Affiliate Marketing: Definition + Guide To Making Money

Would you like to generate an attractive secondary or even primary income online? With affiliate marketing, you can. Our article tells you how it works, what commission models there are and what affiliate networks are helpful for. Also, learn how you can make money with niche sites and which factors influence your success.

Affiliate Marketing: The 4 Most Important Questions at a Glance

Affiliate marketing is a complex topic. First, use the following questions to get a general overview:

• What is Affiliate Marketing? Companies cooperate with online publishers. These provide their partners with customers or interested parties via links on their website and receive a commission for this.
• Who is involved in affiliate marketing? The affiliate (also the publisher), the advertiser, the website visitor and possibly an affiliate network are involved.
• How does the technical side work? The publisher integrates affiliate links into his page. These redirect interested website visitors to the advertiser’s shop. The pays a commission when the visitor takes a specific action, e.g. B. buys a product.
• Can You Make A Lot Of Money With Affiliate Marketing? Anyone who does affiliate marketing professionally and with the appropriate commitment can earn a lot of money with it. About a fifth of the affiliates in Germany earn more than € 3,000 per month, with some particularly successful and complex projects bringing in several € 10,000.

In the next section, learn more about affiliate marketing, its participants and how the process works.

Definition And Process: Affiliates, Advertisers & Affiliate Networks

Affiliate marketing is a form of cooperation on the Internet and an essential source of income for many website operators. Find out below who is involved, how it works and the benefits for the partners.

What is Affiliate Marketing?

Affiliate marketing is a form of online marketing and is based on agency commissions. Dealers (advertisers) cooperate with publishers (affiliates). The publishers operate their websites, e. B. blogs, comparison portals or information sites on particular topics. Using partner programs, you can integrate advertisements, banners or text links that lead to the shops of the respective advertiser.

When visitors to the page take specific actions, e.g. For example, if you click on the link and then complete a purchase, the publisher receives a commission for this. Affiliate marketing is a way for advertisers to draw attention to their offers. They provide advertising material such as advertisements or banners via a partner program and organize the billing. There is exceptionally specialized software for this. However, running your partner program is associated with effort, and advertisers have to take care of the technical issues and promote their program.

That is why there are affiliate networks that bundle several partner programs and thus bring advertisers and affiliates together. The networks organize the technical processes and the settlement of commissions. The advertisers pay a network commission for this, but thereby reduce their effort and increase the awareness of their affiliate offers. Smaller companies, in particular, therefore, usually only offer their partner programs via networks.

Also Read: Facebook Ads: What It Is And How It Works

The Process – This Is How Affiliate Marketing Works

The process outlined below shows you exactly how affiliate marketing works. These steps include:

1.  Registration with the partner program:
2. The publisher registers with a partner program. Alternatively, you first log into a network and then select the program.
3. Integration of advertising material:
4. He incorporates one of the advertising material offered by the advertiser into his website. The link is provided with a code to recognize the affiliate.
5. Redirecting the visitor:
6. When a visitor to the website clicks the link, they are redirected to the advertiser’s shop.
7. Cookie marking of the user/assignment of sales:
8. The click is registered with the advertiser. If a commission was agreed with a click, it will be credited to the affiliate now. If it is dependent on sales or leads, the advertiser’s website places a cookie with a specified duration on the customer so that later purchases can also be taken into account.
9. Payment of the commission:
10. The advertiser pays the commission either in a fixed time rhythm or from an agreed minimum amount. If affiliate marketing takes place via a network, this organizes tracking, billing and payments.

An affiliate can participate in any number of affiliate programs. For success, however, these must fit your website. Most networks have therefore specialized in specific topics.

Advantages For Publishers And Advertisers

Functioning corporations bring benefits to all participating partners. It is the same with affiliate marketing – it is worthwhile for publishers for the following reasons:

• Suitable for small additional earnings as well as a professional business model
• Income without additional financial risk (costs are only for the website.)
• Large selection of partner programs from different areas
• Uncomplicated participation in the programs
• The display of unwanted advertising content on your website can be excluded.

Advertisers also benefit from affiliate marketing. You use it as one of many advertising opportunities that offer the following advantages:

• Target group-oriented advertising option, as affiliate links are integrated on thematically appropriate pages
• Inexpensive, as commissions are usually only due in the event of success
• Strengthening brand awareness solely through the visibility of your offers on various websites

The earnings potential of the publisher and the costs for the advertiser also depend on the remuneration model..

Compensation Models In Affiliate Marketing

In affiliate marketing, the publisher only receives a commission if the visitor to his website performs a specific action. Which that has to be is agreed in advance, because there are various options for this. Some advertisers also offer several compensation models. The following systems are most commonly used:

Pay Per Click

With pay per click, the publisher already receives a commission when a website visitor clicks on the affiliate link or the ad. He doesn’t have to buy anything or provide personal information.

This does not bring the advertiser an immediate financial advantage. Therefore, this method is mainly used to increase brand awareness or reach. 

This can be worthwhile for the advertiser, especially in connection with particularly attractive or particularly cheap offers.

The commission per click is not as high as with the direct mediation of a purchase. It is paid at a fixed price, which is usually in the cent range. Tampering with multiple clicks can be avoided with the help of technical options.

Pay Per Sale

With pay per sale, the publisher receives a commission if the visitor to his website is directed to the advertiser’s page via the affiliate link and buys something there. The purchase does not necessarily have to be made immediately after the forwarding. Setting a cookie on the visitor’s computer makes it possible to take into account purchases made later.

 The individual advertisers offer different cookie runtimes, from a few hours to several weeks.

In most cases, the commission is calculated as a percentage of the purchase price. Fixed price payments are also possible. The commission also varies depending on the industry, as the following examples show:

• Clothing and shoes: approx. 5 to 15%
• Financial sector: mainly fixed amounts, often in the three-digit range
• Travel: approx. 5 to 7%
• Dating agency: from approx. 30%
• Technology: approx. 3 to 10%

Some pay-per-sale models do not relate to individual sales but instead credit the affiliate with commissions for all sales of a customer within a certain period or permanently. In the latter case, one speaks of lifetime remuneration. The publisher receives this for a referral visitor as long as he remains a customer of the respective advertiser. This system is mainly used in the brokering of subscriptions, e.g. B. for software.

Pay Per Lead

With pay per lead, the visitor does not have to buy something directly for a commission payment via the link, but they do have to express their interest in a previously agreed manner. This can, eg. This can be done, for example, by filling out a contact form or downloading information material. In this case, the advertiser can assume that there is interest in further information that may lead to a business transaction.

Pay per lead is primarily used for services and products that require intensive advice and are not bought spontaneously, e.g. B. in finance. The commissions are calculated as fixed amounts and vary between € 0.50 and € 20, depending on the industry and the type of campaign carried out.

Other Commission Systems

There are also a few other remuneration models that are of less practical importance. For example, when paying per click out, the visitor has to click another link on the advertiser’s page so that commission is due. Pay per install is also expected in the software industry, with the commission payment depending on software installation.

Also Read : Social Media Trends 2021: 5 Perspectives Worth Knowing

How Much Money Do You Make Affiliate Marketing?

A publisher’s earning potential in affiliate marketing depends heavily on how severe and professional they are. In this way, the portalvergleich.org probably generates six or even seven-figure amounts per year, which of course, are offset by the related costs for maintaining and optimizing the website. Many smaller site operators tend to earn a little pocket money on top of that.

The agency Projector regularly conducts affiliate surveys in Germany. According to this, 35% of affiliates earned less than € 200 per month and 21% more than € 3,000 per month in 2018.

Affiliate marketing with the pay-per-click remuneration system is similar to banner advertising, provided that this is also billed according to clicks. The earning opportunities, therefore, hardly differ. However, banner advertising is also often paid for using the CPM method, whereby there is a fixed price for 1,000 impressions, which can range from a few cents to high 2-digit euro amounts. This method is worthwhile for publishers whose site has high traffic.

Affiliate Networks You Should Know About

Affiliate networks bundle several partner programs. This has the advantage for publishers that they only have to register once, use the search function to find suitable partner programs more efficiently and receive the commissions paid out collectively. In this way, advertisers can delegate administrative work and technical responsibility and promote their program more effectively.

The advertisers pay a commission to the network, which in most cases amounts to 30% of the sales. Participation is usually free of charge for affiliates. There are now a lot of networks. Some of them specialize in specific industries. Here are a few examples: 

Elope

Elo page is a digital shop system from Germany where you can sell digital products such as eBooks, online courses or even eTickets. On this platform, you can offer many different digital products without having to set up your shop.

AWIN

AWIN brings together almost 15,500 advertisers and 200,000 publishers worldwide. The network specializes in the technology, fashion, travel and finance industries. There are many large online shops and brand providers represented.

Digistore24

In Digistore24, it comes to digital products such as software, e-books or digital courses. The agency fee is often 20 to 30% and can be significantly higher in individual cases. The cookies run for 180 days. If the visitor has accumulated several cookies during this period, the last one always counts.

Mechanism

The mechanism offers a partner network with well-known brands, various advertising materials and billing models. A dashboard helps optimize the publisher account.

Finances

The FinanceAds network specializes in the financial sector and has around 500 partner programs from the banking and insurance sector. It is a premium network with a personal contact person for every advertiser and affiliate.

Amazon also offers extensive opportunities for affiliate marketing, even if it is not a classic network. Learn more about this in the section below.

Affiliate Marketing with Niche Websites & Amazon

In connection with affiliate marketing, niche sites are often mentioned. These are websites dedicated to a specific topic that has not been taken up so often by other sites. Affiliate marketing with niche sites offers a high potential for success if many people are interested in this topic. Products related to it can generate attractive affiliate marketing income.

To find a suitable niche topic, you should, above all, observe trends. Also, keyword research can offer suggestions. Suppose a new trend in the creative field requires unique materials: Via a niche page with instructions and ideas, you can generate affiliate income with links to corresponding creative shops.

The Amazon affiliate program is particularly suitable for affiliate marketing with niche sites. On the one hand, you can use it for advertising products from a vast and varied range. On the other hand, many of your website visitors have Amazon customer accounts, which means that the inhibition threshold for orders is lower than with an unknown shop. 

The registration for the partner program and the integration of the existing advertising material are not complicated. In terms of compensation, Amazon distinguishes between direct and indirect qualified sales. Natural means that the customer buys a product from the category he called up via the affiliate link.

On a

verage, the pay-per-sale commission on Amazon is 4 to 5%. The lowest percentage of 1% is achieved when selling technology such as TV, multimedia, smartphones and tablets. The highest rate of 12% is possible if you broker the purchase of clothing, accessories and shoes, and your qualified sales are at least € 2,500 per month.

How to: How to Become a Successful Affiliate Partner

Perhaps you already run a successful website and can go straight to the search for suitable affiliate programs. However, it is not infrequently more worthwhile to directly create a niche page or a web portal for affiliate marketing. This is how you do it:

1. Research financially attractive website topic :
2. The topic should be of interest to the general public but must not have been taken up by too many other sites. Also, pay attention to the value and commission rates for products that you can convey on this topic.
3. Create high-quality content :
4. High-quality content is essential for good search engine ranking and sufficient traffic, and the satisfaction of your visitors. If you cannot create the content yourself, hire external service providers to do it.
5. Search for suitable partner programs: Either look.
6. Directly for partner programs of individual companies or use networks as well. Make sure that the programs fit your site thematically.
7. Integrate affiliate links :
8. The advertisers offer various advertising materials that you can integrate into your website. These are z. B. Banners or text links.
9. Observe developments: Use suitable tools to observe
10. How the number of clicks and income are developing. If necessary, make changes to get better results.

Seven Tips For Successful Affiliate Marketing

Affiliate marketing does generate passive income in a certain way. However, you still have to invest in work regularly to ensure sustained and growing success. Pay particular attention to:

• Include appropriate affiliate links on the topic :
• The affiliate links should lead to products that are also relevant for the visitors to your website. Even if z. B. Affiliate programs from the financial sector promise high commissions, so the success of these links on a website for horticulture will be limited because too few clicks are generated.
• Create new content regularly :
• If you have created and linked a good website but no longer update it, your search engine ranking will suffer in the long term. This also reduces traffic and income.
• Content must offer added value :
• High-quality content that provides your visitors with interesting information is a significant ranking and, therefore, a success factor.
• Pay attention to SEO: Pay attention to search engine optimization in general. In addition to the points already mentioned, this includes a few other measures, especially keyword optimization.
• Test different partner programs :
• The potential for success of individual partner programs cannot consistently be recognized immediately. So try several options.
• Continuously optimize :
• Always try to discover the optimization potential of the website and the affiliate links. To do this, you need to monitor the development of clicks and earnings closely. Over time, you will gain valuable experience.
• Note the legal features:
• Affiliate marketing is advertising. You are responsible for complying with the related legal provisions, e.g. B. regarding the protection of minors, competition and copyright law.

So far, affiliate marketing has mainly been viewed from the publisher’s perspective. But also shop operators and other internet service providers benefit from it as advertisers. Find out below for whom this is worthwhile and what options are available.

For Shops & Co: Start Your Affiliate Program.

Offering your affiliate partner program works for many, but not all, companies. Think about how much you need the attention generated by affiliate links. Affiliate marketing has advantages for many online shops and companies that are interested in leads or sell digital products. Nevertheless, analyze whether the commissions are profitable or reduce the profit margin too much.

Whether you set up your partner program, use a network or use both options in parallel depends mainly on your human and time resources and your previous knowledge in this area. As a network partner, you can delegate a large part of the work. There are software solutions such as Digistore24 or AWIN for creating your partner program. Use your website to provide interested publishers with important information about your program and promote it, for example. B. via social media channels.

Conclusion: Earning And Advertising Opportunities With High Potential

How much you can earn as a publisher with affiliate marketing depends on your commitment and experience. That is why it is worthwhile to work on it continuously. But it is also suitable as a welcome extra income.

This form of advertising is lucrative for shop owners and other advertisers because it is generally used in a target group-oriented manner and involves hardly any financial risk. Due to the membership in partner networks, the technical implementation is no problem even for small companies.