What is Affiliate Marketing?
Affiliate marketing (or partner marketing) is one of the classic disciplines of online marketing. Affiliates (partners) advertise products and services of companies on their websites and receive a commission in case of success, whereby different remuneration models are applied.
- Is an instrument in performance marketing
- Advertisers only pay if a defined action takes place
- Affiliates (agents) are active on sites, blogs and social media
- Is a win-win situation for companies and affiliates
- Tracking assigns customers to affiliates
How Affiliate Marketing works
The affiliate or publisher operates a website and offers a certain advertising space for products or services. He integrates the advertising material of the merchant or advertiser on his site and is therefore one of the two partners in affiliate marketing. Hence the term partner marketing or partner program (affiliate program). This can be done via banners or other links. This usually sends visitors to online shops. If such a forwarded user buys something in the online shop, the intermediary (affiliate) receives a commission. The advertiser (merchant) or merchant thus concludes a contract with the affiliate. He does this in order to generate even more traffic and new customers via external sites. He also usually provides the necessary advertising material. Depending on the billing model, he pays the affiliate a commission as remuneration. There are also affiliate networks that mediate between the advertiser and affiliate. Their software ensures that the commissions can be calculated exactly. Thanks to tracking, the advertiser can find out relatively precisely which links a consumer used to enter his online shop and can therefore pay the agreed commission to the intermediary. This approach has been firmly established in the online advertising landscape since 1997. Since a commission is only due in the event of success, advertisers have a relatively low risk with this form of marketing. The affiliate can advertise the products and services of third-party companies with little effort or cost. Cookies and codes (IDs) in the links help to technically assign customers and intermediaries to each other – without tracking, affiliate marketing would ultimately not work. Commissions can be paid for purchases as well as for clicks or leads.
Companies increasingly rely on affiliate marketing
By integrating their shops or content on well-matching affiliate sites, merchants have the chance to attract even more potential customers to their offers and thus increase their sales. In addition, branding effects also occur on the external websites. There are various remuneration models in affiliate marketing. In all cases, commission is settled and paid on the basis of performance, i.e. only if a previously clearly defined and measurable performance has been achieved. With pay-per-click, there is a commission for each click of a user on an advertising medium. Pay-per-sale means that there are commissions as a percentage of sales. With pay-per-lead, commissions are paid for each contact made by an interested visitor, for example for registrations or downloads. In addition to direct processing via the merchant, affiliate marketing can also be carried out via so-called partner networks. Affiliates can only be truly successful with high-quality and well-prepared content on their sites. The users must be offered added value, which increases traffic and thus also the clicks on affiliate links and banners. It is also important to choose the right affiliate programs, because not every merchant fits every website or blog. A really good symbiotic relationship can only be created through relevant content. Of course, affiliate marketing only works if affiliates see a good earning opportunity in it. The number of online shops is now almost unmanageable, so the agent makes his choice according to the commission amount, the products offered, the advertising material, the conversion rate of the online shops and the user-friendliness.