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What is affiliate marketing?

Affiliate Marketing is a performance-based marketing channel wherein merchants pay out a predetermined sales commission to affiliates, also known as publishers or advertisers, in exchange for ad space. By compensating advertisers only when conversions are made, affiliate marketing allows merchants to mitigate the risk of a traditional upfront ad spend, while incentivizing advertisers to deliver premium value associated to the sales commission offered.

Publishers traditionally promote merchants’ products and services on their websites via text ads, banner ads, and sometimes even product catalogs that are developed by the merchant and accessible to the publishers through a third-party affiliate network. The third-party affiliate networks are the tracking platforms which house the affiliate programs for advertisers. Publishers who participate in Affiliate Marketing join these networks free of charge and are then able to partner with retailers who sell products and services that are aligned with their target audience. On the flip side, advertisers can also find publishers who are desirable and recruit them into their program via the affiliate network. Once a publisher has joined the affiliate program for any given advertiser on an affiliate network, they can post affiliate ads from that advertiser on their website. Customers that click

through said affiliate ads on a publisher website and convert on the advertisers’ sites get reported back to the affiliate network where the publisher is paid out a commission for referring that customer. As you can imagine, effective Affiliate Marketing programs are highly customized and need to be tailored to the advertiser, their business goals, and especially the products and services they are selling. Affiliate Marketing is a complex world that requires constant attention and expertise, which can make it very daunting for advertisers, so it’s quite common for advertisers to work with an Outsourced Program Management Agency to get their affiliate program off the ground and collaborate with them on an ongoing basis to optimize it for better long-term results.

Different Types of Publishers

While all affiliates work towards the goal of generating conversions in exchange for commission fees, different affiliates employ different models to drive traffic and convert shoppers. Good affiliate management means knowing how each publisher model operates, and how merchants can partner up with different types of affiliates to drive performance. Here are the most prominent publisher models in the industry:

Loyalty Publishers
Loyalty Publishers are affiliates who incentivize customers by paying out a portion of the commission to their shoppers; this is commonly known as “cashback”. Key loyalty publishers include Ebates, Air Miles Shop, and Honey.
Coupon Publishers
Coupon publishers are affiliates who drive value by hosting a high volume of coupons from a large number of merchants. These sites are among the most trafficked websites in the industry, and major players include RetailMeNot, Coupons.com, and Offers.com.
Employee Benefit Publishers
Employee Benefit, or closed portal publishers are gated virtual malls, typically open to the employees of specific companies, or members of an exclusive perk platform. A main focus of these publishers is to offer their customers exclusive deals that aren’t available to the general public. Some examples of these types of publishers include Perkspot, Working Advantage & Perkopolis.
Deal Site Publishers
Deal site publishers differ from coupon publishers by focusing largely on short-term, product-specific offers, rather than longer, site-wide offers. Deal sites usually feature the newest and best deals on a perpetually updating homepage feed. Major deal sites include Brad’s Deals, Dealmoon, and 55Haitao
Search Publishers
Search Publishers specialize in utilizing paid search- the practice of bidding on Trademark and Trademark+ terms to improve a merchant’s search engine ranking. While many of these publishers host coupons like other coupon sites, their traffic is largely driven from search engine traffic. Key players include Linfield Media & DefinitiveDeals.
Influencers
Influencers are internet personalities or groups who command a significant, niche, and very loyal audience. Influencers are becoming an increasingly vital part of affiliate marketing, as influencers have the ability to reach ultra-specific market segments in impactful and authentic ways that other affiliates cannot.

5 REASONS WHY AFFILIATE MARKETING MAKES SENSE

Efficient Customer Acquisition

Since affiliate marketing rose to prominence nearly two decades ago, many affiliates have grown to become among the most trafficked ecommerce websites in the world. By employing in-depth, strategic insight into which affiliate models work best for specific merchants, affiliate managers can pinpoint key opportunities with the right affiliates to drive up conversions and acquire new customer streams for a fraction of the cost of traditional marketing activities.

Boosting Sales

Good affiliate program management means capitalizing on opportunities to open up your merchant to new sales opportunities. By working with the right affiliates, your brand will appeal to segments of your target audience that are untouched by traditional marketing channels; these are the deal hunters, the loyal niche bargain site customers, and every day shoppers who keep their eyes peeled for the latest and greatest deals.

Grow your ROI

Since affiliate marketing rose to prominence nearly two decades ago, many affiliates have grown to become among the most trafficked ecommerce websites in the world. By employing in-depth, strategic insight into which affiliate models work best for specific merchants, affiliate managers can pinpoint key opportunities with the right affiliates to drive up conversions and acquire new customer streams for a fraction of the cost of traditional marketing activities.

Increased visibility

By launching an affiliate program, your merchant is instantly connected to thousands upon thousands of highly valuable affiliate websites. Add in savvy program management to the mix, and watch your merchant reach massive audiences they never would have had access to via any other channel.

Turn affiliates into loyal brand ambassadors

Since affiliates are compensated based on their performance, each affiliate’s success is intrinsically tied to the success of the merchants they work with. This means that it’s always in the best interest of affiliates to work only with brands whom they truly believe in. By founding and nurturing strong relationships with key affiliates, your merchant won’t just be creating partnerships, they’ll be creating loyal brand advocates.