What Is Affiliate Marketing?
Affiliate marketing is a form of performance-based marketing where individuals or businesses promote the products or services of companies. Ecommerce major Amazon is credited for popularising affiliate marketing in online shopping. It did so by enabling bloggers and websites to put links to Amazon’s page for products they review or talk about. When someone buys a product through these links, websites and bloggers get paid.
Affiliate marketing is essentially like outsourcing the selling process to a big network of people who get rewarded when they make sales.
How Do Affiliate Marketers Earn Money?
The following steps and stakeholders are involved in affiliate marketing:
Advertiser/Merchant: This is often used for a company or business looking to leverage affiliate marketing. Advertisers create affiliate programmes to promote products and services.
Affiliate Marketers: These are the Individuals or entities who join an advertiser’s affiliate programme to promote products, services and solutions. Affiliate marketers do this by using various channels such as websites, blogs, social media platforms and emails. These affiliates drive traffic to business websites by encouraging customers to make a purchase.
An affiliate prompts the customer to click on the ‘call to action’ button in order to drive traffic and encourages customers to make purchases on the business’ website. Every time a customer makes a purchase, the affiliate earns a commission. The specific terms of this arrangement, including commission rates and cookie durations (the time period in which the affiliate can earn a commission after the initial click), are defined by advertisers.
What Are The Different Types Of Affiliate Marketing Models?
There are three main types of affiliate marketing models:
Unattached: In this model, an affiliate has no connection to the product or service they are promoting or possesses any related skill or expertise. The affiliate usually runs PPC (pay-per-click) marketing campaigns, using an affiliate link in the hope that shoppers will click it.
Related: This model involves the promotion of products or services by affiliates who hold relevant skills and expertise in the products or services they are promoting.
Involved: As the name suggests, affiliates are more involved in the marketing process. It means that they are either currently using the product or are confident about its impact. These affiliates might share experience in using a product or service, thus garnering more trust from potential consumers.
What Are The Advantages & Disadvantages Of Affiliate Marketing?
For D2C brands, affiliate marketing presents an array of benefits. However, there are also some demerits.
Let’s look at each of them:
Advantages of Affiliate Marketing:
- Cost Optimisation: D2C brands need to pay affiliates only when they successfully generate a lead or sale. This can be more cost-effective than traditional advertising.
- Enhanced Reach: By creating a vast network of affiliates, brands can tap into a wider audience and reach potential customers who may not have otherwise discovered their products or services.
- Targeted Marketing: Brands can tap into bloggers and websites with niche-specific audiences, allowing them to reach their target audience more effectively.
- Brand Exposure: As affiliates promote products or services, brands gain exposure to various platforms and websites, leading to brand awareness.
Disadvantages of Affiliate Marketing:
- Affiliate Onboarding & Management: Managing a vast network of affiliates requires time and effort. It can be challenging to find reliable affiliates, and even more challenging to ensure that they promote products ethically and as per the guideline laid down by a brand.
- Commission Fees: Giving a percentage of each sale to affiliates can eat into profit margins.
- Brand Representation: Affiliates are independent and any adverse action can reflect poorly on the brand.
- Frauds & Dishonest Practices: If affiliates engage in practices such as cookie stuffing or use misleading marketing techniques, the brand’s image may get compromised.
What Are Some Prominent Affiliate Marketing Programmes In India?
There are several dedicated platforms for affiliate marketing like Flickstree and Vcommissions. However, big shots like Flipkart, Amazon and website builder Shopify also run their own affiliate marketing programmes.
Interestingly, high-growth startups in India have also jumped on the affiliate programme bandwagon. Some examples of prominent affiliate marketing platforms and programmes for D2C brands include:
- Shopify
- Flipkart Affiliate Program
- Bigrock
- vCommission
- Amazon Associates
- Cuelinks
- EarnKaro
- Flickstree
What Are The Best Practices For Affiliate Marketing?
Having a well-thought marketing strategy in place can help D2C brands create successful affiliate programmes. Some strategies include:
- Choosing Right Affiliates: Select affiliates who align with your brand’s values, niche, and target audience.
- Offer Competitive Commission Rates: Attractive commissions can attract top-performing affiliates and encourage them to get leads.
- Set Guidelines That Align With Your Brand: Outline the dos and don’ts of your affiliate programme and state how affiliates should promote products keeping the brand’s image on priority.
- Monitor Performance: Regularly track the performance of affiliates to identify top performers. Use tracking tools and analytics to measure click-through rates, conversion rates and other metrics.
- Communicate Effectively: Establish transparent communication with your affiliates, respond to their inquiries promptly and offer support when needed.
- Exclusive Incentives: Provide exclusive offers, discounts or freebies to your affiliates’ audiences. This can motivate their followers to make purchases.
- Reward Top-Performing Affiliates: Rewarding affiliates, especially bloggers, encourages them to continue promoting your brand and fosters a sense of trust.
- Manage Frauds: Regularly review affiliate activities to detect fraud. Implement fraud detection tools and establish clear policies with your affiliates.
