What is Affiliate Marketing and why is it interesting for your business?

What is Affiliate Marketing and why is it interesting for your business?

Do you know what Affiliate Marketing is? Learn now!

With the evolution of the Internet, new marketing formats come up every day, always aiming to increase the ways and channels that are able to catch the attention of the customer. It turns out that people are paying more attention and they are more picky, besides knowing really well the kind of advertisement they are interested in when buying online.

Affiliate Marketing comes as an extremely interesting idea for people who wish to work with Internet sales, besides being a great tool for Producers who wish to increase promotion of their products on the Internet.

If you aren’t familiar with the term “Affiliate Marketing” or if you want to know what you’re missing out for not using this strategy, pay attention to this post!

What is Affiliate Marketing?

Affiliate Marketing works like this: the Affiliate promotes the product of an entrepreneur/company, in exchange for a commission for each sale made or action taken.

Although it may seem as something new, this business model started in the 1990’s, when Amazon, American retail giant, started to make this service available for whoever wanted to promote the products available on the shop.

All it needed to do was to come up with a register bank and wait for Affiliates to do the entire promotion work in for the company. If the strategy resulted in sales, great! If it didn’t, they didn’t spend a dime.

For people who were persuasive, this was the opportunity to make money working from home.

As you can see, it’s about a commercial relationship where everybody wins:

  • Affiliates are able to monetize their websites, blogs, and social media through selling a product of another person, without the need to have a great idea or go through the work of creating a product;
  • Producers get several distribution channels, thus impacting more customers and, therefore, make more sales;
  • And even customers benefit, because they end up having more channels to research about products and make a better purchase decision.

Types of promotion for Affiliate Marketing

There are different formats for Affiliates programs. It’s up to the Producer to decide which one best fits her product and her business goals.

Despite the similarities, Affiliate Marketing turned to leads generation is different from the one focused on conversion, even though both have Return on investment as a goal. Next, we’ll explain each of the different Affiliate Programs.

Cost-per-Click (CPC)

In this kind of program, the Affiliate is paid per click, meaning she makes money every time someone clicks on the banner, pop-up, or any other ad that shows on her blog, website, or social media. In this case, the Affiliate’s payment will depend straight on the performance of the campaign of the advertiser.

Cost-per-Action (CPA)

However, in the cost-per-action model, the Affiliate only gets paid if the users click the ad and make an action on the ad’s landing page, which can be sign up for something, request a budget, or make a purchase.

In these cases, running the ad is not enough. The Affiliate will need to use her influence to recommend the product and convince people that the offer is reliable.

Cost per Thousand (CPM)

In the Cost per Thousand (CPM) format, the advertiser pays a fixed value to the Affiliate when the ad banner reaches a thousand views. It’s worth noticing that the number of impressions corresponds to the number of page views of the blog, under the assumption that who browses a page is already being impacted by the ad placed there.

However,  the CPM is interesting for the Affiliate who has many accesses because she will be compensated recurrently, regardless of the number of visitors who click the banner.

Cost-per-Sale (CPS)

In this model, the Affiliate only gets the commission when the link she shares generates sales and it is the best option for the small Producer. At Hotmart, for example, sales made by Affiliates are identified by HotLinks, which are exclusive links generated by the platform each time someone requests affiliation to a product. It’s this link that allows commissions to be processed automatically at the time of the purchase.

Therefore, if you intend to become an Affiliate but is afraid to be harmed somehow, you can rest assured about that.

Channels that can be used to promote a product

To be successful with Affiliate Marketing, you don’t need to have an exclusive channel just for it, although it is highly advisable you do so, if you want to reach your customers wherever they are. Check out next some channels that you can use to promote and sell products.

Website or blog

The main advantage of having a blog/website is the editorial freedom the Affiliate has to write, besides the options she can use to customize the page making it look like her audience, unlike social media, which have a set layout and even a character limit.

Writing a blog is also useful for people who write reviews about products because it allows you to use visual and written arguments to convince your readers and reinforce your authority on that subject.

Social Media

Social media are the most used channels to promote products and services, and they can bring expressive sales results, as long as they’re used right.

The main social media used for this purpose are Facebook (which has recently surpassed 2 billion users in the world), Twitter, Instagram, Pinterest, and YouTube. Due to their reach, they’re excellent channels for people who want to get known. Just take a quick look at your feed to see dozens of profiles from digital influencers with more followers than some celebrities and artists.

Email marketing

The Affiliate who has a solid email base has the opportunity to build a long-term relationship with their leads, deliver quality content to these people, and even convince them to make the purchase.

It’s about a simple yet effective strategy because it shows people who follow you that you’re not interested only in making the sale but also in adding value to these people’s buyer journey, deepen the knowledge these users have about your product or solution. Take advantage to read our post on email marketing strategies.

But remember: before choosing a channel to promote products, you need to understand your audience and how they search for information. Do you want to reach people who value deeper texts and research a lot before making a purchase? Having a blog is essential!

Would you rather focus on seasonal actions or enjoy the hype to promote your products? In this case, social media may serve your strategy better, once people spend the better part of their days connected.

It’s ideal that you invest in the channels with the highest number of potential customers, and, as your business is growing, map more personas for your promotion strategy.

Step-by-step to become an Affiliate

1. Choose a good Affiliate Program

There are several companies that offer Affiliates Programs, be it of physical products or digital ones. You need to research thoroughly before choosing yours to ensure your work will be well compensated. Hotmart, for example, is focused on the market of online courses. If you’re interested in working on the Internet, it’s worth checking it out. An advantage of the Company is that while commissions are around 4% to 8% on other Affiliate  Marketing platforms, commissions at Hotmart can get up to 50%, 60%, and even 80%.

2- Choose the right products to promote

The second step to becoming a successful Affiliate is choosing the right products for your audience. Imagine you have a blog on pastry. Is your persona interested in a product on fitness recipes?

It’s never enough to say it again: if your reviews don’t help users to solve the problems they’re facing, it’s almost impossible to generate revenue.

It’s also interesting that you really know the products before advertising them, so your ad has credibility. Before affiliating to a product, ask for information about it, evaluate the consumer’s ratings and ask the Producer to send you a sample.

After all, would you like someone to recommend you something bad only to make money? Your audience also wouldn’t!

At Hotmart, this evaluation can be made by an index known as Blueprint, a ranking system that qualifies the products according to the information registered by the Producer herself. The more relevant and detailed the information, the better ranked it will be. Therefore, we assure only the best products are registered on our platform. Learn more about Hotmart Blueprint here.

3- Educate your audience about the product you’re selling

If your goal as an Affiliate is to have recurring revenue, you’ll need to learn your audience about the product you’re selling, so they can take the most out of the experience. In order to do that, you can offer rich material such as ebooks, negotiate with the Producer a free trial of the service, among other actions.

One of the best ways to convince possible buyers about the quality of that product is by demonstrating, through webinars and other online broadcasts such as periscope, stories, and short videos on Instagram and Facebook.

In the case of webinars, viewers can also interact and ask questions, which will help you understand the real needs of your audience thus improving your sales strategy.

4- Work with paid advertisement

Paid ads are a rather short path to reaching your persona while you work on your organic strategy.

But it’s not enough to invest money in campaigns to convince the internauts to buy the product you’re promoting. With the requirement level consumers have nowadays, ads need to be clear about that offer, besides having cohesive copy and images.

Read more about paid advertisement:

How to invest in paid advertising without wasting money

“I’ve got many ad clicks but no conversion. What should I do?”

Are you interested in working with Affiliate Marketing? Learn more about it on the article how Hotmart works!

*Author’s note: This post is from March, 2011 and it has been updated to offer complete and precise information.

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