Affiliate Marketing 101: How It Works and Why It's Good for Business

We're sure you've heard the term Affiliate Marketing floating around the various social media channels by now. If you don’t know yet, Affiliate marketing is a type of performance-based marketing in which a company compensates affiliates for every customer or visitor which resulted from the affiliate's marketing activities. In other words, affiliates advertise a company's products or services via multiple channels like websites, social media, email marketing, and other digital platforms, earning a commission for each successful sale or conversion.

In this article, we'll go over how Affiliate Marketing works and why your company, or any company, should start investing in this marketing strategy.

Here’s How It Works:

1. An affiliate signs up for an affiliate program and receives a unique link or code that tracks their referrals.
2. The affiliate promotes the company's products or services using their link or code through various channels.
3.  When a visitor clicks on the affiliate's link or uses their code to make a purchase, the affiliate earns a commission.
4. The company tracks the affiliate's referrals and pays out commissions on a predetermined schedule.

Why is it a Good Investment?

Investing in affiliate marketing can have several benefits, including:

a)     Cost-effective

The use of affiliate marketing will enable you to advertise your goods or services at an appealing cost. You can save money by avoiding investing in curating and executing advertising or marketing campaigns that might not bring in any sales by simply paying commissions to affiliates for the sales they bring in. Here, you are paying for the sales you already have. 

b)     Increased visibility

Increase the visibility of your business and reach a larger audience by promoting your products or services through a network of affiliates. After all, it is vital for any company to effectively reach both its target consumers and a broader audience.

c)     Targeted traffic
Affiliates can send targeted traffic to your website, which is more likely to convert into sales. This traffic is usually already interested in your niche or industry, so they are more likely to buy from you.

d)     Performance-based

Since affiliate marketing is outcome-based, you only pay for results. Each affiliate's accomplishment may be monitored, and compensation rates can be changed accordingly. This motivates the affiliates to produce more sales.

e)     Build brand reputation
Affiliate marketing can help build your brand reputation by associating it with reputable affiliates. Affiliates with a strong reputation can help increase your credibility and trust with your target audience.

f)     Diversify marketing channels
Investing in affiliate marketing can help diversify your marketing channels by collaborating with a network of affiliates that each have their own distinct audience. Businesses may be able to reach new demographics and consumers this way that they might not have been able to through conventional marketing channels and reduce reliance on a single source of traffic or sales.

g)     Scalable
Affiliate marketing is a scalable strategy, meaning you can recruit more affiliates to promote your products or services and increase your revenue without increasing your marketing costs.

But wait…

Of course, like any marketing strategy, affiliate marketing is not a guaranteed success, and it requires careful planning and execution to be effective. However, if done well, investing in affiliate marketing can provide a cost-effective, scalable, and targeted approach to promoting your products or services, while also building your brand reputation and increasing your revenue. For reference, Filipino-known brands that have utilized Affiliate marketing include Lazada, Shopee, Zalora, Klook, Althea Philippines, and many others.

Ready to start your own Affiliate Marketing strategy?

PurpleBug It! We can advise and help you with your marketing needs. Our team is well-established and consistently fulfills its commitments. Purplebug recommends, evaluates, and develops plans to increase your presence on various social media platforms - from PR Marketing to Influencer Management through Influencer Circle, our service that is supported by comprehensive research platforms.

Inquire now, and let Influencer Circle to PurpleBug It!