What is Affiliate Marketing? See how it all works

Affiliate marketing holds a lot of appeal to people who want to make a passive income. It can be a great way to earn money by marketing different products and services. Affiliate marketing isn’t too difficult to understand, and it could be a lucrative form of income for both people who already run a website and those interested in starting one. Affiliate marketing accounts for 15% of all digital media revenue and is set to grow by 10% in the next few years. So what is affiliate marketing really, and how does it work?

The Basics of Affiliate Marketing

Affiliate marketing allows people to earn a commission from promoting other people’s products. An affiliate chooses products that they like or that are relevant to their audience, promotes them to other people, and gets a percentage of each sale that they successfully make. Affiliate marketing is usually defined as involving three or four different parties. Those who say that there are three parties define them as the advertiser, affiliate or publisher, and the consumer. The fourth party involved is the network, which is usually the intermediary between the advertiser/merchant and the affiliate. Networks aren’t always a part of the process, but they very often are.

How affiliate marketing works infographic
Click the above image to enlarge it, to be able to read the text.

Here’s a little more about each party and how they fit into the affiliate model.

Advertiser

The advertiser might also be called the merchant, creator, seller, brand, vendor or retailer. They create the product, and they want people who can promote their products for them. The advertiser can range from small, single-person businesses up to global companies. The only requirement is that they have a product to sell, and they might not be directly involved in their affiliate marketing activities. Many businesses will hand off most of the work to another party so that they don’t have to handle it.

Network

An affiliate network like WOW TRK is used as the intermediary between merchants and affiliates. By using a network, an Advertiser can make it more simple to find affiliates to promote their products for them. When a advertiser chooses to use an affiliate network, they can have the network vet affiliates for them so that they can find the right publishers. They don’t want to have the wrong people promoting or representing their brand, and an affiliate network can offer access to many affiliates without compromising on quality. As an Affiliate, a network makes it easy to find Advertisers to promote, instead of an Affiliate manually having to reach out to Advertisers themselves to agree deals, they can find multiple deals all on one platform – the affiliate network.

Affiliate

The affiliate or publisher is the party that promotes the vendor’s products. They might be an individual or could also be a company. They promote affiliate products to their audience, with the aim of making as many sales as possible. Some affiliates promote just one product, while others might choose to promote many different products. They may also promote products from a single vendor or from multiple merchants. Affiliate marketing could help affiliates bring in a small amount of supplementary income each month, or they could be earning millions, depending on what they’re promoting and how they’re doing it.

WOW Freebies website screenshot
Example affiliate website – WOW Freebies (owned by WOW Media/WOW TRK). Some of the offers listed on WOW Freebies are affiliate offers found from networks like WOW TRK.

One of the popular ways of promoting an advertiser’s products is by running a blog or website that can be used to link to their products. It could be a review website or a site that finds the very best of different types of products. Another option is a site that is focused on finding products relating to a certain topic.

Affiliate marketers need to be able to create a quality website that is optimized for search engines. They have to have a good grasp over consumer demands and what people are searching for.

Consumer

The consumer is the end target of the product promotion. They are the person who is visiting the affiliate’s website and viewing their content, then clicking on their link and making a purchase. They might know that they are clicking on an affiliate link or they might not. Some affiliate networks and even some countries’ laws require transparency so that consumers know they are helping affiliates to make money.

How Tracking Works

For affiliate marketing to work online, networks or advertisers need to know where their link clicks and sales are coming from. In order to do this, their affiliates use unique URLs, and a tracking cookie is placed on the consumer’s computer. The tracking cookie provides information about when someone visits the site, which page they land on, and any purchases that they make. A tracking cookie will stay on the consumer’s computer for different lengths of time, which affects whether the affiliate gets paid.

Some cookies will last for just 24 hours, while others will stay on a computer for 30 days or perhaps even more. Once the cookie is gone, the affiliate will no longer make a commission from any purchases the consumer makes. Some cookies might also allow affiliates to make money from any purchase made on the site, while others only allow them to earn a commission from the specific product that they linked to.

How Affiliates Are Paid

Affiliates can be paid in a few different ways. Most get paid per sale, as this is the standard model for affiliate marketing. This simply means that after the consumer has made a purchase, the affiliate receives a percentage of the sale price. Another option is being paid per lead. Using this model, the affiliate receives payments based on the conversion of leads. Rather than making a purchase, the consumer will need to do something like getting in touch with the company or join their mailing list. Finally, there is the option of being paid per click. The goal is simply to direct the consumer towards the merchant’s website. The affiliate is then paid based on the increase in web traffic.

Affiliate marketing can be a smart way to make money, especially for people who want to earn money online. It offers a good option for passive income, although it can require some work if starting from scratch.


Interested in getting started in affiliate marketing? It’s easy to get started as an affiliate on WOW TRK, learn how to make money as an affiliate here. Alternatively if you are looking for more sales or leads for your business, get in touch with us to discuss an advertiser campaign today.


Share
Share on Facebook Share on Twitter Share on LinkedIn Share on Telegram
Related Posts