What is Affiliate Marketing? The Myth vs. Reality

As ecommerce has grown and evolved over the years, so too has affiliate marketing. Learn what the affiliate space looks like today, and best practices for getting started with affiliate marketing.

There’s a lot of misinformation that surrounds affiliate marketing — so let’s clear it up.

Affiliate marketing is a performance-based marketing program, where an external partner is rewarded a commission for delivering a specific result to a merchant or advertiser. The result is often a valid sale, however it can also be a completed lead form, a new free trial user, or even a new newsletter subscriber.

Although the first affiliate program was developed in 1994, Amazon’s Associates Program (launched in 1996) is most often recognized as the longest running program and as the model for others to follow.

As ecommerce has grown over the years, so too has the affiliate space. So much so that it’s now incorporated into the marketing strategy of top Fortune 500 companies like Apple, Macy’s, and Target.

Despite all this, affiliate marketing has been plagued with a bad reputation in the past.

Is affiliate marketing real?

The myth that affiliate marketing is a scam or offers a low value source of traffic and sales is simply not true. The reality is that affiliate programs can be as high value as those running the affiliate program make it.

Myth: Affiliate marketing is mostly fraud and offers low value traffic.

Throughout my 12 years in the industry, I’ve worked with affiliate marketing in many different ways — from affiliate, to freelancer, to in-house management of Shopify’s affiliate program.

Today, I’m putting all that knowledge to work, and walking you through the foundations of the affiliate marketing space, what kinds of affiliate marketers exist today, and how you can get started with affiliate marketing.

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Old school affiliate marketing challenges

Even prior to working with an affiliate program, it was clear to me that affiliate marketing offers a strong opportunity for businesses to quickly expand their reach to fresh audiences, and acquire new customers through partnerships.

Although affiliate marketing has proven itself as a viable customer acquisition channel, to this day I still encounter individuals that react to the word “affiliate” like it’s a dirty word.

Although affiliate marketing has proven itself as a viable customer acquisition channel, to this day I still encounter individuals that react to the word “affiliate” like it’s a dirty word. I completely understand given some of its shadier history.

Old school affiliate programs experienced pain and fraud due to the popularity of black hat methods, such as cookie stuffing, typosquatting, spam, black hat SEO, link-farms, trademark infringement, spyware, and brandjacking (sounds scary, right?).

The better performing affiliates during that time were mostly limited to coupons and deal sites, some content sites, and general business development referrals.

Many brands with affiliate programs couldn’t determine if their affiliate traffic was incrementally lifting sales or just milking the brand’s marketing spend. Neglected affiliate programs can still suffer the same issues outlined above, however, the affiliate programs of today now offer more value than ever before.

How affiliate marketing works today

Over the past decade, advancements in technology have greatly improved and matured the affiliate marketing industry. With the rise of self-publishing tools and social media marketing, the global population of affiliates has grown substantially.

With the rise of self-publishing tools and social media marketing, the global population of affiliates has grown substantially.

Campaign tracking tools are more robust, allowing better decision-making and supporting a wider variety of promotional methods. In addition to standard online sales tracking, you can also track referrals by phone, by coupon code, by in-store purchases stemming from online referrals, across multiple devices, and even pay affiliates by multiple in-bound referral sources.

Transparency is now commonplace and expected, thus driving stronger white-hat practices by affiliates. There are more options for products, services, and subscriptions to promote across all niches.

What types of affiliate marketers are we seeing in the industry now?

So you now have a decent idea of how far affiliate marketing has come, and the kinds of challenges the industry has faced in the past, but do you know what affiliate marketers look like today? I’m pleased to say that the affiliate marketers of the current digital landscape are a diverse and vibrant group that include:

• General content, media sites, and networks. Think larger media organizations that own a number of websites, some with millions of visitors per month.

• Comparison/review and niche topic sites. These sites typically review products for a specific audience type or compare a line of products against their competitors. You could have a mommy blog that compares all of the large brand strollers, a marketing blog reviewing SEO tools, or a lifestyle site that compares organic makeup products. These sites will review products and push that message out through channels such as a blog post, detailed comparison chart, video, and social media.

• Apps and solution type partners. These are strategic partnerships where products and/or services are placed in front of a relevant audience through an app partner. Some examples could include a shopping app that can help you find the best price on a pair of sneakers, or a beauty app that includes a specific makeup brand, and that allows users to virtually “try on” makeup using swatches of color and their live image.

• Bloggers and social media mavens. Bloggers can be general and organically introduce products they like to their audience. Or, they can be very niche and talk about products they’re passionate about and that resonate strongly with their audience (for example: yoga sites, a cooking blog, or a site about learning how to knit).

• Influencers, high profile leaders, and authors. ‘Influencer’ is a popular buzzword right now, and that space overlaps with affiliates more than you would initially think. Simply put, to earn big commissions in affiliate marketing you want to get the right product/service in front of the right audience with the right message. Influencers already have a strong audience, and are determined to continue to grow it into the millions, making them perfect for affiliate programs. For some time, the space has been very fixated on monetizing through general sponsorship for a one-time payment, however, an affiliate payout allows the influencer to earn ongoing revenue for as long as the content lives on. This can easily earn the right influencer 10x more in the long-term.

• Courses, workshops, and live events. IRL events are embracing strategic affiliate partnership offers, and incorporating them into their workshops, courses, or even live presentations.

• Mastermind groups, private, and public communities. Typically these are made up of niche topic groups based on interests, hobbies, course students, or even strategists. I’ve seen these groups range from better parenting topics, to French culinary fans, to successful entrepreneurs — all working towards improving themselves.

• Paid advertising affiliates. These types of affiliates use paid advertising traffic in PPC ads, contextual ads, or even social channels for the affiliate programs that allow it.

Across all of these methods, authenticity is crucial for long-term, high earning growth, and top earning affiliates know it. With a solid affiliate program strategy, and proper execution and management, this channel is often one of the best sources of new customers for merchants who participate in affiliate marketing, and is a consistent revenue stream for all affiliates.

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How to become an affiliate marketer

Just like entrepreneurship, becoming a successful affiliate takes dedication and discipline. Ideas alone won’t cut it — having a strategy and executing it is critical for top earning affiliates. Here are some tips to win at affiliate marketing:

• Develop a strategy — What problems are you solving? What niche or audience do you want to serve? Outline the above, and determine how you want to get there while offering something unique or a little different. After that, design your brand look and identify your messaging. While you are at it, set an action plan you can live with based on how much time you have to allocate to your affiliate efforts.
• Be authentic — Whether you want to be a big voice for a particular niche or a solo blogger, you need to get comfortable with yourself. People like to connect with voices that have an authentic message.
• Build a brand — Know your brand and audience well, broadcast yourself while keeping both of those in mind.
• Transparent relationships — If you would like to be privy to special offers, higher payouts, or start a relationship with one of your favorite advertisers, be transparent with them and about your methods.
• Ongoing learning — Never stop learning about affiliate marketing, online marketing strategies, and trends. Keep up-to-date with the online community DigitalMarketer, or if you want a more in-depth approach, check out Charles Ngo’s Ultimate Guide to Affiliate Marketing.
• Communicate with affiliate managers — Your affiliate managers should have a strong grasp on your activities and placements of offers. This helps them identify any low hanging fruit for affiliates. Tap into that knowledge and communicate with them. Although, they can’t provide 1:1 training, they can point you in the right direction and help get started or improve performance.
• Learn how to analyze data — Know how to use marketing tools and analyze performance data. Do the math to determine your marketing costs in order to bring traffic to your site, and calculate conversions and commissions to determine what’s performing best for you. Tweak copy or the location of a CTA to optimize success of the page. Study success for all of your highest performing pages, and try to lift conversions. A performance increase of just a couple of points could mean a big lift in sales.
• Be creative — Do your homework. Research the competitive space and figure out where additional opportunities lie. If you learn everyone is promoting on Facebook, consider also testing your offer elsewhere and in a different ad format, or even bundling the offer with other items or services.

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Don’t believe the myth

Affiliate marketing is no longer the stuff of black hat methods and scams. In fact, the lesson I want to stress most to you is that affiliate marketing is valuable, and has a bright and lucrative future.

But don’t take my words as law, try it out for yourself — there are lots of reputable affiliate programs with low barriers to getting started that can help you build consistent revenue streams. What are you waiting for? Get started today!