When it comes to making money through affiliate marketing, plenty of attention and optimization advice is directed toward bloggers and influencers. However, they’re only half of the profit equation, and businesses promoting their products have a lot to gain as well. Here’s how it all works.
3 Tips for Affiliate Marketers to Make More Money
“Affiliate marketing can be used by companies both to expand quickly and generate greater revenue,” says senior marketing manager Antje Eggersdorfer. “It just must be done the right way.”
In fact, strong partnerships with affiliate marketing blogs, newsletters, and blogs can lead to a significant average return on ad spend (ROAS) of 12:1, according to a report by the Performance Marketing Association. The same report found that affiliate marketing investments yielded $71 billion in US e-commerce sales in 2021. But, eMarketer reports that up to 28% of marketing executives don’t know the effect that affiliate marketing has on their revenue.
Eggersdorfer has worked with businesses navigating their ways through market fluctuations and broad shifts in consumer behavior for 25 years. Throughout this, affiliate marketing has remained an effective and uncomplicated tool for not just navigating these ups and downs, but succeeding despite them. “It’s not magic,” she says. “It’s planning.”
Below, Eggersdorfer and other experts share exactly how to plan your way to more customers and sales with the help of affiliate marketing.
1. Choose Affiliates Wisely
While it may be tempting for companies to partner with many affiliates, Lucas Lee-Tyson, the chief executive officer at LTT Research, advises against casting a wide net. Instead, he recommends zeroing in on “whale affiliates,” i.e., websites, bloggers, and influencers that could drive more leads and sales. Rather than having a generic affiliate program that anyone can sign up for, and relationships that may draw zero revenue, businesses “would be far better off focusing on fewer affiliates with whom they have a closer, higher-level relationship and incentivizing them as strongly as possible,” he says.
When searching for whales, it’s important to look at affiliate engagement metrics like click-through rate and conversion rates. Lee-Tyson recommends using tracking tools like Hyros and Triple Whale to help find the best revenue-driving affiliates for your brand. Other affiliate management platforms like ShareASale, CJ Affiliate, and Rakuten help companies find higher-performing affiliates to reach out to as well.
2. Nurture Affiliate Relationships
Once you’ve identified the right affiliate partners to promote your products and services, businesses can strengthen these partnerships with a mutually beneficial revenue-sharing structure. On average, affiliates’ commission rates range from 5% – 30% for physical products and 20% – 50% for digital products and subscription services.
Always be sure to research your industry to ensure your results are equal to or better than the standard, says Stephen Montagne, founder of NetHustler. As much as commissions matter, so do the terms for how often affiliates get paid. “If you pay them two months after the sale, it might be harder to motivate them or sign up new affiliates,” he notes.
In addition to a proper payment structure, Eggersdorfer and Montagne agree that it’s crucial to provide affiliate partners with the appropriate banner images, videos, promo codes, email swipes, and other product details and assets. “The easier a company makes it for the affiliate to promote them, the better,” Montagne says.
3. Campaign Management
After forming quality affiliate partnerships and providing support to nurture these relationships, companies can optimize affiliate marketing channels. While affiliates will have their own resources to maximize sales, tools like Taboola Pixel can help companies obtain data far beyond how many clicks ads receive for their products. For instance, the Chrome extension will track when someone puts your product in their cart, but doesn’t complete the purchase, indicating a need to re-target ads to that potential customer.
Other automated tools such as Smart Bid allow companies to maximize their campaigns by adjusting bids based on cost-per-click (CPC) data and the likelihood of converting these clicks into revenue. These resources not only allow companies to drive more sales, but also allocate their ad budgets for more profitable results.
Key Takeaways
Businesses will see the most return from developing a small number of high-quality relationships with affiliate partners that have an engaged audience representing their ideal customer. Once you form these partnerships, you can strengthen them through equitable revenue sharing and reliable support with images, videos, email swipes, and other promotional materials. Companies can utilize various data and tracking tools to optimize their ad spend and target consumers who are more likely to buy their products and services.
Frequently Asked Questions (FAQs)
What is the best strategy for affiliate marketing?
Affiliate marketing doesn’t have a best or catch-all strategy, Montagne says. But, picking the right niche, and using data and common sense to gain an understanding of your prospective customer base and how your products and services can help them, are all essential for maximizing returns. “If you can do that, then you can succeed, whether it’s with free or paid traffic,” he says.
Can you make $100 a day with affiliate marketing?
Experts agree that it’s entirely possible for companies to make $100 a day through affiliate marketing with the right partnerships, quality promotional materials, and comprehensive audience data. Within a few months, a reasonable goal should be to make twice that daily, “if you’re doing it well,” Eggersdorfer says.
Lee-Tyson adds that after an initial setup and implementation period, “any marketing channel should be generating at least 10% of the business’ total revenue in order for it to be worth it.”
What is the 80/20 rule in affiliate marketing?
Also referred to as Pareto’s Principle, the 80/20 rule states that about 80% of consequences result from 20% of causes. With respect to affiliate marketing, the 80/20 rule can mean several things: 20% of your products and services drive 80% of your sales, or 80% of sales come from 20% of affiliate content. Ideally, the 80/20 means that 20% of your efforts will account for 80% of sales. That is why access to detailed data and analytics is essential for knowing which strategies to prioritize to provide the best return.
