What is affiliate marketing? What it is and how to get started in 2024

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2 Mar 2024

Businessman and philanthropist Warren Buffet once said, “If you don’t find a way to make money in your sleep, you’ll work until you die.” Affiliate marketing is one way to ensure the money is coming in, even while you’re away from your computer. Whether you create a website, make YouTube videos, or build an audience on social media, you can use affiliate marketing to monetize your content. This introductory guide to affiliate marketing will teach you everything you need to know to get started, from its benefits to affiliate marketing trends, examples and best practices from Wix users.

What is affiliate marketing?

Affiliate marketing is a form of digital marketing when one party earns a commission from marketing another company's products. This party—called the affiliate—searches for a brand partner who promotes their products on their social media accounts, blog or other platforms, making a profit from each sale. Companies then provide affiliates with a unique link—called, unsurprisingly, an affiliate link. That way, they can track the affiliate's performance and compensate them based on sales.

How does affiliate marketing work?

To better understand how this type of marketing works, you'll need to know about the three major players involved: sellers, affiliates and consumers. Together, these three parties make up the affiliate marketing ecosystem.

Sellers: The seller is the company that makes or provides the product. This could be a nationwide franchise like Best Buy or a small independent shop. The number of sellers is constantly growing. In a recent Rakuten survey, 80% of brands said they ran an affiliate program as part of their brand marketing efforts.
Affiliates: Most people get involved in affiliate marketing by becoming an affiliate. The affiliate, also known as the publisher, promotes the seller's products on their own platforms, such as a personal blog or social media page.
Consumers: These are the buyers of the product. When they make a purchase when clicking on the affiliate link, the affiliate earns a commission on the sale.

How do affiliate marketers get paid?

Affiliate marketers have a few different ways to get paid. While pay per sale is the standard practice, it’s helpful to be familiar with the other methods too:

Pay per sale: This is the most common way affiliate marketers earn money and used by 80% of programs. Consumers must buy the product after clicking the affiliate link, and the affiliate receives a percentage of the sale price.
Pay per lead: While less common, the seller may also pay the affiliate to generate leads rather than make sales. In this case, the affiliate must persuade the consumer to complete actions such as filling out a contact form or signing up for a free trial.
Pay per click: Another unusual method is for the affiliate to earn money when consumers click on their link—regardless of whether they convert to a lead or make a purchase. Since clicks can be frauded, fewer affiliate programs compensate for that method.

Types of affiliate marketing

There are several main types of affiliate marketing, and the one you choose will depend on your niche and available resources. So alongside pay per click, pay per sale and pay per lead which we've discussed above, the following are also recognized methods of affiliate marketing that might be worth considering:

Cost per action (CPA) : CPA affiliate marketing is similar to pay per lead affiliate marketing, but the commission is paid for a specific action that takes place before a potential user becomes an actual lead, such as filling out a form or downloading an app. The affiliate only gets paid if the action is completed.

Two-tier: In this type of affiliate marketing, affiliates earn a commission not only for the sales they generate but also for the sales made by the affiliates they refer to the program. So there are two layers of potential payment.

Influencer marketing: Influencers are individuals with a large following on social media who promote products or services to their audience. In influencer marketing, the influencer receives a commission for any sales made through their unique affiliate link. This is a type of affiliate marketing that has really grown in popularity recently and is often tied up with mass marketing, due to its potential large reach .

Pros and cons of affiliate marketing

There are several benefits to becoming an affiliate marketer:

Low risk: Joining an affiliate marketing program is free, so you don't need to invest to start.
Passive income: Once you add the affiliate link to your post, you can earn from the sales without much extra effort.
No customer support: When customers have queries or complaints, the company—and not you—will be responsible for resolving their issues.
Flexible work schedule: Rather than sticking to a traditional schedule, you can work as an affiliate marketer on your own time.
Minimal business costs: You don’t need standard business infrastructure to become an affiliate marketer; all you need is a laptop and an internet connection.

Affiliate marketing is a great way to make money online, but it's important to be aware of the cons before you get started too. Here are some of the biggest drawbacks:

High competition: Affiliate marketing is a popular way to make money online, so there's a lot of competition. It can be difficult to stand out from the crowd and get noticed by potential customers.
Low conversion rates: Even if you're able to drive a lot of traffic to your affiliate links, there's no guarantee that people will actually click on them and make a purchase. Conversion rates vary depending on the niche and product, but they're typically quite low.|
No control over the product or merchant: As an affiliate, you're promoting other people's products and services. This means that you have no control over the quality of the product, the customer service or the branding. If the merchant has a bad reputation, it could reflect poorly on you and your business.
Unreliable payouts: Some merchants are known for being slow to pay their affiliates, or for not paying them at all. This can be a major headache, especially if you're relying on affiliate income to make a living.
Requires a lot of time and effort: Affiliate marketing is not a get-rich-quick scheme. It takes time and effort to build a successful affiliate marketing business. You need to research products and merchants, create high-quality content and drive traffic to your website.

Despite these drawbacks, affiliate marketing can be a great way to make money online. If you're willing to put in the work, you can build a successful affiliate marketing business that generates a significant income.

How to start affiliate marketing

Now that you have some general knowledge about affiliate marketing, here’s a step-by-step overview of how to get started:

01. Select a platform

You can run affiliate marketing on most platforms or social media channels. Instagram is a popular option, but using your blog or YouTube channel tends to yield the most effective results. Instagram doesn't allow users to add clickable links in their posts (only Stories), making it more difficult to direct people to affiliate links. However, with the help of a link in bio tool like Hopp by Wix you can link to an affiliate link as well as other online assets from your bio from one designated URL.

Blogging: If you’re interested in layering on affiliate marketing to your marketing strategy, creating a blog is simple and free of charge. You can monetize your blog by incorporating affiliate links into your articles in ways that are genuinely helpful to your readers. For example, if your post is about baking a cake, you might include a link to buy your favorite kitchen mixer.
YouTube: Affiliate marketing is a proven way to make money on YouTube. If you choose this as your main platform, you’ll need to smoothly incorporate branded products into your videos. Some YouTubers opt to create videos focused around a particular product or brand, while others feature the product as part of a broader theme.
Instagram: Instagram doesn’t offer you the same ability to add links in posts or Reels, so the platform isn’t as effective in converting your audience. Nonetheless, it’s a common choice that yields profit for some. If you go this route, post content that features the product and include a link in your bio or Story.

Regardless of which option you prefer, it's a good idea to post across various platforms so that you can cross-promote your content and expand your reach. This will also give you an understanding of which content works best for you, helping you optimize your promotional efforts.

Learn more: How to make a website

02. Find your niche

The web is full of competition. YouTube alone has over 37 million different channels, while Instagram boasts over one billion active users. Meanwhile, there are over 600 million blogs —and these numbers are only growing.

For this reason, stand out by centering your posts around a specific category—for instance, you might opt for plant-based fast food dupes rather than simply cooking or rock climbing tourism in the Southwest rather than just the outdoors. If your blog niche idea is too broad, the competition will be high and it will be much harder for your target audience to find your content.

Learn more: How to start a business

03. Build an audience

After determining your preferred platform and niche, you’ll need to build a fan base to gain exposure. Whether you focus on growing your Instagram account or becoming a successful YouTuber, having a dedicated audience will increase the likelihood some will click on your affiliate links. These strategies will help you to draw attention to your posts:

SEO: Short for search engine optimization, SEO is the process of strategically adjusting your content to rank high on Google and other search engines. When your blog or YouTube channel appears as a top search result, users are more likely to click on the link and navigate to your page.
PPC: Another way to appear as a top result on search engines and gain more website traffic is to invest in PPC (pay-per-click) advertising. Keep in mind that the amount you spend on ads might be more than what you make from affiliate marketing.
Email marketing If you already have email subscribers through your website, send out newsletters pointing your audience toward your content. You can also add affiliate links directly to your email blasts.
Social media marketing: Run cross promotions to gain further exposure. Spread the word about your YouTube channel, blog or Instagram account on your other social media channels.

04. Connect with affiliate partners and programs

Once you establish your platforms and develop a following, it’s time to start looking for affiliate marketing opportunities. There are two main ways you can find brands to promote:

Join an affiliate marketing program: The easiest way to connect with brands is by joining an affiliate program. While there are various programs out there, you can peruse the most popular below.
Reach out to brands yourself: If you have a particular brand or product you’d love to promote, you can also reach out to companies on your own. Be sure to emphasize how they will benefit from the collaboration. You’ll need to explain why reaching your audience can bring them new customers.

05. Create affiliate content with tracking links

Sellers will provide you with an affiliate link to embed in your content. Rather than promote the products directly, try to make them fit naturally within your content. By incorporating the promotion into a larger, more engaging story, you’ll be able to gently guide your audience toward making a purchase.

To illustrate, lifestyle blogger Simply Tabitha, writes blog guides about topics such as baby toy reviews. In My Review of The Lalo Play Kit article, she added a link to the product at the end of the post. Tabitha writes, “ Check it out—you can save $50 when you get the kit.” Her affiliate link is trackable with an Urchin Tracking Module (UTM) that looks like this: “https://www.meetlalo.com/products/the-play-kit?utm_source=tabitha&utm_medium=blog&utm_campaign=review_post” Thanks to this unique URL, the toy company Lalo will know the website traffic and purchases that came from Tabitha and compensate her accordingly.

Here are some examples of effective affiliate content:

A list of product recommendations, either in the form of a YouTube video or blog post, with promoted items included as suggestions.
A YouTube tutorial showing your audience how to use a series of products, including the one you're promoting.
A webinar in which you teach viewers how to perform a certain task, with a relevant product recommendation included in the presentation.
A blog post offering tips or how-to advice, with a suggestion incorporating the promoted product.
An Instagram Reel or photo showing you using the product.

As you get started as an affiliate marketer, experiment with various strategies to learn which ones reach the biggest audience and generate the most profit.

06. Get clicks

By now, you should have an idea of all the key affiliate marketing ingredients: a strategic platform and niche, a dedicated audience, brand partners and, of course, great content. The only thing left is to convince consumers to click on your affiliate links.

You'll need to place your links within the appropriate context to gain clicks. Think about it: if the name of a product appears out of the blue, no one will be persuaded to click on the link. However, if you tell a story of how a product improved your life or helped you resolve a problem, your audience will be more compelled to click on it and make a purchase.

You should also optimize the link placements. If you add the link to a blog post, place the link at the beginning and end of your article in the form of a compelling CTA (call-to-action). You should also make sure the link visually stands out on the page by making it a different color, adding a CTA button, or using a banner ad.

Tracking affiliate marketing efforts

There are a number of ways to track affiliate marketing campaigns. No matter which method you choose, it's important to track your affiliate marketing campaigns so that you can see how well they are performing and make necessary adjustments. By tracking your results, you can identify which campaigns are most successful and focus your efforts on those campaigns. Tracking is also a way to show your brand partner that your efforts are working. If you're being held to specific KPIs by a brand or partner, you'll need to show you're meeting them.

Use an affiliate tracking platform: There are a number of affiliate tracking platforms available, such as ClickBank, CJ Affiliate (Commission Junction), and Awin. These platforms provide you with a variety of tools to track your affiliate marketing campaigns, including link tracking, conversion tracking, and reporting.
Use Google Analytics 4: Google Analytics is a free analytics platform that can be used to track a variety of website traffic data, including affiliate traffic. To track affiliate traffic in Google Analytics 4, you'll need to create a UTM (Urchin Tracking Module) parameter for your affiliate utm links.
Use your own tracking system: If you're comfortable with coding, you can create your own tracking system. This can be a good option if you need more flexibility or if you want to track data that is not available through other tracking methods.

Here are some of the key metrics you should track for your affiliate marketing campaigns:

Clicks: This is the number of times people have clicked on your affiliate links.
Conversions: This is the number of people who have taken a desired action, such as making a purchase, after clicking on your affiliate links.
Commissions: This is the amount of money you have earned from your campaigns.
Conversion rate: This is the percentage of people who click on your affiliate links and take an action.
Cost per conversion: This is the amount of money you spend on your affiliate marketing campaigns for every conversion you generate.

Affiliate marketing programs examples

While there are various programs out there, the most popular include:

Amazon Associates - perhaps the most known of all the affiliate programs. It offers a wide variety of products to promote, and the commission rates are typically good.
CJ Affiliate - This is a well-established affiliate network with a large number of merchants. It offers competitive commission rates and a variety of tracking tools.
ShareASale - This is another large affiliate network with a wide variety of products and services to promote. It offers a variety of commission rates and payout terms, so you can find a program that works for you.
Rakuten - This affiliate network offers a variety of products and services from well-known brands as well as a cash back system. It offers competitive commission rates and a user-friendly interface.
Awin - This fast growing affiliate marketing program is known for its high-quality merchants and competitive commission rates. It offers a variety of tracking tools and reporting features.

eBay Partner Network - The eBay Partner Network is another popular affiliate marketing program for promoting products on eBay. Affiliates can earn commissions on sales of new and used items.
Etsy - Etsy runs an affiliate program that allows individuals and websites to promote products listed on Etsy in exchange for a commission on sales generated through their referral links. Participants in the Etsy affiliate program are often known as Etsy affiliates. They can earn commissions when users they refer make purchases on Etsy.

You can also become a Wix affiliate and earn commissions driving traffic to Wix.

Affiliate marketing strategies and tips

When you begin your affiliate marketing journey, keep these tips in mind to maximize your success:

Choose sellers with high conversion rates: Before you collaborate with a seller, take a moment to research them. Don’t waste your time marketing a low-demand product. If you promote a high converting brand, the more chances your audience will buy—and the more you’ll earn as a result. Check out the brand’s online reviews, ratings and social media accounts to see if their customers have a strong online presence. This can be a good indicator the brand is in popular demand.
Promote products you believe in: Only market products you can sincerely recommend to your audience. You’ll offer genuine value to your followers while making your personal brand credible and reliable.
Stay up-to-date with trends: Whether your niche is fashion, technology or travel, keeping tabs on the latest industry trends can help you promote the most competitive products with the highest consumer demand. See which topics and themes are center stage by reading publications and following industry leaders on social media.
Don’t put all your eggs in one basket: You don’t want your entire strategy to rely on a single seller’s website, landing pages and conversion rate. Instead, maximize your chances of success by promoting products from various merchants.
Test and optimize: Continually adapt your different marketing strategies to determine which methods yield the most profit. Should you expand your blogging efforts? Redesign your landing pages? Target your audience with email marketing? Play around with different promotional strategies to determine which ones work best for you.

Affiliate marketing examples

Gain inspiration for what’s possible with affiliate marketing through these Wix user examples we loved:

Seasons in Colour

Seasons in Colour's website is dedicated to luxury home accessories. The brand bakes in their affiliate marketing well using the Pro Gallery to showcase the beautiful items for sale. By disclosing “all links provided are affiliate links,” they’re building trust with website visitors.

Lizzy Hadfield

Influencer Lizzy Hadfield uses her website as her home base. In addition, she takes advantage of YouTube to promote her affiliate links. Examine her Outfits For Cold Weather video as an example: She uses storytelling and candid video filming to come across as a trusted friend. Her approach is recommending products as opposed to modeling them as an ad. Accompanying the video, her description reads, “This video contains sponsorship with Monica Vinader, 20% discount is added automatically if you use these links.”

Baileyjst

Baileyjst follows the best practices for influ via affiliate marketing. To demonstrate, in this Instagram Reel, Stanworth tags ScoopClothing and prompts her 50K+ followers to use her unique affiliate code to purchase the clothes. Her video marketing content is not just trendy and visually appealing, but also educational, keeping her audience's attention.

Affiliate marketing trends

As more business is conducted online, and many creators are getting into li. Statista estimates affiliate marketing spending will reach $8.2 billion in 2022. Here are booming marketing trends to embrace:

01. Live shopping: More affiliate marketing will take place through live steam shopping, where streaming video is utilized to sell to a live audience in real-time. L’Oreal is one example of a brand hosting shoppable live streams featuring celebrities and influencers doing makeup tutorials and skincare routines. The streams also include various discounts and giveaways on top of the free shipping for orders made on the same day.

02. Affiliate tracking in the cookieless future: Affiliate marketing partners will need to rely on privacy-safe ways to track and report data, such as using Google Analytics 4 (GA4). The cookies policy will remove the tracking of third-party data on individuals. This means digital marketers won't be able to target ads as specifically as they can now. Cookies track data on a browser and device level, not a user. Advertisers will need to rely on other ways to understand how users interact with ads and affiliate links. Google plans to offer what they call privacy-safe reports through GA4 analytics.

03. Micro and nano influencers take center stage: Brands will work with more affiliates and creators with a smaller follower count, yet high expertise in a niche. This opens more opportunities for new creators to earn commission and work with affiliates. For instance, micro influencers Olivia and Laura took part in jewelry brand Mejuri’s affiliate program in this partner post.

04. AI and automation make an impact: Technology advancements and artificial intelligence (AI) will automate, optimize and make affiliate marketing more efficient. Affiliate marketers will use improved technology like Scaleo, MailChimp and Referral-AI to analyze consumer behaviors faster than ever before.

Affiliate marketing vs multi-level marketing

Multi-level marketing (MLM) and affiliate marketing are two distinct marketing strategies, but they share some similarities.

MLM is a business model in which a company recruits individuals (independent distributors or representatives) to sell its products or services. These recruits can also recruit others into the organization, creating a hierarchical structure of multiple levels or "downlines." Distributors earn commissions not only from their direct sales but also from the sales made by the distributors they've recruited and those further down the line in their organization. MLM companies are sometimes criticized for resembling pyramid schemes, where the primary focus is on recruitment rather than product sales.

There are some similarities between the two strategies. Both MLM and affiliate marketing involve a form of commission-based compensation. In MLM, commissions are earned through a hierarchical structure that includes recruitment, while in affiliate marketing, commissions are earned for driving sales or actions. In affiliate marketing, there is generally no recruitment of a downline, and the focus is on promoting products or services to an audience. MLM, on the other hand, places a significant emphasis on recruitment and building a network. MLM companies often have their own unique products or services that distributors sell, whereas affiliate marketers promote products or services created by external companies.

Affiliate marketing vs referral marketing

Affiliate marketing and referral marketing are closely related, but they are not exactly the same. They share similarities in that both involve individuals or entities promoting products or services to others with the aim of earning rewards or commissions.

Referral marketing is a specific type of marketing strategy that relies on customers or users referring friends, family, or acquaintances to a product or service. It is usually centered around word-of-mouth recommendations. In affiliate marketing, individuals or affiliates promote products or services on behalf of a business or company. They earn commissions or rewards based on specific actions, such as sales, leads, or clicks generated through their referral efforts.

In referral marketing, the focus is on leveraging the existing customer base to make referrals. Current customers are encouraged to refer people they know to the business in exchange for rewards or incentives. Affiliate marketing can encompass a wide range of actions, not limited to simply referring a customer. Affiliates often have the flexibility to choose how they promote and engage with the audience, such as through content marketing, social media, email, or advertising. Referral marketing is usually limited to encouraging customers to refer others. It's a more targeted approach compared to the broader methods used in affiliate marketing.

Affiliate marketing and other types of marketing

Affiliate marketing rarely exists within a vacuum. Meaning it is often dependent on other types of marketing in order to capture traffic and sales.

For example: Online advertising and affiliate marketing are related in that they often complement each other as digital marketing strategies. Online advertising encompasses various channels, including pay-per-click (PPC) advertising, display ads, social media ads and more. Affiliate marketers may create and manage ads to drive traffic to the products or services they are affiliated with.

Online advertising is also a way to generate targeted traffic to a website or specific landing pages. Affiliate marketers can leverage this traffic to promote affiliate products or services. By paying for advertising, businesses can attract potential customers who are then exposed to affiliate marketing content.

Affiliate marketing is a performance-based marketing strategy where affiliates earn a commission for driving sales or leads. Online advertising can help affiliate marketers increase their reach and potential for revenue. When affiliate marketers invest in online ads, they aim to reach a larger audience, resulting in more clicks and conversions, thus increasing their commissions.

In some cases, businesses may use a combination of online advertising and affiliate marketing in coordinated campaigns. For instance, a company may run online ads to raise awareness about a product and simultaneously have affiliate marketers promote that product through their own channels. This coordinated approach can maximize the product's exposure and potential sales.

Some online advertising platforms offer affiliate programs of their own, allowing advertisers to earn additional income by referring new advertisers. This demonstrates how the two concepts can intersect at times, where advertisers both promote products/services and refer others to the advertising platform.

Content marketing and affiliate marketing can also often go hand in hand. An affiliate may decide to start a blog, to create and publish content and links back to the site whose products they're helping to promote and sell. This will also often writing blog posts that need to rank well in search engines and, or paid ads in order to generate traffic and potential sales.

AI and affiliate marketing

Artificial intelligence (AI) has had a significant impact on the field of affiliate marketing by enhancing various aspects of it, specifically making it more efficient and effective. Here are some of the ways in which AI and affiliate marketing work together for more effective campaigns.

AI allows for more precise targeting of potential customers. Through machine learning algorithms, AI can analyze data and user behavior to identify the most relevant audiences for specific affiliate products or services. This helps affiliates reach the right people with their promotions, increasing the likelihood of conversions.

AI can also create highly personalized marketing campaigns. It can tailor the content and product recommendations based on individual user preferences and behavior, making affiliate marketing more engaging and persuasive.

AI-powered analytics can predict trends and customer behavior, which is valuable for affiliates in choosing which products or services to promote. Predictive analytics can help affiliates stay ahead of the competition and adapt to changing target markets.

Chatbots and virtual assistants powered by AI can provide real-time support to customers, answering questions and providing information about affiliate products or services during the buyer decision process. This improves the overall customer experience and can lead to higher conversion rates.

AI tools can help affiliates create content more efficiently. This means being able to generate product descriptions, reviews and other marketing materials much faster than ever before.

AI has the potential to transform affiliate marketing by making it more data-driven, efficient and customer-focused. Affiliates and businesses that embrace AI technologies can gain a competitive edge in the industry.