Affiliate marketing: What is it and how to start?

Affiliate marketing for small businesses: A comprehensive guide.

If you’ve been on social media or a website and noticed #sponsored or ‘Affiliate link’, this is affiliate marketing activity. What’s that you ask? Well, it means that the individual or company posting that content will be receiving commission from purchases made via those posts. Globally, the affiliate marketing industry is worth over $17 billion and anyone can be an affiliate, although it is most commonly influencers or celebrities who are involved in this activity. If looking to boost exposure for your small business, expand your network or provide an extra income stream, affiliate marketing could be a good option to include in your digital marketing strategy.

What is affiliate marketing?

Affiliate marketing is when other people promote your product or service in return for a small commission for each sale or lead. It’s a type of advertising activity that helps you make the most of your digital marketing. This is because it rewards third parties for generating leads to your website or driving sales of your products via a unique link that they share on their online channels.

Affiliate marketing in 4 steps:

1. You find an affiliate you want to work with, or affiliates can enquire.

2. You provide them with a unique link known as a deep link.

3. They create content and share your link on their online platforms.

4. You pay a small commission to the affiliate for each sale they generate.

What are the pros and cons of affiliate marketing?

Before you start an affiliate marketing programme for your business, it’s good to get a rundown on the pros and cons. Here’s what you should consider before you get started with affiliate marketing.

Types of affiliate marketing

Now you know what affiliate marketing is, let’s review the three main type of affiliate marketing – unattached, related and involved.

1. Unattached affiliate marketing

This type of affiliate marketing is used when the person or company promoting your business has no attachment to what they are promoting and the product is not related to the website, blog or social media it is linked to. It’s simply putting the link out there and hoping someone clicks on it. This pay-per-click method is low maintenance but gives minimal control.

2. Related affiliate marketing

Related affiliate marketing is when your links are used on established online sites such as blogs, podcasts or social media that are related to your product or service. The affiliate does not necessarily use the product, but the link is there to be used by anyone who consumes that content.

3. Involved affiliate marketing

This type of affiliate marketing is the most beneficial for small businesses as it creates a partnership between the affiliate and the product they are directly involved with. Perhaps it’s a product they love, a service they use or something they’ve had a great experience with. You can connect with people and brands who care about your product to create a beneficial affiliate marketing partnership.

Affiliate marketing top tips

How can a business utilise affiliate marketing? We know this can be a challenge for many small businesses, as generating consistent traffic is does, but here are some top tips for success.

• Be careful and selective with who you work with: You will need to be mindful of the quality of their content, their follower numbers (and quality), and if they and their online presence aligns with your brand’s vision. You want to ensure authenticity, and this means ensuring your customers trust in your business and brand through whoever is promoting it. As such, it is important that your partnership aligns with your brand initiatives and that it resonates with your audience.

• Remember your niche: Doing so will help give your brand the edge and differentiate it from competitors. This is known as your unique selling point, or USP. Essentially, what makes your brand different from others in the industry?

• Enforce strict terms and conditions: Be very clear about how and where your partnerships can speak about your brand. Whilst you can’t always control the content that’s produced, you can often influence it with creative direction and clear terms and conditions.

• Identify your target audience: Carry out competitor analysis and market research to be clear on who you want to speak to about your brand.

• Create a strong landing page: Make sure that wherever potential customers land provides a great experience, including making sure your copy is targeted and optimised. You don’t want to waste your chance of gaining new brand fans due to a page that’s poorly written and difficult to navigate.

• Be cyber safe: To protect your business from cybercriminals, use a link cloaking tool like Lasso that makes your links more difficult to hack.

Affiliate marketing models

Now you know what affiliate marketing is, the benefits, and how to utilise the channel, but it’s also important to understand the different payment affiliate marketing models.

There are several ways affiliates get paid, including:

Pay-per-click (PPC): a model where commission is earnt on every click of an affiliate link.

Pay-per-lead (PPL): with PPL, affiliates get paid for every lead they generate through their content and promotions. It’s a popular payout method and you can define what a successful lead looks like - typically it is defined by a potential customer making an action.

Pay-per-sale (PPS): the most common payout model, commission is earned for every sale that is made.

Knowing how affiliate payment models work is an important part of your strategy so you know how to budget accordingly and maximise results.

Affiliate marketing is a dynamic and effective way of forging partnerships between brands and affiliates, harnessing the power of collaboration to drive sales and revenue. With its cost-effective nature and measurable results, affiliate marketing offers a scalable and accessible way for brands and businesses to connect with diverse audiences and elevate marketing efforts.

Find out more about digital marketing channels, like SEO and PPC in our Knowledge Centre, or get 1-2-1 advice from our V-Hub Digital Advisers to discuss how your business can get in on the affiliate action.