How can I make money on something someone else produces?
This question underlies a popular monetization model exploited by thousands of businesses worldwide, and this is not a scam. This is called affiliate marketing, and since its emergence in the 1990s, it quickly proved its efficiency, becoming a persistent component in almost any business plan.
Current affiliate industry state
Currently, 90% of advertisers see it as an integral marketing strategy component, generating around 16% of all eCommerce sales in the United States and Canada.
With more than 81% of brands using affiliate marketing programs in the United States alone, related spending has been increasing by approximately 10.1% annually, and is expected to reach $8.2 billion in 2022. The dynamics of the previous years leave almost no doubt about it:
Simply put, the rumors of the demise of affiliate marketing are greatly exaggerated. It is not dead, and it is more than just alive — it’s booming.
Is affiliate marketing legit?
People who are not very well familiar with how affiliate marketing works tend to believe it to be some sort of a scam that offers very low-value traffic and is barely legal.
The truth, however, is that affiliate marketing is a great customer acquisition tool, and a convenient model for small and medium businesses to gain additional income. It is totally legit, and to clear possible doubts, we are now going to figure out what affiliate marketing is, exactly, and how it works.
Affiliate marketing meaning: what is it all about?
In 1994, an American inventor and entrepreneur William J. Tobin founded PC Flowers and Gifts, the first company to have implemented the principles of affiliate marketing. By 2022, this model has become so common that we barely pay attention when coming across it.
So, what is affiliate marketing, and what makes it so popular? Let’s find out.
Affiliate marketing definition
Affiliate marketing is a partnership scheme in which you generate traffic, leads, and sales for a larger business partner, and they pay you a commission for this.
In this relationship, you are an affiliate or a publisher, and the company you assist is referred to as a merchant.
Generally speaking, true affiliate marketing meaning is that you get paid for advertising goods and services of another company.
But how does it work and why would you want to do it?
How does affiliate marketing work?
Your work as a publisher can be broken down into a sequence of steps. In general, it looks like this:
- You place a referral link, ad, or banner on your website
- A customer visits your website, sees the link, and clicks it. This link is unique for every affiliate and is used to track the source where a lead came from
- A customer clicks on the link or banner and is transferred to your partner’s website
- If the customer makes a purchase, the system records transaction details and credits you as the lead source
- You then get paid a commission.
To be able to start, first you need to side with the merchant.
Affiliate networks vs. in-house affiliate programs
There are two major ways in which you can begin advertising for another business as a publisher:
- Join an affiliate network
- Join a brand’s in-house affiliate program
Here is what you need to know about them.
Essentially, an affiliate network resembles a marketplace where interested parties can find each other easily:
- Merchants who want their goods or services to be advertised showcase their affiliate programs
- Publishers review all the available offers and choose whichever suits them best.
The network here serves as a middle man and makes a living by charging a commission for its services.
For merchants, affiliate networks are a good way to draw in new customers and spread brand awareness without significant effort, and serve as an essential part of marketing strategy for 81% of advertisers.
For publishers, joining a network is a quick and reliable way to jump into a partnership with bigger companies. The downsides? Heavy competition among the potential affiliates, network fees, and all the drawbacks of working with intermediaries.
Affiliate networks can get big. For example, CJ Affiliate has over 70,000 publishers. AWIN has 100,000 publishers, and the number of the Amazon Associates program that helps content creators, bloggers, and publishers monetize their work, exceeds 900,000 members.
In-house affiliate programs
Instead of elbowing with competitors on crowded digital marketplaces, you might want to interact with a specific merchant directly. Today, the majority of companies have affiliate marketing programs that you can join. In this case, you will enjoy higher rates and more flexible collaboration conditions, but finding the right program might pose a challenge.
Joining a network or a specific program might be easy, but it does not mean that being a publisher is a piece of cake. Depending on the type of affiliate marketing, each can pose a specific challenge.
Types of affiliate marketing
Mainly, there are three ways in which you can promote the merchant’s products and services:
- Unattached. Also known as pay-per-click, or PPC marketing, this model implies that you are not involved with the product or service you are advertising, and have no authority or expertise in the niche they belong to. All you do is place an affiliate link on your website and hope that people will follow it so that you could earn a commission. This is probably the easiest way to receive compensation but also the least profitable one.
- Related. This type of affiliate marketing implies a connection between the niche you are operating in and the product or service you are advertising. For example, if you are running a plagiarism checker startup, your website can contain links and banners to Grammarly or other similar services. In this case, since you have a certain authority in the niche, the visitors of your website will see you as a trusted source and are more likely to follow your recommendations. For this to work, you need to promote the right services to the right people, know your target audience, and choose the niche properly.
- Involved. If you are an active user of a product or service that you are promoting, your experience can become an advertisement on its own. This is a very personal and straightforward way of promotion that many users trust, but it also puts your reputation and relationship with your audience at stake.
If you do everything right, affiliate marketing can be very lucrative.
What is affiliate marketing like: a real-life case
Meet Margaret, a founder of a small agency specializing in data consultation. Currently, she is scouting her niche for a promising and relevant affiliate program to join. This is a viable tactic for Margaret because it provides:
- a source of income that requires little to no financial investments
- a reliable way to form useful partnerships from the start
One of the options Margaret decides to pay more attention to is Coupler.io — a tool that helps thousands of different teams manage their data and automate reporting processes. So, Margaret joins the Coupler.io affiliate program.
On her website, she places an affiliate link leading to a paid Coupler.io plan page. For every customer who follows this link and makes their first subscription payment on this page, Margaret receives a 50% commission. She also receives a 20% commission for every following subscription renewal.
Depending on a merchant, affiliate programs may have different terms of cookie life — a period between the moment a referral first clicks the link and performs the desired action.
In Margaret’s case, if her referral creates an account (even a free one) on Coupler.io within 30 days after following the affiliate link, and then makes a subscription payment within a year after this, she will still get her commission.
Coupler.io is already being used by 700,000 users, and this number is growing. The subscription prices vary from the affordable $24 per month up for the Personal plan to $249 per month for a Business package designed for larger needs. It looks like Margaret’s choice of an affiliate program will prove to be a lucrative revenue stream.
Now that you know what makes the whole affiliate marketing mechanism tick, it is time to learn how you can start using it to your advantage.
How to start your affiliate marketing path?
Although articles on the internet promise you a fast and easy income as an affiliate marketer, in practice, success requires you to do a lot of preliminary preparations. To help you get started as quickly as possible, we’ve prepared a list of areas you will need to invest your time and effort in.
Learn how to choose your affiliate niche and focus on it
Trying to advertise to an audience “as broad as possible” is a mistake. Contrarily, if you choose a niche properly, you can expect a high quality of engagement and response from your target audience.
How do you find a niche that suits you? There are several criteria for you to navigate by, for example:
- your level of expertise and interest in the niche
- searchability and popularity of the niche
- its profitability
- consistency of demand (how long the niche will remain popular)
- level of competition
There are many research tools that you can use for niche assessment, including Google Trends, Google Search Console, Market Samurai, and so on.
Choose an affiliate program
Knowing how to handpick an in-house program is crucial when you don’t want to become a part of an affiliate network. There is no such thing as ‘the best’ affiliate program, but there are definite criteria by which you should choose one – we’ve covered them in detail in our extensive guide on how to choose an affiliate program and in the article about the best SaaS affiliate programs.
Choose your publishing platform
Simply put, a publishing platform is a set of tools that you will be using to promote the merchant’s product or service. The most popular platforms in 2022 are:
- Websites. This is probably the best option for affiliate marketers because 1) you can post different types of content on your website; 2) you can optimize your website for search engines to improve searchability and credibility; 3) you will only be bound by the terms and conditions of the affiliate program you are participating in.
- Social media. If you can observe the harsh content requirements that many social media services impose you can start building up your presence on YouTube, Instagram, or any other platform. This is easier than launching a website from scratch, but the major downside is content requirements: algorithms want you to post regularly, impose limitations on what you can or cannot publish, and shuffle content frequently.
- Email campaigns. You can easily add new letters to your automated email sequence to start advertising to your customers. However, keep in mind that emails promoting affiliate links require a different approach than sending weekly newsletters. You must possess strong knowledge of your target audience and segment it correctly to send only relevant letters to the proper people. Otherwise, they might be seen as spam.
You are not limited to just one of these platforms. Add podcasts, mobile apps, or browser extensions to the mix. Feel free to combine, just make sure you can handle all this.
Start producing content
An affiliate link works best inside of a context. To create it, you need content. Choose the type of content that suits your niche and platform best, and use best practices to create it. It can be anything: blogs, reviews, how-to guides and tutorials, interviews, and so on. Integrating an affiliate link into top-notch content that is engaging and useful increases the chances a customer will follow it, and thus raises your chances of receiving your commission.
As you can see, technically, it’s not that difficult to start making money as an affiliate marketer. But what about the downsides of this advertisement model?
Pros and cons of affiliate marketing
As with any other method, affiliate marketing has its advantages and drawbacks. Let’s take a closer look at them.
- Low entry threshold and initial investments. Since you do not create products or services as an affiliate, becoming a publisher requires minimal financial investments from your side. If you already have a website or a blog, you can jump right in.
- Freedom of choice. You are the only one who chooses whom you want to work with. The choice of affiliate programs and networks on the internet is wide, so you can always find those that fit your niche the most. Just remember that, to some extent, the products and services you advertise as an affiliate can contribute to and affect your overall image and reputation.
- No extra fees. You don’t have to pay a middle man when joining an affiliate program: the merchant automatically pays you as much as you’ve earned. On the other hand, when you are part of an affiliate network, you always have to pay a commission.
- Building partnerships. Affiliate marketing lets you side up with bigger, more famous brands right away, and potentially build long-lasting and mutually beneficial relationships with them.
- No customer service issues. As a publisher, you are responsible only for the quality of the promotion. The rest – sales, troubleshooting, and so on – are the merchant’s trouble.
- You do not set the rules. As a publisher, you depend on the conditions of each affiliate program or network you participate in.
- High competition. There are hundreds of thousands of publishers out there. Standing out among them, especially considering the previous argument, is often difficult.
- No guarantees of success. Even if you send large volumes of traffic to the merchant’s website, it does not mean you will get paid because visitors just won’t perform the desired action: purchase, contact information entry, and whatnot.
- Your reputation is at stake. This is essential for publishers who practice an involved marketing approach. Even if you enjoyed a product or service and found it useful, other users might not share your experience, resulting in disappointment – in the first place, in you.
- Affiliate links can be stolen. Most affiliate programs are anonymous, which means that the merchant does not control whom they are paying. Some unscrupulous but tech-savvy competitors can hijack your affiliate links and parasite on your marketing efforts, earning commissions instead of you.
These downsides do not mean that affiliate marketing is not worth your effort. Rather, being aware of these peculiarities lets you calculate the balance of benefits and potential risks more accurately.
Here are some of the most popular questions beginner publishers ponder before delving into affiliate marketing.
How much do affiliate marketers make?
According to Glassdoor statistics, your annual income as a publisher lies somewhere within the range between $50,000 and $151,000 annually.
Other estimates claim that 80% of affiliate marketers can make anything between $0 and $80,000 per year, depending on their skill, chosen niche, and other factors.
How fast can you make money with affiliate marketing?
Affiliate marketing is easy to start, but it does require a fair share of your time and effort before you can start making good money. On average, expect to earn your first $1,000 within the first 12 to 18 months.
What is the best affiliate marketing program?
The best program is the one that you have selected yourself, based on your personal goals and preferences. If you’re a beginner, this might pose a challenge. Here is a list of factors to consider when choosing an affiliate program:
- compliance with the nice you have chosen
- compensation mechanism
- commission size
- cookie validity period
- merchant’s reputation
- support the merchant provides to their affiliates
- some extra conditions that a merchant might set.
So, is affiliate marketing worth it?
The affiliate marketing definition implies that you promote products of another business for compensation, using your website or other platforms. People often believe this model requires little to no financial investments and is a fast and easy way to build an income. Although to some extent this is true, affiliate marketing also requires:
- research and background preparations before joining a program or network
- a platform that is well-optimized for search engines and has good traffic
- regular production of high-quality content to integrate affiliate links into
If you manage to tackle these challenges, you will be rewarded with solid annual income – depending on the programs chosen, you can expect to earn up to $150,000 per year, or even more.
So, the answer is, Yes, affiliate marketing is definitely worth it.Back to Blog