Affiliate Marketing 101

You’ve probably heard of it from your friends or family or perhaps you may have seen the term being prominently advertised all over the internet. I am talking about affiliate marketing, of course.

What is affiliate marketing? There are plenty of possible definitions of the term, but it is commonly known as a marketing model wherein a certain brand, company, advertiser, or online merchant will partner up with affiliates (aka as publishers or partners) to help promote their products and services.

The reason why this is a win-win for both parties is due to the fact that the brands will be able to tap into the audiences of their partners and, in turn, their partners will earn income via commissions based on whether or not their audiences buy something from the store.

Key Players

There are three key players when it comes to affiliate marketing. There are the brands or companies that sell the products and services. Then, there are the publishers or affiliates that will become the marketers of the said things and lastly, the affiliate network that will act as the middleman for both parties.

There are also some players in the industry as well, though not as popular as the aforementioned three. There are SaaS platforms that will provide some-much needed tracking software for brands and companies.

There are agencies that will help improve partner relationships, as well as handling affiliate recruitments on their behalf. And of course, the customers that are going to buy any product recommendations promoted by the affiliates.

What Are the Key Metrics to Track in Affiliate Marketing?

The affiliates, when they’re going to promote their partners’ products and services, will be given a special affiliate link that has a tracking code. Whenever their audiences will click on the link, a special internet cookie will be placed on their devices to help them track the activity of their partners.

That being said, these cookies will help generate different metrics in order for the partners to gauge their ROI. Some important metrics to consider are:

  • Sales
  • Average Order Value
  • No. of Subscriptions
  • Email Sign-Ups or Registrations
  • Cost Per Action or CPA
  • CLV or Customer Lifetime Value
  • And Many More.

How to Manage Affiliate Programs?

As brands and companies are busy perfecting their product line, they might not have the time to think about their affiliate programs. That is why some of them employ affiliate agencies to do their bidding and to help them manage their affiliates in a more efficient way.

The management of affiliate programs can either be done in-house or through an agency. If companies were to do the former, they would intentionally use their resources to generate and manage their own affiliate programs.

If companies would employ agencies to manage their programs, they will just pay them a flat monthly fee and the agency will do the rest.

There are even some brands that would use a hybrid approach wherein they will work hand in hand with agencies to help manage their affiliates.

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