Affiliate marketing is one of the most preferred performance marketing techniques brands use to drive the growth of their e-commerce businesses. In this form of marketing, brands collaborate with affiliates or publishers, who promote the company’s products on their website. A publisher earns a commission whenever a sale is made through their referrals. E-commerce companies partner with various publishers to increase sales by reaching out to newer customers who otherwise are not under the brands’ radar. Moreover, it is one of the few forms of advertising where you pay for marketing spending only after the sale. This feature makes it an attractive proposition for e-commerce businesses to use affiliate marketing to reach many new customers, who otherwise are non-existent, with a minimal investment.
Its popularity can also be gauged by the statistics that suggest more than 80 percent of brands rely on various affiliate programs to improve their sales. According to other research, on average, a meticulously planned affiliate program can generate around 30 percent of all digital marketing revenues for the organization. Latest digital marketing reports peg the size of affiliate marketing at around $12 billion globally, with rapid growth predicted in the future.
Besides the points mentioned above, certain benefits associated with affiliate marketing make it a must for brands and advertisers to use this performance marketing strategy to improve the business’s overall health. Let us discuss some of them in this blog.
Low Implementation Cost
The significant benefit of starting an affiliate program for the brands and advertisers is the low cost of implementing the strategy. Brands do not have to worry about onboarding a separate team for ad visuals or purchasing ad space. In addition, as now you have affiliates that are carefully picked by you overlooking the entire affiliate campaign, you are not required to spend on the marketing activities. Affiliates generally bear most of the cost associated with the promotion and marketing to enable more sales through their channels and earn more commission. Moreover, affiliate marketing does not interfere with the brand’s cash flow making it easy to manage the costs.
Better Audience Targeting
As brands and advertisers onboard the affiliates by themselves after carefully considering their followers, reach, content type, and target audiences, there is a high probability that the traffic that comes to the partner’s website is highly aligned with your products and services, thus, increasing the conversion rate. In other words, brands should be conscientious while selecting the affiliates for their campaigns, as this significantly impacts the outcomes.
Affiliate marketing gives better control to brands and advertisers when it comes to tweaking or changing the components of the campaign midway, compared to any other digital marketing technique. Brands can track their campaign’s performance and decide if they want to make changes in the ongoing campaigns to make them more effective. For example, brands can customize the affiliate links, change the offers, add or reduce affiliate partners according to the outcome and much more with a fraction of the cost.
According to various research reports, more than 60 percent of brands have recorded up to 20 percent of their overall marketing revenue from affiliate marketing, making it one of the most lucrative performance marketing tools which give better returns on investments with minimal risks. One of the main reasons for the high ROI is that brands have to invest very little time and effort in the whole process, and secondly, since affiliates work on a commission basis, they go all out to promote your products and services to increase the sales.
We have discussed the benefits of affiliate marketing above. But a sound affiliate strategy is a must for brands to reap the maximum benefit from their performance marketing initiative. Careful selection of affiliates, competitive commission, and clear communication is key to creating a successful affiliate marketing campaign.