What is affiliate marketing we here you ask? Affiliate marketing is a performance based activity whereby an affiliate is rewarded by a business for each new customer attracted through their marketing efforts. Affiliate marketing is often overlooked but when paired with other marketing activities, can form part of a highly effective digital marketing strategy.
There are a number of affiliate programs in the UK however the most popular and successful to date include Amazon Associates, ASOS (ironically) and Vouchercloud.
Each affiliate programme differs from the next with some offering more generous incentives than others, but each one comes with a multitude of benefits to both the business and the affiliate. Part one of our two part blog series will discuss both the benefits and drawbacks of affiliate programmes.
Affiliate Programme Benefits
Firstly, joining an affiliate programme is relatively low risk to the affiliate due to little, or no costs involved in set up. As such, affiliate marketing has become increasingly popular amongst students and graduates as a flexible source of additional income. Affiliate programmes are also considered relatively low risk to the business as they are only required to make payment to the affiliate when the predetermined outcome has been achieved as a result of their marketing efforts.
As this is a performance based activity, the business is guaranteed an excellent return on investment which is not always guaranteed with other forms of marketing activity.
Additionally, if the business wishes to expand into new markets, this is possible, as it is relatively low risk and additional advertising budget is available to fully incentivise new affiliates.
Of course, with every marketing activity, one of the main aims is to gain exposure for the business which is possible through affiliate marketing. As affiliates can work remotely, a business can potentially have affiliates in countries all around the world, thus having their products and services displayed to a large audience. Through affiliate marketing, the business will incur no initial costs in displaying their products/services to the world, whilst the affiliate is presented with an opportunity to make a commission through their marketing efforts - win, win! Affiliate marketing is thought to boost trust in a company by up to 33%, making it an excellent way to build and maintain relationships with customers.
Finally, many become involved in affiliate programmes as a result of the flexible working benefits - an affiliate is effectively their own boss. An affiliate is responsible for making their own money, the harder they work, the higher the commission they are likely to receive. As such, the business is happy in the knowledge that although they are paying for the affiliates services (although only when a sale is made), the affiliate is generating a return on investment when a sale is made, ultimately strengthening the business / affiliate long-term relationship.
Things to watch out for with an Affiliate Programme
However, there can also be drawbacks of affiliate programmes if not managed properly. The first of which is in terms of false advertising. With the incentive of high commission in mind, unreliable affiliates may involve themselves in the activity of false advertising and exaggerated claims of product effectiveness to encourage sales however this is at the expense of the company. In the past, this has tarnished the reputation of affiliate programmes and some businesses. You need to make sure you are using reliable, trusted affiliates and building relationships with these valued partners.
A common mistake made when an affiliate programme begins is that businesses often enlist the help of too many affiliates, which they cannot afford to pay in the long-term. As such, the programme becomes untenable and suffers because of this or (although this is not common) the affiliates risk not receiving payment for their marketing efforts. Additionally, businesses have been known to promise high commission rates to encourage affiliates to join, later decreasing the incentive. You need to make sure you have a strategy in place, building campaigns that deliver in the long-term and support profitable affiliate activity.
Additionally, as there is potential to make high commission on an affiliate programme, fraudulent activity can also occur. As such, there are security measures which can be implemented by the business to ensure their affiliate programme is a success for both parties involved.
Affiliate marketing can be highly successful when implemented correctly, driving relevant traffic and conversions for your brand. For top tips for both businesses and affiliates involved in an affiliate program, see the second part in our blog series here.