and what will you use as an incentive?<\/p>\n As we\u2019ve gone over previously, there\u2019s a wide range of recruitment channels available to pick up new affiliates \u2014 you\u2019ve just got to figure out which best suits your business model. A quick recap of the recruitment methods include:<\/p>\n Partnering up with an affiliate management directory or platform is an easy and risk-free way of getting more affiliates onboard.<\/p>\n Affise is one of the few affiliate management platforms that offers brands tracking and analyzing tools, as well as a network of 500+ brands. Take control of your brand with less effort <\/a>and sign up to Affise today, to see for yourself what we can do for your business.<\/p>\n Once you\u2019ve got an army of affiliates, it\u2019s time to prep them with lots of useful marketing collateral!<\/p>\n This means providing a place that affiliates can easily access online that\u2019s full of marketing and promotion methods and materials. This could be anything from marketing rules and brand voice info, to examples of the kinds of promotion you\u2019re after (banner ads, CTAs, promotional emails).<\/p>\n Read also: <\/b>How to manage affiliate program<\/b><\/a><\/p>\n As we\u2019ve mentioned previously, the right tech is crucial to running a successful affiliate program. There are two types of tech you can rely on to supercharge your affiliate program.<\/p>\n Performance marketing platforms are like one-stop shops for everything you need to set up, run, and manage an affiliate program. And Affise is a great example.<\/p>\nWhat is an Affiliate Program?<\/h2>\n
Parties Involved in an Affiliate Program<\/h2>\n
![\"Affiliate](\"https:\/\/affise.com\/wp-content\/uploads\/2021\/10\/image12.png\")
The Brand<\/h3>\n
\n
The Affiliate<\/h3>\n
The Consumer<\/h3>\n
Benefits of Building an Affiliate Program<\/h2>\n
Low-risk and Cost-effective<\/h3>\n
No Need for an Online Presence to Get Results<\/h3>\n
\n![\"Affiliate](\"https:\/\/affise.com\/wp-content\/uploads\/2021\/10\/image1-4.png\")
<\/a>Builds Credibility and Trust in Your Brand<\/h3>\n
Boosts Your SEO and Drives Traffic to Your Content<\/h3>\n
Increases Revenue<\/h3>\n
![\"Affiliate](\"https:\/\/affise.com\/wp-content\/uploads\/2021\/10\/image5-3.png\")
<\/p>\nTypes of Affiliate Programs<\/h2>\n
<\/h3>\n
\n
\nUnattached<\/strong><\/li>\n<\/ul>\n<\/h3>\n
\n
\nRelated<\/strong><\/li>\n<\/ul>\n
\n![\"What](\"https:\/\/affise.com\/wp-content\/uploads\/2021\/10\/image2-2.png\")
<\/a><\/h3>\n
\n
\nInvolved<\/strong><\/li>\n<\/ul>\nCommon Program Payment Arrangements<\/h2>\n
Purchase-based (Cost-per-sale)<\/h3>\n
Traffic-based (Cost-per-click)<\/h3>\n
\n![\"Affiliate](\"https:\/\/affise.com\/wp-content\/uploads\/2021\/10\/image11.png\")
<\/a>Customer Acquisition-based (Cost-per-lead)<\/h3>\n
Affiliate Recruitment Channels<\/h2>\n
Your Customer Base<\/h3>\n
Influencers<\/h3>\n
Competitors<\/h3>\n
Affiliate Landing Page<\/h3>\n
![\"Affiliate](\"https:\/\/affise.com\/wp-content\/uploads\/2021\/10\/image9.png\")
<\/p>\nPaid Ads<\/h3>\n
Affiliate Reactivation<\/h3>\n
Marketing Conferences and Events<\/h3>\n
![\"Affiliate](\"https:\/\/affise.com\/wp-content\/uploads\/2021\/10\/image8.png\")
<\/p>\nAffiliate Program Directories<\/h3>\n
Tips for Creating and Managing an Affiliate Program<\/h2>\n
1. Choose an Affiliate Platform<\/h3>\n
![\"Affiliate](\"https:\/\/affise.com\/wp-content\/uploads\/2021\/10\/image13.png\")
<\/p>\n\n
2. Choose a Payment Structure<\/h3>\n
3. Draft Up an Affiliate Program Policy and Rules<\/h3>\n
\n
4. Source Affiliates<\/h3>\n
\n
5. Offer Marketing Collateral to Your Affiliates<\/h3>\n
Affiliate Program Technologies<\/h2>\n
Performance Marketing Platforms<\/h3>\n
![\"Affiliate](\"https:\/\/affise.com\/wp-content\/uploads\/2021\/10\/image6-3.png\")
<\/p>\n