Businesses are always looking for new ways to market their products. With the rise of online shopping, it is becoming more common for companies to have a strong affiliate marketing presence on the internet today.
This type of marketing strategy allows companies to find new ways for advertising and can be used to effectively target a very defined and specified market. Depending on the company, affiliate marketing can be used as a means of free promotion or as a paid marketing tactic.
It is a great way to get the word out about a product, get more customers to your website, and can also provide a great deal of business growth. However, it’s not always as easy as it sounds.
There are many advantages and disadvantages that come with this strategy that you must be aware of before starting to market a product. If you know what to look out for, then affiliate marketing can be a simple choice for companies who want to take their online presence up a notch.
What Is Affiliate Marketing?
Affiliate marketing is the field of marketing that enables other website or blog owners to promote a merchant’s product or service through their website and blogs, in return for a certain percentage (usually 10%) commission on each sale.
The affiliate traffic (people who visit the affiliate’s site using the link created by the affiliate) is tracked via special web beacons or cookies which are served by either,
- The merchant,
- An affiliate network like Google Affiliate Network (GAN) where merchants and affiliates can participate as members,
- Both.
This enables an affiliate marketer to earn money online easily because they don’t need not to have their own product or inventory.
The popularity of this method has led to the rise of intermediary websites that point potential customers directly to the affiliate-marketing partner who has agreed to pay a percentage of each sale. These sites work as lead generation or affiliate marketing tools and earn money online by having members post links and banners on their websites.
It is an easy, fast, and simple process for both parties – such as blog owners (affiliates) and merchants (sellers). However, there is no denying that it’s not perfect – all methods have advantages and disadvantages:
First, let’s consider some advantages:
Highly Targeted – One of the best parts about affiliate marketing is its incredibly targeted nature. Because affiliates have been vetted or selected by the company they represent, there is little concern in regards to the credibility of the representative promoting your product.
Since this person has been deemed worthy by your company, you know that they will be effective at getting the word out about your product. Plus, because these affiliates have already established themselves as experts in the industry, it is possible to target a very specific group of people who are already looking for what you have to offer!
Low-Cost Promotion – Although many companies might consider affiliate marketing as another form of paid advertisement, there are some cases where it can serve as free promotion.
By uploading content onto their own sites or channels, affiliates have the opportunity to promote your brand with little cost on your end. This means that you gain more exposure without having to pay anything upfront.
It is still important that you monitor who is promoting your product so that bad reviews don’t scare away potential customers, but affiliate marketing can definitely save a company a significant amount of money in the long run!
Brand Awareness – Since affiliates are using their own channels you can get your product out there with very little cost. This allows businesses to get the word out about their products without having to make a large investment.
Because these individuals have built up credibility through years of industry experience, people will be more likely to trust what they say about your brand and product! This helps you to develop a relationship with your audience and ultimately turn them into customers.
Affiliate Marketing can be used in conjunction with content marketing, email marketing, or any other number of internet marketing strategies.
Increased Business Growth – By working with affiliates you are opening yourself up for new opportunities with business growth. Not only do you gain free promotion on popular sites, increased exposure often brings more customers to your website.
As a result, you have the opportunity to increase sales and spike up business growth which can lead to future opportunities. Furthermore, it can help increase brand awareness which is important if you want to make your business more successful.
Flexibility – The independence and convenience of the environment will also affect your mood and efficiency of work. You can basically work from anywhere as long as you have an internet connection.
You can set your own hours and control the quality of your work. You don’t have to go on about dealing with someone else’s mistakes, because all the work is handled by you personally.
The flexibility with affiliate marketing will be one of the biggest key factors for you. You can even choose not to work on certain days or weeks if you want and still generate enough revenue.
Earn While You Sleep: Once you’ve started to receive a certain amount of visitors and have set up a system that ensures a constant flow of revenue, you can start to maximize your earnings.
With affiliates, you’ll be able to earn even while sleeping and take advantage of the passive reward income over time. You can simply automate your affiliate commissions to go directly into your PayPal account or another preferred method of payment, so you can keep on growing without being tied to a computer all day long.
You can find loads of offers from affiliate networks to advertise available products that align with your niche. With the help of a web service, you’ll quickly figure out which offers are converting and which ones just aren’t worth your time. So you can plan your affiliate campaign efficiently.
Now, let’s consider some disadvantages:
Risky Representation – The biggest concern with affiliate marketing is the risk involved with this type of promotion. Since affiliates are not limited in who they can represent or what they can promote, there is always a concern that it might be at the expense of your company’s reputation.
In order to avoid bad reviews and PR disasters, you must monitor affiliates closely and make sure that everything they say about your product is accurate and fair!
Income Dependency- The fact that all income from an affiliate website depends on the traffic received from its chosen advertising network means that even small changes can have a huge impact on commissions generated by any given site.
This dependency often leads to affiliates trying to send more traffic to their site than it can actually support. This subsequently leads to low conversion rates and a decrease in income being earned by the affiliate.
Hard To Succeed – Although affiliate marketing is an efficient way for businesses to get their products out there, only about 7% of affiliates are usually successful at generating results that match or exceed what they originally invested into their websites.
The other 93% fail to make anything at all from promoting your product, which is why it’s important that you choose affiliates carefully before letting them gain access to your website’s database.
Lack of Trust- Clients are always suspicious about comments left on blogs about products because they feel like they are being pressured to buy. Sometimes this is because people are paid to promote certain products, hence creating too much hype for the company.
No Guarantees For Earnings – Affiliate marketing is the only online business model where you earn money without owning a product. This means that although you can earn commissions, there are no guarantees about how much you will make in the end. This is why affiliate marketing has to be considered seriously before starting it.
For instance, if you end up choosing a niche that doesn’t have any demand, you will basically set yourself up for failure. That’s why it’s very important that while choosing your niche, you pay attention to the demand of the products in that specific market.
Even then, no one can guarantee that you will make any sales at all. All you can do is write great content and hope for the best. But even if you manage to choose a great niche and create amazing content, there are still other factors that can make or break your business. So make sure you’re aware of all the aspects before diving in head first into it.
Bottom Line…
At the end of the day, it all comes down to whether you think affiliate marketing is a sustainable source of income.
The opportunity might seem attractive in the beginning, but it is important to make sure that you understand the nature of this business model and know how to work with it.Most of the disadvantages are related to human factors, so it’s your job to change some things around and work smart. You can read more about that here. If you want to achieve great results in affiliate marketing, you must be willing to put some effort into it and invest in your business. It is more of a long-term strategy than a quick fix, however, the returns will be worth it.