Affiliate marketing, as practically every industry, has its own advantages and disadvantages. But before making a decision whether any affiliate program suits you or not, it might be a good idea to learn more about the matter. Luckily for you, we have conducted a study and offer a detailed list of pros and cons of affiliate marketing. Read this article to dive deeper into the topic and find out what important aspects you shouldn’t ignore.
What is Affiliate Marketing
It won’t be a big mistake to say that everyone at least once in his or her lifetime wanted to know where to get a little bit (or not a little bit) more money or how to expand business, sales and number of customers. There is always a way for those who seek an opportunity. And after considering different available options, one may come to the idea of participating in an affiliate marketing program as an additional source of income.
But what exactly is affiliate marketing?
Affiliate marketing is a strategy applied to promotion of a particular good or service produced by a retailer or advertiser through an affiliate link containing data about an affiliate partner and published by him or her. This partner is rewarded a commission if the result is achieved. The required results may vary. Typically, cost per action (CPA) refers to sales, but in some cases, it may be a lead, click, newly registered customer or app download.
Most affiliate programs are free which makes costs of starting up equal to zero. And if they are implemented in an effective way, affiliate marketing can become a source of stable flow of earnings.
What an Affiliate Marketer Does
An affiliate marketer is a person who promotes goods and services to increase sales for a company. After joining an affiliate marketing program, it is necessary to make a referral link for an advertised product and place it on the blogs, posts, social media, websites or other digital channels. Every time when someone listens to recommendations and makes a purchase via that unique affiliate link, the affiliate gets the commission. It is that easy! But it is necessary to remember that having a dedicated audience is a must for success.
Commission rates also vary and depend on the company, brand and program. Usually they start with 3-5% and may reach up to 30% with some luxury items or services. A flat rate can also be an option.
Pros of Affiliate Marketing
Enough with theory. Let’s move on and see why customers or businesses choose affiliate marketing and what pros these programs can offer to boost earnings and sales.
The notion that the affiliate marketing business is worth billions of dollars is well-known. But what is more wonderful about it is that it is not going to slow down its development pace in the future. Attaching yourself to a developing market or business is much more beneficial than entering a developed one as it increases your chances of success. The number of programs for participation is also growing every day and everyone can choose those which meet their needs in the best possible way.
No Special Education
People who are going to step into affiliate marketing programs don’t need special education or expertise. The good thing is that all the necessary knowledge can be gained through work, practice and testing of different approaches. What is more, there are plenty of free guides on what and how to do to achieve better and faster results. There are even guides on programs that suit best for different categories of marketers.
Low Staffing Costs
Hiring people to work in the marketing department in the office may be quite expensive: you have to pay the rent, salaries, employment benefits and so on. Companies that choose the model of affiliate marketing programs pay only for affiliates’ performance, results and conversions. Other costs are just evaded.
One more benefit of this approach is a cookie window. It means that a merchant has to pay an affiliate for a sale only within a limited timeframe (usually up to a month). In other cases, there is no commission which makes affiliate marketing even more cost-efficient for merchants.
Easy Way to Drive Traffic Quickly
New companies have a variety of options to reach new audiences: from content and social media marketing to YouTube promotion. While building your own marketing strategy or developing a video channel from scratch may be efficient in the long run, hiring content publishers, who use different approaches to promoting products, can be much more relevant when it comes to faster results.
Affiliate marketing is truly one of the best ways to drive traffic effectively. Companies can sign up popular YouTubers or other influencers to promote their goods and services on the popular channels that are watched by the target audience.
YouTubers and other bloggers are probably the best choice for a seller as their channels and websites linked to the corporate website boost the latter’s search engine rankings. It becomes possible thanks to Google algorithms which give a ranking priority to those pages that have a large number of backlinks as they are the indicators of trustworthiness.
Opportunity to Get Real Feedback about Goods and Services
Affiliates, publishing different kinds of reviews on any platform, give insights through comparing different products or demonstrating their drawbacks. This kind of feedback can be quite useful for those merchants who want to improve their business and stay competitive in highly competitive areas.
But one should be attentive and avoid biased reviews that either don’t provide any information besides basic or talk only about advantages or disadvantages. Of course, there are extremes, but they are rather rare on the market.
Deeper Level of Conversion
When an affiliate is passionate about what he or she is doing, about products that are being promoted, it may become the first stage of the affiliate’s conversion and lead to the product purchase. This situation is quite common in affiliate marketing.
The Sky's the Limit for Earnings
Becoming good at something takes time. Affiliate marketing is not an exception. But once you gain all the right skills and expertise, equip the right tools, develop strategies that work and start earning more money, you will be able to promote any good or service in any niche.
The more challenging the leads and sales generation is, the higher the commission. Some companies offer up to 30% per deal for promotion of their products.
Affiliates have a unique opportunity to drive traffic through ads, social media, theme blogs and emails – it means that they have all the necessary channels to reach the biggest audience possible. In the end it will definitely lead to company development and, as a result, grow of affiliate’s earnings.
Wide Choice of Products, Services and Marketplaces
Affiliate marketing programs grant access to millions of products sold on a great number of marketplaces. Even though variety can be confusing, when you catch the flow and get the suitable affiliate program, things will become much easier and the right choice will not be difficult to make at all. The right product will be promoted to the right audience practically by itself.
One more good thing about affiliate marketing is that affiliates can choose programs on the basis of the commission fees and promote only products that will bring more earnings.
Professional partnership is one of the most valuable things in modern business. Such bonds take time to be created. But when a seller and an affiliate marketer work closely on product promotions, they get a unique opportunity to build strong and long-lasting partnerships.
The situation when merchants and their affiliates collaborate on more than one affiliate network is widely spread nowadays as it gives a perfect chance to work with experts and professionals from various niches.
Affiliates are not limited by one or two affiliate programs as there are plenty of them both in related and unrelated to each other niches. It means that you can promote, for example, both luxury items presented by different brands and tickets to events. You can make money from any program!
And if you want to enter new markets, your previous projects may continue to be a daily source of earnings.
If you are good at what you are doing and put much effort into marketing and promotion campaigns, you’ll be rewarded accordingly. Success comes to those who are motivated, unstoppable and ready to work hard and persistently.
Flexible and Convenient Business
Affiliate partners can run different campaigns on different websites to promote goods and services through referral links. With time some of them prove to be efficient and income generating while others may perform not so well. It gives variability and flexibility – there is no need to stick to one program forever. If there are some troubles with promotion of some product, just move on to another one. Risks can be assessed practically in real time and lead to growth and profitability.
Affiliate marketing gives a unique opportunity to be independent in your working environment when it comes to what, when and how to do. You only need a device, Internet connection and electricity. It seems to be perfect when a freelancer has no bosses and doesn’t have to follow any orders and regulations. Reportless life is a dream for millions of people as it gives greater control over your own life.
The seller usually offers its affiliate partners all the necessary tools and materials for promotion like banners, logos, images and so on. This makes the job much easier.
Cons of Affiliate Marketing
After finishing the previous part of our report, you may have thought that you are ready to start your career as an affiliate marketer. But we are begging you not to hurry and read further to learn about disadvantages that, unfortunately, affiliate marketing also has.
Chances to Fail
The statistics show that poor performance of many affiliate marketing programs is a common thing. They are just shut down when their targets are not met.
Sellers need to manage their programs with caution as poor choice of an affiliate can lead to unexpected expenses and costs that exceed the revenue.
One more thing worth paying attention to is the fact that an unattractive landing webpage or low and uncompetitive commission may lead to the situation when affiliates will demonstrate no interest to participate. Consequently, the seller may not justify the expenses for program implementation.
Regular monitoring of the competing programs and the collaboration with the affiliates is a must as bad performers can decrease the potential earnings. And vice versa – working with the right partner who gives good traffic and brings new customers is a critical point for success. It makes development of soft and communications skills crucial for any affiliate program.
Becoming a brand’s affiliate marketer may be much easier than starting a brand itself, but it is still a challenge that not everyone is eager to take. Experience, skills and luck are three pillars of success.
Risks with Company’s Image
Affiliate marketers that don’t follow brand’s corporate policies can lead to reputational and financial losses. The best way to avoid such situations is to send compliance reminders to affiliates on a regular basis and notify them about the most important aspects of the program’s policies. Monitoring of the promotional activity of the affiliates may be rather time and resource consuming, but it will definitely help to avoid some serious risks. Transparent affiliate marketing policy is a key factor.
Death of the Cookie
Data privacy has become one of the biggest concerns in recent years. Many companies have declared it to be one of their top priorities. As a result, new enhanced privacy controls are being introduced on a regular basis to counteract tracking from traffic and cookies. But in the case of affiliate marketing cookies are the main tool to attribute a buyer, affiliate and seller to each other. As a result, we are facing a situation when it is becoming more and more challenging to measure the effect of affiliate programs on sales on the basis of this approach.
At the same time, brand promoters will gain less profit from their participation in different affiliate programs as performance data is becoming more and more inaccurate due to these privacy enhancements and traffic analysis may give the biased picture.
All the advantages of affiliate marketing are appealing to thousands of people who rush into the business which makes it very competitive. New affiliates have a long way to go before they are able to generate their first big money as they must invest a lot of effort into improving marketing skills to generate high quality traffic. And the only way to become the winner is to be smarter and faster and get the right expertise.
Advantages and Disadvantages — What Outweighs?
From the statistical point of view, affiliate marketing offers much more advantages than disadvantages. In this article we tried to give you an unbiased review of those that are of utmost importance and need a thorough look at. But what outweighs – pros or cons – is up to you to decide as much depends on what you are used to doing and whether you are ready to face the challenges that affiliate marketing may bring or not.
Portrait of the Ideal Affiliate Marketer
What is the first thing that comes to your mind when you hear something like “the ideal affiliate marketer”? We think of the following portrait.
First of all, competent and experienced in terms of what they are doing and how affiliate marketing functions on different levels starting from what types of affiliate programs exist and ending with some technical aspects and necessary software.
Secondly, passionate about the niches they are working in. If it is fashion, then knowing all the latest trends; if it is technology – knowing where the market is moving to; if it is traveling – knowing top destinations and so on. We can easily tag such persons as nerds in its good meaning.
Thirdly, with developed soft skills. People that are easy to collaborate with, discuss different matters and business who not only promise, but also do.
And finally, open-minded, seeking opportunities and willing to do something new.
Is it Worth Doing Affiliate Marketing
The question concerning whether one should do affiliate marketing or not is quite tricky. From one point of view, earning online is becoming easier every day. From the other – it may be challenging to make the most of this business.
Affiliate marketing is not an exception. Despite having some drawbacks, it may be a source of income at the end of the day. So before starting an affiliate program or becoming an affiliate, it may be a good idea to study available platforms properly, read about their pros and cons, and make your own decision on what sales you want to boost. If you are motivated by challenges and ready to fight for success, give affiliate marketing a try. If not – choose something else as freelance is not for everybody.
The main aim of this article is to help you decide whether affiliate marketing is suitable for you or not. Listen to yourself and decide what outweighs – pros or cons.
We truly believe that the main idea is that affiliate marketing offers win-win outcomes both for sellers and affiliates. The right approach to promotion is the key to success. Remember, that you are only a few clicks away from giving it a try.
What are the negatives of affiliate marketing?
The main drawbacks of affiliate marketing include high probability of failure from the first try, high competition and problems related to user personal data.
What are the advantages of affiliate marketing?
The main advantages of affiliate marketing include the following: easy and zero-cost access to affiliate programs, plenty of markets to start with and high level of affiliate’s independence.
What should an affiliate marketer be able to do?
Affiliate marketers should be able to do several important things: have the necessary expertise and business knowledge, promote products in an ethical way, follow corporate policies and guidelines, and avoid illegal schemes.
What does an affiliate marketer get paid for?
Affiliate marketers can be paid for different things with a purchase being the top one. But we can also include here a lead, new registered user, click or an app download.
How much money can be made on this?
There is no exact answer for this question as much depends on the affiliate program’s conditions like commission fee, cookie window and some others.
How long will it take me to make my first profit?
It depends on several factors like what market you want to perform in, what sellers can offer and, of course, a bit of luck.
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