What is Affiliate Marketing?

Affiliate Marketing Basics

So what is affiliate marketing? Affiliate marketing is an old favorite that has been around for a while. It’s a reliable and low ad cost marketing channel where merchants share revenue with publishers that sell their products. In industries outside of e-commerce, affiliate marketing is used to reward publishers for collecting leads, getting new users, and sometimes even newsletter subscribers – so it doesn’t have to be tied to the sale of a product. The affiliate marketing landscape is changing and evolving every day with the introduction of new technologies and publisher strategies.

The journey:

  • A visitor reads an article or spots a deal on a publisher website
  • The visitor clicks the link on that website and arrives on the merchant website
  • The visitor decides to take action (like a purchase) on the merchant website
  • A percentage of revenue generated as a result of the conversion is awarded to the publisher

What is an Affiliate Network?

An affiliate network is the middle-man between publishers (affiliates) and merchants (companies). The network allows publishers to join the affiliate programs of merchants suitable for their website audience. It also allows merchants to recruit publishers to promote their website, growing traffic and revenue. At Musictoday we work closely with our vendor partners CJ Affiliate and Pepperjam on a variety of affiliate programs. We also have experience with ShareASale and Affiliate Window.

How are Conversions Tracked?

A tracking pixel tracks user activities on your website. You can track conversions, or pages users visit while visiting your site for example. For affiliate marketing, adding the tracking pixel to your preferred tag management system allows you to track conversions as a result of actions taken by your affiliate program’s publishers. This allows you to properly reward publishers for bringing converting visitors to your website.

Publisher Rewards & Incentives

In e-commerce, publishers are financially rewarded and earn commission on valid sales generated as a result of a click from their website. Merchants have the ability to assign commission rates to various publisher groupings based on their available advertising margins. You may want to assign 5% commission to a particular publisher type or go as high as 12% depending on your budget.

Publishers can also be provided with incentives for motivation such as temporary or long-term commission increases to achieve particular performance goals or paid advertising placements on their websites. Commission levels can also be tiered with a base commission rate of 5%, with a 7% incentive if sales are over $200, or a 9% incentive if sales are over $500 for example. Many publishers have their own advertising calendar so reaching out to them for news on their latest opportunities is key.

Often Misunderstood

Affiliate marketing has earned a bit of a bad reputation in the past due to the perception of low-value traffic, and publishers with abusive practices such as trademark infringement, link farms, cookie stuffing, and fraud. Luckily the industry, and technology, has changed significantly and affiliate networks now allow you to create special rules and terms for your program such as restricting certain publisher marketing methods, developing product exclusion lists and excluding certain publisher types. Tracking tools have also evolved over the years which allows for better decision-making and performance tracking across devices. Networks themselves are also making strides to ensure publishers that join their network are higher quality.

At Musictoday, we’ve found that affiliate marketing comes in second to email for most clients in terms of return on investment. The pay for performance model means there’s better control over spend. Ultimately, if you carefully set up and manage your program correctly, you’ll get your program started on the right foot.

Who are Affiliate Publishers?

Anyone who runs a website can become an affiliate publisher. Here are just a few of the publisher types we come across in the affiliate programs we manage with example websites below so you can get a better understanding of who they are and their purpose.

Recruitment

Many affiliate networks have their own recruitment area within their web portal where you can browse and invite publishers to your affiliate program. It’s also prudent to establish partnerships with out of network websites and invite them to join the affiliate program in question.

At Musictoday, we manually approve all publishers so we can review their website for content appropriateness and quality. An important thing to note is that it doesn’t matter how many publishers you have, it only matters if they can drive relevant and qualified traffic to your site.

Endorsement & Relationship Disclosures

Bloggers and vloggers have started to leverage affiliate marketing as a way to monetize the content they produce. As one of these publishers, it’s important to follow applicable laws by fully disclosing that you may earn a commission as a result of a visitor clicking a link and converting on a merchant website.

The Federal Trade Commission (FTC) reviews website content and social media posts frequently and sent more than 90 warning letters in April to influencers and marketers regarding relationship disclosure. The FTC recommends that publishers disclose their relationship with the merchant clearly and conspicuously on their website or social media posts, this allows their audience to decide how much weight to give the publisher’s endorsement. Learn more about the Federal Trade Commission’s advice on affiliate marketing.

Glossary

  • Merchant: A company that sets up a website to sell their products or services.
  • Publisher / Affiliate: The website that advertises products on behalf of the merchant.
  • Text Link: A string of hyperlinked text that advertises the merchant website and products.
  • Banner: An image available in multiple sizes which advertises the merchant website and its products.
  • Product Feed / Product Catalog / Datafeed: A list containing the products a company sells and the attributes of the products. They supply content to e-commerce websites and aggregators.
  • Commission: A revenue percentage awarded to the publisher/affiliate by the merchant for confirmed product/service transactions.

Interested in our affiliate marketing services? Send us a note and let’s chat!

About the Author: Jasmine Van Schaick is a Senior Marketing Specialist at Musictoday. She manages projects across affiliate marketing, display remarketing, organic SEO, corporate content development and more.