Affiliate marketing is a great way to monetize your web traffic and earn additional income. It's a versatile stream of revenue that you can leverage no matter what your industry or niche. In this comprehensive guide to affiliate marketing, we're going to show you exactly how to get started with affiliate marketing, grow your affiliate marketing business, and share some tips to take your affiliate marketing business to the next level.
You've probably heard people promote affiliate marketing by saying something like "earn money while you sleep." While that's a distinct possibility, we wouldn't be doing our job if we let you believe that affiliate marketing doesn't take work. Affiliate marketing is absolutely one of the best ways to generate passive (or nearly passive) income online, but it's not going to happen if you don't go about it the right way. Fortunately, this affiliate marketing guide includes everything you need to leverage affiliate marketing so you can start waking up to a bigger bank account morning after morning.
What is affiliate marketing?
Affiliate marketing is a process where publishers earn a commission by using an affiliate link to promote a product or service made by another retailer or advertiser. The affiliate partner is rewarded a payout for providing a specific result to the retailer or advertiser.
Typically, the result is a sale. But some affiliate marketing programs can reward you for leads, free-trial users, clicks to a website, or getting downloads for an app.
Most affiliate programs are free to join, so you don’t have to worry about high startup costs. Done right, an effective affiliate marketing strategy can go from side hustle to profitable online business idea by netting you a healthy income.
Types of affiliate marketing
Affiliates always carry a bit of mystery—you never know if the person has ever really used the product or if they are just promoting it for the money. Both cases still exist today.
It wasn’t until 2009 when renowned affiliate marketer Pat Flynn broke down the different types of affiliate marketers into three groups. Understanding these types of affiliate marketing can show you the different ways people make money online in this space, regardless of your moral compass.
- 1. Unattached affiliate marketing
The first type of affiliate marketing is referred to as “unattached,” or when you have no authority in the niche of the product you’re advertising, i.e., There’s no connection between you and the customer. This often involves running pay-per-click (PPC) advertising campaigns with the affiliate link and hoping people will click it, buy the product, and earn a commission.
Unattached affiliate marketing is attractive because you don’t need to do any legwork. Affiliate marketing businesses rely on reputation and trust with a target audience online. Some affiliate marketers don’t have the time or desire to build those relationships, so this type of marketing is their best option.
“Unattached affiliate marketing isn’t a genuine business model, it’s for people who just want to generate income,” explains Elise Dopson, founder of Sprocker Lovers. “Our focus for Sprocker Lovers is building community and providing free education around a particular niche first, which in our case is the sprocker spaniel dog breed, and selling second.”
- 2. Related affiliate marketing
Related affiliate marketing is the practice of promoting products and services you don’t use but that are related to your niche. An affiliate marketer in this case has an audience, whether it’s through blogging, YouTube, TikTok, or another channel. A related affiliate marketer also has influence, which makes them a trusted source for recommending products, even if they’ve never used them before.
While related affiliate marketing can generate more affiliate income, it comes with the risk of promoting something you’ve never tried before. It could be the worst product or service ever, and you wouldn’t even know. It only takes one bad recommendation to lose the trust of your audience. If you don’t have trust and transparency, it’ll be hard to build a sustainable affiliate marketing business.
- 3. Involved affiliate marketing
Involved affiliate marketing refers to only recommending products and services the affiliate marketer has used and truly believes in. “Involved affiliate marketing is the way forward,” says Elise. “It’s rooted in trust and authenticity, which is best for your audience and business.”
In this type of marketing, an affiliate marketer uses his or her influence to promote products and services that followers may actually need, instead of paying to get clicks on a banner ad. It takes more time to build this type of credibility with an audience, but it’s necessary for building a sustainable business.
Elise explains that the involved approach makes advertising much easier for affiliate marketing partners: “You don’t have to hide behind expensive PPC ads and hope for clicks and sales. An organic Instagram Story or blog post about your experience with a product will go a long way.” Elise prefers this method because it’s honest and is “the only genuine way to become a trusted source on any topic.”
How to get started with affiliate marketing
Follow these seven simple steps:
Learn more: Affiliate Marketing Course for Beginners
Step 1: Choose your niche
Your niche is the category you want to talk about and promote.
To stand out amongst the countless other websites today, my advice is to be specific. Instead of tackling a broad niche like food, go for something a bit narrower, like grilling. This helps you build a more focused audience and may also help with SEO.
Here are four questions to ask yourself to find a good niche:
What am I good at?
What do I like doing?
What am I curious about?
What do other people tell me I’m good at?
It’s hard to overstate the importance of choosing something you’re passionate about. You’ll need to create a lot of content to succeed with affiliate marketing. If you choose something you hate, you’ll find it hard to press on when the going gets tough.
That’s why, when I built my first site, I chose to talk about one of my hobbies—breakdancing. And despite knowing nothing about marketing, I grew it to an estimated 2K monthly visits.
Organic traffic going to a niche site
Learn more: How to Easily Find a Niche for Affiliate Marketing
Step 2: Decide on a content platform
You can do affiliate marketing on any platform. This includes:
- Website
- YouTube
- Social media (e.g., Instagram, TikTok)
- Newsletter
- Podcast
The method you choose will depend on your preference and occasionally, your niche’s preference. For example, people who are learning breakdance will prefer videos. So, even if you prefer writing, running a YouTube channel may be a better option.
That being said, we recommend building a website and using search engine optimization (SEO) to rank your content high on Google. This allows us to generate passive search traffic consistently, which means consistent clicks on affiliate links too.
Step 3: Find affiliate programs to join
There are three main types of affiliate programs to choose from:
High-paying, low-volume —
Niche products with fewer buyers. For example, HubSpot sells only to businesses but their affiliate program pays well (100% of first month and 15% monthly recurring commission.)
Low-paying, high-volume —
Products with mass appeal, e.g. PS5 games. For example, Amazon only pays up to 10% commission. But the good thing is they offer commissions off the entire value of the purchase (and not just the product you recommended.)
High-paying, high-volume —
Expensive products with mass appeal, e.g. credit cards. An issue is that these programs tend to attract affiliate marketers with deep expertise and pockets and willingness to black-hat tactics.
Types of affiliate programs
Which affiliate program should you join? This depends on your niche and level of expertise.
If you’re targeting consumers, go with the second model: low-paying, high-volume. If you’re targeting businesses, go for the first one: high-paying, low-volume. Popular programs include software and web hosting-related products.
Which type of affiliate programs should you join?
The best way to find these affiliate programs is with a Google search. Alternatively, enter a competing affiliate site into Ahrefs’ Site Explorer and go to the Linked domains report.
For example, I know that Pat Flynn promotes a number of software products on his website, Smart Passive Income. Eyeballing the report shows that Pat links to Aweber pretty often. And if we expand the caret, we’ll see that Pat is an affiliate.
Pat Flynn's affiliate link
It only takes a quick Google search to find an application form for this program.
If there is a product you’d like to promote but they don’t have a public affiliate program, reach out to the company and ask if they would be willing to build an affiliate relationship with you.
Step 4: Create great content
If you want your affiliate site to succeed, you need to create high-quality content where your affiliate links fit naturally. Don’t just blindly curate products from Amazon’s best sellers. Go the extra mile and make sure your content solves your readers’ problems.
For example, if you’re doing reviews, you should actually purchase the product and test it. Use it over a period of time and report your findings.
Step 5: Drive traffic to your affiliate site
You’ve created great content. The next step is to get more people to read it, so they will click on your affiliate links.
Here are three traffic strategies to consider:
A. Paid traffic
This is where you pay for traffic to your site. You can do this using pay-per-click (PPC) ads.
The advantage of paid traffic is that the moment you start paying, you get traffic.
However, there are some downsides.
First, running ads will dig into your profits. It’s quite normal for advertisers to lose money before they make it… if they ever do.
People tend to lose money before making it in PPC
You need to be realistic about how long it takes to optimize a paid traffic campaign.
Secondly, once you stop paying for ads, your traffic will stop.
Generally speaking, ads are a great traffic strategy if you’re part of a high-paying affiliate program and can make the numbers work.
But if you’re completely new to paid marketing and have no marketing budget (or are working with lower commission programs like Amazon Associates), then it might not be such a great idea.
B. SEO
SEO is the practice of optimizing pages to rank high in search engines like Google
For as long as you can rank high in the search engines for your target keywords, you’ll get consistent and passive traffic.
On the most basic level, SEO is about:
- Understanding what your target customers are searching for
- Creating content around those topics
- Making sure Google understands clearly what your page is about
- Acquiring or earning links to push your pages higher in the search engines
- Ensuring Google can find, crawl, and index your content
- Learn the basics in this video or read our beginner’s guide to SEO:
C. Build an email list
Email lists allow you to communicate with your readers anytime.
Use them to tell fans about new content and keep them coming back to your site for more. This leads to more affiliate clicks and sales.
You can even add affiliate links in the emails to your audience:
Affiliate links in email newsletter
To build an email list, you need to persuade the readers on your site to sign up. That means offering something valuable, like a free eBook, an email course, and more.
Step 6: Get clicks on your affiliate links
Just because you have an amazing piece of content doesn’t mean people will click on your affiliate links.
There are a few things you need to consider.
A. Link placement
If all your affiliate links are at the bottom of the page where people rarely scroll, clicks will be few and far between.
On the other hand, make every other word a link in your introduction, and your content will look spammy.
You need to balance link placement with the other factors below.
B. Context
Let’s say you were writing an article on the best kitchen knives for under $50
Your introduction probably shouldn’t look like this:
Today, I’m reviewing the best chef knives.
The links look out of context and spammy.
This would make more sense:
Today, I’m reviewing three different chef knives you can buy on Amazon for under $50. These are, product name 1, product name 2, and product name 3
C. Callouts
Using callouts like buttons, tables, and boxes can help attract your readers’ attention and make the post more skimmable.
For example, the Wirecutter uses eye-catching boxes with product links anytime they share a top pick.
Wirecutter product call-out
Good Housekeeping takes a different approach and creates a table with buttons:
Good Housekeeping product table
Step 7: Convert clicks to sales
In affiliate marketing, two conversions need to take place for you to make money.
The first conversion is the click to the product page.
You’re 100% in control of this action. Use the tactics above to improve your chances of getting that click.
The second conversion is the visitor purchasing the product. In the case of affiliate marketing, the merchant controls the checkout, and their conversion rates are out of your control.
The trick is to play the game to your advantage and look for merchants with programs that convert well.
Here are a few ways to find them:
A. Public income reports
If people are making decent money from an affiliate program, then it’s likely that the product converts well.
How do you know if people are making money?
Look at public income reports where bloggers publicly reveal how much money they’re making from their affiliate deals.
You can find these reports on Google.
For example, if you search for “income report amazon affiliate”, you’ll see a few blog posts showing how bloggers have made money from Amazon Affiliates.
Search results for affiliate income reports
Looks like one blogger made over $47,000 from Amazon Associates:
Amazon affiliate lifetime earnings
If you’re in the same space, you can also take a look at where her other affiliate income comes from, and potentially promote the same products.
B. Ask questions
If there isn’t much information available about an affiliate program you want to join, sign up and ask questions.
For example, you might want to find out what their average conversion rates are, or a ballpark figure of their top earners’ monthly commissions.
This can help you figure out if the affiliate program is worth promoting.
C. Use your intuition
Sometimes, it’s best to go with your gut feeling.
If the program or product you’re checking out feels “off,” or if you would personally never recommend the product to a friend or family member, then don’t promote it.
How Do Affiliate Marketers Get Paid?
A quick and inexpensive method of making money without the hassle of actually selling a product, affiliate marketing has an undeniable draw for those looking to increase their income online. But how does an affiliate get paid after linking the seller to the consumer?
The answer can get complicated.
The consumer doesn’t always need to buy the product for the affiliate to get a kickback. Depending on the program, the affiliate’s contribution to the seller’s sales will be measured differently.
The affiliate may get paid in various ways:
Pay per sale.
This is the standard affiliate marketing structure. In this program, the merchant pays the affiliate a percentage of the sale price of the product after the consumer purchases the product as a result of affiliate marketing strategies. In other words, the affiliate must actually get the investor to invest in the affiliate product before they are compensated.
Pay per lead.
A more complex system, pay per lead affiliate marketing programs compensates the affiliate based on the conversion of leads. The affiliate must persuade the consumer to visit the merchant’s website and complete the desired action — whether it’s filling out a contact form, signing up for a trial of a product, subscribing to a newsletter or downloading software or files.
Pay per click.
Affiliate marketing is largely about generating traffic to websites and trying to get customers to click and take action. So, the myth that affiliate marketing is all about SEO (search engine optimization) is no surprise.
However, while organic traffic is free, SEO simply can’t sustain affiliate marketers in such a saturated market — which is why some affiliate marketers utilize PPC.
PPC (pay per click) programs focus on incentivizing the affiliate to redirect consumers from their marketing platform to the merchant’s website. This means the affiliate must engage the consumer to the extent that they will move from the affiliate’s site to the merchant’s site. The affiliate is paid based on the increase in web traffic.
There are two common concepts in PPC:
CPA (cost-per-acquisition):
With this model, the affiliate gets paid each time the seller or retailer acquires a lead, which is when an affiliate link takes the customer to the merchant’s online store and they take an action, such as subscribing to an email list or filling out a “Contact Us” form.
EPC (earnings-per-click):
This is the measure for the average earnings per 100 clicks for all affiliates in a retailer’s affiliate program.
Pay per install.
In this payout system, the affiliate gets paid each time they direct a user to the merchant’s website and installs a product, generally a mobile app or software.
So, if a retailer budgets for a $0.10 bid for each install generated via an affiliate program, and the campaign results in 1,000 installs, then the retailer will pay ($0.10 x 1,000) = $100.
10 Affiliate Marketing Terms You Need to Know
At first glance, the terms used in affiliate marketing might seem a bit confusing. But we assure you that they are not as hard as they might seem.
Our list here is a collection of the most common terms you might encounter when working with affiliate programs, both as a creator and a brand.
Term #1: CPA
The term CPA stands for Cost Per Acquisition. In the world of affiliate marketing, it is both a commission payment model and a KPI.
As a KPI, Cost Per Acquisition is the amount of money you are spending to acquire a single customer. You can calculate it using this formula:
Affiliate marketing KPI CPA - Digital Marketer's World
As a commission payment model, CPA refers to the case when brands pay commissions when the customer (that the affiliate had referred to the brand’s website) makes a purchase.
Term #2: CPC
CPC is the abbreviation of Cost Per Click.
Just like CPA, it is also both a metric and a payout model in affiliate marketing.
As a metric, CPC is the cost you incur for generating each click on affiliate links. The formula is:
Affiliate marketing KPI CPC - Digital Marketer's World
As a payout model, CPC is the case when affiliates get commissions every time their viewers click on their affiliate links.
Term#3: CPO
The full name of this term is Cost Per Order.
It is an alternative to Cost Per Acquisition, as you are calculating the amount you spend on marketing to get a single order. The only difference is that with CPO, you only count those who made a purchase, while with CPA, an acquisition can also be something free, like a trial sign-up.
This metric is more commonly used in the affiliate programs of eCommerce stores.
Term #4: Conversion rate
This metric is quite a valuable one to track and optimize for.
Conversion rate tells you what part of your traffic actually reaches your goals. The goals, in this case, can be an order, a sign-up, or a subscription.
To calculate the conversion rate, marketers use this equation:
Affiliate marketing KPI Conversion rate - Digital Marketer's World
In the reality of affiliate marketing, you will calculate the conversion from the traffic that came from affiliate partners. Thus, your number of visitors will be equal to the total number of affiliate link clicks.
Term #5: EPC
EPC or Earnings Per Click is a metric for the creators and affiliates.
It represents the average amount of affiliate income per click on your affiliate links.
You can get your conversion rate using this equation:
Affiliate marketing KPI Earnings per click - Digital Marketer's World
When your EPC is growing, it means that more of your subscribers and visitors make a purchase after clicking on your affiliate links and going to the brand’s website.
Term #6: EPI
It stands for enhanced publisher information. It is a system that allows you to create custom parameters, add them to your affiliate links and pass them to affiliate platforms.
Affiliate marketers use EPI for custom analytics purposes, such as tracking the links of specific teams (used in team performance measurement) or click_ids of other analytics tools, letting them keep track of affiliate link performance in multiple tools at the same time.
Term #7: PPC
PPC stands for Pay-Per-Click.
It is a model of online advertising when you are paying to the ad platform each time people click on your ads and visit your website.
In the context of affiliate marketing, PPC refers to the cases when affiliate marketers or creators use paid advertising to attract more traffic to the affiliate site or channel where they have placed their links.
Term #8: UTL
The full name for this term is Unique Tracking Link.
As a creator, when you are registering for an affiliate program and selecting a product to promote, the affiliate platform generates a link that includes two unique IDs:
Your unique ID letting the brand know that the visitor came from your blog/channel.
Affiliate product unique ID that tells the brand which product you were promoting.
Brands use Unique Tracking Links to track your conversions and calculate your commissions.
Term #9: CPL
The CPL or Cost Per Lead is another term that is both a KPI and an affiliate payout model.
As a KPI, it is the amount of marketing expenses that you have made to get a single lead (either MQL or SQL). You calculate it this way:
Affiliate marketing KPI Cost per lead - Digital Marketer's World
As a payout model, creators get a commission when the person they have referred becomes a lead for the brand.
Term #10: ROI
ROI (Return on Investment) is probably among the most important metrics you should be tracking.
It shows the effectiveness of your marketing activities, as it is the difference between the investments and costs you have put into a specific marketing channel and the benefits (e.g., sales revenue) that campaign has brought you.
The formula for ROI is quite straightforward:
Affiliate marketing KPI ROI - Digital Marketer's World
To conclude, there are many terms and abbreviations that you will encounter when getting started with affiliate marketing, and we hope that we have covered most of them for you here.
Frequently Asked Questions (FAQs)
Q1. What are the pros and cons of affiliate marketing?
The pros of affiliate marketing include its cost-effectiveness, high return, and ease of execution. Regarding the cons, you will need lots of patience to start earning commissions, and the commission rates might not be as high as you wanted.
Q2. What is the difference between affiliate marketing and affiliate networks?
The difference between affiliate marketing and affiliate networks is that affiliate marketing is a promotional model where companies pay commissions to affiliates who promote their products, while affiliate networks (e.g., ClickBank or Commission Junction) are the marketing platforms where these companies and affiliates meet.
Q3. Is affiliate marketing easy?
Starting an affiliate marketing campaign is relatively easy, but it takes patience and experience to get everything right and earn a sizable income from the affiliate marketing business.
Q4. How do I start affiliate marketing as a beginner?
To start doing affiliate marketing, you can follow these steps:
- Decide on the affiliate niche you will operate in.
- Sign up for affiliate programs and select the products to promote.
- Build an audience and promote these products to them naturally.
- Make sure that you are also following the laws and regulations for advertising.
Q5. What exactly does an affiliate marketer do?
An affiliate marketer is an online marketing professional who acts as a middleman between the brands and creators interested in affiliate marketing. Affiliate marketers match these two and earn commissions from the process.
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