When you have read what is an affiliate marketing program, now it’s time to understand how an affiliate marketing program works.
The core motive of any affiliate program would be to drive sales or generate leads. These are done through some of the basic steps that are followed by every affiliate network where you can easily track the progress of the campaign.
When we think about the model of how affiliate marketing programs work, the process is completely simple. Depending upon the type of affiliate marketing program, the process of the affiliate cycle gets differentiated.
The affiliate cycle consists of Publishers, advertisers, and affiliate networks. These are some of the major components that will be revolving around getting a sale for your business and earning money for the affiliate marketers.
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How affiliate marketing works?
The basic process of affiliate marketing is the business needs to give out incentives to the marketers on the successful sales made by them.
This is one of the cost-effective methods for affiliate marketers as well as merchants. As affiliate marketers can generate sales without any major investment and the merchants also do not need to pay unless they get sales for them.
This method has been proven highly resourceful for marketers as well as businesses. And it is getting popular day by day.
The process of affiliate marketing has been divided into three major groups.
1. Pay per click affiliate marketing
The motive of this affiliate marketing program would be that an affiliate marketer will earn a certain amount of commission when a user clicks an advertisement from their website.
If I have to elaborate in detail, whenever a user visits a website, and then they see the banner ad and click it. When the user goes to the merchant’s website from the ad which they had clicked by the affiliate marketer, this is where the affiliate marketer gets paid for sending the user to the merchant’s website.
If you see the above cycle, the affiliate marketer gets paid whenever they send traffic to the merchant’s website.
This method has become a popular platform for the majority of affiliate marketers. And even the merchants are heavily investing in this method so that they can get more volume of traffic.
There are many pay-per-click affiliate marketing programs available for businesses as well as affiliate marketers. Some of the popular PPC programs are Adsense, Adthrive, Mediavine, Propeller Ads, Ezoic, and so on. These PPC marketing programs help to get the relevant target audience depending upon your business.
2. Pay per lead affiliate marketing program
The pay-per-lead affiliate marketing program works whenever the merchant wishes to receive a lead. This can be a user getting registered on a sign-up from the affiliate marketer’s website.
If we have to talk about the process in detail, whenever a user visits an affiliate marketer’s website, they click the ad or the link which has been highlighted there. And then the user gets redirected to the merchant’s website, and they fill the sign-up form having basic details like name, contact number, and other desired details based on the requirement stated by the merchant. When the user successfully submits these details, it is considered as one lead that has been generated by the affiliate marketer. And based on that, the marketer gets paid for helping the business to generate the lead.
The process looks complex, but trust me the affiliate marketing network has all the tracking mechanisms that give you the complete details of the affiliate cycle. The merchants can easily track the source of the lead generated by the affiliate marketer, and the affiliate marketer can track whether the lead has successfully transacted on the website or not.
There are multiple pay-per-lead affiliate marketing programs available on the web. This can be for taking a trial, signing up a contact form, downloading a product and it can even be for filling out surveys. It is all based on the end goal of the merchant for how they want to generate the leads.
Some of the popular pay-per-lead affiliate marketing programs are Grammarly, Canva, AllState, ClickFunnels, Liberty Mutual, FreshBooks, and many others.
3. Pay per sale affiliate marketing program
This is one of the most popular methods of affiliate marketing programs. And you can find this technique adopted by many businesses.
Whenever a user lands on an affiliate marketing website. The user tends to click the ad on the contextual affiliate links that have been displayed on the affiliate marketing website. And when the user has been redirected to the merchant’s website, they see the products and services listed by them. If they have purchased any offerings from the list. The affiliate marketer gets the commission from the sale that they have made.
Through this technique, many affiliate marketers have made thousands of dollars. Because this is the only platform where the merchant gives up to 70% of the product value. Let us assume that you are selling a merchant’s product of $1000 and in case if you are getting 70% commission out of it, that means you are earning $700 per sale. I know that the numbers can drive you crazy. But to achieve these sales is not an overnight task.
The affiliate network gives you the complete analytics of the sales cycle so that you don’t need to worry about whether the transaction has been successful or not.
The popular pay-per-sale affiliate marketing programs are Clickbank, Amazon Associates, ShareASale, Awin, and others.
How do affiliate marketers get paid?
For affiliate marketers to get paid, they need to achieve the affiliate marketing program goals. This can be the pay per sale, pay per lead, and pay per click. When they have achieved the goals, they automatically get paid from the third-party network.
The affiliate marketer needs to furnish all the personal details and bank details on the affiliate marketing platform. When the details get verified, and when they generate sales, they get the amount credited directly to their desired mode of payment. Few of the affiliate marketing networks are paying individuals through the method of Bitcoins.
If we look at the payment lifecycle for affiliate marketers, it usually ranges from a day to a month. You can check these terms and conditions before registering on any affiliate marketing program network.
What are the methods of affiliate networks to track the entire process?
Depending upon the end goal of the affiliate marketing program, the affiliate marketing network implements cookies or any other scripts that are used for tracking mechanisms. These tools are instantaneous and they can easily track the start and end of the affiliate program cycle.
If we have to talk about some of the major goals in tracking the performance are the conversions received for the products or services. Other triggers can be registrations, sign-ups on the contact form, downloads, sign up for the newsletter, and other methods.
The cookies get stored on the user’s system after clicking the links for ads from the affiliate website. This can be on a laptop or mobile device. Every cookie has validity from a few days to months. The cookies work efficiently in giving out the complete details of how the affiliate cycle is performing.
Types of affiliate marketing management platform available for business
There are many types of affiliate marketing management platforms that can be utilized by a business. Depending upon the goals and objectives, they can opt for the type of affiliate management for their company.
Some of the major factors that contribute to this method would be the budget and the manpower that they can dedicate to this process.
Let us now see what affiliate program management is available for business.
1. Developing the platform in house
This method suits businesses if they want to completely depend on affiliate marketing platforms. If the strategy that they have used to generate revenue only through affiliate marketing, then the companies can easily develop the affiliate platform solely for their business.
They need an accounts team, tech team, and customer support to manage this process. Because without the manpower dedicated for these functions, it is very hard for a business to manage the platform completely by themselves.
2. Third-party affiliate networks
It is one of the popular choices by many businesses where they register on third-party affiliate networks. Through this network, they can easily tap into a large set of target audience who can extensively promote your products and services.
For a newly launched business, it is better to register on the third-party affiliate network. Because the consumers are not aware of new business products and services that are offered in the market. This is the best way to promote yourself and get the desired brand awareness.
The main advantage of getting registered on a third-party affiliate network could be you get the complete software, dashboard, and tracking mechanism that has been set up. When Everything is in place, it is easy for companies to scale growth through third-party affiliate networks.
3. Blending both the platform
This is one of the creative and efficient ways for businesses to check results from both the medium. Getting a team in-house and also registering themselves on the third-party affiliate networks. This can be an ideal step for them to see through which medium they are getting better success.
When you can blend both platforms, you will come to know the cost of acquisition and the flexibility of the platforms that are helping your business to drive revenue. This will easily prove you to be a cost-effective method based on the results that you can get using this technique.
Summarising the process of affiliate marketing model
1. The merchant and the affiliate marketer get registered on the affiliate marketing network.
2. The Merchant states the guidelines for the promotion and commission structure.
3. Affiliate marketer selects the product based on the niche of their audience.
4. Affiliate marketer displays the merchant’s ads on their website. This can be through banner ads or contextual affiliate links.
5. The website visitor sees the banner ad or the link, and when they click it.
6. Website visitors are redirected towards the merchant’s website.
7. Tracking mechanism comes into the picture. It begins with the custom UTM parameters associated with the link and the cookies get stored on their system.
8. The customer makes a purchase action from the merchant website.
9. All the details are extracted by the third-party affiliate network.
10. When the details are confirmed by an affiliate network, it passes a message to the merchant website stating the transaction is successful.
11. Based on the ticket size of the product or service being sold, the commission is given to the affiliate marketer.
12. The affiliate marketer gets the amount credited through the desired mode of payment after clearing the waiting period. This ranges from a few days to weeks for details to get verified.
To sum it up
Even after decades of being in existence, the affiliate marketing program will never fade away. As this is creating a win-win situation for all the parties, it can be the merchants, affiliate networks, and marketers. The affiliate marketing program is just growing stronger day by day.
When we look at the process of how affiliate marketing works, it is very simple. Based on the tracking mechanism that they have established and the cookies that get stored on the customer’s system. Through these ways, the marketers and as well as merchants can easily track customer lifetime value and the cost incurred in it.
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