After a brief pandemic-induced lull in pricing, the costs of social media advertising are once again on the rise. As brands begin to realize these cost increases, there is more pressure to maximize marketing spend. To this end, affiliate marketing can be a lucrative avenue to explore, and a great driver of incremental revenue. Brands are taking notice: According to Statista, affiliate marketing spending in the U.S. could reach $8.2 billion by 2022 — up from $5.4 billion in 2017.
Affiliate marketing is the perfect embodiment of performance marketing, because the entire relationship hinges on performance. In its most basic form, affiliate marketing works like this: An affiliate promotes a product or service to her audience, sending leads from her audience to a given brand. If one of those leads converts to a sale (i.e., if her promotion performs), the affiliate is paid a small amount for the sale. The brand makes a sale. The affiliate makes passive income from promoting a product. It’s a mutually beneficial relationship.
For all its win-win energy, affiliate marketing still requires a cohesive marketing strategy. Let’s take a look at 4 key ways you maximize your affiliate marketing program, and ensure it continues to be a driver for incremental revenue.
1. Find the right partners.
Similar to influencer marketing, with affiliate marketing, you’re paying for influence and reach. These partners have built and nurtured relationships with their audiences, and their audiences trust them. With affiliate marketing, you leverage this relationship and hope to use that trust to facilitate conversion. Because of this, it’s critical that the affiliate’s audience mirrors your own, and that the reach makes sense for your goals.
A lifestyle blogger with a handful of weekly unique visitors is not going to drum up much engagement at all, much less deliver quality leads to your brand. But even if the reach is there, it doesn’t always mean it’s a natural fit. A luxury brand would likely have very little success partnering with a website that reviews kids’ toys, for example. Even if the review site is wildly popular, luxury brand buyers and toy reviewers probably don’t have a lot in common.
Affiliate marketing is most successful between brands that have overlapping audiences. For example, a ski resort and an outdoor equipment retailer; a fitness brand and a nutrition blog; a popular sports enthusiast podcast and an athletic apparel retailer, etc., etc.
2. Be deliberate about setting up your affiliate network.
Sorry to say it, but affiliate marketing is not the Field of Dreams. If you build it, they will not necessarily come. You can have the best commission structure and the most comprehensive affiliate marketing program on the planet: The affiliates you need to grow your business are still not going to just show up at your doorstep — you have to seek them out.
Start with a wish list of companies you want to work with. Some might be obvious, big players in the space. Others might take a little exploration. Use tools like SEMRush and Moz to look for sites with high authority — this will help you find prospective partners with good reach. Scope out the competition and see what they’re offering affiliates. Once you know your program is competitive, begin to reach out to your wish list. And like any good marketer — don’t be afraid to follow up! It might take more than one email to make a connection.
3. Empower your affiliates to be the best brand ambassadors they can be.
Arm your affiliate partners with high-quality creative content, ongoing training, and examples of other successful affiliate campaigns. For most of your affiliate partners, marketing your brand’s products and services will be passive income. Make the pathway to income one of least resistance, providing all the tools, training, and support they need to promote your brand messaging and deliver reliable conversions.
4. Apply gains from affiliate marketing to other channels.
With marketing costs on the rise across most media platforms, efficiency of spend is more important than ever. Once your affiliate marketing program is rolled out and firing on all cylinders, you’ll have a new incremental revenue stream. To maximize both your budget and your affiliate marketing program, consider applying some or all of the revenue back into your more expensive channels. Expand your budgets where appropriate to gain more reach, and ultimately, more revenue. Think of it as compounding the returns from your affiliate marketing investment.
Affiliate marketing is a great way to build, grow, and refine your brand. As consumers are becoming more savvy and leaning to online shopping, affiliate marketing will continue to grow and be a valuable marketing channel for advertisers.
Ready to take your affiliate program to the next level? We’re here for it. Get in touch any time.