Affiliate Marketing: How Does It Work

Nearly three years ago, a small vegan manufacturing company hired me to start its planned affiliate marketing program. Like most people, I was not familiar with the concept. So I attended the Affiliate Summit convention in New York not only to understand the concept but how I would incorporate it into a company that effectively did not have a sales force.

Affiliate marketing is the concept of where a person with a website, mobile service or another digital platform such as an e-commerce store (known as an affiliate) promotes the product or services of a company (known as an advertiser). The advertiser supplies the affiliate with marketing content, such as links or banner ads, such as these ads that my department created:

ha_barley_max-250x250  ha_jotg_kit-250x250

The affiliate puts the banners, links, logos or text on websites, blogs, emails or text messages for audiences. When consumers clicked on the link or image, they went to the company’s e-commerce store where they can buy the product. In return, the affiliate received a percentage of the commission of the sale (15 percent for up to $100 in sales transactions; 20 percent for sales of more than $100).

However, the most important part of our program was the ability to store cookies on customer browsers. The cookies provided the company with useful consumer information, such as shopping preferences, buying patterns and when allowing our ads to appear on other engine searches. The information was useful in creating sales campaigns and holiday promotions. Eventually, our program grew to where he gave our affiliates toll-free numbers with their personal IDs embedded as another way to track sales.

As a sales technique, affiliate marketing is a fast-growing way for companies to expand their audiences while reaching new audiences. Global e-commerce had a projected sales number of $1.5 trillion in 2015 as European programs are trying to break into the North American market (Glazer, para. 12).  The benefits of an affiliate marketing plan are that it is a low-risk, pay for performance marketing strategy that leverages time efficiently.

Affiliate marketing poster.jpg
(SOURCE: Prestige Marketing)

If your company has not started an affiliate marketing plan, you may be missing out on an effective way of reaching new clients and understanding their marketing needs.

REFERENCES:

Glazer, R. (2015, Jan. 28). “Five affiliate marketing trends for 2015.” Acceleration Partners. Retrieved January 31, 2016, from http://www.accelerationpartners.com/blog/5-affiliate-marketing-trends-2015

Karr, D. (2014, Jan. 31). “The benefits of affiliate marketing.” Marketing Technology blog. Retrieved January 31, 2016, from https://www.marketingtechblog.com/benefits-affiliate-marketing/

 

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