With a market value of $12 million, affiliate marketing has considerable influence. When employed strategically, it can significantly expand a company’s reach and boost sales. The surge in online shopping, widespread internet usage, and advancements in digital marketing practices has fuelled the increased use of affiliate marketing by marketers. Beyond facilitating access to broader markets, it also has proven to be an efficient and cost-effective approach!
What is affiliate marketing?
Affiliate marketing is when a company compensates third-party partners for generating business towards the company’s products or services. This approach has demonstrated notable efficacy, especially for ecommerce enterprises, as customers can be directed straight to the company’s website. The rise of social media and influencer marketing has further pushed the adoption of affiliate marketing in recent years. Social media influencers, skilled in connecting with specific target audiences, have demonstrated their effectiveness in seamlessly incorporating direct affiliate links for the companies with whom they partner with.
Why should you use it?
With affiliate marketing being responsible for 16% of global eCommerce sales, and more than 80% of brands having such programs, why is it so a popular? The popularity of this strategy stems from its capability to allow companies access to broader markets, ultimately contributing to increased sales volume. Beyond this, affiliate tactics have also enhanced companies’ ability to track sales and leads. These improved capabilities allow companies to review their positioning, providing valuable insights about the channels they should use and the target audiences to focus on.
Additionally, this is also a low-cost advertising strategy with high return on investment. Affiliate payments are made based on agreed commissions and can be agreed on either a cost per action, cost per click or cost per sale basis. The minimal investment required and high returns available, only adds to the appeal, as companies can achieve highly efficient, targeted marketing activities, for low costs and high reward.
While there are many benefits, as with any strategy, there are risks associated. Entrusting messaging to affiliate partners entails a loss of creative control and, if not carefully managed, can potentially harm brand perception. However, with diligent affiliate marketing management these risks can be mitigated. Through frequently checking affiliate landing pages and content, as well as monitoring the quality of incoming traffic, the overall quality of the companies’ affiliate marketing can be effectively managed.
Overall, the power of affiliate marketing, and its ability to drive a company’s sales and website traffic cannot be underestimated. It is already a huge industry, affording many benefits to those who use it. With the rise of Artificial Intelligence, you can only expect affiliate marketing to grow even more and for targeting and market access capabilities to be improved even further.
Sources
Benitez, C., 2023. The Ultimate List of Affiliate Marketing Statistics. [Online]
Available at: https://findstack.com/resources/affiliate-marketing-statistics/
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Comrade Digital Marketing, 2023. Affiliate Marketing in 2023 – Misconceptions and Strategies. [Online]
Available at: https://comradeweb.com/blog/affiliate-marketing-in-2022-misconceptions-and-strategies/#:~:text=An%20affiliate%20marketing%20strategy%20is,more%20for%20your%20advertising%20budget.
[Accessed 14 November 2023].
Concannon, L., 2023. How Influencers Are Changing The Affiliate Marketing Game. [Online]
Available at: https://www.meltwater.com/en/blog/affiliate-influencers#:~:text=Built%20on%20trust%20between%20influencer%2C%20brand%2C%20and%20followers&text=And%20that%27s%20because%2C%20if%20you,are%20often%20aware%20of%20that.
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Frankenfield, J., 2022. Affiliate Marketet: Definition, Examples, and How to Get Started. [Online]
Available at: https://www.investopedia.com/terms/a/affiliate-marketing.asp#:~:text=Affiliate%20marketing%20is%20an%20advertising,ways%20to%20promote%20the%20company
[Accessed 14 November 2023].
