Affiliate marketing is an online sales tactic that lets a product owner increase sales by allowing others targeting the same audience – “affiliates” – to earn a commission by recommending the product to others.
It’s a performance-based marketing strategy where an affiliate is rewarded for each conversions they drive.
The concept of affiliate marketing on the internet was conceived of, put into practice and patented by William J. Tobin, the founder of PC Flowers & Gifts. Launched on the Prodigy Network in 1989, PC Flowers & Gifts remained on the service until 1996. By 1993, PC Flowers & Gifts generated sales in excess of $6 million per year on the Prodigy service. In 1998, PC Flowers and Gifts developed the business model of paying a commission on sales to the Prodigy Network.[4][5]
How Does Affiliate Marketing Work?
Affiliate marketing works by spreading the word about a product or service through personal recommendation. When someone you trust recommends something to you, you’re more likely to take their word for it and try it out yourself.
This is how affiliate marketing works:
A company seeking affiliates creates an affiliate program. They then Approve applications from individuals or businesses who want to be part of their affiliate program
After approval, affiliates are given special links called “affiliate links” that they can use to promote the company’s products
When someone clicks on one of these links and makes a purchase, the affiliate earns a commission from the company
Affiliates can recommend products either through a blog or website, social media channels, or email list.
What are The Benefits of Affiliate Marketing?
There are four key benefits that make this form of marketing attractive to small businesses:
It doesn’t require a big upfront investment like paid advertising does
You only pay when you get results (i.e., when a sale is made)
It’s easy to get started
You can measure your results and adjust your strategy accordingly To learn more about these benefits in detail keep reading! We dive into them below…
1. Low Upfront Investment Costs The biggest advantage of affiliate marketing is that it doesn’t require a big upfront investment like paid advertising does. With paid advertising, you need to pay whether anyone clicks on your ad or not. But with affiliate marketing, you only pay when someone buys something as a result of your recommendation. This makes it much easier for businesses (especially small businesses) to get started with this form of marketing. 2. You Only Pay When You Get Results Another big advantage of affiliate marketing is that you don’t need to pay anything until you make a sale. This means there’s no risk for businesses because they only pay when they get results (i.e., when a sale is made). 3. It’s Easy To Get Started Another benefit of affiliate marketing is that it’s relatively easy to get started compared to other forms of online marketing such as SEO or PPC (pay-per-click). This is because there are already many people promoting products online who are looking for affiliates to promote their products to make money themselves. All you need to do is find these people and contact them asking if you can promote their product in exchange for a commission from any sales you make. 4 .You Can Measure Your Results Lastly, another big benefit of using affiliate marketing for your business is that it provides accurate measurement tools so that you can track your results over time and adjust your strategy accordingly
