I am sure you have heard of the term “Affiliate Marketer” and have read about people online making hundreds, thousands or even millions of dollars online from affiliate marketing. In its simplest form, Affiliate marketing is a performance based business where companies pay people who promote their products. These people are known as affiliates.
Some of the things you have purchased on the internet came from a recommendation from a website you were visiting. The owner of that website would have made a commission due to your purchase. The more products that referred customers purchase, the more money an affiliate will make.
Most affiliate companies pay affiliates through Cost Per Action (CPA). This means the affiliate earns money whenever an action takes place. This usually takes the form of a sale (when someone buys something) or a lead (when someone signs up to something e.g. newsletter, free trial, registration etc.).
Many companies have their own in-house affiliate program. This is common amongst large internet companies such as Amazon and small companies who only sell one or two products. The other option for companies is to use an affiliate network such as Commission Junction or LinkShare. These networks list thousands of offers and products for affiliates.
As an affiliate, there are many benefits to using an affiliate network. In-house affiliate programs and affiliate networks all have minimum payment thresholds. It is much easier to reach a payment threshold if you have hundreds or thousands of different products and services to promote. Frustratingly, many in-house affiliate programs have unrealistic payment thresholds. I have came across affiliate programs that pay $5 for the sale of a $20 product yet they do not pay affiliates until they reach $100 in sales. This means that any commissions you earn will be lost if you do not reach $100 in sales. Collectively this can be a problem as you could have a lot of money spread across dozens of in-house affiliate programs that will never pay you. This is less of a problem when you can promote lots of different products from one network.
Choosing which product to promote is very important. You may be tempted to promote products with the biggest commissions, however generous commissions mean nothing if you cannot convince anyone to actually buy the product. Affiliate networks help you with your decision by listing offers you can promote in table format. Common information is payout, Type (e.g. lead or sale), Earnings Per Click (EPC) and Conversion rate.
Earnings Per Click informs you how much you can expect to make per visitor you send to the offer. For example, an offer may have a payout of $40 but an EPC of $1.50. The conversion rate lets you know what percentage of your traffic converts into a sale. You can work out the EPC if you know the conversion rate and vice versa. In this example, the offer with a payout of $40 has a conversion rate of 3.75%.
How reliable the EPC and conversion rates that affiliate networks provide depends on how popular the offer is. The more people who are promoting the product or service, the more reliable the information is. You may be able to convert much higher than the average affiliate or you may struggle to get any sales. It all comes down to how targeted your traffic is. Take two different websites for example: A sports news website and a website that reviews sports equipment. The news website would be able to get a good conversion rate promoting any sports related product, however the review website would get a better conversion rate on a product such as a sports GPS watch. The reason is simple; people are on that website to buy something. They aren’t there just to read the latest sports news.
Bear this mind when you are choosing a product or service to promote. The more closely related an offer is to your audience, the more likely it is you will convert visitors into sales and leads.
Without further ado, let’s look at some of the most popular ways of making money through affiliate marketing :)
Reviews are a great way of promoting offers. There is a wealth of information online for people who do not buy impulsively. I know because I am one of them. It normally takes minutes for me to decide whether to buy a WordPress plugin that could be used on one of my websites, however when it comes to buying something like a new laptop, television or phone, I am borderline obsessive. It is not uncommon for me to spend weeks researching a product to make sure I pick the right one.
I know many people are like me.
This is why a review is such a great way of promoting a product. People are looking for information about a product so if you can provide that to them, there is a high chance that they will click on your link to the product and buy the product. Reviews have been one of the most profitable way for me to make money online. On my last major blog income from reviews generated more than 75% of the website’s income, far more than what I was making from ad sales etc.
The owner of this site, Jerry Low, also has a lot of experience in this field. On his hosting comparison website Web Hosting Secret Revealed he reviews hosting companies in great detail. This goes a long way in convincing people to visit a site and your review may be the one that convinces that person to click BUY.
Most websites sell their banner space though it can sometimes be more profitable to promote an offer in its place. With a past website I struggled to sell one particular banner area for more than $100 per month but I later found one particular offer that made me twice as much.
I have found some reviews I have written have got a lot of traffic despite the website it was written on not being that popular. This is mainly due to the article ranking high for relevant keywords in search engines. Banners are different as they are generally shown throughout your website. Unless your website is focused on one specific topic, you will probably see a poorer conversion rate from banner ads than you will for reviews. Plus you also need to take ad blindness into account.
It is not fair to compare reviews to banners as they are completely different things. Reviews take time to write whilst it only takes a minute to copy the code for a banner and paste it on your website. The more targeted traffic your website has, the more your banner will be displayed. Therefore, all things considered equal, you should see a rise in banner revenue as your website traffic increases.
3. Promoting Offers Directly
The vast majority of affiliate marketers who are making hundreds of thousands of dollars per month are doing so by promoting offers directly. They do this by purchasing traffic and then sending people directly to the offer or to a landing page that promotes the offer (note: many offers do not permit direct linking to the offer page, therefore you need to send visitors to a landing page). Once they find an offer that is profitable, they try and scale it upwards. For example, they might invest $10-$50 a day promoting an offer to see if it is profitable. If they are able to turn a profit, they will start increasing their advertising expenditure in order to increase their profit.
Affiliate marketers are known to spend thousands of dollars before finding their first profitable campaign. Even once they have gained experience in making money through this method, they will still see a lot of ups and downs. The difference between a profitable campaign and one that costs them money is very small. That is why affiliate marketers spend so much time analysing data.
If you are new to working online and do not have a large budget, promoting offers directly in this manner is not advised. This is something Tyler Cruz spoke about recently. He stressed that you shouldn’t get into this type of affiliate marketing unless you have a lot of money you can afford to lose.
If you have some money to spare and want to try out affiliate marketing, I recommend signing up to a reliable network such as MarketLeverage or PeerFly and then finding an offer that is converting well. Then try and push traffic to the offer using a PPC service such as Google Adwords or 7Search. Start off with long tail keywords that will not cost you much money. Hopefully you will start to see some conversions after a few days and you can then start tweaking things, changing the keywords you are targeting, the website you are buying traffic from etc.
The best way to learn how to make money in this manner is by doing it yourself. It really is a case of trial and error when it comes to making a campaign profitable.
4. Email Marketing
Top bloggers and marketers continue to tell others that “The money is in the list”.
They are 100% correct. A targeted email list with loyal subscribers is a one way ticket to making money consistently. There are email marketers who have hundreds of thousands of subscribers and can make thousands of dollars from one mailing simply by recommending a product.
There are different ways to make money from email marketing. The main ways to profit from a mailing are:
- Sending an email which recommends a product or service – You will then be paid an affiliate commission when one of your subscribers but the offer.
- Using the list to promote your own products – Some marketers have made millions by doing this. Even a simple eBook that is 100 pages long can made tens of thousands of dollars within a few days if the marketer has a big enough list.
- Selling ads – Many email marketers send out mailings on behalf of others for a fee. The more subscribers they have, the higher their fees are for an ad placement.
The frequency of mailings is something that many people disagree on. There are marketers who are sending emails to subscribers with offers every day. Constantly sending offers to readers generally sees unsubscribe rates shoot through the roof so marketers are constantly trying to replace the subscribers that have left. This constant churning of subscribers means that part of their income has to be reinvested in getting new subscribers or the list will die.
Long term, it is more profitable to build up a good relationship with subscribers. When subscribers know you and trust you, they are more likely to purchase your products and products you recommend. Some marketers have such a loyal following that they email every day and do not see large unsubscribe rates.
I believe that emailing subscribers at least once a week is best. If you email less frequently, say once a month, subscribers may be less responsive. It is quite common for people to subscribe to a website for updates and then make a complaint when an email is sent to them because they forget they ever signed up. This is one of the downsides to emailing infrequently.
It is cheaper to build up an email list if you have an existing website. If you do not, you will have to build your list up by buying ads on other people’s newsletters. Blogging can be timeconsuming so if you would rather built up your list through advertising, I recommend starting off with a service such as Safe Swaps for some targeted ad buys and ad swaps.
Tips: An email marketing tool can make or break your email marketing campaign. Jerry uses GetResponse to build and manage his email list – check out his GetResponse review here.
5. All of the Above
The process of promoting offers directly is what many people think of when they hear the term “Affiliate Marketing”, however it refers to any method of promoting an offer in return for a commission. There are some people who only do direct offer promotion or email marketing, though in my experience most affiliate marketers use all of the above methods.
Blogs are the prime example of this. Most blogs are monetized using reviews, banner ads, email marketing and embedded affiliate links within content.
I hope you have enjoyed this overview of affiliate marketing and it has given you some ideas on how you can make money on the internet.