Affiliate Marketing: A Beginner’s Guide
by Guy Galboiz
There are approximately 4.39 billion internet users all over the world shown in 2019 statistics and 1.79 billion of these users shop online. 85% of small business use the internet technology and tools to conduct business and millions have succeeded in such undertaking. With these staggering facts, the internet technology has provided for avenues for entrepreneurs to go into other areas of business transactions. One of these is affiliate marketing.
Affiliate marketing is one internet-based revenue generating task that can be engaged home-based with only a computer, access to internet connection and a bit of research, time and patience then one can gain proficiency in this activity.
History of Affiliate Marketing
This type of marketing activity started in 1989 with William J. Tobin. Tobin is known as the first internet marketer. He is the owner of PC Flowers & Gifts and he conceptualized the idea of affiliate marketing which was launched on the Prodigy Network. This business model paid Prodigy Network a commission for every sale that they generated. In 1993, Prodigy Network generated a total of $6 million dollars from their transactions. Due to the success of the Tobin and Prodigy relationship, Tobin patented his idea in 1996 but it was not issued until 2000.
Other companies followed suit including Amazon who has an associates’ program on their network in 1996. The model attracted a lot of worldwide attention – many companies were now allowing affiliates to sell products and get a commission based on each sale.
In 1997, affiliate directories became popular with Refer-It.com as one of the pioneers. Business-minded people now had options to market different products on their websites without having inventories and other overhead expenses and still get revenue for every sale.
The U.S. Federal Trade Commission published guidelines on affiliate marketing with regards to disclosures. The “Dot Com Disclosures: Information about Online Advertising” regulations further strengthen affiliate marketing’s legitimacy in the world of online business. This regulation was then updated in 2008 requiring bloggers to disclose their affiliations with companies they are marketing for.
Definition of Affiliate Marketing
A dictionary meaning is:
- a marketing arrangement by which an online retailer pays commission to an external website for traffic or sales generated from its referrals.
“most of my earnings are from affiliate marketing, direct ad sales, and sponsored posts”
In simple terms, affiliate marketing is
when a company or product owner agrees that other marketers sell their products and in turn, the marketers received a percentage or a portion of the sale revenue. Revenue to the affiliate marketer happens when the sale has been made and completed.
The affiliate marketer provides for the promotions and advertising of the products like a website or landing page.
The task of an affiliate marketer is to assist people looking for a product and guiding them to products that would best provide a solution.
How does Affiliate Marketing Work?
Here are simple steps on the affiliate marketing process:
- Research on companies who have affiliate marketing programs. com can provide options for products that have affiliate programs. Study and take note of the specifics of the program like how much percentage for each sale or how much dollars per sale; when collection can be made; what collaterals or promo images that is available and others.
- Once decided on the company or product, join by filling up a form and answer all pertinent data. The affiliate marketer will be given an affiliate link to include in the website.
- Promote the product in the best way by ads or links. Engage people to read about the product and get their traffic to the website page of the product. Social media is a great way to promote the product.
- When someone clicks on the product website page and purchases the product, the affiliate marketer will have a percentage of that sale.
Types of Affiliate Marketing Websites
- Product Reviews – These websites provide reviews on products through existing customers or users. The product has comparisons, pros and cons, and reader reviews. Usually such websites educate the consumer and guide them to the best quality products that the affiliate marketer is promoting.
- Price Comparison – They are the websites that provide quick comparisons of products. Usually, the affiliate marketer assists consumers to look for the most cost-effective product or service.
- Personal Blogs – Blogs may not look like a marketing site, but the marketer makes reviews and recommendations for a certain product or service. An affiliate link is provided for each recommendation.
- Niche-Review Sites – These are websites that are specific to a niche or category. An example is a website that is selling dog food. Everything on this website pertains to dog food only.
- How to Websites – Usually these websites pertain how to accomplish a certain activity like woodworking or flower decoration. The affiliate marketer can carry products needed for such activity.
- Coupon Websites – Coupons are a great way to save time and money. Consumers can go to these websites for coupon options and apply these coupons to an affiliate product on site.
- Free Tools Websites – This would have the same objective as the other sites, and this is to provide guidance and solutions to consumers at the same time exposing products or service that is affiliated to the website.
Affiliate Program Products
The following products can be promoted as an affiliate product:
- Physical Products – Pertain to products that cover almost everything from sportswear to cleaning materials.
- Information Products – These products include online courses, e-books, online training, webinars and others.
- Service Products – Products that are under this category are web hosting, logo makers and web developers.
The Future of Affiliate Marketing
Affiliate networks were reported to have garnered a revenue of £2.16 billion in the United Kingdom. Global revenue is said to have reached $6.5 billion. The most profitable affiliate programs were travel, personal finance, gaming, lead generation and retail.
The affiliate marketing business model is becoming so popular and shows a huge possibility to succeed in the coming years. Consumers will always want more information about products and services and majority now research before buying a product or resorting to a service.
It is foreseen that affiliate marketing will become stronger and become a better option to those who want to do internet-based marketing.