Affiliate Marketing Part 1 - Introduction
As an author does it, I would like to apologize at the outset and dampen any expectations. ;-)
I've been using affiliate marketing myself for a while now and have learned a lot in that time. However, I am not an absolute affiliate marketing professional and will therefore certainly not be able to reveal all the secrets and also not have the right answer for every possible situation.
But I will share my knowledge with you and this will surely help many of you to make money from affiliate programs.
Otherwise, the same motto applies as always: You never stop learning and you should keep testing, testing, testing.
Okay, enough of the apologies and here we go.
[Click here for the overview page with all the articles in this affiliate marketing series ]
Introduction to Affiliate Marketing
(How to get started with affiliate marketing )
For all those who have not dealt with affiliate marketing before, I would like to explain the concept behind it first.
Start affiliate marketing with no money
Basically it is of course the case that companies want to bring their products and services to the man or woman. This can be done in very different ways and usually you have to beat the drum for it. After all, thousands of companies are trying to sell their products.
The Internet offers the possibility to follow a purchase process very precisely and so a new form of advertising has emerged, affiliate marketing .
If a website or blog operator integrates a certain product link into his pages, he can receive a commission if someone goes to the relevant shop via this link and buys something there, for example.
Best platform for affiliate marketing
Amazon is an example. There you can register as an affiliate for free and generate special links to categories or individual products in the Amazon shop. If I then build in such a link, I get a commission of a few percent if someone clicks on this link and then buys something from Amazon.
How much does Amazon pay Affiliates?
As an affiliate, you don’t sell anything yourself, but instead refer buyers (or interested parties, but more on that later) to the retailer.
Of course, this ensures that you can advertise hundreds of products without any financial risk and then collect commissions. But of course the commissions are never as high as if you were to sell the product yourself.
commission models
The most well-known way of earning a commission is “pay per sale”. For example, you build a link to a product on Amazon on your website and someone clicks on this link and then buys this product on Amazon. I then get e.g. 5% of the product price credited as a commission.
What is the highest paying affiliate websites?
But in addition to “pay per sale”, there are a number of other payment models:
Pay per sale
As I said, a commission is paid out here if I refer a customer to the dealer via my links. As a rule, a cookie ensures that I also receive the commission if this referred customer buys the product from the retailer a little later. (usually 30-60 days after clicking on the affiliate link)
Pay per Click
Similar to Google AdSense , you get a commission for clicking on an affiliate link. However, these click prices are usually quite low.
Pay per lead
This form of remuneration is quite popular and is used, for example, by insurance companies. I already get a commission credited if someone uses my affiliate link to contact the retailer or, for example, the insurance company. This form of commission is used particularly frequently for products that require intensive advice, since hardly anyone buys or orders anything immediately
.
Pay per SignUp
This remuneration occurs when, for example, someone has registered for an online game and got there via my affiliate link. The remuneration is usually quite low here, but the masses make it here too.
Pay per view
Pay per view
There is also the classic billing per 1,000 banner impressions in affiliate marketing. However, this remuneration model actually contradicts the advantages that characterize affiliate marketing.
Lifetime
There are some affiliate programs that do not pay commissions once, but over a longer period of time. This is mostly the case with merchants who sell subscriptions. So as long as the referred customer has a subscription with the retailer (e.g. server rental), I get an amount X month for month. This can be very worthwhile if the referred customer stays with the retailer for the long term
.
There are a few other obscure remuneration models, but they hardly play a role in reality.
market data
Affiliate marketing will basically take place in 2 ways.
Either you cooperate directly with the retailer, as is the case with Amazon, for example. You register directly with Amazon and can then generate the affiliate links there and choose the advertising material.
Or you can use one of the numerous affiliate networks. They acted as intermediaries between retailers and blog/website operators. They provide the technology for measuring sales, clicks, etc. and for billing the affiliates.
As a result, many small companies and retailers in particular use affiliate networks and do not set up their own. In this way, the blog/website operator can find hundreds of interesting affiliate providers and everything runs through one account. This is of course not insignificant in terms of the time factor, if you consider that otherwise, as with Amazon, you would have to register separately with each retailer and everyone uses different billing software etc.
The affiliate market continues to grow despite the economic crisis. The group of online marketers in the BVDW expects an increase of 15% in affiliate marketing in 2009 to around 308 million euros. This means that affiliate marketing is growing faster than the normal online advertising market (+10%), even if the absolute volume is still far below.
And it can be assumed that with an economic recovery, the growth of affiliate marketing will continue to increase
Who is affiliate marketing for?
Of course, affiliate marketing isn't the best choice for everyone.
Who is eligible for affiliate marketing?
There are many other ways to make money on the internet . This includes, for example, the sale of advertising space , paid content , Google AdSense and many other sources of income .
Affiliate marketing has a lot of potential and if you unleash the right amount of traffic on the right affiliate links in sufficient volume then it is possible to earn very well.
According to a recent study, at least in the US, 17% of the affiliates surveyed (450 participated in the study) earn over $20,000 a month from their affiliate programs.
However, the majority of affiliates (46%) earn relatively little (between 0 and 500 dollars).
Is affiliate marketing still profitable in 2023?
This also shows that affiliate marketing is not a sure-fire success. You can only increase your income if you really put your mind to it and constantly test and optimize. But that's why I'm writing this series of articles.
Affiliate Marketing on Blogs?
There are always statements that affiliate marketing in blogs works poorly. And if you add affiliate links and banners just as carelessly as you do with AdSense banners, for example, then it usually works very poorly.
But there are also very good methods for blogging to use affiliate marketing. I will examine these methods in detail in an article in this series.
Basically, blogs and the corresponding software, such as WordPress, are not an obstacle to affiliate marketing. On the contrary. There are many successful affiliates using WordPress. As with many things in life, it depends on how you use the technology and of course I will also go into that in an article.
And blogs in particular offer a great advantage over normal websites. You can build a reputation as a blogger. And if the readers trust you, product recommendations will of course be better received than on any website.
Why is affiliate marketing the future?
Affiliate marketing is a so-called performance-oriented marketing tool. The costs are linked to the income and it will never happen that you have costs but the marketing tool has not brought anything. That's how it always is with classic banner advertising.
Especially in difficult economic times, companies take a very close look at how effective a marketing tool is. And in the case of affiliate marketing, companies only incur costs if sales are made.
That's why it's so popular right now. The costs are clearly calculable and if you plan your affiliate program well as a company, then there are no surprises.
But affiliate marketing is also very interesting for blog and website operators. If you do it right, you can make very good money.
Therefore, I assume that the importance of affiliate marketing will continue to increase in the future. However, many companies first have to get used to the fact that marketing is no longer centrally in their hands. This is difficult for some companies.
It is worth to learn affiliate marketing?
Pros and cons of affiliate marketing
To conclude the introduction to affiliate marketing, I would like to list the pros and cons of affiliate marketing again.
Benefits of Affiliate Marketing
There are no upfront costs for affiliates. So you don't have to set up an expensive shop, buy products or anything like that.
In Germany there are thousands of programs from all areas to choose from.
Affiliate links and banners are very quick and easy to add.
You can use affiliate links to target a very specific target group.
This is because you have full control and only what you really want is shown.
Affiliate marketing offers a lot of optimization potential. That means work, but ideally you can increase your income more than with almost any other source of income.
Affiliate marketing is very suitable for the long tail. Do you have a website or blog with hundreds or thousands of old articles? Perfect!
Cons of Affiliate Marketing
Especially with “pay per sale” one is very dependent on the optimization of the shop. You have no influence on that. If the shop is poorly done, no matter how many potential customers I can get, there will be hardly any sales and thus commissions.
There are no income guarantees. If you want more security, you are better served with the sale of banner space, since you have a certain planning security there.
A big issue is transparency. Since the dealers usually activate the commissions manually, no one can really say for sure whether the dealer is paying all sales correctly. There are sure to be black sheep from time to time.
There are certainly affiliate programs that are not without legal concerns. If you advertise medicines or gambling, for example, this can have legal consequences.
I hope this introduction has provided a comprehensive and understandable picture of affiliate marketing.
Of course, this is just an introduction. Details on choosing affiliate programs, affiliate website optimization, traffic generation, etc. will of course follow. So don't complain right away. ;-)
As always, I welcome suggestions and criticism.
In the next few days, part 2 of the article series will follow, which is about finding the right niche . Because already when choosing the topic you can set the course for successful affiliate marketing
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